The CFFO Commentary: A Cloud Forms on the Horizon of Ontario’s Green Energy Future

The CFFO Commentary: A Cloud Forms on the Horizon of Ontario’s Green Energy Future

By Nathan Stevens
September 10, 2010

Glenn Fox of the University of Guelph recently shared his critique on the implementation of Ontario’s Green Energy Policy. His thoughts on the subject point to a serious test of the Province’s commitment to the development of renewable energy over the coming year.

The rationale that has been used to support the development of the industry is three fold. The first is an environmental commitment to reduce greenhouse gas emissions. The second is to find new energy sources that supplement the elimination of coal as a source of electricity. The third is to create a business environment to help our province be the North American supplier of renewable energy technology to the rest of the continent.

Fox argues that the trouble with renewable energy policy began when we used Denmark and Germany as our guiding lights for how to implement this policy. His prime example is that while it is true that 20 percent of the power generated in Denmark is from renewable sources, the timing of production is poor. The result is that renewable energy is sold cheaply into Norway and Sweden when there is an excess, and coal-powered energy is bought back into Denmark when production falls short. Essentially, he points out that the details aren’t always as bright as they appear on the surface.

Fox also criticised the quota approach being taken by the province with its differentiated pricing for various technologies. The lack of market competition both between different renewable sources and between renewable and non-renewable sources dampens the drive to innovate and remove costs from the system. This means that there is a real danger of the system allowing inefficiencies to grow in the long-term and that the industry may never truly mature.

However, the real test for Ontarians will come in 2011, when there is the possibility of a double digit increase in residential electricity bills. Some argue Green Energy production and the infrastructure costs associated with it will constitute 50 percent of that increase. The question is - will the general commitment to renewable energy survive a direct hit to ratepayer’s pocketbooks?

Glenn Fox identified a serious test of Ontario’s Green Energy Policy on the horizon. Can the commitment to the renewable energy sector in Ontario survive a direct confrontation to Ontarians’ pocketbooks? With 2011 also being an election year, there is sure to be a lot of debate on the strengths and weaknesses of Green Energy in the months ahead.


Nathan Stevens is the Research and Policy Advisor for the Christian Farmers Federation of Ontario. The CFFO Commentary represents the opinions of the writer and does not necessarily represent CFFO policy. It can be heard weekly on CKNX Wingham and CFCO Chatham, Ontario and is archived on the CFFO website: www.christianfarmers.org. The CFFO is supported by 4,300 farm families across Ontario