Study Says Green Energy Act Falls Short

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According to a wind power study conducted by Guy Holburn and Charles Morand from the Richard Ivey School of Business, Ontario's Green Energy Act doesn't go far enough because it fails to include long-term targets for renewable capacity and leaves decision-making to ministers.

‘Regulatory Risk and Private Investment in Renewable Energy Technologies: A Study of the Ontario Wind Power Sector’ recommends that the Ontario government enact bold legislation on renewable energy – with long-term capacity targets – to attract wind developer investments.

Holburn and Morand surveyed 63 wind developers and studied past policies to determine why previous provincial initiatives to increase green energy, including a feed-in tariff that guarantees the Ontario Power Authority will purchase from renewable electricity suppliers at fixed prices, have failed to meet targets.


‘The new Green Energy Act removes some of the uncertainty around municipal permitting and grid connection policies,’ says Holburn, who specializes in utility regulation and stakeholder management. ‘However, the act does not establish long-term targets for renewable capacity. Instead, it leaves key decisions on targets and power pricing in the hands of the minister, who can easily change policies if political priorities shift.’

According to their study, 4 1/2 years of Ontario government initiatives on green energy have produced mixed investment results in the wind power industry. Less than half of the original 2004 target for renewable investment by 2007 was actually achieved.

Holburn and Morand attribute this to policy-making that is conducted outside of the scope of formal legislative and regulatory processes.

SOURCE: Richard Ivey School of Business at The University of Western Ontario

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