The rising cost of electricity, and its impact on electricity users, has become a key topic of discussion in the Ontario election campaign. While all parties are committed to ensuring Ontario’s power supply is reliable and priced to support business growth and economic priorities, their plans to meet that objective differ. One example of this is in their approach to wind energy development.
PC Leader Tim Hudak believes wind energy has been a key driver of rising electricity bills in Ontario. In reality, independent analysis by The Power Advisory indicates that wind energy accounted for only 5 per cent of the increase in our electricity bills between 2009 and 2012, with the bulk of rising rates due to expensive upgrades of decades-old power plants and transmission systems.
What about future electricity cost increases? All new electricity generation is more expensive than existing generation. Wind energy is cheaper than new nuclear power and cost-competitive with new hydroelectric development. It is also not subject to the risks of rising costs that natural gas faces as a result of fuel price variability and a potential future price on carbon emissions to address climate change. Any political party that advocates a shift away from wind energy needs to demonstrate how their proposals for new electricity generation will be cheaper — it will be challenging to do so.
Mr. Hudak has spoken out against wind energy subsidies. In reality, wind energy projects, like most new electricity generation in Ontario, receive long-term contracts that contribute to price certainty and to keeping Ontario electricity rates stable and competitive. Wind energy developers absorb almost all of the upfront costs in developing their projects, which means no front-end or long-term risks to taxpayers and ratepayers. In addition, the cost of developing wind energy projects continues to fall sharply as new turbine technology boosts output, and economies of scale reduce production and supply costs. Lower costs for wind are being reflected in lower contract prices being offered by the Government of Ontario to procure new wind energy.
Since 2009, the annual supply of wind energy that heats, cools and lights our homes, businesses and schools has doubled to 5.2 terawatt hours — rising steadily to meet over 3 per cent of our electricity demand, which equals the power needs of more than 500,000 average Ontario homes.
Wind energy developments are also creating well-paying, high-skilled jobs and providing communities with additional revenues to meet essential services. Since 2009, wind energy companies have spent more than $5 billion in Ontario to provide a clean energy supply and build new manufacturing facilities while providing opportunities for local businesses and new jobs for graduates.
A key economic driver for Ontario is a responsive, cost-competitive electricity system that respects the environment. A steady stream of new wind energy complements energy conservation, and provides Ontario with much-needed flexibility to align electricity supply needs with changing economic and environmental circumstances.
Robert Hornung is president of the Canadian Wind Energy Association. He lives in Ottawa.