Consider just a few of the issues looming on the horizon:

• Natural gas prices are now running around $7.50 per thousand cubic feet, up from a $2.00 just a few years ago. The country has approximately 56 trillion cubic feet of gas reserves; however, we consume and export roughly 6.5 trillion cubic feet yearly, giving us a little over 8.5 years of domestic supply.

• Oil prices are hovering at $70 per barrel and show few signs of going anywhere but up. China alone has 6 times the population of North America and they want their fair share of the energy pie. Simple supply and demand for this commodity product has industry experts forecasting a price of $350 per barrel within a decade.

• Closer to home, Ontario’s electrical system is in a complete mess due to gross incompetence by former governments and Ontario Hydro. The current and looming debt, including long-term interest to pay for keeping the lights on is estimated at over $200 billion and will take decades (or forever) to pay.

• Electricity is being sold at well below cost in the mistaken idea that it attracts industry and helps homeowners. Nothing could be farther from the truth. Massive subsidization creates massive waste and nothing more. Consider for a moment that Germans (who have the same standard of living as Canadians), consume one-third the electricity and still have all of the appliances and products that we crave.

The fact that energy prices are going up is a serious problem for everyone, especially those who are financially marginalized. A proper energy program would include a portion of energy sales being directed back into the community to help fund efficiency programs to help trim the tremendous amount of energy waste in the province.

Although energy efficiency should be the first order of business in Ontario, a second and equally important program is to move away from the outdated centralized power generating system we currently utilize.

Anyone who has travelled to Europe may be aware of the large number of small, privately-owned power generating facilities in the form of wind turbines, anaerobic digesters (manure to electricity systems), solar electric power and other forms of distributed energy systems. These technologies are the equivalent of today’s internet, using numerous small computers scattered across the country, rather than the centralized mainframe units of old.

Driving the development of “Community Power” systems is the knowledge that right-size electrical generation equipment distributed across a large geographical area such as Ontario improves the strength of the power system, greatly reduces transmission losses, and keeps money and jobs in the local area. When the benefits of clean, emission-free renewable energy are added into the equation, the advantages become overwhelming.

Standard Offer Contracts

The driving force bringing Community Power to this province is the Ontario government’s recent announcement of Standard Offer Contracts (SOCs). These policy mechanisms allow anyone in Ontario to develop renewable energy technologies and supply the electrical energy to the distribution grid at a fixed price over a long-term contract period. Sixteen European countries have implemented these programs over the last decade and have seen an explosion of Community Power projects, generating billions of dollars of revenues while employing well over 100,000 people.

At the recent launch of this program, I spoke with energy minister Donna Cansfield about bringing the program to Ontario. “Ontario’s Liberal Government understands the importance of renewable energy technologies to our electricity grid and communities,” explains Minister Cansfield. “Given the successful deployment in Europe and that our government wants to be leaders in this area, developing SOCs for the benefit of the provinces farming communities, businesses, first nations and so on, was a primary concern.”

The province’s electrical supply is constrained, and every kilowatt-hour of new generation helps to meet the existing energy crunch. When you consider that vast amounts of coal-fired electricity are imported into the province — while our dollars are exported — having the benefit of home-made electricity is not only very comforting, it is good business as well.

Many people worry that paying a higher price for renewable or small-scale electricity amounts to a subsidy, but in fact the opposite is true. Using the current pricing system, electrical power generation at approximately six cents per kilowatt-hour is at least 2 to 3 times below cost, depending on variables such as how society ultimately “stores” nuclear waste for the next million years. (The current Ontario Power Authority indicates that they have no idea how much this will cost, so they don’t attribute even one cent to storage cost).

The SOC program, on the other hand, exposes all of the costs for new generating plants up front and works from these figures to calculate a fair rate of return and electricity tariff; paying, in essence, the true cost of power. Financing, maintenance, financial risk and all other business issues belong to the power station owner; the government pays only for clean electricity delivered to the distribution grid.

Ontario has vast, almost limitless amounts of clean renewable energy sources. Many of the sources have huge additional benefits beyond just the power generation and resulting income. The photo above shows the first anaerobic digester installed in the province, near Cobden. This unit receives manure from the dairy cows and converts it into methane gas for electricity generation. The “digestate” that exits in the unit is almost completely pathogen and odour-free, as well as providing the farmer with an improved fertilizer.

As the price of traditional fossil and nuclear fuels continues to rise, small-scale community power projects offer a hedge against fuel price increases and a way to distribute wealth across the province. This is a bold step for Ontario, as it puts us on par with European policy and launches the province to the top of North American renewable energy program development.

For more information on SOC programs and Community Power development, contact the Ontario Sustainable Energy Association.

— Bill Kemp is the author of The Renewable Energy Handbook and $martPower: An urban guide to renewable energy and efficiency. He and his wife live on an off-grid hobby / horse farm in Lanark County, Ontario. His new book, Biodiesel: Basics and Beyond, will be available in late May.