Green power an expensive failure.
— Headline on a recent Gwyn Morgan column
The green industry is one of the best business opportunities of the next decade.
— Dan Balaban, wind energy entrepreneur
Hmm. We have conflicting claims that seem to have originated on different planets. So let’s take a look at those planets. Gwyn Morgan is chairman of the board of SNC-Lavalin, and is also on the board of EnCana — both fossil fuel energy companies.
Dan Balaban is the president of Greengate Power, which has wind energy projects up and running all across Alberta.
And according to IPPSA (Independent Power Producer’s Society of Alberta), “none of Alberta’s new generation is subsidized by Alberta taxpayers.”
Maybe that’s what Morgan is so upset about: Alberta is not Ontario. He produces a wealth of numbers to show that Ontario is subsidizing wind energy to a ridiculous degree. But how surprising is that? Ontario is the province that brought us Bob Rae. Remember him? He was the premier who kick-started the province into its present $250-billion debt situation. And Dalton McGuinty is making a fine effort to continue the game.
So Alberta is not Ontario, and technology is not fiscal policy. If technology was synonymous with government policy, I think we could assemble a very good analogy with the 2008 recession. The recession was sparked by a speculative housing bubble.
So who or what should we blame? The technology? Those darn houses? I don’t think so.
Neither is technology synonymous with trade policy.
For example, Morgan wrote about the massive subsidies given to a solar energy company in the U.S. called Solyndra. It went bankrupt, and thus became the darling of any Republican who associates alternative energy with the downfall of civilization. Except that there was never very much written about why Solyndra failed.
The main reason it failed was due to dumping by Chinese manufacturers. The U.S. Commerce Department found that various Chinese companies had been selling solar panels in the U.S. market for less then their production costs.
And the Chinese solar industry is gigantic (half of the world’s production capacity, with 99 per cent of its output being exported). So it’s not surprising that Solyndra went belly up.
However, that just brings us back to the question of subsidies in general. Canada’s oil, gas and coal industries get about $1.3 billion per year in federal money. Does that mean that alternative energy schemes should get subsidies also?
You would think so. But how would a government know which part of which industry to subsidize? In the case of wind, there are the conventional turbines, but there is also the relatively new technology of tethered wind power, which captures the more sustained and higher velocity winds at higher altitudes.
In the case of solar, you have a choice of silicon panels or concentrated sunlight powering steam generators.
And then there are all of the different technologies for storing energy when the sun isn’t shining and the wind isn’t blowing.
So what’s a government to do? It risks backing a loser if it backs any of them.
Of course the answer is that governments should back the basic research needed to find out which are the potential winners and which are the potential losers. Then industry can step in with some cash if it wants to start up a company or two. To some extent, governments already do this via university funding, and the University of Alberta’s National Institute for Nanotechnology is the perfect example of where our tax dollars have been put to good use.
But in order to do this, we need to quit demonizing an entire industrial sector. Just as we need to recognize that we will likely never again have a cheap, energy dense source of power such as fossil fuels, we also need to recognize that they are finite; that they are increasingly difficult to get out of the ground; and that they have external effects that are sometimes not very pleasant.
And likewise with alternative energy technologies. They should never be seen as a panacea. However, their costs and benefits should at least be assessed with an open mind.
Evan Bedford is a local environmentalist. Direct comments, questions and suggestions to wyddfa23@telus.net. Visit the Energy and Ecology website at www.evanbedford.com