TORONTO — Ontario's pursuit of wind power has driven up electricity prices, is killing jobs and might even lead to more smog, a new Fraser Institute report says.

Ross McKitrick, author of Environmental and Economic Consequences of Ontario's Green Energy Act (GEA), says the Ontario government's electricity plan is now 10 times more costly than installing pollution-control equipment on existing coal plants — an option he argues would have produced similar improvements in air quality.

His analysis of the GEA concludes the province is well on its way to having some of the highest electricity prices in North America.

"Already, the GEA has caused major price increases for large energy consumers and we're anticipating additional hikes of 40% to 50% over the next few years," McKitrick said in a statement. "Provincial efforts to shield these industries through energy subsidy programs only transfer the costs onto Ontario taxpayers who are already dealing with skyrocketing residential electricity prices.

"Overall, GEA-related energy cost increases will yield a net loss of investment and employment in Ontario, in pursuit of environmental benefits that could have been obtained at a fraction of the cost," he said.

The Ontario government introduced the GEA to help create a new industry of "green" jobs and to replace "dirty" coal-powered generation in an environmentally sustainable way.

The act allows individuals and businesses to set up wind, solar and other renewable generation under contracts that guarantee above-market rates for their electricity.

Many environmental groups have spoken out in favour of the GEA.

But the Fraser Institute report says that wind power has proven "particularly wasteful" because it's rarely available when needed and often has to be unloaded on other jurisdictions at a financial loss to hydro ratepayers.

"Because of the fluctuating nature of wind and solar power, adding renewable capacity to the grid requires additional backup power from natural gas plants," the report says. "Ontario currently has a surplus of base-load generating capacity. Further additions to baseload in the form of wind or solar power may require removing a nuclear plant from operation and replacing it with a combination of renewable and gas-fired generation, yielding a net increase in air emissions."

Building a transmission system that can reach wind projects scattered over a large area is also driving up bills issued to ratepayers, the report says.

Retrofitting the Lambton and Nanticoke coal-fired power plants, which were already well wired into the transmission grid, would have been a much cheaper choice with similar improvements in air quality, McKitrick's report says.

Big hydro users, like the mining, manufacturing and forestry industries, will be hard hit by rising rates leading to fewer jobs for Ontarians, the report predicts.