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Solar and wind power make electricity more expensive—that’s a fact

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From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

As a new year dawns and winter takes hold, it’s worth considering the cost of energy. After a meeting in Italy last spring, the G7 countries (including Canada) pledged to triple renewable energy sources (e.g. wind, solar) globally to ensure an “affordable” energy future. But while direct costs for wind and solar are dropping, they remain expensive due in part to the backup energy sources required when renewables are not available.

In short, an “affordable” energy future is incompatible with increased reliance on renewables. Here’s why.

Wind and solar energy are intermittent, meaning they aren’t consistently available, so we need an alternative power source when there’s no sunlight or wind given the current limited ability to store energy from solar and wind. So we must maintain enough energy capacity in a parallel system, typically powered by natural gas. Constructing and upkeeping a secondary energy source results in higher overall energy costs because two energy systems cost more than one. Therefore, when evaluating the costs of renewables, we must consider the costs of backup energy.

Often, when proponents claim that wind and solar sources are cheaper than fossil fuels, they ignore these costs. A recent study published in Energy, a peer-reviewed energy and engineering journal, found that—after accounting for backup, energy storage and associated indirect costs—solar power costs skyrocket from US$36 per megawatt hour (MWh) to as high as US$1,548 and wind generation costs increase from US$40 to up to US$504 per MWh.

Which is why when governments phase out fossil fuels to expand the role of renewable sources in the electricity grid, electricity become more expensive. In fact, a study by University of Chicago economists showed that between 1990 and 2015, U.S. states that mandated minimum renewable power sources experienced significant electricity price increases after accounting for backup infrastructure and other costs. Specifically, in those states electricity prices increased by an average of 11 per cent, costing consumers an additional $30 billion annually. The study also found that electricity prices grew more expensive over time, and by the twelfth year, electricity prices were 17 per cent higher (on average).

Europe is another case in point. Between 2006 and 2019, solar and wind sources went from representing around 5 per cent of Germany’s electricity generation to almost 30 per cent in 2019. During that same period, German households experienced an increase in electricity prices from 19.46 cents to 30.46 cents per kilowatt hour—a rise of more than 56 per cent. This surge in prices occurred before the war in Ukraine, which led to an unprecedented price spike in 2022.

For Canada, the outlook is also dire. In a recent report, TD Bank estimated that replacing existing gas generators with renewables (such as solar and wind) in Ontario could increase average electricity costs by 20 per cent by 2035 compared to 2021. In Alberta, electricity prices would  increase by up to 66 per cent by 2035 compared to an scenario without changes. These increases are on top of the 15 to 20 per cent increase in average generation costs expected by 2035 under current government policies.

Clearly, when accounting for backup costs, renewable-powered electricity is more expensive than fossil fuels. Policymakers in Ottawa and across Canada must recognize that integrating renewables into electricity grids can lead to significant price increases for consumers, and they should be honest about that fact with Canadians in 2025 and beyond.

Julio Mejía

Policy Analyst
Elmira Aliakbari

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

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Report: $128 million in federal grants spent on gender ideology

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More than $128 million of federal taxpayer money was spent on at least 341 grants to fund gender ideology initiatives under the Biden administration, according to an analysis of federal data by the American Principles Project.

In, “Funding Insanity: Federal Spending on Gender Ideology under Biden-Harris,” APP says it “found how the federal government has been spending hundreds of millions of YOUR MONEY on the Gender Industrial Complex!”

APP says it identified the grants by searching the USA Spending database. The data, which is available for free, is categorized by federal agency; notable grants are highlighted.

The U.S. Health and Human Services Department awarded the greatest amount of funding totaling nearly $84 million through 60 grants.

The Department of State awarded the greatest number of grants, 209, totaling more than $14 million, according to the data.

Other agencies awarding taxpayer-funded gender ideology grants include:

  • U.S. Agency for International Development, nearly $18 million through 8 grants;
  • National Endowment for the Humanities, more than $2.6 million through 20 grants;
  • Department of Justice, $1.9 million through three grants;
  • Institute of Museum and Library Services, $1.87 million through 13 grants;
  • Department of Education, $1.67 million through two grants;
  • Department of Agriculture, $1.6 million through five grants;
  • Department of the Interior, more than 1,000,000 awarded through two grants;
  • U.S. Department of Housing and Urban Development, more than $548,000 through 4 grants;
  • Inter-American Foundation, more than $490,000 through two grants;
  • National Endowment for the Arts, $262,000 through 13 grants.

APP also identified 63 federal agency contracts totaling more than $46 million that promote gender ideology. They include total obligated amounts and the number of contracts per agency.

The majority, $31 million, was awarded through USAID. The next greatest amount of $4.4 million was awarded through the Department of Defense.

The Trump administration has taken several approaches to gut USAID, which has been met with litigation. The Department of Defense and other agencies are also under pressure to cut funding and reduce redundancies.

Notable grants include:

  • $3.9 million to Key Populations Consortium Uganda for promoting “the safety, agency, well-being and the livelihoods of LGBTQI+ in Uganda;”
  • $3.5 million to Outright International for “the Alliance for Global Equality and its mission to promote LGBTQI+ people in priority countries around the world;”
  • $2.4 million to the International Rescue Committee for “inclusive consideration of sexual orientation, gender identity, and sexual characteristics in humanitarian assistance;”
  • $1.9 million to the American Bar Association to “shield the LGBTQI+ population in the Western Balkans;”
  • $1.4 million for “economic empowerment of and opportunity for LGBTQI+ people in Serbia;”
  • $1.49 million to Equality for All Foundation, Jamaica to “Strengthen community support structures to upscale LGBT rights advocacy;”
  • More than $1 million to Bandhu Social Welfare Society to support gender diverse people in Bangladesh.

One of the grants identified by APP, which has since been cancelled, was $600,000 from the U.S. Department of Agriculture to Southern University Agricultural & Mechanical College in Baton Rouge, Louisiana, to study menstruation and menopause, including in biological men.

According to a description of the grant summary, funding would support research, extension, and teaching to address “growing concerns and issues surrounding menstruation, including the potential health risks posed to users of synthetic feminine hygiene products (FHP);” advancing research in the development of FHP that use natural materials and providing menstrual hygiene management; producing sustainable feminine hygiene sanitary products using natural fibers; providing a local fiber processing center for fiber growers in Louisiana, among others.

It states that menstruation begins in girls at roughly age 12 and ends with menopause at roughly age 51. “A woman will have a monthly menstrual cycle for about 40 years of her life averaging to about 450 periods over the course of her lifetime,” but adds: “It is also important to recognize that transgender men and people with masculine gender identities, intersex and non-binary persons may also menstruate.”

All federal funding was allocated to state agencies through the approval of Congress when it voted to pass continuing resolutions to fund the federal government and approved agency budgets.

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Next federal government has to unravel mess created by 10 years of Trudeau policies

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From the Fraser Institute

By Jock Finlayson

It’s no exaggeration to describe the Trudeau years as almost a “lost decade” for Canadian prosperity.

The Justin Trudeau era is ending, after nine-and-a-half years as prime minister. His exit coincides with the onset of a trade crisis with the United States. Trudeau leaves behind a stagnant Canadian economy crippled by dwindling productivity, a long stretch of weak business investment, and waning global competitiveness. These are problems Trudeau chose to ignore throughout his tenure. His successors will not have that luxury.

It’s no exaggeration to describe the Trudeau years as almost a “lost decade” for Canadian prosperity. Measured on a per-person basis, national income today is barely higher than it was in 2015, after stripping out the effects of inflation. On this core metric of citizen wellbeing, Canada has one of the worst records among all advanced economies. We have fallen far behind the U.S., where average real income has grown by 15 per cent over the same period, and most of Europe and Japan, where growth has been in the range of 5-6 per cent.

Meanwhile, Ottawa’s debt has doubled on Trudeau’s watch, and both federal government spending and the size of the public service have ballooned, even as service levels have generally deteriorated. Housing in Canada has never been more expensive relative to average household incomes, and health care has never been harder to access. The statistics on crime point to a decline in public safety in the last decade.

Reviving prosperity will be the most critical task facing Trudeau’s successor. It won’t be easy, due in part to a brewing trade war with the U.S. and the retreat from open markets and free trade in much of the world. But a difficult external environment is no reason for Canada to avoid tackling the domestic impediments that discourage economic growth, business innovation and entrepreneurial wealth creation.

In a recent study, a group of economists and policy advisors outlined an agenda for renewed Canadian prosperity. Several of their main recommendations are briefly summarized below.

Return to the balanced budget policies embraced by the Chretien/Martin and Harper governments from 1995 to 2015. Absent a recession, the federal government should not run deficits. And the next government should eliminate ineffective spending programs and poor-performing federally-funded agencies.

Reform and reduce both personal and business income taxes. Canada’s overall income tax system is increasingly out of line with global best practise and has become a major barrier to attracting private-sector investment, top talent and world-class companies. A significant overhaul of the country’s tax policies is urgently needed.

Retool Ottawa’s existing suite of climate and energy policies to reduce the economic damage done by the long list of regulations, taxes, subsidies and other measures adopted Trudeau. Canada should establish realistic goals for lowering greenhouse gas emissions, not politically manufactured “targets” that are manifestly out of reach. Our climate policy should reflect the fact that Canada’s primary global comparative advantage is as a producer and exporter of energy and energy-intensive goods, agri-food products, minerals and other industrial raw materials which collectively supply more than half of the country’s exports.

Finally, take a knife to interprovincial barriers to trade, investment and labour mobility. These long-standing internal restrictions on commerce increase prices for consumers, inhibit the growth of Canadian-based companies, and result in tens of billions of dollars in lost economic output. The next federal government should lead a national effort to strengthen the Canadian “common market” by eliminating such barriers.

Jock Finlayson

Senior Fellow, Fraser Institute
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