This seems difficult to imagine given the enthusiasm with which Ontario has rolled out new projects and bills supporting the province's 2030 Green Energy Challenge. According to President of the Canadian Renewable Energy Alliance, Jose Etcheverry, "we are at the forefront, not just in North America, but in the entire continent of the Americas…. There is not a single program that is comparable to what we have in Ontario right now, anywhere from Patagonia all the way to Alaska."
An Overview of Ontario's Renewable Energy Progress
To appreciate the weight of Etcheverry's claims, it helps to understand everything Ontario has accomplished to date:
- The feed-in-tariff (FIT) program, launched in October 2009, offers subsidized rates to renewable energy projects generating clean electricity from solar, water, wind, and biomass sources. All of these incentives are part of a bigger plan to decommission Ontario's coal-fired plants by 2014 and expand the province's transmission system.
- Ontario's domestic content program mandates that a percentage of all labour and parts be locally sourced form within the province - a maneuver that has as much to do with promoting green energy as it does with rebuilding a manufacturing industry hard hit by overseas competition.
- In this year alone, Ontario has announced over 694 separate renewable energy projects approved by government agencies. Representing nearly $9 billion in investment, these projects could directly create over 20K green jobs, not to mention countless ancillary employment opportunities in other sectors.
- Certification manuals and courses are undergoing radical changes as solar training programs increasingly phase out US codes in favor of guidelines specific to Ontario.
With progress like this, it is difficult to imagine any criticism arising from within the province. Jon Arnold, a solar consultant, says that "I think this is a really great opportunity for Ontario to take a leadership role. Ontario in particular (among the provinces) because of its population size - it's comparable to a lot of mid-size and larger American states - so the critical mass is here to demonstrate the economics of renewable energy."
However the praise is not uniform. Public policy and public support are often at odds as new technologies, legislation, and opportunities displace those of the less sustainable but more familiar fossil fuel era.
Wind farms, for example, not only generate clean power, but they also spur considerable debate from homeowners unhappy with the noise, sight, and bird deaths. And under new government regulations, municipalities and townships no longer maintain absolute control over what renewable projects they may accept or decline. Add to this the $8 billion of taxpayer money needed to subsidize many of these programs, and it becomes clear that Ontario's renewable energy push still has many hearts and minds to win over.
Rising Prices - Uncertain Support
Solar, wind, and biomass have long billed themselves as affordable alternatives to more traditional (and less clean) energy sources. However, across the board, households can expect to pay $300 more per year as the government continues to cut subsidies in certain areas in order to subsidize technologies in other areas. According to Arnold, "we've had a free ride. Subsidized energy doesn't reflect the real cost of producing it, and we're getting to the point now where the government is trying to catch up on that."
If these higher prices fail to deliver the job creation outlined in Ontario's legislation, the province could face dwindling support amongst the two groups more critical for widespread renewable energy buy-in; namely residential and commercial power producers.
Failure to marshal sufficient public support could ultimately derail the province's green energy initiatives. Even the best FIT programs will not always sway naysayers, and a strong Canadian dollar could put the squeeze on Ontario's manufacturing industry if it rebounds enough to export its own renewable energy technology.
One need look no further than Germany to understand the challenges associated with deploying an effective feed-in-tariff system. Once one of the most aggressive solar markets in the world, Germany began facing troubles once rising subsidy costs and a worsening economy made its FIT incentives prohibitively expensive. According to David Appleyard of Renewable Energy World, "given the lower initial expectations, the subsequently much larger number of qualifying installations has taxed the allocated budget. With the economy in decline, this has meant the generosity of the scheme has become less affordable." Germany had always intended to scale back FIT incentives over time, but with these new developments, it has had to accelerate its reductions ahead of schedule. Earlier this year, it cut FIT incentives by 10%, with several more reductions slated for the coming months.
The potential for rising costs and dwindling support explain why Etcheverry constantly reminds renewable energy producers across Ontario to invest in their communities and design their budgets with the understanding that energy prices will continue to rise, with or without subsidies. "What I encourage renewable energy developers to do is to think a little bit more broadly," said Etcheverry. "Once you're able to have tangible local benefits, support will only increase."