A Tale of Two Approaches to Renewables
The following commentary was originally posted by Huddle on November 15, 2019.
Comparing Saint John Energy and Ontario Cases
By Scott Stoll, November 18, 2019
All renewable energy projects are not created equal. I live in Ontario, where the program to build renewable energy was criticized for being rushed and expensive. As Saint John Energy pursues renewable energy and related storage technology, it’s instructive to look at how it differs from what happened in Ontario.
First, a little background.
The Ontario Experience:
In the mid-2000s, because of air pollution, all political parties had promised the elimination of coal from Ontario’s power generation fleet. Therefore, Ontario needed new supply. It decided to pursue natural gas and renewables.
Supporters of the Green Energy and Green Economy Act (“GEA”) hail the excellent intentions and the number of projects developed, but critics focus on the execution and implementation flaws. In addition to removing coal from the system, Ontario’s goal included jobs and creating revenue for businesses, homes and farms. But GEA removed local planning control in many instances. Projects could be proposed with support from a particular landowner but without wide local support from the neighbouring community. This created a lot of conflict within communities.
“We have a municipal utility in a small city in a province of less than a million people embarking on an appropriately scaled initiative.”
By contrast, Saint John Energy’s pursuit of renewables, in particular, its Burchill Wind Energy Project currently under development near Coleson Cove, is measured, responsible and broadly beneficial.
It’s also important to note that a lot has changed since Ontario launched its renewables program. The technology has gotten better and cheaper and so the price of power generated from wind is significantly lower. Further, people today are more concerned about climate change.
Here’s a look at some key differences.
Price:
Ontario used the renewables program to create jobs as well as electricity. “Made in Ontario” content requirements combined with relatively new technology meant prices had to be higher to encourage mass participation.
This contrasts with Saint John Energy’s open competition to find a developer for Burchill. It was able to maintain price discoverability to reflect its true costs and benefits. This adaptiveness is especially important in our evolving energy economy.
Local Ownership:
In Ontario, early private developers were widely criticized for taking significant profits out of the province. In New Brunswick, and through the establishment of Community Economic Development Corporations (CEDCs) having ownership in the project, that kind of leakage is not as significant a risk. The benefits will stay in your area. Further, members of the community will get the jobs and other economic advantages, including lower rates in the long term, that will flow from Burchill and other potential projects.
NIMBY:
In Ontario, the location of green energy projects created a lot of tension within some communities. Many people did not want a wind turbine looming in their backyard. With Burchill, which will be built in an industrial park, the zoning and location siting are less likely to be contentious with local residents.
Right-Sized:
As the Ontario example shows, you can have too much of a good thing too quickly. Its programs opened the floodgates to a multitude of small projects spread across thousands of acres. That’s not what Saint John Energy is doing. To put this in perspective, Burchill would represent approximately 1% of the provincial generation capacity. Ontario was phasing out coal, representing 25% of its capacity. Frankly, the current investment in renewables in New Brunswick is nowhere near the maximum limit and Burchill can be integrated into a broader, long-term energy plan for the province.
In Ontario, Canada’s most populous province was going all-in. Here, we have a municipal utility in a small city in a province of less than a million people embarking on an appropriately scaled initiative.
Better and Cheaper:
“Members of the community will get the jobs and other economic advantages, including lower rates in the long term, that will flow from Burchill and other potential projects.”
Compared to 10 years ago, renewable energy equipment is better, cheaper and more efficient. Burchill has a better wind regime than many places in Ontario, so it will be more efficient. Crucially, industrial-scale batteries are now viable and they allow utilities the world over – including Saint John Energy – to store intermittent renewable energy and use it to smooth out spikes and peaks.
Lasting Local Benefit:
For a utility of its size, Saint John Energy is sophisticated, forward-thinking and very committed to its short- and long-term success. The Burchill Wind Project will have a positive benefit for at least 25 years. That’s good for the City and good for Saint John Energy customers who can look forward to better pricing in the long run. Plus, they can feel good knowing this energy is clean and that the benefits will stay in Saint John.
Scott Stoll is a member of Aird & Berlis’ litigation, energy, environmental, mining, First Nations, infrastructure and expropriation groups. He regularly appears in matters at the NBEUB and is registered under the Lobbyist Registration Act.