COMMENT – Written by Rick Conroy on Friday, April 16, 2010 – 1 Comment
The gambler
A better man might feel empathy for Dalton McGuinty. Gambling, I’m told, is an addiction. He may not be able to help himself. But here’s the thing—it’s Ontario’s energy future he is putting at risk and it is our money he is wagering. Dalton McGuinty never felt comfortable with the energy file. Not since he blurted out an ill-considered promise to close Ontario’s coal electricity plants, in an election debate in 2003, has he managed to grasp the complexity of the business of electricity or how tightly energy in general is tied to the economic prosperity and well-being of residents of this province.
Most folks leave things they don’t understand alone—they don’t try and turn the house upside down hoping it all comes out right. But that isn’t how McGuinty rolls—at least on this file.

Instead he is placing billions of your tax dollars and your children’s tax dollars on a bet that a mix of unproven wind, solar and other exotic means of electricity generation will one day put a meaningful dent into Ontario’s supply of energy. It is a high-stakes gamble—with about the same odds as winning the lottery.

Nevertheless, McGuinty last week announced his government was offering contracts for 184 renewable energy contracts. By some estimates this converts into an $8 billion investment. This is on top of billions more spent through at least four other outlandishly rich contracts designed to attract investors.

Whom has the province attracted? Well, they include such corporate luminaries as 2225054 Ontario Limited and 6718710 Canada Corporation. Others such as Zep Wind Farm LP signify that these outfits are organized as limited partnerships which means the investors who anted up the money to make the FIT application were able to write off at least part of their investment on their personal taxes. So as a taxpayer you are an enabler of this bit of speculation.

Most of these companies didn’t exist five years ago. Many likely formed just to apply for the FIT contracts. This is the cast of characters to whom McGuinty has decided to hitch Ontario’s energy future.

Like the husband and father who secretly gambles away his family’s savings, McGuinty must create a web of diversions and lies to cover his tracks.

Number one diversion: tell people wind and solar energy is better than coal-generated electricity.

The McGuinty government doesn’t issue a press release on the energy file in which it doesn’t attempt to turn the public’s dislike of coal into support for its misguided green energy schemes.

Energy Minister Brad Duguid last week: “The advantage is we’re not poisoning the lungs of our kids when we use green energy.”

Yes, by all means, we can all go along with not poisoning our children. But the question that needs to follow is: will wind and solar energy help us do that? Will McGuinty’s energy schemes reduce our dependence on coal-fired electricity? Mr. Duguid will dodge the question—but the answer is no.

Worse, he knows the answer is no. All one has to do is look to Europe, which has installed thousands of wind turbines and solar panels over the past two decades. Not one coalfired electricity generating plant has closed due to the introduction of these new generating sources. In fact, European nations are building 50 brand new coal-fired generating plants over the next decade. They are also scaling back wind energy development and the rich incentives required to erect it. Why does McGuinty expect a different outcome in Ontario?

Number one lie: XYZ wind farm will supply electricity for 5,000 homes. The truth is that all the wind turbines in all the world can’t run a toaster, let alone a home, on their own. It is a lie that is repeated in virtually every news story on wind or solar development. Intermittent energy sources like wind and solar must be paired with a fossil fuel generating plant to produce the steady and reliable stream of electricity your toaster needs to run properly.

The truth is wind energy, combined with a natural gasfired generation plant, might be able to supply electricity that you can use in your home—but you will never know how much was supplied by natural gas and how much came from wind. In most jurisdictions the gas plant runs full-time— burning fossil fuel—the unseen partner in the wind and solar fantasy.

However the cost of building and operating additional natural- gas fired plants needed to back up wind is never calculated in the billions we are spending on green energy. It would be cynical to call natural gas green energy.

Many will suggest it is a worthwhile gamble—that doing something is better than doing nothing. But this is a trap. Doing the wrong thing is worse. Much worse. For we are robbing ourselves of the dollars that should be invested in real energy research and development—not frittered away by making the investors in 2225054 Ontario Limited wealthy.

Worse still, we are propelling massive hikes in energy costs. This will have direct impact on low- and middleincome Ontarians. It will be yet another blow to manufacturers and processors—another reason to move jobs out of the province to low-cost jurisdictions. Smelters, miners, pulp and paper mills and auto manufacturers are all large consumers of electricity. As their margins get squeezed they get closer to putting their raw materials on a ship and processing them elsewhere—taking these jobs with them.

In desperation McGuinty is doubling down and digging our hole deeper. So far this year the province has spent on average a little over 3 cents per kilowatt hour for electricity. Last week McGuinty offered to pay 2225054 Ontario and dozens of other such outfits 44.3 cents per kilowatt hour—14 times more than the going rate. Does this sound like a rational man? Perhaps it’s time we intervened.

rick@wellingtontimes.ca