Chom Noamsky
2018-10-05 01:23:08 UTC
To incentivize the development of renewables, the previous Ontario
Liberal govt signed lavish FIT contracts at far higher rates than what
the power was actually worth.
Natcherally, that creates the problem of how to make up the difference,
considering wind and solar do not come even close to paying their own way.
So you invent a magic fudge factor called the "Global Adjustment", apply
to the utility rate, then use the proceeds to honour the FIT contracts.
***
Almost all revenue earned by renewable power producers is from the GA
subsidy rather than actual power sales. From May 2017 to April 2018,
market revenues for renewable generators based on wholesale market sales
totaled about $0.5 billion, which was supplemented by $4.2 billion from
GA revenues to satisfy FIT contract requirements. In other words, almost
90 percent of the revenue to renewable generators came through the GA
subsidy, rather than through sales of actual power.
https://www.fraserinstitute.org/studies/electricity-reform-in-ontario-getting-power-prices-down
Liberal govt signed lavish FIT contracts at far higher rates than what
the power was actually worth.
Natcherally, that creates the problem of how to make up the difference,
considering wind and solar do not come even close to paying their own way.
So you invent a magic fudge factor called the "Global Adjustment", apply
to the utility rate, then use the proceeds to honour the FIT contracts.
***
Almost all revenue earned by renewable power producers is from the GA
subsidy rather than actual power sales. From May 2017 to April 2018,
market revenues for renewable generators based on wholesale market sales
totaled about $0.5 billion, which was supplemented by $4.2 billion from
GA revenues to satisfy FIT contract requirements. In other words, almost
90 percent of the revenue to renewable generators came through the GA
subsidy, rather than through sales of actual power.
https://www.fraserinstitute.org/studies/electricity-reform-in-ontario-getting-power-prices-down