The criticism of the price Ontario currently pays for renewable energy ignores twoimportant facts: renewable prices are still falling, while the costs of fossil fuels and nuclear are rising — and the government subsidizes fossil fuels and nuclear energy to a much greater extent than green energy.

The nuclear industry has been subsidized since day one. Nuclear has accumulated over $20 billion in subsidizes federally, including over $1.2 billion in the past five years — and it continues to collect federal subsidies now, even after being sold to SNC Lavelin.

Compare that to wind, solar and biomass industries that together have received about $1.7 billion from the federal government, which are being spread out from 2002 to 2021. In other words, 10 years from now, renewable energy will have received about 10 per cent of the subsidies nuclear has received — assuming no more nuclear subsidies are paid out in the next 10 years.

The California Energy Commission estimated new nuclear costs between 17-34 c/kWh in 2010. The low end of that estimate is still more expensive then Ontario’s prices for wind power under the feed-in tariff, and the high end approaches the feed-in tariff price for large-scale solar power projects at current costs, which have been dropping rapidly (down 50 per cent) in past five years.

Even if Ontario stopped all new investment in renewable power today, electricity prices would continue to rise. This is due to the inevitable expense of upgrading our ageing electricity grid and building new power plants as old ones retire.

This recent Pembina Institute report compared how replacing renewable energy with power from fossil fuels would affect Ontario electricity prices. Click for more detail.

The Pembina Institute recently modeled these complex interactions for Ontario’s electricity system. Our report on that study, Behind the Switch, found that cancelling the Green Energy Act would likely result in a slightly slower price increase in the short term — saving the average household about the cost of a cup of coffee and a muffin per month. In the longer term, however, the Green Energy Act would result in cost savings for consumers, since the cost of renewables will continue to decrease every year, while the price of natural gas is forecast to continue increasing over the next 20 years.

“Recently there has been much media attention paid to the Green Energy and Green Economy Act. Sometimes the information available is not complete, and sometimes it is not accurate. We want to help with some myth-busting.”

This report examines how scaling back Ontario’s plans to develop renewable energy would affect electricity prices, using an integrated energy system simulator to compare two main scenarios.

The first scenario is based on Ontario’s current Long-Term Energy Plan, in which a large part of new electricity generation comes from additional renewable capacity supported under the Green Energy Act; the second scenario tests the effect of eliminating the Act and largely expanding natural gas in place of future renewable resources.

Behind the switch: pricing Ontario electricity options finds that Ontario consumers would see virtually no relief from high electricity prices if the province cancelled its support for renewable energy under the Green Energy Act.

In fact, the study indicates that investing in renewable energy today is likely to save Ontario ratepayers money within the next 15 years, as natural gas becomes more expensive and as the cost of renewable energy technology continues to decrease.

Stats and projections on the future of solar in Ontario and our opportunity going forward

So the cost of conservation and all the renewable subsidies in 2010 amounted to 0.4 cents of the 13 cents we paid for a kWh in our homes.  A significant amount, perhaps, but hardly the bogeyman that it is so often made out to be.