Patrick Moore on the real costs of coal

The real cost of coal-fired plants is $4.4 billion
Patrick Moore, Letters, The Record.com, Waterloo, 10-Apr-2006

Ontario's renewable energy program needs competition
Tom Adams, Energy Probe, The Record.com, Waterloo, 03-Apr-2006

Energy Policy in Ontario:
Some Perspectives on the Road Ahead
Tom Adams, Ontario Energy Association Breakfast Series, 08-Mar-2006

See also:

Expanding opportunites for renewable energy in Ontario

Comments on the Ontario Power Supply Mix Report

COMMENT: Patrick Moore isn't often in agreement with us in the energy dialogue, but this time he is, arguing the costs of burning coal are extreme. "The health, environmental and financial costs of coal-fired plants were estimated to be $4.4 billion annually."

We don't agree with Moore on most things, but today, he's correct on coal.

The real cost of coal-fired plants is $4.4 billion

Patrick Moore
Letters
The Record.com, Waterloo
10-Apr-2006

In Tom Adams' April 3 Second Opinion article, Ontario's Renewable Energy Program Needs Competition, he claims he's concerned about the "real costs" of sustainable nuclear energy, yet his organization continues to advocate building more greenhouse gas-emitting, pollution-prone coal-fired power plants, without any regard for the "real costs" of burning coal. Adams is the executive director of Energy Probe, a Toronto consumer and environmental research group.

Those "real costs" were outlined explicitly in an independent study conducted for the Ontario Ministry of Energy. The study found a relationship between increased air pollution due to coal-fired electricity generation and up to 668 premature deaths, 928 hospital admissions, 1,100 emergency room visits and 333,660 minor illnesses such as headaches, coughing and other respiratory symptoms, per year. The health, environmental and financial costs of coal-fired plants were estimated to be $4.4 billion annually -- far in excess of the costs of nuclear energy.

And both the International Energy Agency and the Organization for Economic Co-operation and Development's Nuclear Energy Agency have said that new nuclear energy technologies make the construction and operating costs of nuclear energy less expensive than fossil fuel and any other form of electricity generation.

Adams is correct when he points out the excessive costs Ontario is paying for solar energy. He should now recalculate the "real costs" of coal.

Dr. Patrick Moore
Greenpeace Co-founder, Chairman and Chief Scientist, Greenspirit Strategies Ltd.
Vancouver

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Ontario's renewable energy program needs competition

by Tom Adams
Energy Probe
The Record.com, Waterloo
April 3/2006

Ontario Premier Dalton McGuinty's program to buy electricity from small renewable generators, which was announced March 21 in Cambridge, will sock Ontario consumers with such excessive costs it will make even nuclear power appear cost-effective.

Consumers will be forced to pay 11 cents per kilowatt hour for renewable power that's identical to the renewable power bought by the government last fall for 8.6 cents – a 28-per-cent premium.

The reason for the price gap is competition, or a lack of it. The government's previous procurement processes, which produced a lower cost, reflected competitive bidding. Its new Standard Offer Contract program, on the other hand, provides for no competition among power generators. Without the protection of competition, consumers are exposed.

McGuinty is hitting consumers even harder by extending the procurement contracts for 20 years. A long-term deal might have been justified at a low price, but a high price and a long term imposes a double jeopardy on consumers.

The government's lack of concern for consumers is evident in its decision to provide windfalls to investors.

Eligibility for the new program's juicy subsidies is retroactive to 2000. So investors who built generators years ago that now meet the small power generator definitions in the Standard Offer Contract program get the windfall. Of course, at the time they built their facilities, they could not have anticipated the subsidies now being extracted from consumers.

This gouging is partly the result of a conflict of interest. The government admits its program was developed by the Ontario Sustainable Energy Association, a lobby group of power developers.

Gouging consumers to pay extra for renewable energy can also be attributed as the cost of celebrity endorsements and political spin. Science broadcaster David Suzuki appeared with McGuinty to announce the program and government news releases cited support from, among others, the Worldwatch Institute, World Wind Energy Association, and two farm lobbying organizations.

Renewable power developers have convinced some environmentalists that the environmental performance of the province's power system is driven by the number of wind turbines and similar devices installed. The success of this simplistic notion can be seen in the praise some environmentalists heaped on Germany's renewable energy policies.

Too many of them ignore the record of Germany's renewable power industry. In 2004, the wind power fleet there produced electricity at a rate more than a third less than the minimum productivity normally expected of successful wind investments. German consumers paid more than 12 cents Cdn per kilowatt hour for wind power, notwithstanding various government grants and no-interest loans available to renewable energy generators. Photovoltaic power served them much worse: German consumers paid $1.15 per kW-h

Wind power expansion in Germany has been directly responsible for a massive expansion of the high-voltage power transmission grid now happening there. This cost is often ignored by wind power advocates – and by too many environmentalists.

McGuinty's program to pay 42 cents per kW-h for photovoltaic solar power is even worse. The province will need electricity police to catch phony solar generators using an ordinary extension cord to exploit the difference between the lower household price and the special high price the government will pay. Given the prices paid by German consumers, Ontario investors in photovoltaic panels will need extra revenue to pay for their investments.

Under agreements negotiated last year with the province, electricity from the refurbished Bruce nuclear reactors will start at 6.4 cents, with provisions likely to drive the cost up to around 11 cents per kW-h. If this outcome materializes, refurbished nuclear power will be approximately cost-competitive for consumers relative to the new Standard Offer Contract power.

All economically minded environmentalists will point out that the real cost of nuclear power is much higher than it appears to consumers. If costs for waste disposal, decommissioning, nuclear research, and subsidized borrowing for the original construction of nuclear projects were recovered in the cost of nuclear energy, the current price would double or more.

And if the nuclear industry were not relieved of liability in the event of accidents under the federal Nuclear Liability Act, nuclear power would probably be unavailable at any price.

Although compelling, these arguments have not historically led many consumers to adjust their consumption or energy purchases.

McGuinty's new program represents a challenge to the environmental community. Environmentalists who endorse subsidies to the renewable energy industry – subsidies clearly inflicting wanton harm on consumers for no gain – may find their credibility will suffer if they try in future to present economic arguments favouring energy conservation, or arguments against nuclear power.

By paying too much, the Ontario government is encouraging inefficient power production in a way that will give renewable energy a black eye with consumers. Renewable energy can provide attractive solutions for many of Ontario's power problems, but competition, not the Standard Offer Contract program, is the way to go.

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Tom Adams is the executive director of Energy Probe, a Toronto consumer and environmental research group. Second opinion articles reflect the views of Record readers on a variety of subjects.

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Energy Policy in Ontario:
Some Perspectives on the Road Ahead

Tom Adams
Energy Probe
Ontario Energy Association Breakfast Series
March 8, 2006

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The presentation given by Tom Adams to the Ontario Energy Association Breakfast Series follows below:

Jack delivers a simple message and he does it so well, 'All coal is bad.'

My message is 'Clean coal is as good as it gets.' Clean coal is so good, that instead of fooling around with yesterday's gas and nuclear technologies, Ontario should start building new coal-fired generators, starting at the Lakeview site in Mississauga.

I am going to present the case for coal in five parts:

1. The public has been mislead about coal;
2. Pollution control technologies work;
3. Exciting new technologies are rapidly developing;
4. Consequences of not moving forward with clean coal;
5. We will develop a graceful exit for the Ontario government from its rash anti-coal promise.

#1 What has the public been told about coal?

The public has been spun on coal. They have been told:

- Air pollution control scrubbers only cut pollution by ½ of 1%;
- Lambton is Ontario’s #2 polluter;
- Investing in scrubbers would be a waste of money; and
- It is a myth that the best Lambton generators are comparable to gas.

These statements are all misleading as I will make clear.

#2 Do pollution control technologies work?

Our cleanest coal power – L3/ 4 – have new scrubbers that slash acid gases and toxic mercury emissions by about 80%. I could tell you that they are in the cleanest 2 percentile of all the coal plants in NAFTA but who would care. More importantly, our best coal is cleaner than many gas-fired power plants in Michigan, Ohio, Pennsylvania and New York – all key power suppliers to Ontario who also share our air. Closing L3/4 will increase air pollution in Ontario.

As to the allegation that scrubbers only cut emissions by ½ of 1%, the spin there is to treat toxic emissions like mercury with CO2.

#3 How are state of the art coal technologies doing?

Just great.

With technology in hand to virtually eliminate acid gases, and with progress on mercury, the next emission challenge is CO2. The Europeans currently have the lead with cogeneration, fuel blending with biofuels and high efficiency boilers all being used there today, with success. The Japanese and Americans are channeling staggering resources into coal R&D.

Geologic sequestration of CO2 is further out on the horizon but also looks promising. South western Ontario appears to enjoy geology suitable for massive, longterm CO2 storage.

#4 What are our prospects if we don’t go ahead with clean coal?

Gloomy.

Solar is popular, but how many people know that in Germany the price paid for solar last year was $1.15/kWh? Lambton power costs about 4 cents. New water power in Ontario is also popular but the potential is limited and many remaining sites are sensitive.

The Ontario Power Authority has set out its vision of the consequences of not building a clean coal future in Ontario. What we will get is a perverse and hideously expensive two-for-one deal. The OPA's plan calls for a lot of gas plants to be built ASAP to cover the supply gap while nuclear plants are being constructed.

In effect, to take out one unit of coal, Ontario finds itself in a position where it has to build one unit of gas plus one unit of new nuclear.

#5 How can the Ontario government make a graceful exit from a promise that it must now understand was rash?

At the time its policy was developed, the outlook for gas prices appeared moderate, security issues only interested fringe groups, and the technologies for clean coal were less advanced. Getting rid of dirty coal was a great idea. It still is.

The government should follow the IESO's lead in focusing on reliability. The government should be credited for demonstrating flexibility in staying the execution on some units by over a year.

Obviously, the government must rescind its closure order on Ontario's cleanest coal power. Closing Lambton 3 and 4 will increase mercury, NOX, and SOX pollution in Ontario. The scrubbed power from Lambton 3 and 4 is environmentally beneficial and must be preserved.

Sliding the schedule for killing the other existing coal units we need is not good enough: the government should order scrubbers for several existing coal units immediately.

Only the unreasonable could criticize the government for expanding the scope of the OPA to survey all option, including clean coal technologies and to present to the public the best options. Ontario could so easily be taking advantage of the advancements being paid for by others.

What is the bottom line?

Ontario has only one power generation option that can stand on its own. It needs no government subsidies. Its technology is modern and moving forward rapidly. Its cost is low. Its supply is secure. It's not interesting to terrorists. Its environmental outlook is responsible. Its production is reliable enough to support intermittent generators like wind power or to fill in when nuclear generators shut down for years at a time.

Ontario needs clean coal, it is as good as it gets."