Broken dreams

It’s been a tough couple of weeks for Dalton McGuinty on the energy file. Like every tragedy, however, the audience knows going into the theatre things are likely to end badly for the hero in the end.

By now most Ontarians have opened and begun to digest their August electricity bill. For many, the experience has been a kick in the head. Many don’t understand how rates could be climbing so fast when the average cost the province pays for electricity has barely budged in a decade. Most don’t know how delivery costs could be more than the actual stuff being delivered. Others have the more immediate worry about how they are going to pay the bill.

This is how his month began. It got worse when the Globe and Mail’s George Radwanksi reported a couple weeks ago that the Premier acknowledged that he had not considered the environmental impact of a planned wind turbine factory installed on Pigeon Bay just offshore of Pelee Island. The project has since been cancelled and new offshore setbacks of five kilometres have been proposed, but the anger remains.

In his ambitious, but confused, desire to be seen leading a green revolution in Ontario, the Liberal premier has instead created mistrust and disillusionment from the Bruce Peninsula to Point Pelee; from the Niagara Escarpment to Prince Edward County. Members of his own government are beginning to question the Premier’s grip on the file particularly as they measure the frustration brewing in rural Ontario.

Then the Japanese complained.

This week, Japan initiated a trade dispute with Canada complaining that Ontario’s guaranteed fixed prices offered under the FIT (feed-in tariff) program contravenes the General Agreement on Trade and Tariffs (GATT).

What caught the attention of the Japanese were rules that stipulate that in order to receive these rich contracts (up to 15 times the going average rate), up to 60 per cent of every wind turbine and solar panel must be manufactured in Ontario. How else would Ontario get the 50,000 jobs promised with the introduction of the Green Energy Act?

Japan might not have noticed, except McGuinty crept into bed with the Korean industrial giant Samsung in 2009. Since then McGuinty has lavished his new partner with $7 billion in wind and solar contracts which feature preferential pricing and priority access to Ontario’s electricity grid.

McGuinty is in a tough spot. Just last year he joined the chorus of Canadian politicians protesting loudly against “Buy America” provisions in that country’s infrastructure investments. The U.S. government relented.

He will put on a brave face. He will threaten to stand up to Japan and the others who follow. But he will, most likely, be forced to back down. He won’t be allowed to thrust Canada into a trade war over wind turbines.

And those jobs he promised? You didn’t actually think they were real, did you?

But perhaps the worst news he read this week was the story in the London Telegraph on Sunday with the headline “An ill wind blows for Denmark’s green energy revolution.” Denmark has long been the poster child of wind energy development—with the largest concentration of wind turbines of any nation on the planet. But the cost of this experiment is becoming too much for the Danes to bear. They’ve had enough of the lie that their country generates 20 per cent of its electricity from wind energy. It was never true.

Most of Denmark’s wind-generated electricity is exported to Germany, Norway or Sweden. The economies of each of these countries rely heavily on North Sea oil. Under the cap-and-trade scheme these European nations employ to try and stem greenhouse gas emissions, Denmark’s neighbours are pleased to receive the Danes’ electricity and earn the credits that allow them to pump more oil—while selling more reliable fossil fuel-generated power back to Denmark at a profit.

It’s a shell game in which no one can say for certain if Danish wind-powered electricity ever reaches a light switch or refrigerator. We can, however, say with certainty that Danish wind energy isn’t reducing carbon dioxide emissions.

So what powers Denmark’s economy? Coal, mostly. And for the privilege of appearing green, Danes pay some of the highest electricity rates in the world—about 30 cents per kilowatt hour (Ontario consumers pay between 5.3 cents and 9.9 cents per kilowatt hour).

The Danes have had enough.

From the London Telegraph story: Under public pressure Denmark’s ruling Left Party is curbing the handouts to the wind industry.

“Since 2005 alone, 5.1 billion kroner [C$900 million] has been paid to the wind turbine owners. That cost has been borne by businesses and private consumers,” says the party’s environment spokesman, Lars Christian Lilleholt. “It seems to have become a political fashion to say that there should be more support for wind. But we have to look at other renewables. We cannot go on with wind power only.”

So the romance with wind is over in Denmark. The same is true in Germany, where the government earlier this month extended the life of its nuclear fleet of generators by eight to 14 years. France, too, is scaling back its wind ambitions.

And what about Ontario?

According to calculations by the County’s own Parker Gallant, writing for the National Post, McGuinty has already committed about $25 billion to green energy programs and mandates on our behalf.

The question for Ontario residents is: how much more of taxpayers’ money will Dalton McGuinty waste on this fantasy? Are we truly unable to learn from the experience in Europe? Do we really have to make the same mistakes all over again?

rick@wellingtontimes.ca