September 24, 2010

The Pickens are good in Ontario

T. Boone Pickens famously boasted about building the world’s largest wind “farm” in Texas. The $2-B  US project was to provide 500 MW of power and make Texas–not a windy state–a leader in energy production from wind power.
Except, it didn’t happen.
Pickens told the CBC’s “The Current” today that there wasn’t enough transmission capacity to make that work, so now he is focusing his alternative energy plans on Minnesota and–lucky us–Ontario.
While Pickens’ one and only goal is to make money (he once bought the water rights for a huge territory in Texas and said, “People say water is like air. You don’t charge for air so you shouldn’t charge for water. Well, OK, watch what happens: you won’t have any water.”) which is why he is headed for subsidy-rich Ontario, he has also learned a few things about wind. “America gets 52 percent of its power from coal,” he said today. When he hears people talk about replacing coal with wind and solar he says he is surprised that anybody could be so “uninformed.” “The best we could do with wind and solar,” he said, “is 10 percent.” And that could happen only with government subsidies, he adds.
But Pickens isn’t really about alternative energy sources at all, except for their potential to make him tons of money out of the pockets of taxpayers and ratepayers—his real energy focus these days is natural gas.
That’s a topic for another day, except one must be reminded that natural gas and wind power development go hand-in-hand.
Once more, proof that wind and solar are not connected to any environmental concerns: it’s about money.
As Terence Corcoranwrote in The Financial Post last January,”That’s green energy in action: subsidies, distortion, trade battles, fake job creation and back-room political deals.” He forgot GREED.

September 18, 2010

“Are you frying your eggs at 4 am yet?”

Lawrence Solomon, executive director at Energy Probe asks that question and a few more in his column today in The Financial Post. Noting that Ontario Premier Dalton McGuinty is under fire for the smart meter program (which is supposed to cost $2 billion but is more like $ 10 billion) which, critics say, makes no economic sense for consumers. We can’t win in other words.

“Mr McGuinty isn’t in this for the money–if he was, he wouldn’t be closing economical coal plants while sinking cash into money-losing nuclear plants and money-losing long-distance transmission lines to carry power from money-losing industrial wind farms. These and his other money-losing initiatives will causeOntario’s power prices to double or triple should he get his way.”

Unfortunately, as Mr Solomon points out, the technologies are going against Mr McGuinty’s grand plans: “…power from wind turbines can’t be dispatched to customers when customers need it–the wind has a mind of its own. To make matters worse, the wind tends to blow best overnight when it’s least needed [Ed.: and when the turbines’ involuntary neighbours are trying to SLEEP].”

So, what he’s doing instead is using time-related power rates to “punish people and businesses,” says Solomon. But the punishment isn’t enough. “Too few people are frying their eggs before 7 a.m.–the time at which the punishment starts–and too many are cooking their dinners at 7 pm, smack dab during peak punishment period.”

Remember what ENRON stands for: Electricity Nightmare Ripoff Ontario Next.

Not added into this scenario at all is what the cost of declining property values will mean for communities throughout Ontario.

See the entire article here.

September 13, 2010

“The Green Energy Act needs to be scrapped”

Here is a post from Paul McKeever (president of the Freedom Party) on his blog, about the state of power generation and politics in Ontario. The opinions are strident but the facts are there:

You’re in for a Shock: Disturbing New Facts About Ontario’s Green Energy Act

September 7, 2010 by Paul McKeever 

Ontario Premier Dalton McGuinty is telling everyone that his decision to increase the price of electricity is “responsible” because it will force consumers to pay for the power they consume.  It will end an irresponsible old subsidy, he implies, but that implication is false.  In reality, his price hike is designed to pay for an irresponsible new subsidy.

Forty-two consecutive years of Progressive Conservative (“PC”) rule gave Ontario ridiculously expensive nuclear power generators.  To avoid voter backlash, the PCs hid the actual cost of nuclear electricity from consumers.  Billions of dollars in government debt were racked up so that electricity bills could be kept artificially low.

In 1998, the Harris government passed legislation to end that irresponsible subsidy by adding a debt retirement charge to electricity bills.  It also eliminated price controls on the retail price of electricity.  The resulting prospect of getting a reasonable return on investment led the private sector to begin planning the construction of privately owned and operated generators that would replace Ontario’s aging, government-owned fleet.

However, as the election of 2003 approached, vocal opposition to higher (i.e., actual) electricity costs led Harris’ PC successor, Ernie Eves, to again hide the actual cost of electricity.  He imposed a 4.3 cent price cap.  The remaining cost of electricity would be paid with government debt and taxes.  Within a couple of weeks, McGuinty, who initially condemned Eves’ new subsidy, supported it.

Eves’ re-imposition of price controls had a massively negative impact that continues to plague Ontario to this day. The price cap, and the evidence that Liberals and Conservatives were both willing to fiddle with market prices, scared the private investors away before their shovels hit the ground.

With prices being subsidized, consumers had no reason to reduce their electricity consumption.  The resulting black-outs and brown-outs of the summer of 2003 handed the McGuinty Liberals a majority government in October of that year.  At the end of that October, McGuinty largely ended the irresponsible subsidy by increasing the price cap.  He explained that, in the approximately 11 months since the cap was introduced, the subsidy had already cost the taxpayer $700M.

In 2003, Ontario often had to import expensive U.S. power to meet Ontario’s power demands.   Yet, in the face of such a shortage, McGuinty pandered to clean air advocates by promising to close Ontario’s workhorse coal-powered electricity generators by 2007.

In 2005, McGuinty introduced a new, irresponsible subsidy to encourage private sector investment in the construction of gas-powered electricity generators.  Specifically, he offered them contracts pursuant to which they would be paid for their electricity at a rate approximately three times that paid for electricity generated by coal-powered plants.  Rather than cranking up taxes to build new generators, McGuinty would crank up the cost of electricity to cover the cost of the subsidy.

Even with the subsidy, it would be years before the new gas-powered plants were operational.  Faced with the continuing threat of black-outs and brown-outs, the McGuinty government decided to buy time by imposing limits and penalties on electricity consumption.  Most symbolically, he vowed to ban incandescent light bulbs by 2012.  He paid for “Power Wise” commercials in which David Suzuki steals incandescent bulbs from porches, and breaks into homes to steal beer fridges, all so as to convince us that such theft and coercion is necessary not so as to cope with a politically-caused power shortage, but to save the earth.

In 2006, McGuinty’s political time-buying would get some help.  Al Gore’s junk science thriller, “An Inconvenient Truth”, transmitted to the masses the green cult’s irrational fear that “human CO2 production” (a code phrase meaning “capitalism”) will kill us.   For every politician, that fear would be the gift that keeps on giving.  So long as a new tax or fee or regulation could be characterized as one needed to reduce CO2, many voters would support it.  McGuinty could now ban Edison’s bulb, and introduce “green” fees and regulations with political impunity.

By 2006, Ontario’s high taxes, high labour costs, and potentially higher electricity costs were driving industry and commerce out of the province.  The business exodus reduced power consumption more than a million light-bulb snatching Suzukis could ever hope to.  The dramatic reduction in demand left Ontario with more than enough electricity to meet its needs even during peak consumption periods.

By 2008, the drop in demand for power had introduced a new problem: “surplus baseload generation”.   When Ontario’s “baseload” nuclear, coal, gas, and hydro generators generate more electricity than is being demanded, the excess electricity must be eliminated from the grid.  One option is to reduce generation, but only coal and hydro plants are capable of getting back up to speed quickly enough to meet increased demand after a few hours of low demand, and McGuinty is closing the coal plants.  Another option is to export excess power to U.S. buyers at discount prices.  When the U.S. will not buy the discounted surplus electricity, Ontario now pays the U.S. to take it (i.e., it “sells” the electricity for a “negative price”).

In 2009, the McGuinty government introduced the Green Energy Act.  Echoing the misguided subsidy for gas-powered generators, the Act introduced even larger subsidies for private companies who supplied wind and solar power to the grid.  Specifically, pursuant to the “feed-in tariff” (a.k.a. “FIT”) system, they would be paid for their electricity at rates as much as 16 times higher than the price of conventional electricity.   Moreover, wind and solar power generators would be given priority: consumers would be forced to buy up all of the expensive wind and solar power before meeting their remaining power demands with relatively inexpensive electricity from coal, gas, hydro or nuclear generators.   With artificially high prices and priority, private investors could now make a killing on otherwise money-losing solar and wind power generation.  Not surprisingly, thousands of private sector companies – including many farmers located in ridings that have usually voted PC – have signed up to get their cut of the loot.

Ontario’s Independent Electricity System Operator is now predicting that the additional power from wind and solar generators will make those expensive and wasteful episodes of surplus baseload generation more frequent for years to come.  It is expected that, to cope with the more frequent periods of low demand/excess electricity, wind and solar power generators will be taken off-line from time to time.  However, consumers will still have to pay the wind and solar companies for the power they do not deliver while off-line.  In a nutshell: McGuinty’s Green Energy Act will leave consumers paying the US even more to ditch excess electricity while simultaneously encouraging the construction of even more solar and wind power generators whose owners will be paid not to generate electricity during the periods of excess electricity that their wind and solar generators cause.

To deal with public outrage over soaring electricity prices, McGuinty now falsely implies that Ontario consumers are guilty of not paying the full cost of the electricity they are already consuming, and that he is merely raising prices to put an end to that irresponsible practice; that he is being “responsible”.  The inconvenient truth he thereby tries to disguise is that, for purely self-serving political reasons, his government is jacking up our electricity bills to pay for unneeded energy that we will not consume.

If we are to have an affordable and reliable supply of electricity in this province, we must learn from Ontario’s political history.  For electoral reasons, PC and Liberal governments have imposed price controls that have scared away private investment in power generation.  The result has been government debt and the payment of outrageous subsidies to the private sector.

Going forward, a system of affordable and reliable electricity requires elected officials who will not repeat the politically self-serving fiascos of Ontario’s past and present governments.  The Green Energy Act needs to be scrapped.  It is plain to see that the contracts made pursuant to it are immoral and unconscionable: they should not be honoured. Ontario’s government needs to allow prices to be determined by supply and demand.  And, to end the discouragement of private investment in affordable electricity generation, Ontario’s government needs to establish guarantees that it will not regulate prices, that it will not subsidize any form of generation, and that priority will be given to purchasing electricity from generators who offer it for the lowest price.

None of these desperately needed steps will be taken by a Liberal or PC government.  One cannot expect McGuinty to repeal his own Green Energy Act.  PC leader Tim Hudak is not about to alienate thousands of new wind and solar power-producing voters in PC-friendly ridings by repealing the Green Energy Act.  Instead, he is promising to repeat a PC fiasco of the past: sticking the taxpayer with the cost of even more unaffordable nuclear generation.  Fortunately, the least expensive power of all is the ballot.

Paul McKeever is the leader of the Freedom Party of

September 9, 2010

So much more to learn

Those of us who have been reading and listening and learning about the state of power supply in Ontario and specifically the role of large-scale, industrial wind power generation, know there is much to learn. And it is truly amazing how little so many people understand.

The mythology: wind power is “clean” “green” and good; it will bring jobs, and free power, and people love the look of the “wind mills” as they sit and turn peacefully in the wind “farms” or “parks.”

As other commentators posted here have said, the truth is quite different. Ontario’s rush to wind can most charitably be attributed to the McGuinty government’s belief that wind power generation will bring jobs to the province, especially in the wake of the collapse of the auto industry, which for years was the foundation of Ontario’s prosperity.

If you wish to be uncharitable, you could say that the McGuinty government has to live up to an election promise to shut down coal plants, regardless of the fact that Ontario’s air pollution is caused by industry south of the border and its citizens’ own cars and trucks.

The truth is: if the wind business does produce any jobs they will be so few and far between that they will each be the result of hundreds of thousands of dollars in subsidies. If Ontario goes the way of Spain, Germany and Denmark, there will be NO net increase in jobs.

The other truth is, and people looking at their electricity bills are just beginning to see this, trying to substitute wind and solar for coal, natural gas and nuclear is enormously expensive.

Anyway, Lowell Green on his radio show on CFRA today revealed another chink in the public’s awareness. Mr Green is no supporter of wind because it is is expensive and unreliable (he doesn’t know how underperforming it is, at less than 25% capacity), but he learned today from PC Leader Tim Hudak that communities have had their planning powers completely stripped where renewable energy projects are concerned, by the Green Energy Act. It was a complete surprise that communities are completely unable to protect their own citizens against developments that will change their landscape forever, bring noisy polluting machines (sound is a form of pollution) into areas where people live, and which themselves have a negative impact on the environment.

Mayoral candidate Jim Watson told the people of North Gower a few weeks ago that the Green Energy Act was necessary because “otherwise, we would have a patchwork of rules and regulations.”

Ah. So we must all blend together in Ontario and accept.

Another truth: countries where there was success with wind turbine developments were those in which communities got to say where the machines went. That’s not true here.

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