Same wires, more power

Bitcoin Energy Debate examines electricity usage, mining costs, environmental impact, and blockchain efficiency, weighing renewable power, carbon footprint, scalability, and transaction throughput to clarify stakeholder claims from Tesla, Square, academics, and policymakers.

Key Points

Debate on Bitcoin mining's power use, environmental impact, efficiency, and scalability versus alternative blockchains.

✅ Compares energy intensity with transaction throughput and system outputs.

✅ Weighs renewables, stranded power, and carbon footprint in mining.

✅ Assesses PoS blockchains, stablecoins, and scalability tradeoffs.

There is a great debate underway about the electricity required to process Bitcoin transactions. The debate is significant, the stakes are high, the views are diverse, and there are smart people on both sides. Bitcoin generates a lot of emotion, thereby producing too much heat and not enough light. In this post, I explain the importance of identifying the key issues in the debate, and of understanding the nature and extent of disagreement about how much electrical energy Bitcoin consumes.

Consider the background against which the debate is taking place. Because of its unstable price, Bitcoin cannot serve as a global mainstream medium of exchange. The instability is apparent. On January 1, 2021, Bitcoin’s dollar price was just over $29,000. Its price rose above $63,000 in mid-April, and then fell below $35,000, where it has traded recently. Now the financial media is asking whether we are about to experience another “cyber winter” as the prices of cryptocurrencies continue their dramatic declines.

Central banks warns of bubble on bitcoins as it skyrockets
As bitcoins skyrocket to more than $12 000 for one BTC, many central banks as ECB or US Federal ... [+] NURPHOTO VIA GETTY IMAGES
Bitcoin is a high sentiment beta asset, and unless that changes, Bitcoin cannot serve as a global mainstream medium of exchange. Being a high sentiment beta asset means that Bitcoin’s market price is driven much more by investor psychology than by underlying fundamentals.

As a general matter, high sentiment beta assets are difficult to value and difficult to arbitrage. Bitcoin qualifies in this regard. As a general matter, there is great disagreement among investors about the fair values of high sentiment beta assets. Bitcoin qualifies in this regard.

One major disagreement about Bitcoin involves the very high demand for electrical power associated with Bitcoin transaction processing, an issue that came to light several years ago. In recent months, the issue has surfaced again, in a drama featuring disagreement between two prominent industry leaders, Elon Musk (from Tesla and SpaceX) and Jack Dorsey (from Square).

On one side of the argument, Musk contends that Bitcoin’s great need for electrical power is detrimental to the environment, especially amid disruptions in U.S. coal and nuclear power that increase supply strain.  On the other side, Dorsey argues that Bitcoin’s electricity profile is a benefit to the environment, in part because it provides a reliable customer base for clean electric power. This might make sense, in the absence of other motives for generating clean power; however, it seems to me that there has been a surge in investment in alternative technologies for producing electricity that has nothing to do with cryptocurrency. So I am not sure that the argument is especially strong, but will leave it there. In any event, this is a demand side argument.

A supply side argument favoring Bitcoin is that the processing of Bitcoin transactions, known as “Bitcoin mining,” already uses clean electrical power, power which has already been produced, as in hydroelectric plants at night, but not otherwise consumed in an era of flat electricity demand across mature markets.

Both Musk and Dorsey are serious Bitcoin investors. Earlier this year, Tesla purchased $1.5 billion of Bitcoin, agreed to accept Bitcoin as payment for automobile sales, and then reversed itself. This reversal appears to have pricked an expanding Bitcoin bubble. Square is a digital transaction processing firm, and Bitcoin is part of its long-term strategy.

Consider two big questions at the heart of the digital revolution in finance. First, to what degree will blockchain replace conventional transaction technologies? Second, to what degree will competing blockchain based digital assets, which are more efficient than Bitcoin, overcome Bitcoin’s first mover advantage as the first cryptocurrency?

To gain some insight about possible answers to these questions, and the nature of the issues related to the disagreement between Dorsey and Musk, I emailed a series of academics and/or authors who have expertise in blockchain technology.

David Yermack, a financial economist at New York University, has written and lectured extensively on blockchains. In 2019, Yermack wrote the following: “While Bitcoin and successor cryptocurrencies have grown remarkably, data indicates that many of their users have not tried to participate in the mainstream financial system. Instead they have deliberately avoided it in order to transact in black markets for drugs and other contraband … or evade capital controls in countries such as China.” In this regard, cyber-criminals demanding ransom for locking up their targets information systems often require payment in Bitcoin. Recent examples of cyber-criminal activity are not difficult to find, such as incidents involving Kaseya and Colonial Pipeline.

David Yermack continues: “However, the potential benefits of blockchain for improving data security and solving moral hazard problems throughout the financial system have become widely apparent as cryptocurrencies have grown.” In his recent correspondence with me, he argues that the electrical power issue associated with Bitcoin “mining,” is relatively minor because Bitcoin miners are incentivized to seek out cheap electric power, and patterns shifted as COVID-19 changed U.S. electricity consumption across sectors.

Thomas Philippon, also a financial economist at NYU, has done important work characterizing the impact of technology on the resource requirements of the financial sector. He has argued that historically, the financial sector has comprised about 6-to-7% of the economy on average, with variability over time. Unit costs, as a percentage of assets, have consistently been about 2%, even with technological advances. In respect to Bitcoin, he writes in his correspondence with me that Bitcoin is too energy inefficient to generate net positive social benefits, and that energy crisis pressures on U.S. electricity and fuels complicate the picture, but acknowledges that over time positive benefits might be possible.

Emin Gün Sirer is a computer scientist at Cornell University, whose venture AVA Labs has been developing alternative blockchain technology for the financial sector. In his correspondence with me, he writes that he rejects the argument that Bitcoin will spur investment in renewable energy relative to other stimuli. He also questions the social value of maintaining a fairly centralized ledger largely created by miners that had been in China and are now migrating to other locations such as El Salvador.

Bob Seeman is an engineer, lawyer, and businessman, who has written a book entitled Bitcoin: The Mother of All Scams. In his correspondence with me, he writes that his professional experience with Bitcoin led him to conclude that Bitcoin is nothing more than unlicensed gambling, a point he makes in his book.

David Gautschi is an academic at Fordham University with expertise in global energy. I asked him about studies that compare Bitcoin’s use of energy with that of the U.S. financial sector. In correspondence with me, he cautioned that the issues are complex, and noted that online technology generally consumes a lot of power, with electricity demand during COVID-19 highlighting shifting load profiles.

My question to David Gautschi was prompted by a study undertaken by the cryptocurrency firm Galaxy Digital. This study found that the financial sector together with the gold industry consumes twice as much electrical power as Bitcoin transaction processing. The claim by Galaxy is that Bitcoin’s electrical power needs are “at least two times lower than the total energy consumed by the banking system as well as the gold industry on an annual basis.”

Galaxy’s analysis is detailed and bottom up based. In order to assess the plausibility of its claims, I did a rough top down analysis whose results were roughly consistent with the claims in the Galaxy study. For sake of disclosure, I placed the heuristic calculations I ran in a footnote.1 If we accept the Galaxy numbers, there remains the question of understanding the outputs produced by the electrical consumption associated with both Bitcoin mining and U.S. banks’ production of financial services. I did not see that the Galaxy study addresses the output issue, and it is important.

Consider some quick statistics which relate to the issue of outputs. The total market for global financial services was about $20 trillion in 2020. The number of Bitcoin transactions processed per day was about 330,000 in December 2020, and about 400,000 in January 2021. The corresponding number for Bitcoin’s digital rival Ethereum during this time was about 1.1 million transactions per day. In contrast, the global number of credit card transactions per day in 2018 was about 1 billion.2

Bitcoin Value Falls
LONDON, ENGLAND - NOVEMBER 20: A visual representation of the cryptocurrencies Bitcoin and Ethereum ... [+] GETTY IMAGES
These numbers tell us that Bitcoin transactions comprise a small share, on the order of 0.04%, of global transactions, but use something like a third of the electricity needed for these transactions. That said, the associated costs of processing Bitcoin transactions relate to tying blocks of transactions together in a blockchain, not to the number of transactions. Nevertheless, even if the financial sector does indeed consume twice as much electrical power as Bitcoin, the disparity between Bitcoin and traditional financial technology is striking, and the experience of Texas grid reliability underscores system constraints when it comes to output relative to input.  This, I suggest, weakens the argument that Bitcoin’s electricity demand profile is inconsequential because Bitcoin mining uses slack electricity.

A big question is how much electrical power Bitcoin mining would require, if Bitcoin were to capture a major share of the transactions involved in world commerce. Certainly much more than it does today; but how much more?

Given that Bitcoin is a high sentiment beta asset, there will be a lot of disagreement about the answers to these two questions. Eventually we might get answers.

At the same time, a high sentiment beta asset is ill suited to being a medium of exchange and a store of value. This is why stablecoins have emerged, such as Diem, Tether, USD Coin, and Dai. Increased use of these stable alternatives might prevent Bitcoin from ever achieving a major share of the transactions involved in world commerce.

We shall see what the future brings. Certainly El Salvador’s recent decision to make Bitcoin its legal tender, and to become a leader in Bitcoin mining, is something to watch carefully. Just keep in mind that there is significant downside to experiencing foreign exchange rate volatility. This is why global financial institutions such as the World Bank and IMF do not support El Salvador’s decision; and as I keep saying, Bitcoin is a very high sentiment beta asset.

In the past I suggested that Bitcoin bubble would burst when Bitcoin investors conclude that its associated processing is too energy inefficient. Of course, many Bitcoin investors are passionate devotees, who are vulnerable to the psychological bias known as motivated reasoning. Motivated reasoning-based sentiment, featuring denial,3 can keep a bubble from bursting, or generate a series of bubbles, a pattern we can see from Bitcoin’s history.

I find the argument that Bitcoin is necessary to provide the right incentives for the development of clean alternatives for generating electricity to be interesting, but less than compelling. Are there no other incentives, such as evolving utility trends, or more efficient blockchain technologies? Bitcoin does have a first mover advantage relative to other cryptocurrencies. I just think we need to be concerned about getting locked into an technologically inferior solution because of switching costs.

There is an argument to made that decisions, such as how to use electric power, are made in markets with self-interested agents properly evaluating the tradeoffs. That said, think about why most of the world adopted the Windows operating system in the 1980s over the superior Mac operating system offered by Apple. Yes, we left it to markets to determine the outcome. People did make choices; and it took years for Windows to catch up with the Mac’s operating system.

My experience as a behavioral economist has taught me that the world is far from perfect, to expect to be surprised, and to expect people to make mistakes. We shall see what happens with Bitcoin going forward.

As things stand now, Bitcoin is well suited as an asset for fulfilling some people’s urge to engage in high stakes gambling. Indeed, many people have a strong need to engage in gambling. Last year, per capita expenditure on lottery tickets in Massachusetts was the highest in the U.S. at over $930.

High sentiment beta assets offer lottery-like payoffs. While Bitcoin certainly does a good job of that, it cannot simultaneously serve as an effective medium of exchange and reliable store of value, even setting aside the issue at the heart of the electricity debate.

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Hinkley Point C dome lift marks a nuclear reactor milestone in Somerset, as EDF used Big Carl crane to place a 245-tonne steel roof, enabling 2027 startup amid costs, delays, and precision indoor welding.

Key Points

A 245-tonne dome lifted onto Hinkley Point C's first reactor, finishing the roof and enabling fit-out for a 2027 startup.

✅ 245-tonne steel dome lifted by Big Carl onto 44m-high reactor

✅ Indoor welding avoided weather defects seen at Flamanville

✅ Cost now £33bn; first power targeted by end of 2027

Engineers have lifted a steel roof onto a building which will house the first of two nuclear reactors at Hinkley Point in Somerset.

Hundreds of people helped with the delicate operation to get the 245-tonne steel dome into position.

It means the first reactor can be installed next year, ready to be switched on in June 2027.

Engineers at EDF said the "challenging job" was completed in just over an hour.

They first broke the ground on the new nuclear station in March 2017. Now, some 10,000 people work on what is Europe's largest building site.

Yet many analysts note that Europe is losing nuclear power even as demand for reliable energy grows.

They have faced delays from Covid restrictions and other recent setbacks, and the budget has doubled to £33bn, so getting the roof on the first of the two reactor buildings is a big deal.

EDF's nuclear island director Simon Parsons said it was a "fantastic night".

"Lifting the dome into place is a celebration of all the work done by a fantastic team. The smiles on people's faces this morning were something else.

"Now we can get on with the fitting of equipment, pipes and cables, including the first reactor which is on site and ready to be installed next year."

Nuclear minister Andrew Bowie hailed the "major milestone" in the building project, citing its role in the UK's green industrial revolution ambitions.

He said: "This is a key part of the UK Government's plans to revitalise nuclear."

But many still question whether Hinkley Point C will be worth all the money, especially after Hitachi's project freeze in Britain, with Roy Pumfrey of the Stop Hinkley campaign describing the project as "shockingly bad value".

Why lift the roof on?

The steel dome is bigger than the one on St Paul's Cathedral in London.

To lift it onto the 44-metre-high reactor building, they needed the world's largest land-based crane, dubbed Big Carl by engineers.

So why not just build the roof on top of the building?

The answer lies in a remote corner of Normandy in France, near a village called Flamanville.

EDF has been building a nuclear reactor there since 2007, ten years before they started in west Somerset.

The project is now a decade behind schedule and has still not been approved by French regulators.

Why? Because of cracks found in the precision welding on the roof of the reactor building.

In nuclear-powered France, they built the roof in situ, out in the open. 

Engineers have decided welding outside, exposed to wind and rain, compromised the high standards needed for a nuclear reactor.

So in Somerset they built a temporary workshop, which looks like a fair sized building itself. All the welding has been done inside, and then the completed roof was lifted into place.

Is it on time or on budget?

No, neither. When Hinkley C was first approved a decade ago, EDF said it would cost £14bn.

Four years later, in 2017, they finally started construction. By now the cost had risen to £19.5bn, and EDF said the plant would be finished by the end of 2025.

Today, the cost has risen to £33bn, and it is now hoped Hinkley C will produce electricity by the end of 2027.

"Nobody believes it will be done by 2027," said campaigner Roy Pumfrey.

"The costs keep rising, and the price of Hinkley's electricity will only get dearer," they added.

On the other hand, the increase in costs is not a problem for British energy bill payers, or the UK government.

EDF agreed to pay the full cost of construction, including any increases.

When I met Grant Shapps, then the UK Energy Secretary, at the site in April, he shrugged off the cost increases.

He said: "I think we should all be rather pleased it is not the British tax payer - it is France and EDF who are paying."

In return, the UK government agreed a set rate for Hinkley's power, called the Strike Price, back in 2013. The idea was this would guarantee the income from Hinkley Point for 35 years, allowing investors to get their money back.

Will it be worth the money?

Back in 2013, the Strike Price was set at £92.50 for each megawatt hour of power. At the time, the wholesale price of electricity was around £50/MWh, so Hinkley C looked expensive.

But since then, global shocks like the war in Ukraine have increased the cost of power substantially, and advocates argue next-gen nuclear could deliver smaller, cheaper, safer designs.

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Ontario Global Adjustment Supreme Court Appeal spotlights a constitutional challenge to Ontario's electricity charge, pitting National Steel Car against the IESO over regulatory charge vs tax, procurement policy, and renewable energy feed-in tariff contracts.

Key Points

An SCC leave bid on whether Ontario's global adjustment is a valid regulatory charge or an unconstitutional tax.

✅ Appeals Court revived case for full record review

✅ Dispute centers on regulatory charge vs tax classification

✅ FIT renewables contracts and procurement policies at issue

The Ontario government wants the Supreme Court of Canada to weigh in on a constitutional challenge being brought against a large provincial electricity charge, a case the province claims raises issues of national importance.

Ontario’s attorney general and its Independent Electricity System Operator applied for permission to appeal to the Supreme Court in January, according to the court’s website.

The province is trying to appeal a Court of Appeal decision reinstating the challenge from November that said a legal challenge by Hamilton, Ont.-based National Steel Car Ltd. should be sent back to a lower-court for a full hearing.

Court reinstates constitutional challenge to Ontario's hefty ‘global adjustment’ electricity charge
National Steel Car appealing decision in legal challenge of Ontario electricity fee it calls an unconstitutional tax
Doug Ford’s cancellation of green energy deals costs Ontario taxpayers $231 million
National Steel Car launched its legal challenge in 2017, with the maker of steel rail cars claiming the province’s global adjustment electricity charge was a tax intended to fund certain post-financial-crisis policy goals. Since it is allegedly a tax, and one not imposed by the provincial legislature, the company’s argument is the global adjustment is unconstitutional, and also in breach of a provincial law requiring a referendum for new taxes.

The global adjustment mostly bridges the gap between the province’s hourly electricity price and the price guaranteed under contracts and regulated rates with power generators. It also helps cover the cost of building new electricity infrastructure and providing conservation programs, but the fee now makes up most of the commodity portion of a household power bill in the province.

Ontario argued the global adjustment is a valid regulatory charge, and moved to have National Steel Car’s challenge thrown out. An Ontario Superior Court judge agreed, and dismissed the challenge in 2018, saying it was “plain, obvious and beyond doubt” it could not succeed. However, an appeals court judge disagreed, writing in a decision last November that the “merits should not have been determined on a pleadings motion and without the development of a full record.”

In filings made to the Supreme Court, both the IESO and Ontario’s Ministry of the Attorney General argued their proposed appeals raise “issues of national and public importance,” such as whether incorporating environmental and social policy goals in procurement could turn attempts by a public body to recover costs into an unconstitutional tax.

Most applications for leave to appeal to the Supreme Court are dismissed, but the Ontario government claims the court’s guidance is required in this case, as it could lead to questions being raised about other fees or charges, such as money raised from fishing licences.

“A failure to dispose of this claim at the pleadings stage may well result in such uncertainty that public authorities across Canada decline to incorporate the kind of environmental and social policy goals objected to in this case into the decisions they make about how to spend funds raised from regulatory charges,” the filing from the attorney general states. “Alternatively, it may induce governments not to engage in cost recovery in connection with publicly supplied goods and services, which can otherwise be sound public policy.”

The government has so far had to pay National Steel Car $250,000 in legal costs “to avoid responding to the credible claim that the Global Adjustment is an unconstitutional tax,” said David Trafford of Morse Shannon LLP, one of National Steel Car’s lawyers.

“The application for leave to appeal is the next step in this effort to avoid having to respond to the case on the merits,” Trafford added in an email.

The application for leave to appeal is the next step in this effort to avoid having to respond to the case on the merits

David Trafford of Morse Shannon, one of National Steel Car’s lawyers
 
National Steel Car has particularly taken issue with the part of the global adjustment that funded contracts for renewable energy under a “feed-in tariff” program, or FIT, which the company called “the main culprit behind the dramatic price increases for electricity.”

The FIT program has been ended, but contracts awarded under it remain in place and form part of the global adjustment. Ontario’s auditor general estimated in 2015 that electricity consumers would pay $9.2 billion more for renewable energy under the government’s guaranteed-price program, a figure that later featured in a dispute between the auditor and the electricity regulator that drew political attention.

National Steel Car said its global adjustment costs grew from $207,260 in 2008 to almost $3.4 million in 2016, reflecting how high electricity rates have pressured manufacturers, to almost $3.4 million in 2016. For 2018, there was approximately $11.2 billion in global adjustment collected, according to the IESO’s reporting.

A spokesperson for the IESO said it “is not in a position to comment” because the case is still before the courts.

Electricity prices have been an ongoing problem for both Ontario consumers and politicians, which the previous Liberal government tried to address in 2017 by, among other things, refinancing global-adjustment costs through the Fair Hydro Plan and other measures.

Since National Steel Car filed its lawsuits, though, the Liberals lost power in the province and were succeeded in 2018 by Premier Doug Ford and the Progressive Conservatives, who made changes to the previous government’s power policies, including legislation to lower electricity rates introduced early in their mandate.

The province has also pursued interprovincial power arrangements, including building on an electricity deal with Quebec as part of its broader energy strategy.

“The present government of Ontario does not agree with the former government’s electricity procurement program, which ceased awarding new contracts in 2016,” Ontario’s attorney general said in a filing. “However, Ontario submits that (the lower-court judge) was correct in holding that it does not give rise to a claim susceptible to being remedied by the courts.”

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Ontario Electricity Demand 2020 shows a rare decline amid COVID-19, with higher residential peak load, lower commercial usage, hot-weather air conditioning, nuclear baseload constraints, and smart meter data shaping grid operations and forecasting.

Key Points

It refers to 2020 power use in Ontario: overall demand fell, while residential peaks rose and commercial loads dropped.

✅ Peak load shifted to homes; commercial usage declined.

✅ Hot summers raised peaks; overall annual demand still fell.

✅ Smart meters aid forecasting; grid must balance nuclear baseload.

Demand for electricity in Ontario last year fell to levels rarely seen in decades amid shifts in usage patterns caused by pandemic measures, with Ottawa’s electricity consumption dropping notably, new data show.

The decline came despite a hot summer that had people rushing to crank up the air conditioning at home, the province’s power management agency said, even as the government offered electricity relief to families and small businesses.

“We do have this very interesting shift in who’s using the energy,” said Chuck Farmer, senior director of power system planning with the Independent Electricity System Operator.

“Residential users are using more electricity at home than we thought they would and the commercial consumers are using less.”

The onset of the pandemic last March prompted stay-home orders, businesses to close, and a shuttering of live sports, entertainment and dining out. Social distancing and ongoing restrictions, even as the first wave ebbed and some measures eased, nevertheless persisted and kept many people home as summer took hold and morphed into winter, while the province prepared to extend disconnect moratoriums for residential customers.

System operator data show peak electricity demand rose during a hot summer spell to 24,446 megawatts _ the highest since 2013. Overall, however, Ontario electricity demand last year was the second lowest since 1988, the operator said.

In all, Ontario used 132.2 terawatt-hours of power in 2020, a decline of 2.9 per cent from 2019.

With more people at home during the lockdown, winter residential peak demand has climbed 13 per cent above pre-pandemic levels, even as Hydro One made no cut in peak rates for self-isolating customers, while summer peak usage was up 19 per cent.

“The peaks are getting higher than we would normally expect them to be and this was caused by residential customers _ they’re home when you wouldn’t expect them to be home,” Farmer said.

Matching supply and demand _ a key task of the system operator _ is critical to meeting peak usage and ensuring a stable grid, and the operator has contingency plans with some key staff locked down at work sites to maintain operations during COVID-19, because electricity cannot be stored easily. It is also difficult to quickly raise or lower the output from nuclear-powered generators, which account for the bulk of electricity in the province, as demand fluctuates.

READ MORE: Ontario government extends off-peak electricity rates to Feb. 22

Life patterns have long impacted overall usage. For example, demand used to typically climb around 10 p.m. each night as people tuned into national television newscasts. Livestreaming has flattened that bump, while more energy-efficient lighting led to a drop in provincial demand over the holiday season.

The pandemic has now prompted further intra-day shifts in usage. Fewer people are getting up in the morning and powering up at home before powering down and rushing off to work or school. The summer saw more use of air conditioners earlier than normal after-work patterns.

Weather has always been a key driver of demand for power, accounting for example for the record 27,005 megawatts of usage set on a brutally hot Aug. 1, 2006. Similarly, a mild winter and summer led to an overall power usage drop in 2017.

Still, the profound social changes prompted by the COVID-19 pandemic _ and whether some will be permanent _ have complicated demand forecasting.

“Work patterns used to be much more predictable,” the agency said. “The pandemic has now added another element of variability for electricity demand forecasting.”

Some employees sent home to work have returned to their offices and other workplaces, and many others are likely do so once the pandemic recedes. However, some larger companies have indicated that working from home will be long term.

“Companies like Facebook and Shopify have already stated their intention to make work from home a more permanent arrangement,” the operator said. “This is something our near-term forecasters would take into account when preparing for daily operation of the grid.”

Aggregated data from better smart meters, which show power usage throughout the day, is one method of improving forecasting accuracy, the operator said.

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Ontario Renewable Energy Cancellations highlight Doug Ford's move to scrap wind turbine contracts, citing electricity rate relief and taxpayer savings, while critics, the NDP, and industry warn of job losses, termination fees, and auditor scrutiny.

Key Points

Ontario's termination of renewable contracts, defended as cost and rate relief, faces disputes over savings and jobs.

✅ PCs cite electricity rate relief and taxpayer savings.

✅ Critics warn of job losses and termination fees.

✅ Auditor inquiry sought into contract cancellation costs.

Ontario Premier Doug Ford, whose new stance on wind power has drawn attention, said Thursday he is “proud” of his decision to tear up hundreds of renewable energy deals, a move that his government acknowledges could cost taxpayers more than $230 million.

Ford dismissed criticism that his Progressive Conservatives are wasting public money, telling a news conference that the cancellation of 750 contracts signed by the previous Liberal government will save cash, even as Ontario moves to reintroduce renewable energy projects in the coming years.

“I’m so proud of that,” Ford said of his decision. “I’m proud that we actually saved the taxpayers $790 million when we cancelled those terrible, terrible, terrible wind turbines that really for the last 15 years have destroyed our energy file.”

Later Thursday, Ford went further in defending the cancelled contracts, saying “if we had the chance to get rid of all the wind mills we would,” though a court ruling near Cornwall challenged such cancellations.

The NDP first reported the cost of the cancellations Tuesday, saying the $231 million figure was listed as “other transactions”, buried in government documents detailing spending in the 2018-2019 fiscal year.

The Progressive Conservatives have said the final cost of the cancellations, which include the decommissioning of a wind farm already under construction in Prince Edward County, Ont., has yet to be established, amid warnings about wind project cancellation costs from developers.

The government has said it tore up the deals because the province didn’t need the power and it was driving up electricity rates, and the decision will save millions over the life of the contracts. Industry officials have disputed those savings, saying the cancellations will just mean job losses for small business, and ignore wind power’s growing competitiveness in electricity markets.

NDP Leader Andrea Horwath has asked Ontario’s auditor general to investigate the contracts and their termination fees, amid debates over Ontario’s electricity future among leadership contenders. She called Ford’s remarks on Thursday “ridiculous.”

“Every jurisdiction around the world is trying to figure out how to bring more renewables onto their electricity grids,” she said. “This government is taking us backwards and costing us at the very least $231 million in tearing these energy contracts.”

At the federal level, a recent green electricity contract with an Edmonton company underscores that shift.

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Ontario Global Adjustment Deferral offers COVID-19 electricity bill relief to industrial and commercial consumers not on the RPP, aligning GA to March levels for Class A and Class B manufacturers to improve cash flow.

Key Points

A temporary GA deferral easing electricity costs for Ontario industrial and commercial users not on the RPP.

✅ Sets Class B GA at $115/MWh; Class A gets equal percentage cut.

✅ Applies April-June 2020; automatic bill adjustments and credits.

✅ Deferred charges repaid over 12 months starting January 2021.

Manufacturers welcome the Government of Ontario's decision to defer a portion of Global Adjustment (GA) charges as part of support for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan.

"Manufacturers are pleased the government listened to Canadian Manufacturers & Exporters (CME) member recommendations and is taking action to reduce Ontario electricity bills immediately," said Dennis Darby, President & CEO of CME.

"The majority of manufacturers have identified cash flow as their top concern during the crisis, "added Darby. "The GA system would have caused a nearly $2 billion cost surge to Ontario manufacturers this year. This new initiative by the government is on top of the billions in support already provided to help manufacturers weather this unprecedented storm, while other provinces accelerate British Columbia's clean energy shift to drive long-term competitiveness. All these measures are a great start in helping businesses of all sizes stay afloat during the crisis and, keeping Ontarians employed."

"We call on the Ontario government to continue to consider the impact of electricity costs on the manufacturing sector, even after the COVID-19 crisis is resolved," stated Darby. "High prices are putting Ontario manufacturers at a significant competitive disadvantage and, discourages investments." A recent report from London Economics International (LEI) found that when compared to jurisdictions with similar manufacturing industries, Ontario's electricity prices can be up to 75% more expensive, underscoring the importance of planning for Toronto's growing electricity needs to maintain affordability.

To provide companies with temporary immediate relief on their electricity bills, the Ontario government is deferring a portion of Global Adjustment (GA) charges for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting from April 2020, as some regions saw reduced electricity demand from widespread remote work during the pandemic. The GA rate for smaller industrial and commercial consumers (i.e., Class B) has been set at $115 per megawatt-hour, which is roughly in line with the March 2020 value. Large industrial and commercial consumers (i.e., Class A) will receive the same percentage reduction in GA charges as Class B consumers.

The Ontario government intends to keep this relief in place through the end of June 2020, alongside investments like smart grid technology in Sault Ste. Marie to support reliability, subject to necessary extensions and approvals to implement this initiative.

Industrial and commercial electricity consumers will automatically see this relief reflected on their bills. Consumers who have already received their April bill should see an adjustment on a future bill.

Related initiatives include developing cyber standards for electricity sector IoT devices to strengthen system security.

The government intends to bring forward subsequent amendments that would, if approved, recover the deferred GA charges (excluding interest) from industrial and commercial electricity consumers, as Toronto prepares for a surge in electricity demand amid continued growth, over a 12-month period beginning in January 2021.

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