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  • Ontario’s Energy Challenges Down The Road

Image Courtesy of FreeDigitalPhotos.net

Image Courtesy of FreeDigitalPhotos.net

With a June election looming and Ontario’s increasingly burdensome energy costs skyrocketing without relief, we stand on a precipice between an energy policy that will let homeowners and future generations down the line enjoy what they have without worry; and an energy policy that could bankrupt the province and its citizenry. This week, let’s look at some of the challenges and opportunities that will face Ontario’s energy industry in the years to come.

The Green Energy Act Won’t Be Reversed, but it Can be Slowed Down

No concern about Ontario’s energy woes is greater than the effects the Green Energy Act has had on the public trust. From higher energy prices A few weeks ago we polled readers on the effects and consequences the Green Energy Act brought for Ontario residents. The response was overwhelming, and we’ve understood that the GEA is in need of serious reform or curtailing to control prices. As one of our respondents added:

We cannot compete with the rest of Canada let alone the rest of the world. Stop wind and solar subsidies now. We cannot afford to lose any more jobs in Ontario.

Michael S. Ontario

 One avenue is to reform the GEA’s FIT program to lessen the pro-corporate incentives that run contrary to programs which have been successful in Europe and Australia. While many critics of the GEA have called for wind farms and other subsidized green technologies to be cancelled, annulled, or stopped entirely: this just isn’t possible. And in fact, parties that originally called for the end of wind farms and other GEA initiatives have since recanted this position.

 The buy-out in these contracts well exceeds what Ontario would stand to benefit from cheaper energy. While the economic loss due to the GEA is done, it can be mitigated by imposing stricter review and control of new and current contracts, and adjusting Ontario’s FIT policy to be more pro-consumer, rather than allowing it to raise prices.

We May Get Our Energy From Quebec

Quebecois Hydro is cheap and in abundance at the moment, a match made in heaven for an Ontario that will see it gradually tapering off from excess energy production in the future. In a province with such an outrageous energy excess, it’s sometimes difficult to recall that Ontario suffered an energy deficit prior to 2005. As production begins to taper off over time with the closure of more gas and coal-fired plants, a cheap energy solution may be to buy energy from Quebec.

The plan isn’t new – Ontario has been buying Quebec energy for years now to supplement peak needs. This is a popular plan among critics of the GEA, but relies on development of new energy infrastructure in Quebec. While hydro remains a very cheap and sustainable energy source, it remains to be seen if Quebec can see the value on behalf of Ontario energy users.

Prices May Not Go Down

With Ontario undergoing a still-extensive renovation project on outdated grids and infrastructure, prices are set to rise up until 2022. It’s clear that high prices will be the norm unless drastic change is taken. For the average homeowner, the fluctuating cost of energy that we need and use every day seems out of our hands – and indeed it is. Ontario’s energy policy has become the hot potato for politicians and energy experts, but sooner or later they’ll have to deal with the problem before it’s too late.

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