Ontario’s Premier Dalton McGuinty and Energy Minister George Smitherman have introduced the Green Energy and Green Economy Act of 2009, a clean energy bill that would unleash $5 billion in spending over several decades and create 50,000 new jobs in three years.
It has been called bold, forward-thinking, transformational, a North American first and a potential turning point in Ontario’s entire economic history. Its passage is almost certain.
The act "could propel the province past California as the most innovative North American leader in the renewable energy field," said Earth Day founder Denis Hayes.
What a stark contrast to Ottawa. In January, Prime Minister Stephen Harper’s Conservative government killed off the nation’s main program for developing renewable energy in the federal budget. The move has been called a miserable failure and an environmental travesty.
Ontario’s bill targets three main areas: renewable power generation, energy efficiency with a focus on buildings and smart grid development. Its key feature is an advanced "feed-in tariff."
The tariff, modeled after successful policies in Germany, Spain and Denmark, would set the price Ontario is willing to pay for specific energy sources — wind, solar, hydro, biomass and biogas. Developers would sign contracts with the government, knowing in advance what they would earn: rates would be guaranteed for decades.
The system would create price certainty and reduce project risk for every developer and manufacturer in the Ontario renewable energy supply chain.
It won’t be the province’s first go at it. In late 2006, Ontario introduced North America’s first feed-in tariff program, known as the Standard Offer Contract Program. The tariff resulted in more than 1,500 megawatts of contracts but only 75 megawatts of capacity were built, largely out of transmission constraints. The program was iced in May 2008.
If anything, those numbers show the enormous market potential of clean energy in Ontario. The new bill would better tap that capacity, however, by creating a smart grid to make it easier for renewables to plug into the system.
Additionally, the bill would slash much of the red tape that has obstructed clean energy growth. It would guarantee clean energy developers the "right to connect" to the grid and assure their applications are processed within six months. And in a blow to NIMBYism — the "not-in-my-backyard" syndrome that has created roadblocks for new renewable energy — the bill would exempt clean energy projects from all municipal permit requirements.
New public buildings would be forced to be built to the Silver standard under the LEED rating system. Private buildings would have to undergo assessments for energy efficiency before sale.
Notably (and pleasantly) absent is investment in carbon capture and storage technology (CCS), which was the cornerstone of the energy section of Canada’s federal budget. In that case, CCS was a smokescreen to slip dirty oil sands development past the public, and at the expense of new clean energy.
Ontario, on the other hand, has committed to phase out coal by 2014, and it’s getting close. The province got nearly a quarter of its energy from coal five years ago. Today, that number is just seven percent.
The new bill is Ontario’s greenest leap forward yet, though question marks remain. For one, new nuclear is in the mix.
Nearly all of the province’s existing nuclear power plants will be coming to the end of their working lives in the coming decades. Ontario’s plan is to refurbish or rebuild them, with the goal of retaining its current nuclear capacity of 14,000 megawatts, or about half of its total electricity. Greenpeace opposes that decision:
The McGuinty government wants nuclear power to continue providing 50 per cent of electricity, creating a “nuclear ceiling” in the electricity system. The ceiling caps new renewable energy projects at 5,312 megawatts to allow space on the transmission grid for 14,000 megawatts of nuclear electricity. The proposed Green Energy Act does not remove the government’s self-imposed ceiling.
"You cannot build new reactors, mine uranium to fuel them and create radioactive waste and still be considered a green energy leader," said Greenpeace Canada Director Bruce Cox.
In addition, while Energy and Infrastructure Minister George Smitherman told the Toronto Star that the feed-in tariff would be "generous," the act did not specify a price, keeping investors and the industry in the dark. The tariff must be high enough to attract needed capital. Not an easy task in a credit-starved and slumping economy.
Still, confidence remains high, and industry groups have heaped praise on the government. "I hardly doubt the government would go through such an effort only to introduce a Green Energy Act that doesn’t have the beef," Kerry Adler, president and CEO of wind developer SkyPower Corp, told the Toronto Star.
The Canadian Wind Energy Association called the bill "an important step towards the achievement of CanWEA’s Wind Vision 2025 — which envisions 20% of Canada’s electricity provided by wind energy by 2025."
Toronto-based Trillium Power Wind Corp, an offshore wind developer, said the Ontario government is "way ahead of the game" and "Ontarians are going to significantly benefit."
The bill was released two weeks after Obama signed into the law the America Recovery and Investment Act of 2009. The signal is clear: Ontario is firmly on the side of change, while its national government clings to its fossil-fuel past.
Like Obama’s bill, Premier McGuinty’s plan is as much about the economy and industrial innovation as it is about the environment and climate protection. The province lost 71,000 jobs in January alone, many of them in the manufacturing sector. It is estimated that more than 1.75 million jobs will be created in the wind industry worldwide.
Ontario is now on track to capture a growing share of them.
There’s no mistaking it: A new direction in energy policy is underway in North America. Ottawa would be wise not to resist.