The Ontario Power Authority released its list of Qualified Applicants for Large Renewable power projects today. The deadline for applicants to apply for qualification was one month ago, on September 4th.
The Government of Ontario will now proceed to contract for more wind and solar power, despite the fact Ontario has a surplus of power and has been selling off power to neighbouring jurisdictions throughout October at a loss of millions of ratepayer dollars.
The company that had proposed a wind power project in North Gower, Prowind of Germany (incorporated as Prowind Canada here) is NOT on the list of qualified applicants.
The chair of Ottawa Wind Concerns Jane Wilson says the community is cautiously optimistic: “The citizens of North Gower, Richmond and Kars demonstrated solid opposition to the project via a plebescite last year, which resulted in a supportive motion unanimously passed at Ottawa City Council. We think any other company looking at coming here will get the message that a huge wind power project close to over 1,000 homes and our school is not appropriate. We continue to stand ready to take every means available to fight another proposal.”
LRP I RFQ Qualified Applicants List PostedThe LRP I RFQ submission deadline was September 4, 2014, at 3:00 p.m. Seventy Qualification Submissions were received by the deadline. Following two months of review for completeness and eligibility, the OPA has now completed its evaluation of all Qualification Submissions and has determined the final list of Qualified Applicants. These entities would be eligible to submit proposals under any future LRP I RFP.
Those RFQ Applicants that are not listed on the LRP I RFQ Qualified Applicant List are reminded that they would not be eligible to submit a proposal under any future LRP I RFP but may qualify to participate in any future round of LRP procurement.
More information and the LRP I RFQ Qualified Applicant List are available on the LRP Website.
Next Steps in the LRP Process
The OPA is working to finalize the draft versions of the LRP I RFP and LRP I Contract and anticipates they will be posted in November. Once the documents have been posted, municipalities, communities, stakeholders and other interested parties will be invited to review them and provide feedback. A webinar will also be scheduled to discuss the draft documents – details on the timing of the webinar will be posted with the draft documents.
New study explains why Ontario has gone from affordable electricity rates to among the highest in N America. Photo: Bloomberg
Ross McKitrick and Tom Adams, The Financial Post, October 30, 2014
Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers
Ontario’s green energy transformation – initiated a decade ago under then-Premier Dalton McGuinty – is now hitting consumers. The Nov 1 increase for households is the next twist of that screw. As Ontario consumers know all too well, the province has gone from having affordable electricity to having some of the highest and fastest-increasing rates in Canada.
Last year, in a report for the Fraser Institute called “Environmental and Economic Consequences of Ontario’s Green Energy Act,” one of us (McKitrick) explained how the Green Energy Act, passed in 2009, yielded at best tiny environmental benefits that cost at least ten times more than conventional pollution control methods, and was directly harming growth by driving down rates of return in key sectors like manufacturing.
But complex financial structures and a lack of official disclosure around large embedded costs have let supporters of the green energy act deny that green power is responsible for the price hikes. Green industry advocates, including the consulting firm Power Advisory and advocacy group Environmental Defense, have added up the direct payments to new renewable generators, and concluded that since those costs are relatively small, the impact of renewables on the total cost of power is likewise small.
However, such analyses ignore the indirect costs that arise from the way renewables interact with the rest of the power system. Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers through a mechanism called the Global Adjustment. Our new study, released Wednesday by the Fraser Institute, quantifies the impacts of different types of new generators on the Global Adjustment. The analysis pinpoints what causes the raw deal for consumers.
Here’s how it works: over the last decade, Ontario closed its coal-fired power plants and built a rapidly expanding portfolio of contracts with other generators including renewable energy companies producing power from hydro, wind, solar and biomass. These companies charge the Ontario Power Authority (OPA) higher-than-market-value prices for energy. To make up the difference, the OPA slaps an extra charge – called the Global Adjustment – on the electricity bills of Ontarians.
The Global Adjustment adds to the commodity portion of rates, which combined with charges for delivery, debt recovery, and regulatory factors constitute the overall rate. Elements of the Global Adjustment that are not disclosed include payments to generators to not generate, rates paid to historic non-utility generators, and costs for new hydro-electric developments.
Since 2007, the Global Adjustment has risen six cents per kilowatt-hour in inflation-adjusted terms, pushing up the commodity portion of bills by 50%. Not long ago, Ontario’s total industrial rate was less than six cents per kilowatt-hour. The rising Global Adjustment is by far the biggest driver of the resulting 21% increase in the overall average cost of power in the province over the period 2007-2013. The Global Adjustment’s upward path is a direct consequence of government intervention in the electricity market. Our analysis unpacking the costs of different types of generation shows that the consumer impact of new renewables substantially exceeds the direct payments to those generators by as much as 3 to 1. And renewables are a big part of the problem: Wind and solar systems provided less than 4% of Ontario’s power in 2013 but accounted for 20% of the commodity cost paid by Ontarians.
Getting to the bottom of the rate implications of adding renewables gained new urgency when Premier Wynne declared last month that the 2013 fleet of wind and solar will almost triple by 2021. This is an incredibly reckless decision. In his National Post column recently on the 2014 Ontario Economic Summit, co-chair Kevin Lynch, Vice-Chair of BMO Financial Group, stated bluntly “That Ontario has a serious growth problem is rather difficult to deny, or debate.”
What’s the solution? If the Province wants to contain electricity rate increases it needs to halt new hydroelectric, wind and solar projects. In order to reverse rate increases, the province should seek opportunities to terminate existing contracts between renewable energy companies and the OPA. Alas, as the Premier has indicated, that’s not where they’re headed.
Alternatives to costly new renewables include using some imported electricity from Quebec while Ontario refurbishes its nuclear power plants and maintaining 4 of 12 coal-fired power units at Lambton and Nanticoke that had been outfitted with advanced air pollution control equipment just prior to their closure, making them effectively as clean to operate as natural gas plants. Costly conservation programs encouraging consumers to use less electricity make particularly little sense these days in Ontario. Right now, Ontario is exporting vast amounts of electricity at prices that yield only pennies on the dollar, and also paying vast but undisclosed sums to generators to not generate.
Many European countries made costly commitments to renewable energy but are now winding them back. Germany is investing in new smog-free coal power generation. Environmentalists often suggested that following Europe is the way to go. Perhaps Ontario should consider following them now.
Ross McKitrick is a Professor of Economics at the University of Guelph and Senior Fellow of the Fraser Institute. Tom Adams is an independent energy consultant and advisor.
Another $20-million autumn weekend with Ontario power sold off cheap to neighbouring states and province
Another October weekend has come and gone along—and so has at least another $20 million of Ontario ratepayer dollars, due to selling off surplus Ontario power cheap.
This past weekend of October 24-26 saw Ontario sell off another 189,000 megawatt hours (MWh) of electricity to our neighbours in Michigan, New York and Quebec. Those MWh went for a song generating, $4.31 each and earning about $820K. The flip side is, ratepayers paid over $110 per MWh for that power generation. We lost $106 for each MWh (10.6 cents per kilowatt hour); that means the subsidized cost of those megawatt hours was over $20 million, or a one-time hit of about $4.50 for each of Ontario’s average electricity ratepayer. The trouble of course is that it is not a one-time hit, as this situation occurs frequently during spring and fall when demand for power is low.
Included in that $20 million we paid to export our surplus is the cost for the spasmodic production of electricity from thousands of industrial wind turbines throughout the province and, presumably, some solar production. Wind turbines produced over 52,000 MWh Octover 24-26, and wind power producers were paid for not producing another 17,000 MWh. That 69,000 MWh cost Ontario’s ratepayers half of the $20 million. It doesn’t include what Ontario Power Generation spilled in hydro, what gas generators were paid to idle, or what Bruce Nuclear was paid to steam off nuclear power.
What this past weekend and others before it should be telling the Ontario Liberal government and the Minister of Energy Bob Chiarelli is that Ontario’s ratepayers are consuming less of this expensive commodity. Premier Wynne’s “Conservation First” initiative, as Tom Adams notes in a recent post titled “Crock of Conservation,” has driven demand down but the energy ministry keeps adding more inefficient renewables to Ontario’s grid.
During the past weekend, Ontario exported 20% of its average electricity demand. If each Ministry of the Ontario government wasted 20% of their budget, the main stream media might pay attention but it seems that the Minister of Energy is allowed to waste ratepayer dollars without any serious oversight because the money is simply extracted, without effect on the Ontario deficit.
We can only hope for the day when it is recognized that ratepayers are also taxpayers, and that their money is being wasted with regularity due to Ontario’s energy policy.
Wolfe Island: destruction of a pretty place and for what?
Donna Rachel Edmunds, Breitbart News, October 27, 2014
Wind power is too variable and too unpredictable to provide a serious alternative to fossil fuels, a new study by the Scientific Alliance and the Adam Smith Institute has confirmed. The researchers concluded that, although it is true that the wind is always blowing somewhere, the base line is only around 2 percent of capacity, assuming a network capacity of 10GW.
The majority of the time, wind will only deliver 8 percent of total capacity in the system, whilst the chances of the wind network running at full capacity is “vanishingly small”. As a consequence, fossil fuel plants capable of delivering the same amount of energy will always be required as backup.
The report was undertaken by the Scientific Alliance and the Adam Smith Institute. Using data on wind speed and direction gathered hourly from 22 sites around the UK over the last nine years, the researchers were able to build a comprehensive picture of how much the wind blows in the UK, where it blows, and how variable it is.
They found that, contrary to popular opinion, variability was a significant factor as “swings of around 10 percent are normal” across the whole system within 30 – 90 minute timeframes. “This observation contradicts the claim that a widespread wind fleet installation will smooth variability,” the authors write.
Likewise, and again contrary to popular assumptions, wind does not follow daily or even seasonal outputs. There were long periods in which the wind was not blowing even in winter, making it difficult to match generation of wind power to demand. The report concludes that covering these low periods would either need 15 storage plants the size of Dinorwig (a pumped storage hydroelectric power station in Wales with a 1.7GW capacity), or preserving and renewing our fossil plants as a reserve.
Most significantly, it found that the system would be only running at 90 percent of capacity or higher for 17 hours a year, and at 80 percent or higher for less than one week a year; conversely, total output was at less than 20 percent of capacity for 20 weeks of the year, and below 10 percent during nine weeks a year. “The most common power output of this 10GW model wind fleet is approximately 800MW. The probability that the wind fleet will produce full output is vanishingly small,” the authors note. The consequence is that many more wind turbines will have to be built than is often assumed, as the capacity of the fleet can’t be assumed to be synonymous with actual output.
The findings will deliver a body blow to governmental claims that their current target of generating 27 percent of energy from renewable sources – mostly wind and solar – by 2030 is credible.
“If there were no arbitrary renewable energy target, governments would be free to focus on what most voters expect: providing a framework in which a secure and affordable energy supply can be delivered,” commented Martin Livermore, director of the Scientific Alliance.
“If emissions are also to be reduced, the most effective measures currently would be a move from coal to gas and a programme of nuclear new build. In the meantime, the renewables industry continues to grow on a diet of subsidies, and we all pick up the tab. Getting out of this hole is not going to be easy, but it’s time the government started the process rather than continuing to dig deeper.”
According to the 2013 Renewable Energy Roadmap (the most recent to date), offshore wind capacity reached 3.5GW by June 2013, and onshore capacity reached 7GW in the same month. Governmental modelling suggests that offshore wind capacity will hit 16GW by 2020, and 39GW by 2030.
In the introduction to the Roadmap, the ministerial team headed by Ed Davey, secretary of state for energy and climate change wrote “The Government’s commitment to cost effective renewable energy as part of a diverse, low-carbon and secure energy mix, is as strong as ever. Alongside gas and low-carbon transport fuels, nuclear power and carbon capture and storage, renewable energy provides energy security, helps us meet our decarbonisation objectives and brings green growth to all parts of the UK.”
In an interview with the CBC for a news story on Ottawa’s rural ward 20/Osgoode, sitting councillor Diane Holmes said that she has “no sympathy” for the rural councillors, and that perhaps they should just leave.
In fact, Homes said, if there was a vote to let the rural wards go, she would be “first” to vote.
The story may be seen at cbc.ca/m/news/Canada/Ottawa
The report covered comments by Ottawa’s rural residents to the effect that they felt excluded from City plans and projects, and were not sure they are getting value for their tax dollars. Retiring Osgoode councillor Doug Thompson said that there has been a rural-urban divide, but that the situation was improving.
Commenting on Twitter, Ward 21 incumbent councillor Scott Moffatt said Holmes’ remarks were “ignorant.” Candidate for Ward 21 Dan Scharf offered Diane Holmes a tour of Rideau-Goulbourn.
In 2009, Holmes voted against a motion by then-councillor for Rideau-Goulbourn Glenn Brooks, who had proposed a motion to Council asking for a moratorium on a proposed wind power project in North Gower, pending health studies on the effects of the noise and infrasound produced by wind turbines.
Ontario hydro bills are scheduled to increase as temperatures decrease, the Ontario Energy Board announced Thursday.
The price per kilowatt hour will go up for on-, off- and mid-peak hours of the day starting November 1.
The Board says the changes will translate into a 1.7 per cent increase on a typical bill. That’s about $2 a month for the average household.
The lowest priced periods remain weekdays from 7 p.m. to 7 a.m., as well as all day during weekends and holidays. The off-peak price will be 7.7 cents per kilowatt hour — a 0.2 cent increase from current prices.
Electricity prices in Ontario have now gone up 51 per cent in off-peak usage, 41 per cent in mid-peak usage and 41 per cent in peak usage in the last four years.
What the lost $44 million could have bought: 293 family docs, 580 nurse practitioners
Blowing Ontario’s ratepayer dollars
Money lost in just one week could have paid for 580 nurses
So far this October, Ontario’s electricity sector has been blowing our money away at an awesome pace.
Scott Luft, whom I admire for his ability to assimilate comprehensible data, posted on Tumblr some disturbing information about the first 10 days of electricity production (and curtailed production) in Ontario. Because the fall means low demand for electricity, our current surplus energy supply (principally, wind, solar and gas) was curtailed to the extent that it cost ratepayers $20 million, while the HOEP (hourly Ontario energy price) generated only $8.2 million. That $20 million of curtailmentcost will find its way to the Global Adjustment (GA) pot and onto ratepayers’ bills.
I took a different route and looked at the cost of Ontario’s exports for the week of October 3rd to October 9th —those numbers are also disturbing. During those seven days, Ontario exported 399,048 MWh (megawatt hours) which was 15.7% of total Ontario demand. Wind turbines generated and delivered 184,204 MWh, which was surplus to our needs and probably exported. The money generated via the HOEP from all of the export sales was $56,300 or 14 cents a MWh. Wind turbines produced just $15,164 and we sold that production for just 8 cents a MWh.
To put this in perspective, the exported production’s cost all-in (contract value per MWh + regulatory + transmission + debt retirement charge) averaged $110/MWh, according to the latest monthly IESO Market Summary August 2014 report’s findings. Using $110/MWh the 399,000 MWh exported in those seven days hit Ontario’s ratepayers with about $44 million (less the $56,300) via allocation to the GA—that will show up on the electricity line on our bills.
Wind generation alone at the contracted rate of $135/MWh cost ratepayers $24,900,000 plus another $5 to $6 million for their curtailed production, according to Scott Luft. That $30 to $31 million plus the cost of steaming off Bruce Nuclear, paying idling gas plants, etc., and the additional cost of solar generation, would confirm the $44 million is a reasonable estimate.
What has Ontario missed out on by having ratepayers subsidizing those exports by $44 million for those seven days?
the annual salary of 293 family physicians, or
580 nurse practitioners, or
repairing all the Toronto District School Board’s school roofs, or
one and a half days of interest on Ontario’s public debt, or
all of Ontario’s 301 MPP salaries for a full year, or
40 MRI machines, or
100 months of mortgage payments on the empty MaRS Phase 2 building, or
increasing funding for autistic children by 30% over current levels.
Just a few examples of how the wasted subsidy money that cost each Ontario ratepayer $10 for just one week could have been used!
Brinston–While some critics of wind turbines howl that the cost of the eventual teardown of a turbine is astronomical, the actual cost today would be $30,000 to $100,000, per turbine.
The bigger issue is, who is going to pay for it.
Municipalities are on the hook to ensure companies tear down or, in industry jargon, decommission a turbine, unless they’ve got a binding agreement with the wind power company. Some municipalities demand from wind turbine companies ongoing payments into protected (or escrow) accounts or bonds to set money aside annually to pay for decommissioning.
Some municipalities require a letter of intent from wind turbine companies to ensure they will be responsible for decommissioning. Some municipalities have no agreement at all, including Wolfe Island, said its mayor, Denis Doyle. TransAlta communications manager Stacey Hatcher said the decommissioning plans are between the company and the landowner and because of that, the info is confidential. [See editor’s note #1]
The 86 turbines on Wolfe Island, on the St. Lawrence River at Kingston, were built by Canadian Hydro Developers, later purchased by Trans Alta and there is no bond or escrow account in place. The company does, however, reimburse the island about $100,000 per year for hosting the project. Based on current decommissioning projects around the world, it can cost $30,000 to $10,000 [sic] to dispose of a turbine. If it were to cost $50,000 to remove each turbine on Wolfe Island, it would cost $4.3 million to remove them all. Of course, that price goes up over time. [See Editor’s note #2] Hatcher said the company plans to repower or recontract when they [sic] current contracts are up.
There are 10 three-megawatt wind turbines at Brinston, between Kemptville and Winchester, and the power company ProWind [see Editor’s note #3] pays $1,000 per megawatt per year over the next 20 years into an escrow account that will rack up $600,000 to pay for decommissioning. [Editor’s note #4]
Windlectric Inc. wants to build 36 turbines on Amherst Island where Statec Consulting said that decommissioning costs are up to Windlectric. Typically, decommissioning will not remove all of the concrete base, but that’s only the first few feet of concrete that went into the ground. [We’re done adding editor’s notes at this point.]
One of the most infamous decomissionings involved 37 decrepit turbines in Hawaii that stood unused for six years before they were taken down in 2012. Tawhiri Power estimated that the take-down cost $30,000 per turbine. [OK, one more; see Editor’s note #5]
The seven-turbine community-owned Black Oak Wind Farm in New York State will start construction in late 2014. The decommissioning plan would currently cost about $55,883 per turbine, although the project expects to generate at least $50,000 per turbine by selling it as scrap metal. The municipality agreement means the power company must pay $140,000 per turbine in escrow but also means the payment can be reviewed and changed if decommissioning estimates change.….
WCO Editor’s notes:
1. Many landowners were told that it was to their benefit to decommission the turbines themselves as there is so much scrap value in the turbines; this is untrue due to the quality of metal being used, and also the other costs of decommissioning such as crane rental, and disposal of the toxic components.
2. So, that would be the millions then…
3. ProWind, properly “Prowind,” does not own the Brinston project, and hasn’t for several years. It is now owned by EDP Renewables.
4. In the original negotiations with Prowind, the developer wanted the landowners and the municipality to be responsible for decommissioning costs. It was the local community group that brought these costs to the attention of the municipality, and played a significant role in the agreement now in place.
5. US dollars? Canadian dollars? Also, the size of the turbines and the machinery involved is a factor. The turbines erected in Hawaii over a decade again, and the turbines at Wolfe Island are now miniscule compared with the 500-foot-plus, 3 -MW behemoths being built and proposed.
Here a commentary from Ottawa-based energy economist, Robert Lyman:
In May 2014, the Fraser Institute, based in British Columbia, published a report authored by Professor Ross McKitrick and PhD candidate Elmira Aliakbari of the University of Guelph. The report, Energy Abundance and Economic Growth, endeavoured to answer an important question in economic research: does economic growth cause an increase in energy consumption or does an increase in energy availability cause an increase in economic activity, or both?
The question has important implications for government policy. Suppose GDP (i.e., national income) growth causes increased energy consumption, but is not dependent on it. In this view, energy consumption is like a luxury good (like jewelry), the consumption of which arises from increased wealth. If policy makers wanted to, they could restrict energy consumption without impinging on future economic and employment growth. The alternative view is that energy is a limiting factor (or essential input) to growth. In that framework, if energy consumption is constrained by policy, future growth will also be constrained, raising the economic costs of such policies. If both directions of causality exist (i.e., if economic growth causes increases in energy consumption and increases in the availability, and use of energy causes economic growth), it still implies that restrictions on energy availability or increases in energy prices will have negative effects on future growth.
The main contribution of the report, in terms of economic theory, is that it shows how new statistical methods have been developed that allow for investigation of whether the relationships between economic growth and growth in energy use are simply correlated or are causal in nature. The theoretical and methodological discussion in the report is quite complex, even for a trained economist, which is probably why the report received very little public attention. The clear conclusion of the analysis, however, is that growth and energy either jointly influence each other, or that the influence is one-way from energy to GDP. Further, of all the OECD countries studied, Canada shows the most consistent evidence on this, in that studies under a variety of methods and time periods have regularly found evidence that energy is a limiting factor in Canadian economic growth.
In other words, real per-capita income in Canada is definitely constrained by policies that restrict energy availability and/or increase energy costs, and growth in energy abundance leads to growth in Canadian GDP per capita.
The report concludes with a reference to Ontario’s electricity policies.
“These considerations are important to keep in mind as policymakers consider initiatives (especially related to renewable energy mandates, biofuels requirements, and so forth) that explicitly limit energy availability. Jurisdictions such as Ontario have argued that such policies are consistent with their overall strategy to promote economic growth. In other words, they assert that forcing investment in wind and solar generation systems – while making electricity more expensive overall – will contribute to macro-economic growth. The evidence points in the opposite direction. Policies that engineer energy scarcity are likely to lead to negative effects on future GDP growth.”
One can read the entire Fraser Institute report at:
Living close to wind farms could cause hearing damage
New research published by the Royal Society warns of the possible danger posed by low frequency noise like that emitted by wind turbines
Camilla Turner, The Telegraph, October 1, 2014
Living close to wind farms may lead to severe hearing damage or even deafness, according to new research which warns of the possible danger posed by low frequency noise.
The physical composition of inner ear was “drastically” altered following exposure to low frequency noise, like that emitted by wind turbines, a study has found.
The research will delight critics of wind farms, who have long complained of their detrimental effects on the health of those who live nearby.
Published today by the Royal Society in their new journal Open Science, the research was carried out by a team of scientists from the University of Munich.
It relies on a study of 21 healthy men and women aged between 18 and 28 years. After being exposed to low frequency sound, scientists detected changes in the type of sound being emitted from the inner ear of 17 out of the 21 participants.
The changes were detected in a part of the ear called the cochlear, a spiral shaped cavity which essential for hearing and balance.
“We explored a very curious phenomenon of the human ear: the faint sounds which a healthy human ear constantly emits,” said Dr Marcus Drexl, one of the authors of the report.
“These are like a very faint constant whistling that comes out of your ear as a by-product of the hearing process. We used these as an indication of how processes in the inner ear change.”
Dr Drexl and his team measured these naturally emitted sounds before and after exposure to 90 seconds of low frequency sound.
“Usually the sound emitted from the ear stays at the same frequency,” he said. “But the interesting thing was that after exposure, these sounds changed very drastically.
“They started to oscillate slowly over a couple of minutes. This can be interpreted as a change of the mechanisms in the inner ear, produced by the low frequency sounds.
“This could be a first indication that damage might be done to the inner ear.
“We don’t know what happens if you are exposed for longer periods of time, [for example] if you live next to a wind turbine and listen to these sounds for months of years.”
Wind turbines emit a spectrum of frequencies of noise, which include the low frequency that was used in the research, Dr Drexl explained.
He said the study “might help to explain some of the symptoms that people who live near wind turbines report, such as sleep disturbance, hearing problems and high blood pressure”.
Dr Drexl explained how the low frequency noise is not perceived as being “intense or disturbing” simply because most of the time humans cannot hear it.
“The lower the frequency the you less you can hear it, and if it is very low you can’t hear it at all.
“People think if you can’t hear it then it is not a problem. But it is entering your inner ear even though it is not entering your consciousness.”
Ottawa Wind Concerns 