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Ontario ratepayer fatigue: covering the costs of bargain basement sale of surplus power from wind and solar

When will it end?

Another month goes by and another $168 million from Ontario ratepayer’s pockets went to subsidize surplus electricity exports to our neighbours in New York, Michigan and Quebec. The month of August saw another 1,759,000 megawatts (MWh) or 1.76 terawatts of excess electricity generation exported. That cost Ontario’s electricity ratepayers $209 million—the Independent Electricity System Operator (IESO) sold it for $41 million.

The 1.76 terawatts (TWh) sold at the big discount was enough to supply 183 thousand “average” Ontario households with power for a full year. That sale brings our exports to 15.09 TWh for the first 8 months of 2015, enough to supply almost 1.6 million “average” households with power for a full year!

The costs of those export losses fall to all ratepayers; for the eight months ended August 31st, that means a “green energy tax” of $1.4 billion, or about $300 per average household. Quick math will disclose that the average monthly cost is $177 million meaning the total cost for Ontario’s ratepayers in 2015 may reach $2.1 billion or roughly $460 per ratepayer. The 23 TWh we will probably export would have provided 2.4 million ratepayers with their average annual power needs.

What about wind power in all this? In August, wind produced 3.5% (459.3 gigawatts or GWh) of total generation (13.05 TWh) and just over 26% of our exports; solar produced about 29 GWh (not including “embedded generation”). Combined, they represented 27.7% of our exports which begs the question—what benefit do they provide and why do we keep adding more generation at subsidized rates, if we lose money because we must export our surplus generation?

That question is unfortunately not going to be answered any time soon, if we look at the recently released IESO 18 month outlook (Oct 2015 to March 2017).   The IESO report notes:

“About 1,900 MW of new supply – mostly wind and solar generation – will be added to the province’s transmission grid over the Outlook period. By the end of the period, the amount of grid-connected wind generation is expected to increase by 1,300 MW to about 4,500 MW. The total distribution-connected wind generation over the same period is expected to be about 700 MW. Meanwhile, grid-connected solar generation is expected to increase to 380 MW, complementing the embedded solar generation capacity of about 2,200 MW located within distribution networks by the end of the Outlook.”

According to the IESO report, Ontario will add 1,700 MW of generation from wind and solar generation over the next 15 months, which brings wind turbine capacity to 5,200 MW and solar to almost 2,600 MW. This is clearly not needed or dependable.

The IESO report also highlights what we have been told by various business associations that have expressed concern about the effects of rising electricity costs: “For the three months, wholesale customers’ consumption posted a 5.9% decrease over the same months a year prior with Pulp & Paper, Iron & Steel and Petroleum Products accounting for most of the reductions.”

That’s evidence that our primary processors are exiting Ontario, in large part because of high electricity prices, taking jobs with them.

The Ontario Wynne government is bent on ensuring Ontario leads the way to the highest prices of electricity in all of North America; they have only a couple of jurisdictions to overtake.

Time to turn the lights off!

©Parker Gallant

October 4, 2015

Re-posted from Wind Concerns Ontario www.windconcernsontario.ca