Ontario’s green energy goals face an uncertain future
Jobs provide incentive for added investment in renewables, associations say
Scott Smith expresses no angst about the future of renewable energy in Ontario. That’s impressive, because the recent provincial election saw Premier Dalton McGuinty and his chief rival for the post – Progressive Conservative Party leader Tim Hudak – repeatedly trade barbs over the province’s controversial Green Energy Act.
The ambitious – some would say foolhardy – program was unveiled in 2009 by McGuinty’s governing Liberal Party. Its goal was to eliminate carbon emissions from the electricity system (Ontario has 34,882 megawatts of installed electrical capacity) and position the province as a hub for green energy development. Hudak vowed to scrap the program if his party won the election. McGuinty, who was re-elected for a third term, but with a minority government this time, vowed to stay the course – sort of. During the campaign, McGuinty did pledge to reduce subsidies to the program’s signature feed-in-tariffs if he were elected to a third term. The tariffs guarantee green energy producers above-market rates for their power on 20-year contracts in return for buying up to 60 per cent of their project materials in the province.
Yes, it’s uncertain times for the renewable energy industry in Ontario, but Smith, vice-president of policy at the Canadian Wind Energy Association (CanWEA), is putting on a brave face. He says CanWEA and its members, which include wind energy owners, operators, manufacturers, project developers and service providers, are ready to roll up their sleeves and get to work. “We were prepared to work with whatever party was in place,” he says. “In the short term there is political uncertainty and that’s the nature of political campaigns. Long-term, the government has to look at what is the benefit of wind energy and what are the economics of it. At the end of the day, wind energy development is the right thing to do.”
For better or worse, the greening of Ontario’s electricity grid seems poised for a shakeup, one that could jeopardize some impressive investment numbers. CanWEA states that every 100 megawatts (MW) of new wind energy capacity built in Ontario represents 250 jobs per year during the development phase and 18 permanent operations and maintenance jobs. A recent study commissioned by CanWEA on the economic impacts of the wind energy sector in Ontario contends that meeting the wind energy targets in Ontario’s long-term energy plan would result in more than 80,000 person-years of employment and more than $16 billion in private sector investment, with more than $8.5 billion invested directly in Ontario’s manufacturing, construction and service sectors.
Smith says environmentally and economically, it would be folly for McGuinty’s Liberals to backtrack in any way on the green power goals set in 2009. “Those numbers can’t be ignored by any government,” Smith says.
Those involved in Canada’s budding solar energy sector likewise watched the Ontario election results closely. Hudak’s vow to do away with feed-in-tariffs was a concern, but so were the struggles of the McGuinty government in implementing its lofty green energy policies.
The solar industry has faced its share of challenges in Ontario. Last summer, it was revealed that 1,500 micro solar projects conditionally approved were stalled because there was no capacity to connect them to local electricity grids. That was resolved when Brad Duguid, the energy minister at the time, subsequently directed the Ontario Power Authority to allow the owners to move their projects to a spot where it was possible to feed solar power into the grid and generate revenue.
There have also been complaints about long waits for regulatory approvals. The delays and uncertainty have caused customers to cancel orders for solar panels, leading to layoffs among some of the province’s solar panel manufacturing businesses. Canadian Solar Industry Association (CanSIA) president and CEO Elizabeth McDonald has watched the situation and the provincial election closely. She agrees there have been rough spots in implementing the Green Energy Act, but insists it will get better with time. “This is really new. It hasn’t been perfect and to me that’s not unexpected,” McDonald says. “But I’m very confident solar power has a future. We have to diversify our energy mix in Ontario so we can get off coal. All the parties were in agreement on that.”
According to CanSIA figures, each megawatt of newly installed solar photovoltaic capacity requires approximately 44 jobs. Under optimal conditions, the solar sector in Canada could employ up to 41,000 people by 2025.
The leadership from these associations may not sound worried about the state of their industries in Ontario, but the view from the trenches is somewhat different. The uncertain future of Ontario’s renewable energy sector is even being felt in Alberta. Michael Carten, chief executive of Calgary-based Sustainable Energy Technologies remains uneasy about what is in store for his company. The firm makes solar inverters and the company was focusing its efforts on the Ontario market because the feed-in-tariff was driving demand for its product. But the recent struggles in Ontario for the solar sector has Carten thinking hard about the wisdom of that strategy. He told the Globe and Mail in August, “If I had thought that the utilities would simply not obey the rules and the government would do nothing about it, I would never have started here.”