The Drummond Report:less money for health care, plenty for wind power developers
The Report from the Commission on Reform of Ontario’s Public Services was released this week and amid the calls for Ontario to do something about its desperate debt situation, are expressions of surprise at what recommendations are being proposed for the health care sector.
We leave it to others to comment on that BUT insofar as Ontario’s renewable energy plan has soaked up an awful lot of public money, we wish to comment on the lost opportunities.
In short, while expenditures on health care are being slashed, in fact the subsidies to companies producing “renewable” power are continuing along. Mr. Drummond did recommend a reduction in the Feed In Tariff (FIT) rates, which are among the highest in the world–at a time when the countries that started this are cutting subsidies severely, or doing away with them altogether (Denmark, Germany, Spain). But there was no indication from Mr. Drummond as to how much of a cut he recommended. Others (Energy Probe, Wind Concerns Ontario, Terence Corcoran) recommend the FIT program be cancelled altogether.
Since we’re concentrating on finances today and not health (but it’s money that could GO toward health care) we need to comment on just how much money we’re talking about. Power from hydro-electric generation costs about 4 to 6 cents per kilowatt hour (kWh) in Ontario and we can also buy power from Quebec for about the same rates. Wind power, however, is 13.5 cents (Samsung gets an “adder” of another cent) and old solar contracts were for about 80 cents a kWh, and then were cut back to 58.8 cents. Bear in mind that consumers are paying at most 10.8 cents/kWh, so you can see that this isn’t a particularly sustainable business model …and Ontario’s Auditor General has said as much.
The whole renewable energy program will cost billions over the next few years. The “Smart Meter” program–criticized by the Auditor General as having been implemented without a cost-benefit study of any kind–was supposed to cost $2 billion but in fact is heading for $7 billion.
Individual wind power developers (many of them foreign-owned, having come here to scoop up the generous subsidies) stand to make millions on these tax-payer supported projects. For example, a 20-MW wind project over 20 years, will make $125 million gross.
That’s money that might have gone toward nursing salaries and helping more young people to choose nursing as a career.
Yes, Ontario should look at a mix of power sources, but why choose one technology that has so many negative effects to Ontario as a whole?
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