Response to The Wacky World of Green Power in The Globe and Mail, April 10

In The Wacky World of Green Power (April 10), Globe and Mail columnist Margaret Wente states that incentive programs for renewable power such as Ontario’s Feed-In Tariff “achieve little or nothing of any social benefit”. She also writes “Renewables simply can’t produce the large volumes of reliable energy that our economy needs.”

Wente covers a number of important issues in her column, but some of her assumptions are simply incorrect. Renewable energy does provide social benefit – in the form of cleaner air, reduced societal health care costs, reduced carbon emissions and quantifiable future operating costs when compared to potentially uncertain future fossil fuel prices.

Importantly, renewable energy can account for a significant share of electricity supply. In Germany it has already risen from 6% of supply in 2000 to 15% in 2008, with the government target for 2020 set at 27%. Increased dependence on renewables is not just a European phenomenon – on March 23 the governor of Colorado signed into law a bill requiring 30% of all energy to come from renewable sources by 2020, including 3% from solar power.

Wente concludes that most forms of renewable power are simply too expensive, save for hydro power from Northern Ontario. There is no question that Ontario’s Feed-In Tariffs are high compared to the cost of power generated from fossil fuels using fully depreciated plants. There are several valid reasons for these rates, including the government’s desire to kick-start the renewable energy industry, attracting investment and creating jobs; the fact that the most expensive (solar) power is mainly generated at peak times when grid electricity is expensive and new capacity most needed; and the fact that renewable generation can be situated close to where power is used, reducing the need for new grid infrastructure.

Finally, Wente talks about incentives stimulating a “speculative boom” with “inefficient, poorly designed plants. Nothing could be less likely. Unlike most other generating projects, in which rate-based utilities take on project and construction risk, Ontario’s Feed-In Tariff for renewable pays only for the kilowatt hours actually generated. It shifts all of the risk away from ratepayers and onto private developers – forcing them to be cautious and to design the most efficient plants possible. The program ushers in a new era in which the government and ratepayers are not standing by, ready to bail out cost overruns or pay for system downtime.