In Germany, on the busy Friday afternoon of May 26th, more than a third of the electricity consumed in the entire country was being generated by solar power1. You may have read about this. What you probably didn’t read is that solar makes up less than four percent of Germany’s total energy generation2. So how does that work?
The key to understanding this—at first blush, magical—math is realizing that power demand in a complex economy is wildly variable and that large-scale energy storage turns out to be incredibly difficult, meaning that power must be produced at more or less the instant it is consumed. At any given moment in Ontario, for example, between 12,000 and 15,000 megawatts of power is being consistently pulled down the line3 . Ontario’s hydroelectric and nuclear plants run at full capacity, day-in and day-out, to satisfy this baseload. Now imagine a hot summer morning. These power plants are chugging (or rather, splashing and atom-splitting) along at peak output, cranking out their 15,000 MW, when, over the course of a few hours, a million air conditioners are turned on around the province. The grid suddenly needs to come up with another 10,000 MW of power, or else Toronto, and Ottawa, and Thunder Bay, and everywhere in between, start browning out.
Fortunately, Ontario has special peak demand power plants on stand-by, ready to spool up as soon as consumption rises above what the baseload plants can handle. Less fortunately, the kinds of power plants that can go from zero to gigawatt on demand are almost universally dirty fossil fuel plants like coal, oil, and gas that, quite frankly, have no place in a modern energy portfolio.
This is the magic of solar power. Unlike other intermittent and renewable power sources such as wind turbines, the peak energy output of solar panels is on blazing summer days, which syncs almost perfectly with peak demand. Each solar installation we build, though it may make only a small contribution when considered from the perspective of annual averages, is able to punch well above its weight when it is needed the most.
If Ontario could do what Germany has done, and develop a commitment to solar power to the tune of a mere 4% of our total annual generation, it would allow us to entirely end our reliance on coal, and then some. To put that in perspective, recall that the provincial government estimates that emissions from coal plants are directly causing upwards of 600 premature deaths and 300,000 lesser health problems in Ontario each year4 .
But solar power in Ontario is dependent on the controversial Feed-In Tariff (FIT) program to remain economically viable. FIT gets a lot of flak for the way that incentives given to renewable energy providers through the program are passed on to consumers as energy bill increases. Currently, the FIT program is costing the typical household about three dollars each month on their electricity bill5. That figure can be expected to rise to closer to ten dollars per month by the time solar is able to fully supplant coal as Ontario’s peak demand energy source.
We can’t look at that ten bucks in a vacuum, though. Coal is not without its real and long-term financial costs. You might be surprised to learn that coal power is likewise subsidized through consumer energy bill adjustments6. That fact doesn’t get a lot of press. The bulk of the economic burden of coal power, however, comes from the costs of environmental cleanup and of providing health care support to the hundreds of thousands of people getting sick from coal-driven pollution each year.
When we look at what former Leader of the Opposition Preston Manning calls the “full-cost accounting7,” it is costing Ontario roughly $993 million per year to clean up the mess made by coal power8. And that expense, of course, is being carried by taxes on citizens and businesses. Subsidies, healthcare costs, and environmental costs result in the average household in Ontario paying about $17 per month in taxes and energy bill increases to prop up the status quo of crude and outdated coal-fired power plants.
And neither technology nor energy prices are going to stay still. The costs of fossil fuels are inevitably going to keep rising as reserves are depleted. Solar energy, on the other hand, just keeps getting cheaper as technology improves. The FIT program tracks the difference between these price points as they grow closer each year, and the size of the incentive shrinks in response. In the near future, these price points will meet and renewables will be able to compete, and win, on a level playing field. But by that time, without FIT, Ontario will have already been forced to deepen its commitment to coal, gas, and nuclear.
It’s a mistake to think of the FIT program as an environmental initiative. In truth, it is an investment in the energy infrastructure that will best serve both the health and the economy of Ontario. At the low price of $3 to $10 per month, we’re building a compact renewable energy base which we can leverage into a one hundred percent elimination of our expensive reliance on coal. Breathing easier, jumpstarting technological innovation, and insuring ourselves against rising fuel costs are all just happy side-effects.
5 http://www.ontarioenergyboard.ca/OEB/_Documents/MSP/MSP_Report_20120427.pdf, http://www.ontarioenergyboard.ca/OEB/_Documents/EB-2004-0205/RPP_Price_Report_May2012_20120419.pdf, http://www.torontohydro.com/sites/electricsystem/residential/yourbilloverview/Pages/ResidentialRatesFAQ.aspx
8http://www.energy.gov.on.ca/docs/en/coal_cost_benefit_analysis_april2005.pdf, adjusted to 2012 numbers by way of http://www.ieso.ca/imoweb/media/md_supply.asp