Renewable Energy Doesn’t Cost Ontario That Much, Report Reveals

Investing in wind, and solar power is not the main cause of rising costs of electrical bills in Ontario, as many in the province tend to believe. According to a study released last week, the cost of green energy – renewables, and bioenergy – is a mere 9% of an average household power bill in the province.

“As the new kid on the block, renewable energy is all too often blamed for rising electricity costs. The truth is renewables play a fairly small role in Ontarians’ electricity bills today,” said Gillian McEachern of Environmental Defence. “But they have significant health and environmental benefits that aren’t reflected in our monthly bills.”

The study conducted by Power Advisory LLC, an independent energy consultancy firm, found the costs for wind, solar, biomass and energy conservation was only $15 on an average monthly household power bill ($137) in Ontario. The costs of nuclear power and maintaining the electrical transmission network were found to be $37 and $46 respectively on an average bill. 

“Energy provided by the wind and the sun will always be free. The same can’t be said for other sources of energy,” reads the study titled Your Home Electricity Bill.

Coal power plants are estimated to have cost Ontario an estimated $4.4 billion in health care and environmental and financial impacts. Upgrading Ontario’s long neglected electricity delivery network over the last ten years and phasing the province off of coal-fired power plants account mostly for the price of power bills going up, concludes the report which was published by Environmental Defence.

The last coal plant in Ontario is scheduled to shut down this year. Ontario currently has cheaper electricity rates than provinces dependent on coal for most of their electrical needs such as Alberta, Saskatchewan and Nova Scotia.

Average power bills in major North American cities.

Shifting from coal to renewables has cost the province money. Environmental Defence argues the cost would have been the same if not more had Ontario decided to make up for the electricity shortfall with nuclear or natural gas.

“The Ontario government estimates that new gas generation costs between $85-$296 per Megawatt hour (MWh) and new nuclear generation costs between $87-$143/MWh, while wind energy costs $115/MWh,” states the report. Wind produces most of Ontario’s non-hydro renewable energy.

Last December the government of Ontario released its long-term energy plan and predicted power bills will rise 42% by 2018. Environmental Defence believes one of the best ways to avoid this price hike is through energy conservation.

According to the report, “if Ontario households increase energy conservation and energy efficiency, Ontario bills in 10 years could ultimately return to current levels." The report cities estimates from the Ontario Power Authority that if Ontarians use 20% less electricity the price of power bill today would be the same in ten years. 

Average power bill in Ontario according to the "Your Home Electricity Bill" report.

Retrofitting houses, more stringent energy efficiency standards for household appliances, energy audits of homes and financial assistance for low-income households with their bills are the report’s recommendations for decreasing the cost of electricity and improving energy conservation in Ontario.

Comparing electrical bill prices with and without energy conservation measures. 

Ontario’s long-term energy plan calls for some investments in energy conservation and refurbishing nuclear power plants to keep power costs from jumping up even more. Critics argue this may not be effective. Nuclear projects in Ontario almost always run two and half times over budget.

The rising costs of electricity in Ontario has been pinned on renewable energy by the Progressive Conservative Party of Ontario – the official opposition – and blamed for scaring away business and pinching the pockets of Ontarians. The Progressive Conservatives have vowed to scrap subsidies for renewables and Ontario’s Green Energy Act if they win the next election. Ontario could face its next election as early as this spring. 

Image Credit: Government of Ontario, Environmental Defence