Proposed Act would create significant economic uncertainty, put local jobs and investments at risk
Ottawa, March 8, 2012 – The Canadian Wind Energy Association (CanWEA) strongly opposes the private Members Bill introduced in the Legislative Assembly yesterday by Ontario Progressive Conservative leader and MPP Tim Hudak (Niagara West-Glanbrook). The Affordable Energy and Restoration of Local Decision Making Act proposes to end Ontario's Feed-in Tariff (FIT) Program which would create significant policy uncertainty and put local jobs, investments, and new manufacturing at risk.
The proposed Act further ignores the sanctity of signed contracts by opening the door to the possibility that such contracts can be revoked. Such actions would create significant uncertainty among investors looking to new opportunities in Ontario and expose Ontario to the risk of paying damages to investors who have already made good faith investments in the province.
"The FIT Program has successfully attracted investors to Ontario from around the world, facilitating investment and job creation that has made Ontario a North American leader in renewable energy development," said Robert Hornung, President of CanWEA. "Hundreds of much-needed jobs are being created in places like Windsor, Tillsonburg and Niagara, and thousands more are being created in construction and local services. A stable policy framework is critical to our ability to continue to attract investors, create new jobs and build a world-class manufacturing capability."
Despite its successes to date, the FIT program can be strengthened and improved, according to CanWEA. The FIT Review currently underway has received input from many stakeholders including CanWEA on changes that would serve to make the program even more effective and we await the results of the review.
It must be noted the FIT Program has not played any significant role in increasing electricity prices in Ontario to date. In fact, "the cost of conservation and all the renewable subsidies in 2010 amounted to 0.4 cents of the 13 cents we paid for a kWh in our homes," states the Environmental Commissioner of Ontario in The True Cost of Renewable Energy and Conservation.
Ontario is, however, in the midst of modernizing an aging electricity system that requires investments to renew and build new transmission and distribution infrastructure for system reliability and load servicing and to phase-out conventional and polluting coal-fired generation. In that context, wind energy is cost-competitive today with most other forms of new generation, particularly when life-cycle costs and future environmental regulations are considered.
A July 2011 Pembina study, Behind the switch: pricing Ontario electricity options, found that Ontario consumers would see virtually no relief from high electricity prices if the province cancelled its support for renewable energy under the Green Energy Act. In fact, the study indicates that investing in renewable energy today is likely to save Ontario ratepayers money within the next 15 years, as natural gas prices are forecast to start to rise. The addition of any new generation (all more expensive than existing generation) and badly needed investments in electricity infrastructure guarantee increased rates for consumers going forward.
"Wind energy is playing a growing role in helping Ontario build a cleaner, stronger and affordable electricity system that will ensure Ontarians continue to enjoy the lifestyle they are accustomed to," said Hornung. "At the same time, investments are required to ensure the province's aging electricity system is ready to meet the needs of a prosperous future."
Ontario's stable policy for wind energy has attracted millions of dollars in new investments and jobs in manufacturing in areas of the province hit hard by economic challenges. According to a report by ClearSky Advisors, Ontario is expected to install more than 5,600 MW of new, clean wind energy capacity by 2018, creating 80,000 person-years of employment, attracting $16.4 billion of private investments (with more than half of that invested in the province), and contributing more than $1.1 billion of revenue to municipalities and landowners in the form of taxes and lease payments over the 20-year lifespan of the projects.
The proposed Affordable Energy and Restoration of Local Decision Making Act would give Ontario's municipal governments authority for issuing Renewable Energy Approvals (REAs) and for applying significant conditions on projects that go beyond environmental protection. It is unclear how this would operate in practice as REAs are associated with many significant areas of provincial jurisdiction and municipal governments will likely be challenged to find the resources and expertise required to take on these responsibilities.
CanWEA believes municipalities have a vital role to play in any new local development, and has always encouraged municipal governments to take full advantage of all opportunities for engagement under the GEA. Municipal engagement and consultation is an important part of the renewable energy development process. The Renewable Energy Approval (REA) requires municipal consultation, including public consultations and CanWEA has always advocated that its members go beyond minimum regulatory requirements. Our mandate to support the responsible and sustainable development of wind energy is backed with the development of Best Practices for Community Engagement and Public Consultation – which were informed through discussions with dozens of municipal leaders.
CanWEA is the voice of Canada's wind energy industry, actively promoting the responsible and sustainable growth of wind energy on behalf of its more than 420 members. A national non-profit association, CanWEA serves as Canada's leading source of credible information about wind energy and its social, economic and environmental benefits. To join other global leaders in the wind energy industry, CanWEA believes Canada can and must reach its target of producing 20 per cent or more of the country's electricity from wind by 2025. The document Wind Vision 2025 - Powering Canada's Future is available at www.canwea.ca.
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Ulrike Kucera, Media Relations Officer
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