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Ford government spending $231M to cancel renewable energy projects


Jason

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Wasting hundreds of millions of dollars to own the libs.

 

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At the project, located two hours east of Toronto, cranes started arriving last month to tear down 100-metre-tall wind turbines that were just built and ready to be switched on. The project was more than a decade in the making and was expected to produce enough energy to power more than 60,000 homes over the length of its contract.

 

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I'm slightly confused. The article mentions that the cancellations would save the government $790M in the long term, but I can't really figure out what kind of deal was in place. Was this a tax break or subsidy or loan or what? Wind power should be pretty market competitive, so it doesn't make sense for a government to fund it all directly, but this project doesn't seem big enough to justify so much in incentives. I would guess that the government was going to be paying out a lot of money, but they'd get repaid over time or something.

 

 

When I was trying to figure out what was going on, most of what I found were a bunch of small time articles complaining about the wind farm. As a complete aside, I was recently in northern Scotland where they have recently put up some massive on and off-shore wind farms. Individual turbines dotted the landscape. When I asked people about them, the locals largely seemed proud of them. They'd brought some jobs to relatively isolated communities and they seemed happy to be "green." I wouldn't be surprised if those turbines had faced similar local opposition, but once they're in place I doubt most people continue to feel strongly about them.

 

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19 hours ago, TwinIon said:

I'm slightly confused. The article mentions that the cancellations would save the government $790M in the long term, but I can't really figure out what kind of deal was in place. Was this a tax break or subsidy or loan or what? Wind power should be pretty market competitive, so it doesn't make sense for a government to fund it all directly, but this project doesn't seem big enough to justify so much in incentives. I would guess that the government was going to be paying out a lot of money, but they'd get repaid over time or something.

 

 

When I was trying to figure out what was going on, most of what I found were a bunch of small time articles complaining about the wind farm. As a complete aside, I was recently in northern Scotland where they have recently put up some massive on and off-shore wind farms. Individual turbines dotted the landscape. When I asked people about them, the locals largely seemed proud of them. They'd brought some jobs to relatively isolated communities and they seemed happy to be "green." I wouldn't be surprised if those turbines had faced similar local opposition, but once they're in place I doubt most people continue to feel strongly about them.

 

The former Liberal government signed some long term contracts to provide power at fixed prices (many that are multiples of the "market rate")-- along with a minimum purchase volume.  (I,e,  a commitment from the government that they would receive $X per KWH for the next 20 years, and guaranteeing to purchase a minimum amount of power).  This has been funded by a "Global Adjustment" on Ontario power bills.  Some facts

*  15% of the Global Adjustment is due to contracts associated with solar/bioenergy, despite them only producing 3% of Ontario's power

*  Between 2008 and 2017, the cost of electricity rose 71% in Ontario, compared to 34% in the rest of Canada

*  The June 2019 rate adjustment, increased residential power costs in Ontario by a further 17%

*  Fraser institute study showed Ontario businesses pay 65% more for electricity than in the rest of Canada

Using data compiled by Hydro-Québec, the study compares the hydro bill (including taxes) for a typical household using 1,000 kWh per month in selected cities, as of 2016: 

  • Montreal: $83.08
  • Winnipeg: $97.50  
  • Calgary: $109.19
  • Vancouver: $114.38
  • Halifax: $166.80
  • Ottawa: $182.51
  • Toronto: $201.23

I haven't seen any data on the specifics of the cancelled contracts, but if they are like some of the other green energy contracts that are currently in place (paying private companies multiples of the market rate to generate electricity), I'm not surprised that paying the penalties is cheaper than putting some of these ideas into production.

 

Edit:  And before this turns into a global warming discussion.  Ontario only produces 4% of its power from oil/gas, none from coal and is a net exporter of power.

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