Prof. Ross McKitrick
Prof. Ross McKitrick

Are claims about the merits of wind power full of hot air? Wind turbines provide fewer economic and environmental benefits for Ontario than advocates had hoped for, says a new report by a University of Guelph economist.

Ontario’s Green Energy Act (GEA) promoting renewable energy has already increased energy costs, threatens economic growth and offers little environmental payoff, says economics professor Ross McKitrick.

His report, called “Economic and Environmental Consequences of Ontario’s Green Energy Act,” was published this spring by the Fraser Institute. McKitrick is a senior fellow with the public policy think-tank, and studies environmental economics at Guelph.

He analyzed costs and benefits of green energy, particularly electricity from wind turbines. Then he compared that information with costs of obtaining the same environmental benefits from existing power sources, including coal-fired plants.

“I’m trying to compare apples to apples. I looked at how much the Green Energy Act would cost after scaling up to compare it against existing power plants,” he says.

The law guarantees long-term, above-market rates for producers of power from renewable sources.

McKitrick says Ontario’s electricity costs will soon be among the highest in North America.

That will reduce return on investment and lead to job losses, particularly in mining and manufacturing, he says. The province claimed the GEA would create 50,000 new jobs. But most of those are temporary positions, he says, and the legislation failed to account for job losses as other sectors cope with higher energy costs.

The act was also expected to reduce greenhouse gas emissions and smog. But McKitrick says natural gas plants – and their attendant emissions – are needed to provide power during low-wind periods. “When you see a wind turbine, you have to realize a natural gas plant is behind that to balance the fluctuation in power from the turbine.”

And because of mismatched supply and demand for wind power, up to 80 per cent of the electricity from wind turbines is surplus power exported to the United States at a loss of about $200 million a year.

The Green Energy Act is intended to provide cleaner power. But McKitrick’s analysis shows the same air quality improvements could have been obtained using ordinary pollution abatement technology, such as smokestack scrubbers, at much lower cost. Retrofitting coal-fired power plants “would have reduced emissions almost as much as closing them altogether.”

A 2005 study by other researchers showed that an ongoing retrofit of existing power stations would have provided all of the claimed environmental benefits of the Act more cheaply. But McKitrick says Queen’s Park ignored that aspect of the report.

He believes energy sources need to be assessed based on true costs and benefits. Rather than effectively subsidize some energy producers but not others, he says, “We should make them all pay their bills and compete on the wholesale market.”

McKitrick thinks the government should resume retrofitting of coal-fired plants. And, he says, “I would restore standard zoning procedures and allow popular say in what is being built in our backyards.”

He has spoken about wind turbine installations to groups around the province, especially rural landowners. Last month, Queen’s Park announced new rules intended to give municipalities more say in turbine projects.

“I’m very disappointed that the decision-making process has slammed the door so completely on standard cost evaluation tools intended to protect the province from bad policy-making.”

This year, McKitrick was named as U of G’s spokesperson for the “Research Matters” outreach campaign run by Ontario’s universities.