Ontario municipalities 'ecstatic' future green energy contracts are on hold

Ontario's energy minister has halted competition for the next round of renewable energy contracts in order to save billions, but critics question if Ontario will still meet the power needs of the future.
Council debated whether to invest in renewable energy certificates or municipal green energy initiatives. (Tugliq Energy)

Municipalities across Ontario are cheering the government's decision to suspend its competition for 1,000 megawatts' worth of big, new renewable energy projects.

But one industry association representing companies that were preparing to try to snag a contract is shocked at the sudden shift in the winds at Queen's Park.

Ontario's energy minister minister said Tuesday there simply isn't the demand for power to go ahead with its second round of procurement.

Instead, it can save $3.8 billion in costs related to the electricity system and save residents $2.45 a month on their electricity bills, Thibeault said. 

Mayors rejoice

In the rural township of North Frontenac, Mayor Ron Higgins's phone was ringing off the hook after the surprise announcement.

His township's council was the first to pass a motion earlier this year demanding that any new project receive municipal approval in order to get the province's green light.

A one-time wind farm proposed for an area along the highway to Bon Echo Provincial Park had caused his residents much angst in recent years, said Higgins. 

After North Frontenac passed its resolution motion in March, more than 100 other municipalities followed with resolutions of their own, and pressure mounted this summer at a meeting of Ontario municipalities.

Still, Higgins only expected to have more input in the next request for proposals.

"But it caught me off guard. I wasn't expecting them to cancel it outright at this point," said Higgins.

"I'm thrilled."

Wind association 'shocked' by decision

But not everyone was thrilled.

"We were extremely disappointed and shocked by the decision," said Robert Hornung, president of the Canadian Wind Energy Association, which represents project developers, wind turbine owners, manufacturers and others in the industry.

The association and its members will turn to making the case for a future competition for renewable energy contracts, as the province embarks on consultations for a new long-term energy strategy due in 2017. 

Hornung is convinced the province will need more wind power to hit its greenhouse gas emission targets, and he hopes the decreasing cost of producing power from wind will be attractive.

But in the meantime, he questioned whether the move could leave Ontario unprepared for future electricity needs.

"It's very true we do have a surplus of power today," said Hornung.

"But when you're procuring power today, you're looking to have that power come on line three or four years down the road and that's when new power needs are going to be emerging."

Move brings market uncertainty, says professor

Warren Mabee, a professor at Queen's University, shared Hornung's view that the province could stand to better plan ahead, or bring on extra renewable energy for the day when one of its nuclear reactors needs to be taken off line.

He also questioned if the province might be hampering its longtime goal of creating an entire industry around green energy, which it intended to foster through incentives and predictable procurement plans.

"By back-tracking on those long-term plans and saying, 'We're not going to buy as much,' they've introduced a strong element of uncertainty into the marketplace," said Mabee.

"That's going to affect businesses, it's going to affect potential jobs, it will have a rundown effect that's not going to have the effect they wanted."