Tuesday, June 17, 2025
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy
      • Economic Policy
      • Justice
      • Rights and Freedoms
      • Assisted Suicide (MAID)
      • Health Care
      • COVID-19
      • Gender Identity
      • Canada’s Political Tradition
      • AI, Technology and Innovation
      • Media and Telecoms
      • Housing
      • Immigration
      • Agriculture and Agri-Food
      • Competition Policy
    • Energy Policy
      • Energy
      • Environment
    • Foreign Policy
      • Israel-Hamas War
      • Ukraine
      • Taiwan
      • China
      • Europe and Russia
      • Indo-Pacific
      • Middle East and North Africa
      • North America
      • Foreign Interference
      • National Defence
      • National Security
      • Foreign Affairs
    • Indigenous Affairs
  • Projects
    • CNAPS (Center for North American Prosperity and Security)
    • The Promised Land
    • Voices that Inspire: The Macdonald-Laurier Vancouver Speaker Series
    • Dragon at the Door
    • Canada on top of the world
    • Justice Report Card
    • The Great Energy Crisis
    • DisInfoWatch.org
    • Double Trouble
    • Digital Policy & Connectivity
    • Managing Indigenous Prosperity
    • Defending The Marketplace of Ideas
    • Reforming the University
    • Past Projects
      • Canada and the Indo-Pacific Initiative
      • The Transatlantic Program
      • COVID Misery Index
        • Provincial COVID Misery Index
        • Beyond Lockdown
        • COVID and after: A mandate for recovery
      • Speak for Ourselves
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • An Intellectual Property Strategy for Canada
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
      • Centre for Advancing Canada’s Interests Abroad
      • Indigenous Prosperity at a Crossroads
        • Aboriginal Canada and Natural Resources
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Inside Policy
  • Libraries
    • Columns
    • Commentary
    • Papers
    • Books
    • Video
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy
      • Economic Policy
      • Justice
      • Rights and Freedoms
      • Assisted Suicide (MAID)
      • Health Care
      • COVID-19
      • Gender Identity
      • Canada’s Political Tradition
      • AI, Technology and Innovation
      • Media and Telecoms
      • Housing
      • Immigration
      • Agriculture and Agri-Food
      • Competition Policy
    • Energy Policy
      • Energy
      • Environment
    • Foreign Policy
      • Israel-Hamas War
      • Ukraine
      • Taiwan
      • China
      • Europe and Russia
      • Indo-Pacific
      • Middle East and North Africa
      • North America
      • Foreign Interference
      • National Defence
      • National Security
      • Foreign Affairs
    • Indigenous Affairs
  • Projects
    • CNAPS (Center for North American Prosperity and Security)
    • The Promised Land
    • Voices that Inspire: The Macdonald-Laurier Vancouver Speaker Series
    • Dragon at the Door
    • Canada on top of the world
    • Justice Report Card
    • The Great Energy Crisis
    • DisInfoWatch.org
    • Double Trouble
    • Digital Policy & Connectivity
    • Managing Indigenous Prosperity
    • Defending The Marketplace of Ideas
    • Reforming the University
    • Past Projects
      • Canada and the Indo-Pacific Initiative
      • The Transatlantic Program
      • COVID Misery Index
        • Provincial COVID Misery Index
        • Beyond Lockdown
        • COVID and after: A mandate for recovery
      • Speak for Ourselves
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • An Intellectual Property Strategy for Canada
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
      • Centre for Advancing Canada’s Interests Abroad
      • Indigenous Prosperity at a Crossroads
        • Aboriginal Canada and Natural Resources
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Inside Policy
  • Libraries
    • Columns
    • Commentary
    • Papers
    • Books
    • Video
No Result
View All Result
Macdonald-Laurier Institute

Chasing the wind – The value of wind generation in a low-emission nuclear and hydro-dominant grid: the case of Ontario

September 10, 2024
in Energy, Energy Policy, Papers
Reading Time: 3 mins read
A A
Ontario’s wind energy policies are failing taxpayers

By Edgardo Sepulveda
September 10, 2024

PDF of paper

Executive Summary

In 2018, the newly elected Ontario government passed one of its first pieces of legislation – to repeal the Green Energy Act (GEA).

Modelled on German legislation to promote wind and solar generation, the 2009 GEA initiated the largest use of guaranteed above-market price long-term contracts (FITs) in North America.

What caused Ontario Premier Doug Ford to pull the plug?

The GEA proved to be incredibly contentious locally and province-wide: it gave government the power to override local opposition to the installation of wind turbines and contributed to an unprecedented increase in electricity prices. Hoping to jump-start wind generation, Premier Dalton McGuinty’s government established high wind prices, fixed for 20 years, which averaged $151/MWh over the 2020–23 period.

As the sector grew, so did the fiscal liability of those contracts. Multi-billion-dollar government subsidies started in 2017 and will total $7.3 billion for the current fiscal year (Ontario 2024a), equivalent to 0.65 percent of provincial GDP (Ontario 2024b). No other government in Canada has subsidized its electricity sector by this much for so long. Unsurprisingly, the very German government that first introduced FITs is likewise under fiscal pressure due to ballooning subsidies (Sorge 2024).

This paper tells the economic story of wind generation in Ontario in several parts. First, we provide an overview of wind generation’s impact on electricity costs, prices and subsidies: to keep prices low, Ontario subsidizes 70 percent of the cost of wind. Second, based on regression and cost-benefit analysis, we show that the costs of wind far exceed its societal and climate benefits for the 2020–23 period, with average net cost of -$124/ MWh, due to financial (high prices) and structural factors. Due to its nuclear and hydrodominant generation and elimination of coal, Ontario is one of the lowest-emission large grids in the world. The climate benefit from any new zero-emission generation will be limited to the extent it can displace gas generation. Relative to other areas, Ontario’s wind capacity factors are modest and out of sync with gas generation, all resulting in a relatively low wind emissions offset (0.227 tCO2/MWh). Third, we calculate a cost-benefit “break-even” wind price of $46/MWh for the 2027–2030 period.

There are financial and structural challenges to aligning the public costs and benefits of wind generation in Ontario. Given the political defeat of the GEA, the province should have strong incentive not to “overpay” for wind within Ontario’s single-buyer system.

For legacy wind projects whose contracts will expire, we explore the benefits of the province implementing a wind re-contracting standard offer of $46/MWh for a maximum ten-year contract. Some wind operations would shut down, while others would recontract on those terms.

Among a broader set of options for new wind projects, one would be to continue with the private wind IPP contracts approach, but for the Independent Electricity System Operator (IESO) to design a competitive auction process with a maximum reserve price of $46/MWh. Another possibility would be to discard the contractual approach in favour of financing and compensating wind projects based on cost-of-service economic regulation. A third option would be to leverage the larger economies of scale and lower cost of public financing and have new wind projects publicly owned and operated, as is the case for about half the wind capacity in PEI and the thrust of the new strategy in Quebec.

Read the full paper here:

Tags: Edgardo Sepulveda

Related Posts

Canada should be a mining superpower, too: Heather Exner-Pirot in The Hill Times
Resources

Canada should be a mining superpower, too: Heather Exner-Pirot in The Hill Times

June 16, 2025
Want to build big projects, and fast? First Nations partnerships are key: Karen Restoule in The Hub
Indigenous Affairs

Want to build big projects, and fast? First Nations partnerships are key: Karen Restoule in The Hub

June 9, 2025
Empowering maritime First Nations: Improving treaty rights under the Marshall decision
Indigenous Affairs

Empowering maritime First Nations: Improving treaty rights under the Marshall decision

June 5, 2025
Next Post
Ontario’s wind energy policies are failing taxpayers

Ontario’s wind energy policies are failing taxpayers

Newsletter Signup

  Thank you for Signing Up
  Please correct the marked field(s) below.
Email Address  *
1,true,6,Contact Email,2
First Name *
1,true,1,First Name,2
Last Name *
1,true,1,Last Name,2
*
*Required Fields

Follow us on

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario, K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

  • Inside Policy Magazine
  • Annual Reports
  • Jobs
  • Privacy Policy

© 2023 Macdonald-Laurier Institute. All Rights reserved.

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.

Privacy Preference Center

Consent Management

Necessary

Advertising

Analytics

Other

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy
      • Economic Policy
      • Justice
      • Rights and Freedoms
      • Assisted Suicide (MAID)
      • Health Care
      • COVID-19
      • Gender Identity
      • Canada’s Political Tradition
      • AI, Technology and Innovation
      • Media and Telecoms
      • Housing
      • Immigration
      • Agriculture and Agri-Food
      • Competition Policy
    • Energy Policy
      • Energy
      • Environment
    • Foreign Policy
      • Israel-Hamas War
      • Ukraine
      • Taiwan
      • China
      • Europe and Russia
      • Indo-Pacific
      • Middle East and North Africa
      • North America
      • Foreign Interference
      • National Defence
      • National Security
      • Foreign Affairs
    • Indigenous Affairs
  • Projects
    • CNAPS (Center for North American Prosperity and Security)
    • The Promised Land
    • Voices that Inspire: The Macdonald-Laurier Vancouver Speaker Series
    • Dragon at the Door
    • Canada on top of the world
    • Justice Report Card
    • The Great Energy Crisis
    • DisInfoWatch.org
    • Double Trouble
    • Digital Policy & Connectivity
    • Managing Indigenous Prosperity
    • Defending The Marketplace of Ideas
    • Reforming the University
    • Past Projects
      • Canada and the Indo-Pacific Initiative
      • The Transatlantic Program
      • COVID Misery Index
      • Speak for Ourselves
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • An Intellectual Property Strategy for Canada
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
      • Centre for Advancing Canada’s Interests Abroad
      • Indigenous Prosperity at a Crossroads
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Inside Policy
  • Libraries
    • Columns
    • Commentary
    • Papers
    • Books
    • Video

© 2023 Macdonald-Laurier Institute. All Rights reserved.