Maureen Bader: B.C. Clean Energy Act promotes corporate welfare scheme
One of the excuses the B.C. government gave for springing the HST on unsuspecting taxpayers was because Ontario was doing it. Seems the government wants to copy Ontario in other ways as well. The release of B.C.’s new Clean Energy Act in April has B.C. competing with Ontario to see whose handouts will “attract” the most so-called clean and green energy investment in Canada. “Attracting” clean energy investments will somehow keep electricity rates competitive and create jobs. However, the evidence from both Ontario and abroad is clear: green-energy corporate welfare leads to higher energy prices and fewer jobs.
Creating a more generous green-energy subsidy scheme than Ontario’s won’t be easy. Since May 2009, the Ontario government has been paying a guaranteed rate to renewable energy companies—one that is higher than what these companies would otherwise receive. The Ontario government pays 13 cents per kilowatt hour for electricity produced from biomass, 13.5 cents from wind, and 44 to 80 cents from the sun.
This will drive up the cost of electricity for Ontario families. In April 2009, an average homeowner in Toronto paid 11.46 cents per kilowatt hour for electricity. The guaranteed green rate will drive that cost up to about 14.5 cents in 2011. It means the average family in Ontario will pay an extra $300 per year to heat their home and cook their food.
However, Premier Gordon Campbell has indicated quite clearly he’ll try to do a better job than Ontario to create a high-cost energy environment. He said, “There is not a jurisdiction that won’t try to win the clean-energy race.” Ontario’s commitment to subsidize energy sources has made it the most expensive energy market in Canada—do we really want to be in this race?
In comparison, B.C. ratepayers now pay B.C. Hydro between 6 and 8.3 cents per kilowatt hour for power. B.C. Hydro has already announced its rates will probably go up by 29 percent over the next three years, but that’s before the increase it will need if B.C. ratepayers are forced to subsidize high-cost energy producers.
Can you say wood-burning stove?
Why might Ontario premier Dalton McGuinty want to force Ontario families to pay more to heat their homes in the winter? The Ontario government is desperate to appear to be doing something about declining employment in manufacturing. Premier McGuinty promises to create more than 50,000 jobs with his new Green Energy Act.
Will it work? Probably not.
Spain is often pointed to as an example of green subsidy success. However, a study by researchers at the Universidad Rey Juan Carlos in Spain showed that subsidies to clean power producers destroyed jobs in metallurgy, non-metallic mining, and food processing, and the beverage and tobacco industries. Most of the renewable energy jobs created in Spain were temporary and created in the construction of the renewable energy projects. Only one-in-ten jobs in the “green” energy sector was a permanent job and included those in operation and maintenance of the renewable sources of energy. The study found it cost almost $900,000 to create each “green” job in Spain. The unemployment rate in Spain now hovers around 20 percent.
The lessons here are clear: large-scale corporate welfare schemes that promote ecofads are expensive failures. If we really want to be competitive with Ontario, we would maintain our low-cost energy advantage, not throw it away. Governments have proven again and again that forcing taxpayers to fund subsidy schemes that try to pick winners makes losers out of competitors, taxpayers, and consumers.
Maureen Bader is the B.C. director of the Canadian Taxpayers Federation.
Comments
4 Comments
Mob Barley
May 6, 2010 at 4:02pm
So how is that anti-HST fight going over at the CTF ?
Oh, never mind, the CTF supports it.
Jose
May 6, 2010 at 5:16pm
Maureen,
You whine all the time, but I never see any proposed alternatives. How else should BC keep the lights on, create jobs and reduce GHG's (oh forget the last one - we know you're a denier)?
It does not help the electricity debate if you just NIMBY up everything. Status quo is not sustainable.
Jose
Vancouver
seth
May 6, 2010 at 8:11pm
Canada's only alternative to ultraexpensive and GHG spewing wind and Hydro is cheap, clean and green nuclear power.
Wind is dirty because it needs so much natural gas or hydro to load balance it, hydro because it produces immense quantities of methane spewing rotting vegetation. Methane has 25 times the GHG effect of CO2
"The study at ELA demonstrated huge increases in the production of both methyl mercury and greenhouse gases following flooding. It examined in detail how the methyl mercury is produced, and showed that large reservoirs can contribute significantly to climate change, if they flood large areas of vegetation."
http://www.dfo-mpo.gc.ca/regions/CENTRAL/pub/ela-rle/index-eng.htm
The Gordo is currently quoting a 33% Hydro increase over four years using the old slow boiling of the frog technique to get taxpayers used to the evenual doubling of rates. Each year more increases will be announced.
Any analysis of BCHydro's 2009 annual report and the 2010 power call shows BCHydro has committed to $65B in new stockbroker provided IPP power at 12.6 cents a kwh, that power rates will have to more than double to cover the cost by 2013 and BC's on the books $45B in debt would have to be increased to $120B to cover PPP's and IPP committments.
Today May 6th, BChydro is buying Pirate power at 12.6 cents a kwh and selling it on the spot market for 3.4 cents daytime and giving it away free weekends and evenings like a cell phone contract.
Now thats Gordonomics!!!
See my comment on Will McMartin's story at the Tyee for more.
http://thetyee.ca/News/2010/03/22/Finavera/
Now add $10B for Site C at 11.5 cents a Kwh to sell at the same price.
With current US nuke power cost at 3 cents a kwh (OECD data) and new nuke power dropping to under one cent in the ten year time frame, most of the entire forty year $75B in IPP purchases/Site C investments will be worthless.
One $3B Candu complex at Burrard Thermal would produce the same amount of power as the $75B but of the much more valuable baseload type saving hundreds of square miles of BC forest, farmland and rivers - 3% the cost.
While Dolton McWhinney in Ontario is paying much more than the Gordo for his crazed renewable schemes, to date he has only announced $17B in worthless renewable purchases in a province with three times the energy production of BC. OPG announced as well that it was going ahead with nuclear power upgrades of some kind. That $17B for .3 Gw average is worth $.6B if nuclear - 3% the cost.
The nuke power is high value baseload. Run of river and wind is worthless unpredictable intermittent power that often has to be given away just to balance the grid.
At the end of four years 75% of BCHydro's revenue will be going to pay off Gordo's Pirate cronies while a much smaller portion of Ontario energy costs will go to Ontario's IPP's.
Only when you look at the millions the Gordo and the Dolt will be able to make post politics on board of director appointments, lobbying and consulting fees, and corporate speaking engagements does the scam make sense.
With Alberta and Washington State planning cheap clean and green nuclear power builds and BCHydro's rates needing to double just to pay for worthless energy delivery contracts. BCHydro will surely have to go bankrupt.
seth
glen p robbins
May 11, 2010 at 12:21pm
Following Ontario is a mistake--we have already done this with legal precedent for too long.
Once Campbell and the others are taken to scaffold--BC needs to move swiftly to adopt its own leadership--allowing other provinces to copy our lead if they choose.