Professor Ross McKitrick: Wind turbines don’t run on wind, they run on subsidies.
As STT followers are acutely aware, wind power is an economic and environmental fraud. Because wind power can only ever be delivered at crazy, random intervals – and, therefore, never “on-demand” – it will never be a substitute for those generation sources which are – ie hydro, nuclear, gas and coal (see our posts here and here and here and hereand here and here and here and here).
Were it not for government mandates – backed by a constant and colossal stream of subsidies (see our post here) – wind power generators would never dispatch a single spark to the grid, as they would never find a customer that would accept power delivered 30% of the time (at best) on terms where the vendor can never tell customers just when that power might be delivered – if at all (see our post here).
Ultimately, it’ll be the inherently flawed economics of wind power that will bring the greatest rort of all time to an end. The policies that created the wind industry are simply unsustainable and, inevitably, will either fail or be scrapped.
The Canadians are reeling under the ludicrous wind power policies of a hard-green-left Liberal government, clearly intent on committing economic suicide. Power prices – driven by exorbitant guaranteed rates to wind power outfits – have rocketed – tripling in less than a decade, driving energy intensive businesses – like manufacturing – out of business or offshore – stifling business investment – killing off or threatening thousands of sustainable (unsubsidised) jobs across Canada and otherwise creating economic chaos (see our post here).
Ross was interviewed for the brilliant Sun News documentary ‘Down Wind’ by presenter, Rebecca Thompson, which has been extracted in the video below. The transcript appears below.
Rebecca Thompson: First we turn to Professor Ross McKitrick, an economist. He recently published a very scathing review of how economically unsound the Ontario Liberal government’s Green Energy Act is.
Professor Ross McKitrick: Well the important thing to understand about wind turbines is that they don’t run on wind, they run on subsidies.
Rebecca Thompson: We went to see McKitrick at the University of Guelph.
Professor Ross McKitrick: All the arguments that they’ve put forward for the Green Energy Act they really turned out to be phoney once we looked at them closely. They said that it would improve the economy, reduce air pollution emissions and it would replace coal fired power. And the problem is with the first one, it is not going to improve the economy because of what you are doing is replacing power that costs 3 to 5 cents per kilowatt hour to generate, and you’re replacing it with power that costs at least 13 1/2 cents per kilowatt hour to generate. So you’re raising the cost of doing business, it will drive down the rate of return in manufacturing and mining and that has to translate into job losses and reduced investment and shrinking the economy.
Rebecca Thompson: So you’ve pointed out that wind energy in fact, isn’t in the public interest in the short term but will it be in the long term?
Professor Ross McKitrick: Nobody was building wind turbines in Ontario until the government started throwing money at it. It is not a profitable source of electricity, it’s not cost-effective. Wind turbines can’t compete on the wholesale market without a lot of government support.
Rebecca Thompson: The system used to fund wind energy in many places around the world is called a Feed-In-Tariff (FIT).
Professor Ross McKitrick: And that means if you build a bank of wind turbines somewhere, and you get the contract that everyone is looking for you get a guarantee of 20 years being paid 13 1/2 cents per kilowatt-hour for the electricity that’s generated while the wholesale rate in Ontario is typically between 2 – 4 cents per kilowatt hour.
Rebecca Thompson: The Ontario government piggybacked off what is a European idea of a feed in tariff policy where the prices are locked in for 20 year contracts. And here’s another head scratcher …
Professor Ross McKitrick: The other provision of the contracts is that the system has to buy the power from you whenever you produce it. So the standard power plants, nuclear plants and hydro plants and so forth – there is no guarantee for them to buy their power, they have to compete on a wholesale market they have to price their product, in this case electricity, so that the system operator will buy it. With wind turbines, if the blades are running, the system operator has to buy it. Now they have adjusted that slightly in the last year because of this problem of the system operator being forced to buy tons and tons of power when it doesn’t need it, at 13 1/2 cents per kilowatt hour and sell it on the export market at one or two cents per kilowatt-hour – it was costing hundreds of millions of dollars a year for the system operator to do that. So the province now allows the system operator to reject some of the power that the wind turbines produce and instead the province will pay the wind turbine owners a benefit for what they call ‘deemed production’. So it’s really just transferred that same costs on to the taxpayer now.
Rebecca Thompson: The bottom line is pretty good for the wind energy sector.
Professor Ross McKitrick: They get a 20 year contract to sell wind power at far above market rates and it doesn’t matter that they are generating power at times when the province absolutely doesn’t need it, and we can’t use it, and we just have to try to find some neighbouring jurisdiction to buy it from us. We used to have a few large power plants in Ontario and we had our grid that was optimised to source electricity from a few large central locations. We’re now shutting down the large central locations and replacing them with this proliferation of tiny little unreliable wind farms and you have to build a whole new grid to accommodate that. So that’s again an extra cost to get something that we already had.
Rebecca Thompson: What’s more is that the Green Energy Act hasn’t even come close to creating the number of jobs the Liberals claimed it would.
Professor Ross McKitrick: It turned out that the province had claimed that there were going to be 50,000 new jobs created from the Green Energy Act. When the Auditor General asks them to back that up because it doesn’t really make sense that this would create any jobs – what they admitted was they were really talking about were temporary construction jobs – as you put up wind turbines you need some workers in to do that. But then once the wind turbines are built, then those jobs disappear and there are no ongoing jobs. In economics, it’s an old fallacy, what’s called the broken window fallacy. If you go around breaking shopkeeper’s windows, since they have to hire repair people to fix the windows then you’ve somehow improved the economy. But, you haven’t. All you have done is increase the cost of having what you had before – which was windows in stores.
Rebecca Thompson: If the new shift to green power is so inefficient why hasn’t anyone working in the system spoken out?
Professor Ross McKitrick: There are a couple of reasons. The power workers union has spent money on advertisements. They did try to fight against the closing of Lambton and Nanticoke – they understood that this was a bad deal for the workers in the province. But they did want they could. But it’s hard to be up against a government that is pushing so much propaganda on coal. There were people certainly in the power generating sector that understood that the government’s numbers weren’t correct and didn’t add up. But, they were effectively muzzled.
Rebecca Thompson: McKitrick speaks to people all the time about the changes in the system.
Professor Ross McKitrick: I do find people working in the power sector, they know that this is a crazy system. These wind farms are displacing hydro electricity which is just a waste on every level because we have the hydroelectric facilities, they don’t generate any air pollution emissions. They give us reliable, predictable baseload power. And now we run wind turbines and let those hydro-facilities sit idle. So people who work in the sector, they can see what’s going on and they know that this is a waste. But, for understandable reasons they’re not about to make a big noise about it because they could lose their jobs if they do.
Rebecca Thompson: Whether any government would actually be able to get out of existing contracts is debatable. Ross McKitrick says it’s possible.
Professor Ross McKitrick: One option might be to buy out some of the wind turbine companies and take those wind turbines off the grid, or only use their power when they’re competitive. In Europe, what governments have started to do though is put on special new taxes on renewable sources, solar and wind, to try and recover some of these costs. Alternatively, the government may look to try and tear up the contracts and accept the legal liability that goes with it, but it’s not going to be easy.
Sun News: Down Wind
Down Wind, which runs for 96 minutes, can be purchased as a file and downloaded or as a DVD for those in the US and Canada (here’s the link). For those outside the US and Canada the file can be purchased and downloaded (using this link). If you’re in there fighting the great wind power fraud, Down Wind is essential viewing.
For a detailed synopsis of Down Wind – see our post here.