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Ontario urged not to scrap renewable energy policy

White House Chief of Staff John Podesta talks about the FY2001 Budget, set for release Monday, Feb. 7, 2000, during the taping of Fox News Sunday at the Fox studios in Washington Sunday, Feb. 6, 2000.

CHRIS KLEPONIS/AP

Ontario has become a global leader in the clean-energy business and killing the government program that is driving investment in wind and solar industries would be a mistake, says the head of a leading progressive American think tank.

With a fall election looming, Ontario Progressive Conservative Party Leader Tim Hudak has vowed to abolish the Green Energy Act, under which renewable energy producers receive premium prices for their power in exchange for commitments to procure goods and services in the province. The producers are paid a special rate, known as a feed-in tariff.

Defenders of the renewable energy policy have enlisted John Podesta, former adviser to President Barack Obama and founder of the influential Washington-based Center for American Progress.

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In a meeting with The Globe and Mail's editorial board, Mr. Podesta said that if the Green Energy Act is abolished, Ontario would be throwing away an opportunity to be a leader in an industry that is gaining momentum around the world, especially in economic powerhouses like Germany and China.

"I think it would be a mistake for Ontario" to repeal the Green Energy Act, he said. "I would think that there's a strong case to be made given the job growth that's already been had in Ontario and looking at the energy platforms across the globe in the future, that going backwards is really not the right answer."

Mr. Hudak argues the province's feed-in tariff policy is contributing to sharply higher power prices that hurt consumers and undermine the province's competitiveness. And he has been particularly critical of the Liberal government's $7-billion deal with South Korea-based Samsung Electronics Co. Ltd. to invest in Ontario and provide premium-priced solar and wind power to the grid.

But Mr. Podesta said Germany has pursued the world's most aggressive renewable-energy strategy, including premium pricing for green power, yet it remains a manufacturing juggernaut.

Policies aimed at promoting German competitiveness "were carried out simultaneously with a tremendous investment in clean-tech and using a feed-in tariff specifically, and it's led to them being global leaders in this space and in manufacturing generally," he said.

He added that China is also investing heavily to become a global leader in an export-oriented, manufacturing-driven clean-energy sector.

In a later speech at the MaRS Discovery District in Toronto, an incubator for medical and high-tech research, Mr. Podesta said the feed-in tariff "has put Ontario on the map not just as a leader in Canada but as a model for the world as well," he said.

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While the costs of energy in the province are going up, he suggested that rising utility rates are mostly due to the cost of making much-needed and long-overdue investments in Ontario's aging energy infrastructure.

"Over the long-term the cost of conventional energy will rise, while the cost of clean energy will fall," he said.

However, Ontario's requirement that companies maintain a high level of local procurement to qualify for feed-in tariff contracts may not be the best route over the longer-term, the Washington policy analyst said.

"It's a tool to drive investment into the local infrastructure . . . but I think that ultimately you want access to the most innovative products at the cheapest costs to make sure prices are low," he said.

With files from reporter Richard Blackwell in Toronto

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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