Monday, August 22nd, 2011
If a new industry emerged in Ontario that would create more than 150,000 person-years of employment, inject economic growth back into struggling communities, and attract roughly $30 billion of private sector investment — while costing the average household no more than a coffee and a muffin each month — it would be a good news story.
Now imagine we could take advantage of this new opportunity without creating the usual side effects of industrial development, such as long-term environmental degradation or toxic air pollution — you might expect that policy makers, corporate leaders and communities would be lining up in support. The industry featured in the above scenario isn’t fictional. A number of reports released recently show that green energy has begun to produce such benefits throughout Ontario. Ontario has taken the lead in creating the right conditions for renewable energy to flourish — along with the jobs, technological expertise and pollution-free power supply that accompany growth in this sector. Yet, despite becoming a North American leader in this expanding global market, some people continue to call for Ontario to take a step backwards. As with any new initiative, the programs initiated by the Green Energy Act have not been without growing pains, but more than 30 manufacturers and hundreds of other companies have already set up shop in Ontario because of Act. A recent report by ClearSky Advisors estimates that wind energy developments in Ontario will create more than 80,000 person years of employment and attract more than $16 billion in new private sector investments in the next eight years. In the report, The Economic Impacts of the Wind Energy Sector in Ontario 2011 – 2018, ClearSky estimates that the number of jobs created by the wind industry in Ontario on an annual basis varies from a low of 5,700 person years of employment in 2011 to over 14,200 in 2014. The report also estimates that more than $1 billion in revenues will flow to local municipalities and landowners in the form of taxes and lease payments over the lifespan of the wind projects studied. And it’s a similar story when it comes to solar power — another ClearSky report found that Ontario’s solar industry would create 74,000 person years of employment and roughly $13 billion of new private sector investments by 2018. But nothing in the world is free — so the logical question is, just how much more would all of these benefits cost Ontarians? It’s a complicated question with a surprising answer. The Pembina Institute, a national sustainable energy think-tank, recently contracted a team of energy modelers to see how prices would be affected if the Green Energy Act were cancelled, and the energy that is currently planned to come from renewable sources were replaced with other electricity sources. The Institute published the results of that study in a recent report, Behind the Switch: Pricing Ontario electricity options, which found that Ontario consumers would actually see very little change in rising electricity prices if the province completely cancelled its support for renewable energy. That’s because cancelling renewable energy means relying on some other form of power in its place — and that ‘something else’ is likely more fossil fuels, which are not free. The modeling found that cancelling the Act might result in a slightly slower increase in electricity costs in the short term, but clean energy investments today will save homeowners money within about 15 years, as natural gas prices are forecast to start to rise. There is a fair bit of uncertainty about how quickly natural gas prices will rise in the future, but it is clear that the wind and sunshine are going to continue to be free and the cost of building new clean energy plants continues to decrease, as it has for decades. So cancelling the Green Energy Act and relying more on natural gas for electricity would not only increase the uncertainty and volatility of electricity prices — there would be other costs for Ontario ratepayers, as more fossil fuels means increased costs related to negative health impacts, air pollution and greenhouse gas emissions. That’s the part of Ontario’s energy dilemma that we really need to be talking about. Ontarian ratepayers deserve to know what the full costs and consequences of cancelling the green energy act would be — and what other energy sources would be used to replace renewable power in this province. If cancelling the Act means less clean energy, green jobs and more power from fossil fuels at a similar or higher price in the near future, it’s a bad deal for Ontarians in the long run. -30- Tim Wohlgemut is co-founder of ClearSky Advisors, a research firm focused on the renewable energy sector. Their reports are available online at http://www.clearskyadvisors.com Tim Weis is director of renewable energy and efficiency policy for the Pembina Institute, a national, non-partisan sustainable energy think tank. The Institute’s reports Ontario electricity options are available online at http://www.pembina.org/re We encourage you to join the conversation and leave your comments on the Sunday Toronto Star online.