Ontario Legislative Building - the Pink Palace is seeing red

Just a few weeks ago, Ontario’s Progressive Conservative Party was a no show at the Ontario Feed-In Tariff Forum. The Party provided a written statement instead of joining their political counterparts at the large gathering of industry executives.

This Tuesday, however, the party leader spoke up and it is not good news.

According to the Globe and Mail, “Ontario Progressive Conservative Leader Tim Hudak is pledging to reverse a key energy policy of the McGuinty government by ending generous, long-term contracts for wind, solar and other renewable-electricity projects.”

As part of the closed-door approach, Hudak committed to end the $7 billion Samsung deal and left an open question about his support for the overall Feed-In Tariff program. In fact, in his speech to the Ontario Power Summit Hudak declared “Also, we will end the FIT program.”

Until recently, Hydro One, the province’s transmission and distribution system operator, looked like it was leading the resistance on new PV installations. Though it is obligated to connect, Hydro One has refused connection to a number of projects, even small Residential microFIT systems, citing ‘system constraints’ as a vague rationale.

The Canadian Solar Industries Association (CanSIA) has been trying to work closely with Hydro One on their concerns, but have had difficulty in obtaining a technical explanation for these connection refusals.

Ontario Hydro did have the expertise

Hydro One, and its predecessor Ontario Hydro, have a decades-long history of working with renewables, distributed generation and grid-tied inverters – the key interface between solar projects and the grid.

At one time, Ontario Hydro Technologies was a recognized expert in these fields and was being actively sought out for its knowledge. Companies like Ballard Power Systems actively consulted with Ontario Hydro on inverter design and requirements as they developed their distributed power business. Ballard’s systems have since been shipped worldwide and ex-Ballard executives like ex-BC Hydro Chairman Mossadiq Umedaly have led inverter companies Xantrex (now owned by Schneider) and Enecsys.

Where utilities elsewhere in the world may be unfamiliar with these technologies, Hydro One should not be so surprised.

Wind is a Toronto Icon

Moreover, the wind turbine at Exhibition Place in Toronto has become a Toronto icon – ranking in recognition just behind the CN Tower – and was the first wind turbine installed in a major North American urban city centre.

The solar PV and wind industries have become international success stories, but blossomed elsewhere due to a lack of support in Ontario. Only recently, thanks to the Green Energy Act, has Ontario again become a centre of international activity.

Political agenda on the table

It now appears that the real challenges to Ontario’s wind and solar industry are political after all.

With five months to go before the Ontario election, the political heat is being turned up in a major way on these nascent industries.

Curiously, Hudak stated that he would “treat energy as economic policy.” Yet, this is exactly what the Green Energy Act has done.

The mandate for the Green Energy Act that created the Feed-In Tariff (FIT) was to create jobs. The FIT program has been very successful thus far on new job creation. ClearSky Advisors has forecast as many as 70,000 new jobs by 2015 – and that is just in Ontario’s solar PV industry. ClearSky is currently assessing the number of jobs that the wind industry will create. Meanwhile, the Samsung deal alone is expected to generate 16,000 new jobs. That is a lot of jobs in an economy decimated by auto industry cutbacks.

Aside from new jobs, the province is in dire need of an updated energy grid and supply. If anything, Hydro One’s system constraints should not be an excuse not to act, but the primary reason for connecting renewables. The FIT program has helped reveal how constrained and antiquated the Ontario energy grid is, and offers solutions.

Saying no as the official opposition can be a lot easier than developing new programs as the government in power. What can the Progressive Conservative party offer as a replacement to the Green Energy Act?

It is often easier in politics to say no, than to say yes.

Economy, environment and employment

Perhaps Hudak and the Ontario Progressive Conservative’s are basking in the after-glow of the recent victory by Harper’s Conservative Party of Canada. If so, they may want to consider the implications of the NDP’s historic surge given that party’s progressive outlook on the environment. That progressive environmental stance has become a strong factor in Canadian politics, and may yet have a significant impact on the Ontario election.

Will the Ontario PC’s look towards a little greenwashing to appease the left, or can they offer solid programs that can benefit the three ‘E’s’: Economy, Environment and Employment?

Lots of questions

In the run-up to the October election Hudak may now need to explain why he is willing to pay the penalties that the province may face in cancelling its Green Energy Act obligations. If they are elected, will the Progressive Conservative party go as far as overriding the Ontario Power Authority and cancelling the new energy contracts? If they do, assuming that they can afford the penalties, where will they get the power from to replace them?

Will the Conservatives simply ask Ontario to turn the lights off?

What programs will his party put in place to replace the new jobs and create more employment? And, what will they offer for an energy policy? What proposals will he promote to deal with an energy grid in dire need of extensive upgrading? Asking Ontarians to turn the lights and furnace off during the cold Ontario winter may not be all that politically appealing.

Why can emerging economies like India’s copy Ontario’s domestic content policies to their advantage?

Subsidies for PV are declining in other jurisdictions, but support for solar remains strong. Fortunately, the solar industry’s cost-reduction pace appears to be keeping up with subsidy reductions as market factors including consumer behavior begin to have a strong positive impact.

As Tim Wohlgemut, Co-Founder of ClearSky Advisors, observed “When you consider the economic impacts of solar, it is clear that it creates far more jobs than any other energy source while also decreasing health and environmental costs.”

Ontario needs solar

If they can look at the facts without their political filters on, Hudak and the Progressive Conservatives may find that Ontario needs solar after all.

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4 Responses to “Ontario Conservatives Come Out of Hiding on Solar and Wind”

  1. I think this is very short sighted, and is a shining example of how our political system works to get people elected. Your qoute “It is often easier in politics to say no, than to say yes” is a perfect example of showing the lack of insight many political leaders have on issues concerning the “anything” and expecially the enviroment. You would think with a name like “the conservative party” they would have some conservation in mind in respect to the enviroment. but unfortunatly the real conservative approach is be finacially conservative today and worry about the “anything” later.

    great post, informative, thank you

  2. Green energy is a political issue. Now we practically have a monopoly in energy generation. A monopoly that can dictate conditions and demand endless hidden subsidies. Distributed generation threatens their position and monopolists fight back.

    While being not in political power, they hold economic power very well. Conservative Party is a tip of of this iceberg, humble representatives of big money. If (when?) they come to political power, financial support of energy policy will be redirected to the big guys once again. Ontario needs energy and we are now at the watershed – renewable or nuclear/coal. Outcome of the next elections will set energy course for decades.

    Obama tries to stop century-long subsidies to big oil – http://greenq.ca/news/index.php/2011/obama-calls-to-stop-4bln-a-year-oil-subsidies/. What about Ontario post provincial elections 2011?

  3. Thanks Graham & Anatoli.

    CanSIA is currently putting together information on successes of the FIT program (job creation, investment, etc.). This is an excellent initiative.

    When the fact are in, the negative rhetoric will not be well supported.

    I am frequently asked by many of the major solar companies on my candid assessment of the program. That answer has been consistent: The situation is messy, unfortunately, but the province is better off with it than without it.

  4. Paco Caudet says:

    The FiT program also brings investment into the province, just as it has in other jurisdictions before. Remember that other FiT rates are being reduced after years of implementation. Ontario is in the starting blocks.
    So it’s not only jobs and energy that are at stake, there’s also money. And money talks, but it is not being heard, neither in the media nor through CanSIA.
    The manufacturers can get together and have their say, but there is much more at stake with investors, waiting for those NTPs. Without lenders there is no jobs, no energy, no grid.
    And don’t forget the thousands of small microFiT investors, voters who have put their savings into the programme. They should speak out too.

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