Ontario’s Green Energy Act

On May 14, 2010, the Ontario Legislature passed the Green Energy Act. This legislation is intended to attract new investment, create new green economy jobs and better protect the environment. Whether it will actually have this effect is uncertain.

At the heart of the Green Energy Act (GEA) is the extensive support for emergingrenewable power generation. This support takes the form of extensive subsidies, anywhere from merely double to nearly ten times the going rate for electricity as compared to the spot market price. These prices are also guaranteed, up to 20 years in some cases.

The Act aims to create employment by requiring the builders of renewable power projects to use local resources and labour. By 2012, this will be 50% for wind and solar projects. The provincial government is subsidizing the creation of jobs through its subsidies, but the cost is projected to be quite high. It’s not like the government is simply absorbing these costs, either. They are being passed along to the consumer, in the form of higher rates on their bills and higher taxes. After all, the Ontario government owns the power company.

The legislation is expected to bring in streamlined approvals for renewable energy projects, which should spur investment. The government is committed to working with municipalities and ensuring strong protection for health, safety and community consultation. As well, the Act provides increased opportunities for municipalities,First Nationsand Métis communities to build and operate their own renewable energy projects, and will ensure that some costs can be recovered.

At the same time, the province would prevent renewable projects from being blocked forfrivolous reasons. While this will allow power projects to be pushed through quicker, it has the possible side-effect of undermining local democracy, which seems to be in contravention of the commitment to work with local government.

Unless a home buyer waives the right, under the new act anenergy auditis required prior to the sale of a home. This is one of a number of conservation provisions in the act.

 There hasn’t been a great deal of study into the health effects of many renewable energy projects.

The Green Energy Acts establishes an academic research chair to examine any potential health effects that may arise out of these projects.

 It is expected the Act will allow the Ontario government to move forward with its pledge to eliminate coal-fired power plants by 2014, including the massiveNanticoke No 1, one of the biggest coal-fired power plants in North America, and one of Canada’s leading sources of greenhouse gas emissions. As it is, the two largest wind farms in Canada are in Ontario, while the province has a wind power generation capacity in excess of 1100 MW/H. This compares favourably with the output of the nuclear reactor at 700 MW/H, though it must be noted that the wind capacity listed is peak capacity only, while any typical daily output is usually much lower.

The Green Energy Act is a bit of mixed bag. While it contains support for renewable energy, the sheer cost may be unmanageable, and citizen buy-in may be substantially derailed by higher hydro bills. It purports to support local government, but at the same time removes their ability to protect the interests of their citizens.

It is perhaps inevitable that the best way to accelerate the development of effective renewable energy is to let private industry into the game, and hope for the profit motive to deliver the anticipated results. The subsidies may end up being unsustainable, and if they become a burden to the taxpayer, they may find a government who will end the subsidies. A balance must be found, and maintained, that will encourage development, but not break the backs of the common rate-payer.