wind and solar

Renewable Energy Targets Are Ridiculous! They Should ALL be Scrapped!

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Queensland says: Time to Scrap the Renewable Energy Target

June 15, 2014 by 

dick-warburton

The RET Review Panel’s interim report is expected within the next few weeks and we hear there is no joy in it for the wind industry and its parasites. The big end of town have made some walloping submissions – all targeting the mandatory RET as the costly and ineffective market distortion that it is. Here’s The Australian’s take on the position taken by the Business Council of Australia.

RET no longer relevant, says BCA
The Australian
Barry Fitzgerald
13 June 2014

THE nation’s peak business lobby has called for the controversial renewable energy target to be amended ahead of the scheme being brought to an end in 2030.

In a submission to the Abbott government’s expert panel reviewing the RET, the Business Council of Australia said the scheme in its current form was no longer relevant to Australia’s circumstances.

It said the RET was a poor climate change mitigation measure as it reduced greenhouse gas emissions at a high cost of abatement relative to other measures. Without changes, it said, the RET would continue the “wealth transfer from households and business electricity consumers and baseload generators to the renewable energy industry because it increases electricity prices to pay for renewable energy’’.

It said the RET should be amended and suggested “smoothly transitioning out of the RET by amending the target and ending the scheme in 2030”.

It noted when the RET was established under the Howard government, Australia’s electricity demand was expected to grow in perpetuity, and was forecast to reach 300,000 gigawatt hours by 2020. It is now forecast to reach only 230,000GWh due to a decline in demand.

“This means the legislated (20 per cent) target is now forecast to see renewable energy represent at least 27 per cent of Australia’s electricity generation,” the submission said.

“In an electricity market that is already oversupplied, there is no economic justification for electricity consumers to pay for additional generation capacity that is not required.”

The BCA also argued since the cost of “some” renewable energy has declined since the scheme was established, in some cases, it does not require a subsidy to be commercially deployed. It wants the RET amended to a “true” target of 20 per cent by 2020, and the government not to extend the target once all obligations have been met in 2030.

“Any amendments considered as part of the review of the RET should not adversely affect investments that have already been made and should be mindful of their impact on investments currently being planned or already subject to approval,” the BCA said.

The submission repeated previous BCA statements that the RET as its stands distorts electricity markets.
The Australian

The BCA seem to be taking the “Goldilocks” approach – avoiding the “too hot” and “too cold” extremes of the policy spectrum. From what STT hears, it’s not the approach the Federal Coalition are going to take – nor is it the approach of the Queensland State government (see below).

The Federal Coalition have received Parliamentary advice that the recent wind industry tosh about scrapping the RET creating “sovereign risk” is just that (see our post here). And, ditto, concerning wind industry threats about being entitled to compensation from the Commonwealth for “losses” they will suffer when the RET is wound back or scrapped (see our post here).

The advice has stiffened the resolve of a few who were momentarily spooked that scrapping the RET could cost the Commonwealth a small fortune in claims from wind power outfits. Realising the “sovereign risk/compensation” story was nothing more than the deluded and panicked pleading of an industry on the ropes, these boys are now keener than ever to put the RET to the sword.

mark mccardle

And the Queensland State government’s submission to the Panel pulls no punches and calls for the RET to be scrapped. So does Aloca (an aluminium processor) and the Australian Industry Greenhouse Network (representing miners and manufacturers).

Here’s The Australian again.

Rooftop solar should go, RET told
The Australian
Annabel Hepworth
12 June 2014

A LANDMARK review should consider closing the federal scheme promoting the installation of rooftop solar panels and wind farms to new projects, the Queensland government says.

It argues that reducing the Renewable Energy Target will help alleviate bills.

In a submission to the RET review panel chairman Dick Warburton, obtained by The Australian, Queensland Energy Minister Mark McArdle warns that the RET would add about $60 to a typical residential customer’s bill in 2014-15.

“Given the impact it is now having on household bills it is timely that the review panel has an opportunity to propose amendments to the RET ensuring it is appropriately aligned with other objectives such as addressing cost-of-living expenses,” the submission says.

Solar prices have fallen for residential systems, with the prices on the larger-sized 5kW systems dropping by more than 32 per cent between August 2012 and last April.

Even though Queensland has slashed its feed-in tariff — which pays households to generate electricity from the panels — there are still about 3000 new PV systems being installed each month.

And when further cuts kick in on June 30, a significant fall in uptake of solar panels is not expected, the submission says.

“The phasing-out of support is an appropriate approach for maturing or established technologies,” it says.

It comes as some of the nation’s biggest emitters have also called for the RET to be wound back, a move that is being resisted by the clean energy industry.

Alcoa has told the review that the costs involved in the small solar scheme are a “substantial and unwarranted impost on large electricity users” and that the “highly volatile” nature of the scheme “erodes business confidence and planning certainty”.

The Australian Industry Greenhouse Network — which represents big emitters in sectors such as mining and manufacturing — says that the scheme should be abolished as it would lead to “a reduction in the cost burden immediately without affecting existing assets or sovereign risk”.

But the Australian Solar Council argues the solar industry needs the scheme as it is in decline because of the close of state and territory feed-in tariffs, uncertainty created by the RET review and the phasing out of the solar credits multiplier.

Queensland says the RET “undermines the viability of generation assets which were built in response to market signals rather than a government mandated subsidy”.
The Australian

Queensland has seen a huge uptake of rooftop solar – but it hasn’t replicated the wind rush of Australia’s south-eastern states (NSW, Victoria, SA and Tasmania). Queensland has a cluster of 20 tiny 600kw fans (with a piddling 12 MW of installed capacity) at Windy Hill, west of Cairns – run by Thai-turbine terrorists, RATCH; and that’s it. There are a number of “pipe-dream” projects proposed, but none of them have PPA’s – so are going nowhere fast. Hence the Queensland government’s focus on the cost impact of solar panels installed as a result of the RET and feed-in tariffs.

The solar boys shouldn’t be so worried about their future when the RET goes.

With spiralling power costs – and falling panel costs – there is already a healthy market for rooftop solar PV among domestic users (albeit, perhaps, a smaller market in the short-term than if the RET rort continued unabated).

But the big future for solar is in rural and remote locations, where it is more economic for a home, farm or station to go “off-grid”.

Supplying power transmitted through networked grids costs serious money (think installation and maintenance over generations): doing so for a few remote farms or a sheep station – with transmission lines extending for dozens and sometimes hundreds of kilometres just to reach them all – is uneconomic; the returns in revenue from those few users represent a pittance by comparison with the enormous upfront costs of connection to the grid and ongoing maintenance of the connection, over time.

In one case in NSW, a transmission line was upgraded recently at a cost of just over $2million: the line in question services a total of 9 farms, which together pay less than $14,000 in annual network service fees. The revenue recovered will never repay even a fraction of the cost of the upgrade – in the result, that cost will effectively be borne by all power consumers, thus subsidising the few remote users involved. The example cited is not an isolated case.

In NSW, the State government has just announced plans to privatize parts of its electricity network. It also has serious plans to address the costs of supplying remote rural homes and towns on the rural part of the network (which it plans to retain) by way of “off-grid” solar solutions.

The plan is fairly simple. Instead of maintaining transmission lines to small, remote rural towns, remote homes, farms or sheep stations, a “stand-alone solar system” will be provided. Solar panels sufficient to provide for the town or customer’s needs will be installed; with battery storage; and a diesel generator for back up. The idea has been around for 20 years, but with increasing costs attached to maintaining remote transmission lines and falling solar PV costs the concept has come into its own (see this paper from 1995 here).

The forecast cost of providing such a stand-alone solar setup to a home, farm or station ranges from between $35,000 to $70,000 per unit – depending, obviously, on the capacity of the unit needed to supply the particular customer. The manner in which these systems can be consumer-financed is being explored at the moment (with a lease/buy-back option on the table). The units are likely to last at least 20 years and, even allowing for maintenance costs of the units, will be far more economic than maintaining thousands of kilometres of transmission line and network gear for the sake of a relative handful of remote customers.

desert-sun

Solar trumps wind in the scenario above simply because inland Australia has an abundance of sunny days – even in winter – thereby giving solar PV a reasonable degree of reliability; whereas, no-one in their right mind would rely on the vagaries wind for anything (see our posts here andhere).

Moreover, solar PV prices continue to fall and face downward pressure due to the scale of China’s investment in manufacturing capacity. The Americans and the Germans – who also piled into solar panel making – are currently crying foul over being under-cut by Chinese panel manufacturers, trying to prevent the Chinese from competing in Europe and the US.

STT understands that the smartest among the solar boys – aware of the plans above – are already sharpening their pencils ready to do some serious business. Stand-alone solar – taking users off-grid in remote locations – doesn’t require the “support” of the fat pile of power consumer subsidies currently generated by the mandatory RET and REC Tax: it just makes pure economic sense and, therefore, good business. We wish them well – for a happy, prosperous and unsubsidised future.

Narndee Station PAYNES FIND

Faux-green Energy is Just a Novelty Power source. Not for Prime-Time!

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Britain’s economy comes under energy attack

The wind blows the hair of Britain  

Britain Braces For World War II-style Energy Rationing

Great Britain is in the midst of an energy crisis. The country’s climate agenda

has curtailed electricity production and now there may not be

enough power to continually keep the lights on in the UK.

Britain’s energy crisis is getting so bad that the country faces “Second World War-style” rationing in order to keep the lights on throughout the country, according to the Register.
The government is launching major energy reforms to lower power demand and reopen power plants previously shut down to comply with European Union environmental rules. One such reform is that the government will pay factories to “voluntarily” shut down during peak hours when wind energy can’t produce enough power.
The government will also start paying companies to provide their own back-up power and energy producers will be able to “name their own price” for bringing coal plants online that were shuttered due to strict environmental regulations.
EU environmental rules forced many UK coal plants and other fossil fuel-fired plants to shut down. The problem is they were largely replaced with green energy, like wind power, which only produces electricity when the wind is blowing.
Opting to build costly green energy with reliability issues means UK officials are going to look at more demand-side policies to lower energy consumption. Paying factories voluntarily to shut down is just one of those options.
Despite the huge problems, Britain still plans on building more wind turbines and other green energy sources to fight global warming, reports the UK Telegraph. The UK’s National Grid CEO Steve Holliday said plans to pay factories to shut down were “just the beginning” of more policies to reduce energy demand.
“We should be optimistic that demand response could avert the need to build significant amounts of power stations in ten years’ time or so,” Holliday said. He added that people have always had “expectations that the supply will always be there”, but this will no longer be the case with more green energy on the grid.
Holliday added that building new sources of green energy that are subject to wind speeds and sunlight would be much costlier than encouraging people to lower their demand for power.

Read more: http://dailycaller.com/2014/06/11/britain-braces-for-world-war-ii-style-energy-rationing/#ixzz34hfB0qdY

Ezra warns of Destruction We are About to Witness, at the Hands of the Liberals

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EZRA LEVANT - LEVANT: Ontario, yours to dismantle

Credits: MICHAEL PEAKE/Toronto Sun

EZRA LEVANT | QMI AGENCY

 

Put aside the scandals and corruption and police investigations into the Ontario Liberal Party. That’s just morality and ethics stuff, and Ontarians are apparently fine with that.

But what about the economy created by the Liberals, happily accepted by voters last Thursday?

For seven years running, Ontario has had a higher unemployment rate than the national average. Ontario is a have-not province, now subsidized by others, including Saskatchewan and Newfoundland, two new have provinces.

Stop and let that sink in.

Ontario’s taxes are high, and about to grow higher: Premier Kathleen Wynne’s campaign centrepiece was a new payroll tax for a provincial pension plan, deducted from every employee’s paycheque.

In other words, a job tax.

There will be other taxes too, including on Pearson Airport, the airport already saddled with the highest user fees in the world.

And Ontario’s disastrous experiment with wind turbines and solar panels will continue for decades — that’s the length of time Ontario will force residents and companies to buy power at inflated rates to subsidize their green schemes.

Even as power prices fall in other provinces and competitor states in the U.S. It’s surely a coincidence that the former president of the Liberal Party is a wind turbine executive.

That’s what’s so dispiriting.

Not that Ontarians are fine with a corrupt political class.

But that Ontarians are fine with economic decline and that more and more economic “success stories” aren’t entrepreneurs, but rather crony capitalists with ties to the government.

Ontarians, for more than a century the economic engine of Canada, are fine now being an economic brake. The decline first brought on by Dalton McGuinty is no longer a blip. It’s a trend.

It seems unthinkable that Ontario could ever be anything other than the biggest and strongest province. But it surely felt that way in Montreal, too, for the longest time.

But take the story of the Bank of Montreal to see how things don’t last forever.

The Bank of Montreal is Canada’s oldest bank, founded in 1817. And for 160 years, it was headquartered in — obviously — Montreal. But in 1970, politics brought risk and cost to Quebec in a way not seen before.

The FLQ crisis brought terrorism and martial law. In 1976, the Parti Quebecois won the election. So in 1977, the Bank of Montreal moved its head office operations to Toronto.

For two lifetimes it was unthinkable that the Bank of Montreal would leave Montreal. But in the course of 20 years it happened.

Politics matters.

Ontarians just renewed their bonds with a party that deliberately campaigned to the left of the NDP; a party that has overtly joined the cause of government workers unions, against the interests of taxpayers.

Ontario’s so-called Sunshine List — the annual publication of government workers earning more than $100,000 — used to be a source of embarrassment. Now it’s the government’s base of support.

Ontario has chosen the takers against the makers. Thirtynine percent of Ontarians were fine with that and voted Liberal. And most of the 24% who voted for the NDP were fine with it too.

The day after the election was instructive. Mere hours after the election, Joe Fontana, the Liberal mayor of London, was convicted of fraud. But Wynne happily met with Fontana earlier this year, while he was before the courts — and merely by associating with him, gave him her political stamp of approval.

At exactly the same time, banks from around the world issued credit warnings about Ontario’s debt, and the province’s cost to borrow jumped the most it had in six months.

An official credit downgrade is imminent, though some banks say they’re waiting for the provincial budget, to make it official.

Corruption and debt.

Can they really bring down Canada’s economic colossus?

Ask Detroit — for decades, the highest-paid, most industrialized city in America. After two generations of Democratic rule, it’s an impoverished ghost town.

Oh, this is just the beginning.

Let’s see what new taxes and rules Toronto’s next mayor, socialist Olivia Chow, will bring with her.

Anyone want to bet on when the Bank of Montreal moves to Calgary?

CCSAGE Fighting Back Against Wind Turbine Injustice!

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400 PEC residents and business owners threaten claims for compensation if wind turbines are built here

JUN 15

Posted by 

Naturally Green sign[NATURALLY GREEN signs.  Due to strong demand, we have ordered new signs, which are now available for purchase.  For pickup in the  Picton area, phone 613-476-2700; South Marysburgh, 613-476-7310; Wellington, 613-399-2407, Ameliasburgh, 613-962-6902 .]

At the beginning of May, CCSAGE NATURALLY GREEN took ads in local County papers and on CountyLive to point out existing legal rights to claim compensation if the construction of industrial wind turbine factories cause adverse effects to the value of businesses and properties.

Within three weeks, almost 400 County business and property owners indicated they would consider bringing such claims.

What did we do with this overwhelming response?

  • On June 4th, we wrote to the Premier, the Ministers of Energy and the Environment, the leaders of the two opposition parties and the Presidents of Gilead Power and wpd Canada Corporation. Below is a copy of our letter for your information.  You can read a copy of our letter HERE .
  • We notified our colleagues in all parts of Ontario with or threatened by industrial wind turbines of our initiative and its result.
  • We issued a media release to every print and electronic outlet in the entire Province.

We’ll keep you informed from time to time of future developments. Meanwhile, thank you to all respondents on-line, by mail, at our Town Hall meeting in Milford and in response to canvasses on Picton, Bloomfield and Wellington Main Streets.

CCSAGE NATURALLY GREEN

Newly Installed Solar Panels cause a Serious House Fire!

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North Anston: House fire was caused by new ‘solar panels’ say residents

House fire on Nursery Road in North Anston

House fire on Nursery Road in North Anston

 

A North Anston couple and their young son dramatically escaped a fire as their home went up in flames this morning, according to residents on the street.

 

Firefighters were called just after 11am on Thursday morning to a house that was ablaze on Nursery Road.

The whole street watched on in shock as South Yorkshire firefighters – who are currently staging a 24 hour strike – used a crane and hoses to tackle the flames that were coming from solar panels on the roof.

One woman said: “They have only just had those solar panels put on, I would say they have only been on a week.”

Another said: “I have only just noticed them.”

There were four fire engines on the scene and a Police cordon was set up at both ends of the street as traffic was forced to divert around the villiage.

A neighbour said: “I saw the woman run out of the house in her pyjamas with her phone in her hand and her young son who I think is about two-years-old.”

“I have heard the man was upstairs asleep because he works nights.”

Firefighters started a walk-out this morning at 9am in a long running row over pension arrangements but they have been answering to 999 calls.

A man said: “I timed them and it took them 18 minutes to get here.

Residents Forced to Fight for Compensation for Losses… from Wind Projects!

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Claim ready

Garth

County businesses and property owners prepare to defend the value of their livelihoods and savings

CCSAGE Naturally Green has opened another front in the battle to defend Prince Edward County from industrial wind turbines—and has recruited a phalanx of worthy soldiers ready to resist the invading developers.

Taking their cue from a successful litigation in Ottawa, nearly 400 businesses and property owners in PrinceEdwardCounty have signalled their intention to seek financial compensation if they suffer loss of value as a result of turbines constructed nearby.

Many fear that the arrival of massive 40- storey turbines looming over their homes and business will lead to a loss in revenue and a drop in property values. CCSAGE Naturally Green has spent the past few weeks informing property and business owners of their rights to claim compensation.

The principle was affirmed last year by the Supreme Court of Canada when it ruled that governments cannot diminish private property value without compensating the affected property owner.

The case revolved around a truck stop that found itself essentially put out of business, when a new section of highway 417 restricted direct access to the restaurant and gas bar. The province argued it had not taken any of the claimant’s land and therefore was not obliged to compensate the truck stop.

The claimant made an appeal to the Ontario Municipal Board (OMB) and was awarded $335,000 in damages for market value loss. The case was appealed all the way to the Supreme Court of Canada. It ruled that the routing of the new highway represented a substantial interference with the claimant’s property, and reinstated the OMB’s original ruling and compensatory award.

Critical to the issue facing landowners in Prince Edward County is that the Supreme Court described the distinction as “on one hand, interferences that constitute the ‘give and take’ expected of everyone and, on the other, interferences that impose a disproportionate burden on individuals.”

It found that even if the province believed it was acting in the general public’s good, it could not impose a burden upon an individual property owner disproportionately without compensating them.

Likewise, the province argues that industrial wind energy is beneficial to all Ontario residents, yet the burden—in this case loss of property or business value—will be harm specific business and landowners particularly those in the shadows of these massive machines. Such is the basis of the claim that nearly 400 business and landowners are readying to make.

Garth Manning is heading the initiative on behalf of CCSAGE Naturally Green. Manning is a widely respected property lawyer—now retired. He earned the Queen’s Counsel designation and has served as president of the Ontario Bar Association.

Through advertisements in this newspaper and others, as well as in a public meeting in Milford, Manning and his CCSAGE colleagues were able to alert many dozens of folks to their legal right to claim costs through the OMB.

The overwhelming response has surprised even him.

“The probability of a high number of claims if wind turbines are constructed in Prince Edward County is certain,” predicted Manning.

It is neither a silver bullet nor is it a substitute for other measures in defending the County from industrial wind turbines, according to Manning. But this initiative effectively puts industrial wind developers on notice that folks in this County, and elsewhere in Ontario, will actively defend themselves against loss of value.

It may not have an impact on the most ardent developers, but investors in these businesses must now assess another investment risk factor.

 

 

 

Academic, Ian Plimer, Tells About the Faux-Green Movement, and What it Has Become

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Academic slams tyranny of the greens

PUBLISHED: 03 JUN 2014 

Academic slams tyranny of the greensIan Plimer describes the greens as a ‘malevolent, unelected group’. Photo: Paul Harris

TREVOR SYKES

Professor Ian Plimer has never been renowned for moderation in his opinions about the extremist elements of the green movement and in this book he launches on them in a full-blooded, broken-bottle attack.

In his own words: “What started as a ­laudable movement to prevent the despoilation of certain areas of natural beauty has morphed into an authoritarian, anti-progress, anti-democratic, anti-human monster.” That Plimer should attack the greens is no surprise. More impressive is the book’s foreword, written by Patrick Moore, a co-founder of Greenpeace, who fully ­supports Plimer.

He congratulates Plimer for a book that provides a “different . . . and extremely rational look at the agenda of the green movement today”. “In many respects, they have become a combination of extreme political ideology and religious fundamentalism rolled into one,” Moore says.

“There is no better example of this than the fervent belief in human-caused ­catastrophic climate change.” Moore even rejects the core green belief that carbon dioxide emissions are harmful.

Plimer’s thesis is that the real agenda of green groups (often registered as charities) is nothing less than the destruction of modern civilisation and that a key aim is to kneecap the global energy industry which provides society with electricity. It has always seemed odd that greens are so hostile to a gas which is vital for the life of trees. As a trained geologist, Plimer is well aware that the planet’s climate has been changing since its birth 4½ billion years ago. “If the Earth’s climate did not constantly change, then I would be really worried,” he says.

What he contests is that manmade carbon dioxide has anything much to do with such change. It must be comforting for left-wingers to blame evil industrialists for destroying our planet, but in fact carbon dioxide accounts for only 0.04 per cent of the atmosphere and man-made carbon dioxide accounts for maybe 4 per cent of that, so Plimer regards the proposition as nonsense.

Also, carbon dioxide emissions do not accumulate quickly in the atmosphere.

After five to seven years, they are absorbed by the oceans, trees or rocks. Plimer believes that for scientists to argue that traces of a trace gas can be the driving force for climate change is fraudulent.

WHAT CAUSES CLIMATE CHANGE?

 

Sceptical scientists do not know what causes climate change but it would seem a complex combination of factors. Plimer believes the atmosphere is merely the medium through which climate change manifests itself and the major driver is “that giant fusion reactor we call the sun”.

He says: “It is quite capable of throwing out immense clouds of hot, ionised gases many millions of kilometres into space, sometimes with drastic effects on both the Earth’s atmosphere and on spacecraft travelling outside the lower atmosphere and the Earth’s protective magnetic shield.” Plimer, who is not renowned for pulling his punches, describes green extremists as hypocritical – “a malevolent unelected group attempting to deconstruct healthy societies that have taken thousands of years to build”.

That may sound extreme, but it’s difficult to find an alternative explanation for the change they have forced upon the Drax power station in Yorkshire.

Drax used to boast it was the largest, cleanest and most efficient coal-fired power station in Europe, generating up to 3960 megawatts. Greens demonstrated against it, saying Drax was the largest carbon dioxide emitter in Europe. So Drax is changing from coal to biomass. Plimer says it intends to import timber from North Carolina for fuel. This is madness, both economically and ecologically. A plant which used to burn 36,000 tonnes of coal a day will instead burn 70,000 tonnes of wood.

Forests will have to be chopped down in North Carolina, which must involve some destruction of native habitats of creatures such as otters and woodpeckers. Habitat destruction kills birds and animals more surely than climate change ever will. The timber will be reduced to pellets in factories fuelled by conventional fuels, then shipped across the Atlantic in diesel-burning boats. Over the 20-year life of the power station, that would involve the destruction of ­511 million tonnes of wood.

The energy density of wood is about half that of an equivalent weight of coal, so wood will produce more expensive ­electricity. Burning wood also releases its stored carbon dioxide.

WIND AND SOLAR POWER UNRELIABLE

 

The European Environment Agency has ruled that burning wood is carbon neutral because the carbon dioxide will be absorbed over time by the oceans or other trees.

That leaves the EEA in the odd position of believing that a molecule of carbon dioxide emanating from wood behaves differently to a molecule emanating from coal.

The greens, having achieved their aim, have stopped demonstrating although there is a strong argument that the conversion of Drax will make it more, not less, harmful to the planet.

Wind farms and solar power stations are unreliable and totally unable to provide base load electricity.

Plimer gives calculations which show that wind turbines are barely able to generate as much electricity in their lifetime as it takes to make them.

. Even more bizarre was the Spanish solar plant which enjoyed such large subsidies that it could make profits generating electricity at night by shining floodlights on the panels. The floodlights were powered by a diesel generator. These are only three examples of green illogic from a book crammed with them.Plimer has assembled a massive case which needs answers.

Even more bizarre was the Spanish solar plant which enjoyed such large subsidies that it could make profits generating electricity at night by shining floodlights on the panels. The floodlights were powered by a diesel generator. These are only three examples of green illogic from a book crammed with them

Not For Greens, by Ian Plimer, Connor Court. $29.95.

Ontario is in for a Very Rough Ride….and they asked for it!

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Kathleen Wynne’s reality: Ontario’s massive debt cannot be ignored

 Theresa Tedesco | June 12, 2014 | Last Updated: Jun 13 8:41 AM ET

Ontario Liberal leader Kathleen Wynne speaks to supporters after winning the Ontario election in Toronto on Thursday June 12, 2014.

Frank Gunn/The Canadian PressOntario Liberal leader Kathleen Wynne speaks to supporters after winning the Ontario election in Toronto on Thursday June 12, 2014.

Now that voters have returned Kathleen Wynne to power, the premier will need to find a way to manage a debt load that is larger than California’s while continuing to keep the credit rating agencies mollified long enough to avoid a dreaded downgrade.

With a net debt of $267.5-billion that is growing at a faster rate than the economy, the challenge is just beginning for the party that emerged victorious from the provincial election. “They are still going to be facing pressures from the credit agencies to get the province’s fiscal finances in order,” said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto. “There’s no way to avoid it. The reality is there and it can’t be wished away.”

Put simply, Ontario is increasingly dependent on tapping lines of credit because it spends more than it collects. Currently, the province pays $11-billion annually in interest payments to finance its debt — money that is not going toward paving roads, building public transit, hiring more teachers and shortening wait times in hospitals.

During the 40-day election campaign, which focused predominantly on the economy, the three main parties offered a stark choice: Conservative leader Tim Hudak vowed to cut 100,000 public-sector jobs over four years and lower corporate taxes to kick-start the creation of one million jobs in eight years while balancing the budget in two.

The New Democrat and Liberal parties both promised to loosen the provincial purse strings further and increase spending for at least two years by borrowing more money and increasing taxes. NDP leader Andrea Horwath promised to offer wage subsidies to businesses to hire new workers, slash auto insurance rates and cut government spending by $600-million annually although she wouldn’t say how she would balance the books in three years.

Liberal leader Wynne also promised to balance the budget by 2017 and she too was vague on details of cost cutting, prompting critics to accuse both parties of pinning their hopes on unusually robust economic growth in the range of 2.8% to 4.7% to pump up government coffers.

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“It’s a bit of a Hail Mary to hope the economy will recover so much that it will take care of the problem,” said Candice Malcolm, Ontario director of the Canadian Taxpayers Association. “It’s a huge hole to come out of and it’s going to require tough measures, including looking seriously at the spending side.”

Ms. Malcolm believes that the premier will not be given much time to make drastic spending cuts before credit rating agencies and bond markets begin to force her hand. Finn Poschmann, vice-president of policy at the C.D. Howe Institute, concurs: “Certainly the pressure is there for a downgrade. To balance the budget in two or three years will take sharp measures and that is a difficult task.”

Next year, the province’s net debt is forecast to jump by 7.7%, faster than the 4% economic growth rate anticipated during the same time. Still, while Ontario may be carrying more debt than California, long considered the poster child for poor fiscal management, Moody’s Investor Services Inc. has nonetheless applied a slightly higher — and more favourable — credit rating of Aa2 (the third-highest investment grade rating) to Canada’s largest province. Meanwhile, Standard & Poor’s has slapped a lower AA-rating with a negative outlook for Ontario.

Meanwhile, there are signs of pressure that a downgrade is inevitable. For one, Ontario has $250-billion worth of bonds rated by Moody’s, the most of any sub-sovereign borrower tracked by the New York-based ratings company, according to Bloomberg. The province’s ability to pay back those bonds, known as the debt-to-revenue ratio, is 237.7% — the worst among all Canadian provinces, including Quebec, according to a Moody’s report. Alberta ranked lowest — and the best — with a debt-to-revenue ratio of 31.9%.

Michael Yake, assistant vice-president at Moody’s Toronto, explained the rating agency’s concerns in an interview: “We see deficits narrowing at a lower pace but in Ontario, they are growing from previous forecasts. That’s not an ideal situation from our point of view.”

And that is worrisome for a province that borrows as much as Ontario. A future downgrade would result in higher borrowing costs, adding billions more to the debt-to-revenue ratio. Ontario currently spends 9.2% of its revenues on interest payments and provincial government estimates predict that figure will rise to almost 11% in the next four years. Keep in mind that interest rates have been at 20-year low levels and will inevitably rise if the economy grows at a faster clip.

The cost of carrying that debt will also skyrocket, as much as $3-billion in annual interest costs for every point increase in interest rates, according to Jack Mintz, the Palmer chair and director of the School of Policy at the University of Calgary. The bottom line: more money will be earmarked for servicing the debt and less spending for vital services.

“It’s been an issue that has been lingering for several years,” said TD’s Mr. Issa. “Some very tough decisions are going to have to be made to get the books in order.”

Wind Energy is a Dreamer’s folly. Just a money pit!

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Robert Bryce’s new book slays the wind power Easter Bunny

June 13, 2014 by 

Easter-Bunny-Wallpapers-HD

Robert Bryce picked the wind power fraud for what it is from the very beginning.

In his 2010 book “Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future” (Public Affairs), Bryce skewered every one of the myths relied upon by the wind industry to peddle its wares; and went on to predict the massive benefits of the US shale gas revolution – in terms of both cheap energy – operating as a boost to a flagging economy – and as a method of reducing CO2 emissions in the electricity sector.

We’ve covered some of his recent writings on US energy policy and the wind power fraud (see our posts here and here and here).

Bryce has just published another cracking book “Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong” (Public Affairs) that loads up on the nonsense that is US energy policy today.

Here’s a review of Bryce’s latest by the New York Times.

Wind? Biofuels? Get Real, a Contrarian Says
Review of Smaller Faster Lighter Denser Cheaper
The New York Times
7 June 2014

Every so often we need someone to put in a kind word for the devil, if only to remind us of unpleasant facts. On energy policy, we need someone willing to declare flat out that “if oil didn’t exist, we would have to invent it. No other substance comes close to oil when it comes to energy density, ease of handling, and flexibility.”

We need someone who says: Don’t kid yourself, coal will be around for a long, long time, as a cheap source of electricity across the globe. Someone who scoffs that anyone who believes in wind power and biofuels as a solution to the soaring demand for energy also believes in the Easter Bunny. And someone willing to argue that the most sensible long-term answer to the world’s unquenchable thirst for electricity is a revival of nuclear power, a reality that he says thinking environmentalists are coming to accept.

Robert Bryce, a senior fellow at the Manhattan Institute, a conservative research group, fills that role with zest. The author of four books on oil and energy, Mr. Bryce has written a new book well worth reading, though it will not sit well with those who applauded when Al Gore received the Nobel Peace Prize. The title of his breezy book — “Smaller Faster Lighter Denser Cheaper” — captures the headlong rush of Western culture’s endless drive for ever better technology. It is an extraordinary impulse that has created a world in which more people live longer and more comfortably than ever before.

The book amounts to Mr. Bryce’s emphatic, against-the-grain views on energy policy coupled to a once-over-lightly history of Western technology. His eccentric take on history bounces from the Panama Canal to Edison’s light bulb to the first computers, weirdly wrapping in excerpts on the AK-47 Kalashnikov automatic rifle, Olympic 100 meter times, and the Tour de France. He introduces puzzling techno-terms like “attoseconds,” which are billionths of a billionth of a second. (That, astonishingly, is the scale of time used in laser snapshots of the inner workings of an atom.) His historical vignettes do illustrate the benefits of Smaller Faster, etc., but they are like making an entire meal of amuse-bouches.

Mr. Bryce’s policy prescriptions will be more welcome in Houston than in the White House. He contends that the pantheon of environmentalists like Mr. Gore, Bill McKibben, Amory Lovins and Greenpeace — he calls them “the catastrophists” — are wildly optimistic, if not daft, in their extravagant hopes for wind power, solar cells and biofuels. He insists that his differences with them are not ideological but purely physics and economics: that their alternative possibilities are inherently too weak as fuels to scale them up to meet the world’s unceasing demand for more electricity.

From studies of wind farms he calculates that the average power density for wind energy is about one watt per square meter. A wind farm large enough to power just one data center for Facebook would require nearly 11 square miles of land, he says. On a far larger scale, the United States has about 300 billion watts of coal-fired generation capacity. So to replace it by wind power would sop up 300,000 square kilometers of land, about the area of Italy. Here he is tilting at windmills — no one has ever proposed shuttering the nation’s coal mines and relying on wind — but the comparison serves his contention that in the big picture, wind power will always be a minor player.

Biofuels have a power density even smaller, only a third of wind’s, and thus they hog even more land, he writes. Mr. Bryce considers it a scandal and a gross misuse of government subsidies that 40 percent of the nation’s corn harvest already goes into producing corn-based ethanol, pushing food prices much higher as collateral damage.

He pounces on Mr. Lovins’s prediction that by 2050, the United States will draw 23 percent of its power from biofuels. That is “ludicrous beyond language,” he says. If an acre of switchgrass yields about 17 barrels of oil equivalent a year, then achieving that 23 percent would take up 342,000 square miles of cropland, the equivalent of Texas, New York and Ohio combined, he calculates.

Mr. Bryce knows his way around an oil field, and he writes authoritatively about the constantly improving technology of extracting oil and gas. Thanks to those improvements, estimates of oil and gas reserves have shot up, defying repeated predictions that they were on the verge of topping out. Comparable innovations in wind energy or biofuels just aren’t possible, he maintains.

Disappointing for a man so sure of other data, Mr. Bryce waffles on the critical point of global warming. He declares himself a resolute “climate agnostic,” despite the overwhelming scientific consensus that climate change is a reality. Environmentalists might well see this as a convenient way to skirt the issue of the fossil fuel industry’s responsibility for endangering the planet.

He says he is neither an “alarmist” (a revealing choice of words) nor a “denier,” but tries to patch together an “incontrovertible” climate outlook that both “tribes” can accept: Carbon dioxide emissions are rising, dramatically so, and that will continue; the world will need vastly more energy in the decades ahead to raise the living standards of those in poverty; and if ever we needed smaller, faster, lighter, denser, cheaper, the time is now.

Mr. Bryce’s solution is “N2N,” a reliance on natural gas on the way to a more nuclear world. He is not the first to note that natural gas is relatively clean and available in extraordinary abundance. It generates electricity; it is the coming thing in propelling vehicles. Its use is already cutting CO2 emissions in the United States.

Mr. Bryce makes a case that nuclear power is clean and green and far superior to any other fuel in power density. His enthusiastic embrace of nuclear will astonish most readers, however, with his contention that the Fukushima Daiichi disaster in Japan should be seen as a boon to the revival of nuclear power, rather than an obstacle.

At Fukushima, three reactors melted down with a substantial release of radiation, forcing as many as 300,000 people from their homes, and leaving still unresolved problems of cleaning up massive amounts of radioactive water. And yet, Mr. Bryce writes, even though the plant was wrecked by one of the most powerful earthquakes ever to rock the planet, the World Health Organization has concluded that radiation exposure due to Fukushima was low. No lives were lost to radiation — at least none so far.

Mr. Bryce is decidedly bullish on America, not least because of what’s happening in the oil patch. America enjoys the cheapest power in the industrial world, at 12 cents a kilowatt hour versus 26 cents in Europe and 24 cents in Japan. It leads the world in natural gas production, nuclear production and refined oil output. Thanks to the oil shale, it could soon eclipse Saudi Arabia and Russia in crude oil.

“The best way to protect the environment is to get richer,” he asserts. “Wealthy countries can afford to protect the environment. Poor ones generally can’t.”
The New York Times

chicken-little-poster

Let’s assume (as STT does, for the sake of argument) that the global warming/climate change Chicken Littles are right: the sky really is falling and it’s all CO2’s fault.

So what the HELL are we doing pouring hundreds of billions of dollars into subsidies for wind power? (see our posts here and here)

STT has always thought that if man-made CO2 emissions really were destroying the planet, then sensible governments would have moved to build nuclear power plants from the moment Chicken Little started wailing about the heavens collapsing. It’s a theme that Robert Bryce covered in “Power Hungry” and expands upon in his latest effort.

The French generate around 80% of their sparks using nukes – and have used nuclear power – without any serious incident – for over 50 years: the first plant kicked off in 1962.

Nuclear power is the only stand-alone thermal power source that is base-load and which does not emit CO2 emissions when generating power.

STT readers know that we are a big fan of hydro power, the development of which stalled after the Greens “No Dams” mantra shot them to political power (and see our previous post).  The perversities of our renewable energy legislation mean that the cleanest and most reliable source of renewable energy – hydro – does not benefit from the incentives given to ludicrously expensive and completely unreliable wind power.  That’s right, the “Waterboys” don’t get RECs (only hydro generating capacity built after 1998 is eligible – the 99% of total hydro capacity that was built before then gets nothing).

There is huge potential for further investment in hydro power in Australia – all up and down the Great Divide – bringing with it the ability to harvest huge volumes of water in times of flood – and to beneficially manage that water during periods of drought. However, the perverse nature of the mandatory RET provides every advantage to unreliable and costly wind power at the expense of hydro power: the former takes a matter of months to construct and begin earning revenue (ie RECs); whereas the latter takes years and sometimes decades to complete and for investors to start earning a return (see this video). Investors looking for a quick return on their cash have simply plumped for the soft option and piled in to wind power, with disastrous results on every level (see our post here).

The nuclear power debate has revved up in recent times, with numerous leaders of green groups coming out in favour of nukes as the only sensible answer to generating CO2 free sparks.  These boys have been rounded on by their own kind as “heretics” in a style more befitting of the Spanish Inquisition.

The nuke debate is one that STT will leave to others. Anyone considering taking it up should start with Robert Bryce’s latest.

Smaller Faster Bryce

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Matt Gurney: Throw the Liberals out

 Matt Gurney | June 11, 2014 

It's hard to imagine a party in more desperate need of a long, restorative spell in the wilderness.

THE CANADIAN PRESS/Frank GunnIt’s hard to imagine a party in more desperate need of a long, restorative spell in the wilderness.

Tomorrow, June 12, is election day in Ontario. The polls are, to say the least, unclear. No one has any idea what is going to happen. As one person, who does “stakeholder relations” work for clients in Ontario, recently told me, the smart money is planning on six possible outcomes: A Tory minority or majority, a Liberal minority or majority, or an NDP minority or majority. It really could be any of those.

National Post editorial board: A Conservative government for Ontario

It is difficult to overstate just how richly the Ontario Liberals deserve to be removed from office. It is difficult even to know where to begin.

As managers of public services they are, in the most charitable interpretation, famously inept. Witness the scandal at ORNGE, the non-profit set up to run the province’s air ambulance service, which soon devolved into a byzantine scheme to redirect public money into various private wallets. Witness the scandal at eHealth, which the auditor general found to have spent $1-billion comprehensively bungling efforts to create an electronic health records system. Witness former premier Dalton McGuinty’s signature green-energy initiative, which has seen electricity rates skyrocket even as the province exports electricity at a huge loss.

Continue reading…

The campaign has not been a particularly edifying one. Don’t be surprised if turnout is low — perhaps historically so. But such an outcome, while perhaps understandable, would also be unfortunate. This may not be an exciting election, or one that has seen much thoughtful debate and entertaining oratory, but it’s an important one. Ontario is currently governed by a party that has behaved, time and again, in a fashion that is nothing short of appalling. If the Liberals are re-elected come Thursday, Ontarians will have chosen exactly the government that they deserve.

I’d need a dozen columns to even begin to scratch the surface of just how deserving of a crushing defeat the Ontario Liberals are. Even a brief overview would run into the thousands of words. So, just for those who need a little reminder, recall that this is the government that promised, before being first elected 11 years ago, to not raise taxes, and then immediately raised taxes. Rather than say that the province’s unexpectedly poor fiscal status required such action, the former premier, Dalton McGuinty, tried to convince Ontarians that he hadn’t raised taxes, but merely imposed a premium to fund health care — and then, when it turned out public sector union contracts left the government on the hook for premiums, McGuinty had to publicly stress taxpayers were on the hook for them. Because it was, you know … a tax.

This is the government that established a green energy sector that Ontarians will spend decades paying above market rates for, to provide power beyond what the province currently requires, and that we must export at a loss for lack of any other option. It now subsidizes monthly hydro bills for all but the most voracious consumers of power rather than let the true costs show up in our mailboxes each month — but they don’t call it a subsidy, of course. It’s the “Ontario Green Energy Benefit.”

The Liberals have run a government that lied, repeatedly and for years, about what the economic cost of harmonizing the provincial sales tax with the federal GST would be — an entirely defensible policy that the Liberals, for some reason, pretended would not end up costing Ontario families more … which they later admitted it would. It’s a government that suddenly imposed an eco-tax on consumers — surprise! — and only backed off after the public noticed and became outraged. It’s a government that has committed to billions in ongoing spending by allowing the unionized broader public service to expand far faster than inflation and population growth would warrant, all in the name of buying “labour peace.” That labour peace, it should be noted, ended the instant the Liberals mused about slowing the volleys of cash being hurled the unions’ way. I guess it was more like renting labour peace.

While they were fighting all these battles, Ontario blew a billion bucks in a futile effort to create electronic health records

It’s a government that never saw a minor social irritant it didn’t want to legislate away. Under the Liberals, we’ve seen restrictions on junk food and trans fats in schools, bans on harmless garden-variety (literally) pesticides, and repeated crackdowns on tobacco sales and smoking in cars containing children, even though the children themselves can light up in the car without the police saying boo. It’s a government that considered enforcing a little-known, always-ignored provincial regulation requiring that sushi only be made with previously frozen seafood, but had to settle for banning pitbulls and teens in tanning beds, instead. While they were fighting all these battles, Ontario blew a billion bucks in a futile effort to create electronic health records and became a have-not province, but oh well. Don’t those dandelions on your lawn look fantastic?

The Liberals are a government that ran an air ambulance service that was better at streaming public dollars toward Liberal-friendly executives than it was at rescuing people using helicopters that were unsuited to the role, but sure looked pretty. It’s a government that spent perhaps as much as $1-billion public dollars cancelling two gas-fired power plants that it had previously vocally championed, once polls showed they might lose a couple of seats due to local opposition. Oh, and it’s a government that wrote off the entire town of Caledonia to lawlessness because it didn’t like the optics of sending in mostly white provincial police officers to deal with a small number of native thugs who were assaulting people and destroying property — crimes — during a land ownership dispute. McGuinty called it “peacekeeping.” When I asked him why police were tasked with peacekeeping, which is the military’s job, instead of enforcing the laws equally for all citizens, he shrugged and had no answer.

THE CANADIAN PRESS/Darren Calabrese

THE CANADIAN PRESS/Darren CalabreseOntario Premier Kathleen Wynne, left, and Glen Murray, Minister of Infrastructure, ride the subway while en route to Wynne’s speech at the Toronto Region Board of Trade in Toronto Monday, April 14, 2014.

The Ontario Liberals have a new leader now — Kathleen Wynne. She acknowledges that a lot of bad things happened under her predecessor’s watch, and even that she was involved with some of them. She had no choice, she insists, since she was “part of a government.”

It’s not quite “I was only following orders,” but it’s damn near close enough.

In a perfect world, Ontarians would have plenty of terrific options to choose from when searching for a replacement. But they don’t. Both the NDP and the Progressive Conservatives leave a lot to be desired. It’s entirely reasonable for Ontarians to be underwhelmed at what awaits them in their polling stations.

But a vote for either the Tories or the NDP is still better than a vote for the party that brought us everything recapped above, and so much more. It’s hard to imagine a party in more desperate need of a long, restorative spell in the wilderness of opposition than the Ontario Liberals. A vote for them is an endorsement of their record of mismanagement, waste and meddling. If Ontario returns another Liberal government, that record will continue, and that will be exactly what Canada’s most populous province deserves.

National Post