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Profit in sustainable energy

In several recent articles, Parker Gallant has criticized the Ontario Sustainable Energy Association, accusing this small, non-profit organization of having undue influence over Ontario’s energy policy. He claims “taxpayers are involuntarily funding OSEA to lobby the government to take actions that will cost taxpayers even more money,” and questions who OSEA represents: Certainly not him. Of course, between the lines, Gallant’s real beef is with renewable energy. His attack on OSEA is a backhanded attempt to discredit Ontario’s Green Energy and Green Economy Act.

The legislation has been hugely successful, motivating thousands of ordinary people to mount solar panels on their roofs, spurring local manufacturing, and attracting international investment. The overwhelming response to the opportunity to profit from producing clean energy makes it possible to close the coal plants and reduce greenhouse gas emissions, contradicting naysayers who argue that renewable energy cannot meet demand.

Gallant suggests that the role OSEA played in the passage of the Green Energy Act was out of proportion to the size of its membership, consisting primarily of small community groups that are developing renewable energy. Certainly OSEA is proud of its part in the campaign for green energy legislation but it cannot claim all the credit. The campaign was led by The Green Energy Act Alliance consisting of organizations representing farmers, First Nations, union workers and environmentalists. Together their members represent thousands of Ontario residents who support renewable energy. However, while Gallant accuses OSEA of serving “vested interests,” the Alliance did not include any commercial companies. Profit was not the motive.

OSEA’s membership may be small, but its lofty goal — which is, as Gallant describes “to save us from smog, reduce greenhouse gas emissions, and create sustainable communities” — is shared by the majority of people. For some, it is a matter of faith. The Neighbourhood Unitarian Universal Congregation unequivocally acknowledges the peril posed to the planet and is collectively doing something about it by installing solar panels on the roof of its Toronto church, crediting the Green Energy Act for making it financially feasible. Meanwhile the Ahmadiyya Muslim Community has erected a windmill beside its mosque and members are installing solar panels on their homes.

Then there are the First Nations of Wikwemikong, M’Chigeeng and the Chippewas of Georgina Island, which are developing wind farms. Under the Green Energy Act, they have the opportunity to generate revenue for their communities and create jobs for their young while being good stewards of the environment for future generations according to their traditional values.

Farmers too are reaping the benefits. “Renewable energies do need land and it’s the best opportunity to add a mix to the crops you’ve already got. We’re talking about sustaining the family farm,” says Joe Botscheller of Farmers for Economic Opportunity.
OSEA was formed more than a decade ago to assist such community groups. The Toronto Renewable Energy Co-operative founded OSEA to share the valuable lessons it had learned in its struggle to erect the now iconic windmill at Exhibition Place in Toronto. Funds from such organizations as the Trillium Foundation, which Gallant accuses OSEA of using to “lobby” the government, in fact have been provided to help communities develop renewable energy.

However, for small, widely dispersed communities to do this, the electricity system had to change. The Alliance looked to Europe. There, legislation that successfully spurred renewable energy included three essential provisions: feed-in tariffs based on the cost of production that allowed a modest profit; long-term fixed prices to secure investments and assure producers their power would be purchased; and access to the electricity grid, a major barrier for small generators.

Gallant considers the feed-in tariffs too expensive. He blames OSEA and its “political clout” for the decision by the Ontario Power Authority to reverse its plans to reduce the price paid for energy from small, ground-mounted solar systems by nearly a third, opting instead for a less severe cut. OSEA was among many organizations that criticized the OPA for changing the price before the review time. We argued for stable prices, while acknowledging that tariffs will fall as the technologies become cheaper. In the end, though, we urged the government to honour its promise to pay the original price because the ultimate goal is to generate as much clean energy as quickly as possible in order to address the urgency of climate change. Despite the influence ascribed to us by Gallant, however, we didn’t get our way on this one.

Gallant complains about the millions of dollars being spent on what he characterizes as subsidies for green energy, but he fails to mention the subsidies for coal or nuclear power. And he overlooks the fact that much of this money will go straight into the pockets of ordinary people. The tariffs, calculated to provide a return of 9% to 11% annually, have made it possible for thousands of Ontarians to invest their personal capital in renewable energy. As a former banker, Gallant should be able to recognize a good investment.

Instead, he blames recent rises in electricity prices on renewables, even though the vast majority of clean electricity contracted under the Green Energy Act is not even on line yet — and when it is, it will make up only a small portion of the province’s energy. Gallant doesn’t like what he sees when he looks at his electricity bill but neglects mentioning the line items for the never-ending debt we keep paying for our nuclear plants. He faults renewables for the cost of upgrading Ontario’s aging grid, although the largest allocation is for a new transmission line to carry power from the refurbished Bruce reactors.

Meanwhile, the Green Energy and Green Economy Act is putting people to work. Installing solar panels and operating wind turbines are jobs that cannot be outsourced. They require the skills of local tradespeople, and community colleges are now training workers both new and unemployed.

Domestic content rules are also creating well-paying manufacturing jobs. In Scarborough, Samco Machinery, now Samco Solar, has been able to increase its labour force after halving it because of the recession. Germany’s Siemens will set up Ontario’s first factory to make blades for wind turbines while South Korea’s largest company, Samsung, is investing billions of dollars and creating many highly skilled jobs to replace those lost in the auto sector.

Gallant doesn’t appreciate these economic benefits. Thankfully, most of us do. We can’t ignore the inundation of Pakistan, the deluges in China, the killer heat wave in Russia or the oily mess in the Gulf of Mexico. We are prepared to pay the price for protecting the planet. With the Green Energy Act, we can profit too.

Kristopher Stevens is executive director of the Ontario Sustainable Energy Association.

.Posted in: FP Comment Tags: Energy, Ontario, Ontario Sustainable Energy Association, power .

Read more: http://opinion.financialpost.com/2010/09/03/profit-in-sustainable-energy...