How not to design an energy policy

WindsunWindsun Solar Expert Posts: 1,164 ✭✭
We don't usually allow editorial or political type posts in this forum, but this caught my eye as a classic case of government gone mad:

http://www.thestar.com/news/insight/article/897359--green-goals-bigger-bills
...electricity prices have soared 18 per cent this year. Sharp, who analyzed the electricity market through the lens of the GEA last summer, forecasts a 26 per cent hike in rates in 2011, which he said would translate into a price jump of 3.04 cents per kilowatt hour (kWh) and add about $304 to a typical consumer's electricity bill in 2011....

Comments

  • Ralph DayRalph Day Solar Expert Posts: 923 ✭✭✭✭
    Re: How not to design an energy policy

    Ah, but you've got to bear in mind we in Ontario are not paying the real cost of energy, and haven't for generations. The provincial utility (recently broken into several parts) was/is a monopoly with little government oversight. The cost of Nuclear (it'll be so cheap we won't even have to meter it!) is still being paid for decades later (stranded debt), and being produced/sold for 4cents per kwhr. That's nowhere near what the longterm costs of producing it are.

    Our peak rate now is 9.9cents perkwh, off peak 5.9cents. Some of that peak power is probably bought from out of province so the spot market price is nowhere near 9.9 cents.

    The provincial government is trying (I have a microFIT system) but all anyone thinks about is the bottom line NOW, not in 25 years time.

    Ralph
  • stevendstevend Solar Expert Posts: 34
    Re: How not to design an energy policy

    Ditto what Ralph said. Also, Ontario is largely a manufacturing province and we've lost a lot of it in recent years. Part of the purpose of the Green Energy Act is to spur on a green economy. I collect articles about progress along those lines. Here's a small sample (some links no longer work so I put opening paragraphs instead):
    http://www.solarbuzz.com/news/NewsNAMA238.htm
    http://www.cleanbreak.ca/2010/08/11/1000-mw-of-solar-module-capacity-announced-in-ontario-so-far-and-here-are-the-players/
    http://www.renewableenergyworld.com/rea/blog/post/2010/10/opportunities-abundant-as-ontario-moves-closer-to-a-green-economy
    http://www.solarbuzz.com/news/NewsNAMA237.htm
    http://www.solarbuzz.com/news/NewsNAMA234.htm
    http://www.solarbuzz.com/news/NewsNAMA229.htm
    June 8, 2010
    Padova, Italy: Silfab Plans 120 MW Module Assembly Facility in Canada.
    Silfab is planning anew highly automated PV module production site based in Ontario (Canada) with a capacity of 120 MW to be reached in two stages
    ...
    SMA Solar Technology AG strengthens its presence in North America with solar inverter production, sales and services in Ontario, Canada.
    ...
    December 3, 2009
    Kitchener, Canada: Canadian Solar to Build Solar Panel Manufacturing Facility in Ontario
    ...

    Also, there's the health issue. From this document:
    http://www.mei.gov.on.ca/en/pdf/MEI_LTEP_en.pdf
    "Worst of all, Ontario relied heavily on five air-polluting coal plants. This wasn’t just polluting our air, it was polluting our lungs. Doctors, nurses and researchers stated categorically that coal generation was having an impact on health increasing the incidence of various respiratory illnesses. A 2005 study prepared for the government found that the average annual health-related damages due to coal could top $3 billion. For the sake of our well-being, and our children’s well-being, we had to put a stop to coal."
    And from the charts on page 11 you can see that from 2003 to 2010, coal's contribution to generation has gone from 25% to 8%.

    I could go on and on but suffice it to say I'll be voting for this government again and this Green Energy Act is among the reasons.
    -Steve
  • WindsunWindsun Solar Expert Posts: 1,164 ✭✭
    Re: How not to design an energy policy

    What struck me most about it was that it seems to be designed - like so many US programs - as more of a social policy than an energy policy, which in the past has led to some problems. The massive feed in tarrifs - the highest in the world - are a speculators dream. It is the same thing that led to the collapse of the "green" push in Spain.
    The Swedish retail giant IKEA announced Thursday it will invest $4.6-million to install 3,790 solar panels on three Toronto area stores, giving IKEA the electric-power-producing capacity of 960,000 kilowatt hours (kWh) per year. According to IKEA, that's enough electricity to power 100 homes. Amazing development. Even more amazing is the economics of this project. Under the Ontario government's feed-intariff solar power scheme, IKEA will receive 71.3¢ for each kilowatt of power produced, which works out to about $6,800 a year for each of the 100 hypothetical homes. Since the average Toronto home currently pays about $1,200 for the same quantity of electricity, that implies that IKEA is being overpaid by $5,400 per home equivalent.
    Read more: http://www.financialpost.com/Power+failure/3641528/story.html#ixzz16UwrXOh9
  • icarusicarus Solar Expert Posts: 5,400 ✭✭✭✭
    Re: How not to design an energy policy

    It can be argued that energy policy as an arm of social policy is not always a bad thing.

    Since we don't have a truly free market in almost anything, relying on the market solely to invoke change also does not always work. If subsidizing RE in an attempt to further the technology and the acceptance of that technology can be a good thing.

    As has been stated before, most of us have not been paying the full "cost" of our energy choices for decades, if you calculate in the environmental cost. (See also Nuclear/tar sands/ CO2 from coal etc). The simple fact is that the cost of energy is going to rise regardless, and to use the argument that we shouldn't adopt newer/cleaner/better technology simply because it is more expensive is silly. We will pay the cost one way or another, and in the case of higher energy prices paying it up front as opposed to a decade or more down the road makes intuitive sense, even though it may cost us more today!

    Once again, teetering pretty close to the edge of political comment that might be left to other forums, IMO.

    Tony
  • stevendstevend Solar Expert Posts: 34
    Re: How not to design an energy policy
    Windsun wrote: »
    What struck me most about it was that it seems to be designed - like so many US programs - as more of a social policy than an energy policy, which in the past has led to some problems.

    You're probably right. Here's text from the Green Energy Act itself:
    "The Government of Ontario is committed to fostering the growth of renewable energy projects, which use cleaner sources of energy, and to removing barriers to and promoting opportunities for renewable energy projects and to promoting a green economy.
    The Government of Ontario is committed to ensuring that the Government of Ontario and the broader public sector, including government-funded institutions, conserve energy and use energy efficiently in conducting their affairs.
    The Government of Ontario is committed to promoting and expanding energy conservation by all Ontarians and to encouraging all Ontarians to use energy efficiently."
    Source: http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2145

    Sure the $0.71 per kWh is ridiculously high, and so's the $0.80 per kWh for <10kW systems, but that's not just paying for power. That's paying for the creation of a green industry from scratch. To take a small example, previously the company I contract out to had two fulltime guys and a stringer, me. Now they have seven fulltime guys as a direct result of this feed-in-tarriff.

    Incidentally, the article of your first post was wrong about the price change for <10kW systems. It's still $0.802/kWh for rooftop. Only the ground mount systems were reduced to $0.642. That immediately cut back around 85% of applications. The article was also wrong in that the big flood of applications was before the cut. The cut was done specifically because having all the ground mount systems also at $0.802 was not affordable. So the government isn't just spending with abandon. The 85% reduction estimate comes from the number of customers who changed their minds where I work as a result of the cut.

    Is it sustainable? I have my doubts alongside my hopes that it is. Personally, social policy is what I'm interested in, not just how to produce cheap energy regardless of consequences. I want clean, renewable energy that doesn't cause health problems, pollution or contribute to climate change. Some of that may require social changes - conservation, willingness to pay higher prices if that's what it takes, changing energy usage patterns to lower peak demand, ...

    Likely it will fall apart as in the coming election, the opposition will take the opposite stance, and if elected, dismantle it all.
    -Steve
  • Ralph DayRalph Day Solar Expert Posts: 923 ✭✭✭✭
    Re: How not to design an energy policy

    Do you think a new government would buy out my 20 year contract? Then I could net meter and drive all electric vehicles...charge one on one day, drive the other, then rinse and repeat.

    Ralph
  • WindsunWindsun Solar Expert Posts: 1,164 ✭✭
    Re: How not to design an energy policy
    stevend wrote: »
    Is it sustainable? I have my doubts alongside my hopes that it is. Personally, social policy is what I'm interested in, not just how to produce cheap energy regardless of consequences. I want clean, renewable energy that doesn't cause health problems, pollution or contribute to climate change. Some of that may require social changes - conservation, willingness to pay higher prices if that's what it takes, changing energy usage patterns to lower peak demand, ...

    Likely it will fall apart as in the coming election, the opposition will take the opposite stance, and if elected, dismantle it all.
    -Steve

    We have been around in the solar business for almost 35 years, and this is about the 3rd or 4th go around for high RE subsidies. The previous 2 or 3 crashed and burned big time when the subsidies and incentives were cut drastically or elminated. A total cut may not happen this time around, but anytime you pin your prosperity or business on government programs ruled mostly by political concerns, you are on shaky ground.

    The last couple of times we saw dozens of companies go under - and a lot of them deserved it, especially many of the SHW ones. Even as recently as last year, when California cut their rebates from $4 something to about half, I know of at least two companies that went under, and there were probably dozens more we never knew about. To be fair, some of the reason was also the local governments jumping on the bandwagon to extort high fees for permits etc.

    Diversity is the key - anyone that has a sole source of revenue is always in a dangerous situation, no matter what the industry is.
  • stevendstevend Solar Expert Posts: 34
    Re: How not to design an energy policy
    Windsun wrote: »
    The last couple of times we saw dozens of companies go under - and a lot of them deserved it, especially many of the SHW ones.

    I wasn't involved in solar back then but I've heard about the SHW debacle and how it damaged the industry for a while.
    Windsun wrote: »
    Diversity is the key - anyone that has a sole source of revenue is always in a dangerous situation, no matter what the industry is.

    To have a large PV solar industry, doesn't it still come down to price of PV relative to other power sources? Relatively few private individuals are willing to shell out the big bucks for PV while taking into account all the real costs (see posts above.) The others do it out of necessity: cottege country, distant enough from the grid such that it's cheaper to go PV than get a line strung out, frequent and prolonged grid power outages. Those latter support only a small industry, not one the size that subsidies make possible, or that should exist when all real costs are accounted for. I'd be interested to hear your thoughts on that.
    -Steve
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