Blowing our tax dollars on windmills
Who doesn't love windmills?
The very word conjures up nostalgic images of solitary brick or wooden towers with vanes set against picturesque fields. Of course, wind farms nowadays are filled with row upon row of tall, steel tube towers, but even these wind turbines have a sparse, modern beauty to them.
The thing is, wind power is also expensive. In Quebec, it's about 2.5 times more expensive to produce than hydroelectricity from large dams in the James Bay area (roughly 14¢ versus 5.5¢ per kWh), which account for most of the electricity produced by Hydro-Quebec.
Moreover, the province has more energy than it needs, which is why the government cancelled six small hydroelectric projects earlier this year. If that's the case, why are Quebec taxpayers still indirectly subsidizing the wind power industry to the tune of $695 million a year? And why is the government announcing new supply contracts for wind power?
The government claims it is "investing in the future." But it is surely no coincidence that most of the jobs created by these subsidies are concentrated in one region, the Gaspe Peninsula, where there is high unemployment. Politicians know how to use high-flown language to buy votes.
Ontario has invested more than any other province in wind power, with just over 2,000 MW of installed capacity, according to the Canadian Wind Energy Association. (Quebec is second with some 1,700 MW, followed by Alberta with 1,100 MW.) But Ontario, like Quebec, also has more energy than it needs.
According to a recent Fraser Institute report, since 2006, around 80% of the wind power generated in the province has occurred "at times when it was unneeded, in other words when at least as much power production was being dumped on the export market."
The province's Green Energy Act (GEA) ensures that the system operator will buy all available wind power at 13.5¢ per kWh, whereas prices received for exported power are typically less than 4¢ per kWh.
Of course, Ontario is currently reliant on many coal-fired power plants, which adds a pollution dimension that does not exist for Quebec with its mainly hydro-powered grid. Yet the same Fraser report calculates that retrofitting Ontario's coal-fired plants could have produced roughly equivalent environmental benefits at a much lower cost.
Unfortunately, what it comes down to is that even clean coal is just not sexy enough. And so Ontario, like Quebec, is throwing taxpayers' hard-earned dollars into the wind.
Michel Kelly-Gagnon est président et directeur général de l'Institut économique de Montréal. Il signe ce texte à titre personnel.
* Cette chronique est publiée dans les journaux de Sun Media, tant dans ses quotidiens présents dans plusieurs des marchés urbains canadiens les plus importants (Toronto, Ottawa, Calgary, Edmonton, Winnipeg et London) que dans ses 28 quotidiens régionaux.