OTTAWA, ON (September 10, 2024):
In Chasing the Wind: The value of wind generation in a low-emission nuclear and hydro-dominant grid: the case of Ontario, Edgardo Sepulveda exposes the staggering costs Ontario taxpayers have been forced to bear due to the province’s misguided wind energy policies.
The paper highlights how the Green Energy Act’s (GEA) procurement strategy has not only led to inflated energy prices but also jeopardized the long-term sustainability of Ontario’s energy landscape. It contributed to a ballooning of electricity prices, which resulted in an unprecedented subsidization of wind and other costs that now total $7.3 billion a year.
Sepulveda’s analysis critiques Ontario’s reliance on privately owned wind projects, supported by bloated fixed-price contracts. This approach has handed massive profits to private developers while locking Ontario’s taxpayers into a cycle of ever-increasing energy bills. The burden on the public purse is heavy, and the paper makes it clear: the current system is clearly inefficient.
The paper criticizes the cost-of-service approach to pricing, where Ontario’s residents are shackled to high, guaranteed returns for private developers, with little room for innovation or cost-cutting. In contrast, the study argues that publicly owned wind projects could have mitigated these costs by taking advantage of economies of scale and significantly cheaper public financing, which would deliver far better value to Ontarians. Sepulveda explains that despite significant financial investment, the societal and environmental benefits of wind energy in Ontario do not justify the costs. Specifically, the paper demonstrates that the net cost of wind energy is negative, meaning that the costs to the province (such as the financial burden of subsidies) outweigh the environmental benefits. Ontario’s grid already relies heavily on low-emission sources like nuclear and hydro, meaning wind power’s added benefit in reducing emissions is limited.
The paper calls for an immediate reassessment of Ontario’s wind energy policies. As taxpayers continue to foot the bill for an inefficient and profit-driven system, it is crucial that policy-makers rethink their approach to wind energy. A shift towards public ownership, Sepulveda argues, could reduce the burden on taxpayers and ensure a more affordable and equitable energy future.
To learn more, read the full paper here:
Edgardo Sepulveda is a regulatory economist with more than three decades of experience in the telecommunications and electricity sectors. He has advised governments, regulatory agencies, companies, unions, and consumer advocates in more than forty countries.
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