Governments must stop picking winners and losers and let the market decide.
We hear a lot these days from politicians, environmentalists and the industry itself about electric vehicles being on the cutting edge of the new green energy revolution aimed at fighting man-made climate change.
So how are they doing, sales wise?
Well, out of 1.45 million registered business and government commercial vehicles in Ontario at the end of 2015, there were zero plug-in hybrid electric vehicles (PHEVs) and eight battery electric vehicles (BEVs).
BEVs and PHEVs use external plug-in battery charging, while PHEVs and conventional hybrid vehicles also use hydrocarbon fuels to generate power in order to operate.
Of 6.9 million registered private passenger vehicles in Ontario at the end of 2015, there were 2,113 BEVs and 3,274 PHEVs, totalling 5,387, or .078%.
Considering the Ontario government’s recent announcement that it will spend $20 million on electric vehicle charging stations, that’s a subsidy of more than $3,700 per Ontario vehicle alone.
Of 21 million registered vehicles across Canada at the end of 2014, there were 5,341 BEVs, and 5,437 PHEVs, totalling 10,778 or .05%.
The average cost of Ontario’s eight commercial model BEVs, including subsidies, is twice that of a comparable gasoline fuelled vehicle.
Government subsidies for purchasing or leasing EVs (electric vehicles) are up to $8,500 in Ontario, $8,000 in Quebec, $5,000 in B.C. and up to $1,000 for in-home vehicle charging systems in Ontario and Quebec.
Typically mid-range priced EVs have about a 100 km battery range, low cost EVs less than that.
Weighed against fuel savings of a few hundred dollars per year, the potential downsides are the unknown total cost of ownership due to a lack of data on long-term maintenance costs, downtime costs, and the limited driving range of EVs.
All pose potential risks to private and public sector users.
As with many claims by politicians and environmental advocates about the benefits of green energy, these often aren’t reliably or independently verified.
A recent German study, for example, “Environmental comparison of electric vehicles (EV) versus vehicles fuelled by petrol, diesel, natural gas, biodiesel, bioethanol and biogas,” assessed 13 different environmental impact categories.
Only EVs with batteries charged exclusively from renewable energy reduced the impact on the environment across most categories.
For decades, Canadian and Ontario auditors general have reported on numerous cases of government energy and environmental policies and programs being implemented with little or no analysis done beforehand.
With regard to provincial renewable electricity production, the 2011 Ontario auditor general’s annual report stated: “No independent, objective, expert investigation had been done to examine the potential effects of renewable energy policies on prices … no long-term energy plan was in place,” and the energy ministry did not estimate potential job losses and the cost per renewable for energy-related jobs in Ontario.
The 2015 Ontario auditor general’s annual report concluded Ontarians paid $37 billion extra for electricity from 2006 to ’14.
We could eventually pay hundreds of billions of dollars more for higher than market price power and 20-year green energy subsidies, while curtailing manufacturing (due to high energy prices) and offloading excess power at a loss.
Nationally, the federal government gave our fossil-fuel industries about 60% of the annual $2.74 billion (U.S.) available in subsidies in 2013 and in 2014.
Canada’s “national energy strategy” that came out of the premiers’ annual meeting in July contained 50 “actions”, many of which are already common practice.
It also included vague intentions to “maximize access to energy savings by all energy consumers,” plus pledges to “identify gaps in existing research” related to “transformational technologies.”
Actual targets for reducing greenhouse gas (GHG) emissions were excluded from this strategy.
Free carbon credits and possible exemptions to select industries and technologies under Ontario’s looming cap-and-trade plan will skewer the marketplace.
So will subsidies to Alberta’s fossil fuel industry arising out of its coming carbon tax.
Presently, only B.C.’s carbon tax plan is revenue neutral.
What we should do is eliminate all brown and green energy subsidies, and implement life cycle, cost-accounted economic and sales tax based policies to level the playing field among all energy suppliers for businesses, consumers and taxpayers.
In the real world, businesses won’t invest in creating separate departments and expertise to manage or mitigate the risks of using any new new green technology, unless there are compelling profits or savings to be gained.
Prime Minister Justin Trudeau, Canada’s premiers, territorial leaders and other stakeholders should do their homework before formulating these policies.
– Vezina is chairman of Hydrofuel Inc., and co-author of Democracy Eh? A Guide to Voter Action