All that despoliation of Ontario communities, agricultural land and the natural environment for … what? Expensive power produced out of phase with demand, says Marc Brouillette
In a stunning commentarypublished yesterday by theCouncil for Clean and Reliable Energy, energy policy consultantMarc Brouilettesays that Ontario’s wind power program is an expensive adventure that does not achieve any of its goals for the environment or economic prosperity, and is in fact, making things worse.
At a cost of $1.5 billion in 2015, Brouillette says, the fact that wind power generation is completely out of sync with demand in Ontario results in added costs for constrained generation form other sources. Constrained nuclear and hydro cost $300 million that year, and a further $200 million in costs was incurred due to “avoided” natural gas generation.
And, the power isn’t even getting to the people who need it. “[O]nly one-half of total provincial wind output makes it to the Central Region and the GTA where most of Ontario’s electricity demand exists,” Brouillette states.
All things considered, wind costs more than $410 per megawatt hour, which isfour times the average cost of electricityin Ontario. This is being charged to Ontario’s electricity customers, at an increasing rate.
Ontario should reconsider its commitment to more wind, Brouillette concludes: “these challenges will increase if Ontario proceeds to double wind capacity to the projected ~6,500 MW.”
Reposted from Wind Concerns Ontario windconcernsontario.ca
Ontario municipalities demanding no new wind power contracts now 24
Huron-Kinloss and West Lincoln have joined 22 other Ontario municipalities supporting the Wainfleet Resolution; the total is now 24.
The resolution refers to the Auditor General’s 2015 report in which Bonnie Lysyk detailed the amount of money Ontario citizens have paid for renewable power in a program that never had cost-benefit analysis. Ontarians paid twice as much for wind power as they should have, she said, with the result that Ontario consumers have seen their electricity bills skyrocket. Worse, she said, is the fact that Ontario is in a situation of surplus power generation, which means regular losses as power generators are paid to “constrain” production, and surplus power is sold off at bargain-basement process on the electricity market.
The Wainfleet Resolution asks that the province not give out any new wind power contracts; the IESO accepted bids for more than 2,000 megawatts of new wind power generation last year, and planned to let contracts for 300 megawatts of new projects, despite the surplus.
While Ontario has over 400 municipalities, only about 100 are rural/small-town communities vulnerable to wind power development. Wind power projects have also been proposed in Northern Ontario where there are no organized municipalities but “unorganized territories.”
Ontario electricity customers: in pain with more to come
Anybody watching as Ontario circles the drain?
Ratepayers to Queen’s Park: we have a problem
Wind power costs plenty for only 4% of generation
In the past six months, reports from the Canadian Manufacturers and Exporters, the C.D. Howe Institute, the Association of Major Power Consumers of Ontario, the Canadian Federation of Independent Business and the Ontario Chamber of Commerce have all called for “competitive” electricity prices.
A few of the members of some of those associations already benefit from absorption of some costs by residential and small business ratepayers, but still complain their electricity bills are too high and not competitive with competing jurisdictions in Canada and the U.S.!
Ontario is cursed with probably the most complex electricity system in the world even though 80% of our electricity is generated by nuclear and hydro. Both of those generation sources produce power at an average of about 6-7 cents per kilowatt hour (kWh), yet Ontario’s delivered electricity prices are among the highest in North America. Why? Most of the reasons relate to the Global Adjustment Mechanism (GA)NB 1: which has increased every year since its creation in 2005. The GA absorbs a plethora of ratepayer costs that are billed out via the “electricity” line on our bill. In the first six months of the current year, the GA accumulation is $4.6 billion versus only $2.2 billion in the comparable six month-period of 2014.
Here are some of the reasons for the increasing cost of electricity to Ontario’s ratepayers. Note that many have nothing to do with generating electricity.
Some current ratepayer costs:
Moving two gas plants (Oakville and Mississauga) at a cost of $1.1 billion
Smart meters costing $2 billion to enable time of use (TOU) billing with no benefit
The shift in costs (estimated at $422 million for 2012 by the C.D. Howe Institute) from Class A ratepayers to residential and small commercial enterprises
Cost overruns on the Niagara tunnel (“Big Becky”) of $500 million
Supporting the employee pensions of Hydro One and OPG pensions by contributing $4. for every $1 contributed by the employeesNB 2:
The $200 million cost of Hydro One’s messed up billing system
The costs for the 1.2 million letters and postage ($600K) for the CEO of Hydro One to apologize to their ratepaying customers for messing up their billing system
The $120 million annual cost of the Northern Industrial Electricity Rate Program to reduce electricity rates by 2 cents/kWh for industry in Northern Ontario
The $35-40 million annual cost of the Northern Ontario Energy Credit to assist single and family households with their electricity bills
The $2.6 billion it cost for the Lower Mattagami run of river project to principally produce expensive hydro electric power in the Spring when Ontario’s demand is at its lowest level
The Low-income Energy Assistance Program with an annual cost of $4 million to assist households living in Energy PovertyNB: 2
The annual costs (currently estimated at $40 million annually) associated with the development of a “smart grid” (smart grid entity charge) estimated in 2010 to cost $1.5 billion
The costs of the Net Revenue Requirement (NRR) for gas plants estimated to be a minimum of $650 million annually for them to sit idling so they can back up wind and solar generation
The annual costs of $30 million for the recovery of OPG’s expenses related to the conversion of one unit of Thunder Bay to biomass from coal
The $170 million costs of converting Atitokan from a coal generation unit to biomass together with the annual operating costs (operation, maintenance and administration) to sit idle for most of the time
Annual Conservation spending of $400 million that provides grants for people to purchase high efficiency air conditioners, LED bulbs, etc., and for businesses to retrofit their lighting system, purchase high efficiency refrigeration units, etc. and for municipalities to switch their street lighting systems and municipally owned arenas to LED, etc. etc.
The costs (unknown) of the “Lost Revenue Adjustment Charge” to allow your LDC to recover revenues (via the “delivery” charges) lost because your community has used less electricity
The costs of spilling clean hydro (3.7 terawatts in 2014 for OPG), constraining wind and solar generation, steaming off Bruce Nuclear, all at an estimated annual cost of $400-500 million.
The costs of subsidizing utility-scale wind power generation, which represented about 9% ($700 million + unknown amount for constrained wind generation) of the GA costs but only 4% (6.8 TWh) of total electricity generated
The costs of erecting and maintaining meteorological station for IESO to measure constrained wind at every wind development with a capacity rating of 10 Megawatts or more
The actual generation and costs of (an average of $500. per MWh) of solar panels NB: 3 to generate electricity usually when not needed. With 2,000 MW of capacity IESO doesn’t disclose what they produce yet claim they are transparent. An estimate of costs to ratepayers at 15% of rated capacity suggests ratepayers absorb in excess of $1 billion annually or 15% of the total GA costs but they produce less than 2% of total generated electricity
The costs associated with exporting Ontario’s surplus electricity production which was about $1.2 billion in 2014 and appears headed to $2 billion in 2015
Some future ratepayer costs:
The Ontario Energy Support Program, estimated to cost $200 million annually commences January 1, 2016 and will support 570,000 household’s currently living in “energy poverty”
Also effective January 1, 2016 the Ontario Clean Energy Benefit will no longer exist raising electricity bills 10%
Another 500 MW of capacity from wind (300 MW) and solar (200 MW) is to be added to the grid raising annual costs by about $200 million
The further shift of smaller industrials from Class B to Class A ratepayers will effectively transfer costs (estimated) of $300/400 million from clients with peak energy needs of 3MW under the “High 5” system
Lump sum payments and free Hydro One shares (after privatization) to Hydro One and OPG employees. Cost to ratepayers is an unknown at this time
The costs to convert the Toronto Zoo’s “zoo poo” to electricity
The costs of research and grants related to “energy storage.” The Energy Storage Association‘s members appear to be the beneficiaries of the grants but haven’t registered as lobbyists with the Ontario Registry. Costs are unknown! Members of the Association include: NextEra, Northland Power, MaRS Discovery District and even Ontario Sustainable Energy Association.
Another 1,500 MW of wind capacity scheduled to be in place by December 31, 2016 that will add a further $500 million annual cost to the system.
Future Ratepayer Savings:
As of January 1, 2016 the Debt Retirement Charge will no longer be levied saving an average ratepayer (residential) about $70 annually. The DRC will continue to be charged to businesses!
Net Ratepayer Increase:
The additional future costs coupled with the demise of the Ontario Clean Energy Benefit will see residential rates increase by a minimum of $400 annually, based on a quick estimate, and raise overall rates to rival those of Alaska and Hawaii.
Taxpayer-related costs:
The Ministry of the Environment and Climate Change will continue to incur costs associated with the legal fees to defend the issuance of their approvals of industrial wind developments via the Environmental Review Tribunal! Costs are unknown.
The Ontario Ministry of Transportation (MTO) will continue to experience costs associated with grants of $8,500 to individuals, etc. purchasing electric vehicles for those who can afford luxury Tesla automobiles, etc! Overall costs are unknown.
The MTO will continue to incur costs associated with the installation of charging station for electric vehicles! Costs are unknown.
Various municipalities will eventually experience declining property value assessments from their residential taxpayers associated with industrial wind turbines driving down property values and municipal tax revenue and require additional funding from the Ministry of Municipal Affairs and Housing or higher municipal taxes. Costs are presently unknown!
Taxpayer related benefit:
The one and only taxpayer benefit relates to the end of the Ontario Clean Energy Benefit on January 1, 2016, saving taxpayers about $1 billion annually. The taxpayer savings will however increase ratepayer bills by a like amount and will also generate about $130 million via the cost of the HST for the additional cost of electricity.
Premier Wynne and her Minister of Energy, Bob Chiarelli seem to believe we can continue on this path of destruction of the province in an effort to have Ontario save the world from “climate change” as she noted when her Environment Minister Glen Murray announced their “cap and trade” plans back on April 13, 2015 by stating: “The action we are taking today will help secure a healthier environment, a more competitive economy and a better future for our children and grandchildren.”
The Liberal government may feel it has created a “healthier environment” but that has come at the expense of what was once a thriving economy and the envy of the developed world. The debt they have created coupled with the highest electricity rates of competing economies will continue to undermine the future for our children and grandchildren. There goes “the better future for our children and grandchildren” that Premier Wynne claims.
NB 1: The GA was originally established to capture the difference between the contracted rates for power and the actual market value given via the hourly Ontario electricity price (HOEP) but has become the dumping ground for anything that doesn’t fit elsewhere.
NB 2: Energy poverty reflects itself when energy costs are 10%, or more of a household’s total income.
NB 3: Solar panels on your neighbour’s roof, the farmer’s barn, your municipally owned arena, IKEA, Loblaws, Toronto District Public Schools, etc., etc.
The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.
Here, from Ottawa-based energy-specialist economist Robert Lyman, a quick look at what many people don’t know (and aren’t getting told by the government or the wind power lobby) about the costs of generating power from wind and solar.
A must-read.
THE HIDDEN COSTS OF ONTARIO RENEWABLE ELECTRICITY GENERATION
Ontario residents can be forgiven if they fail to understand the public debate during the current (2014) provincial election about the costs of different types of electricity generation and why these have caused electricity rates for consumers to rise so much over the past ten years. The complexity of the system makes it difficult to explain the costs associated with one source of supply, namely the renewable energy generation (industrial wind turbines and solar power generators). In this note, I will nonetheless try to explain in layperson’s terms why these costs are significant.
Electricity supply in Ontario takes place within the framework of the policy and legislative framework established by the Ontario government, an important part of which is the Green Energy and Economy Act of 2009 (GEA). Historically, the goal of Ontario electricity policy was to keep electricity rates for consumers as low as possible consistent with the goal of maintaining adequate and reliable supply. Within the current framework, however, that is no longer the goal. The GEA seeks to stimulate investment in renewable energy projects (such as wind, solar, hydro, biomass and biogas) and to increase energy conservation. To do this, it:
Changed the review process for renewable energy projects to reduce environmental assessment and hasten approvals
Created a Feed-in-Tariff that the Independent Electricity Systems Operator (IESO) must pay, guaranteeing the specific rates for energy generated from renewable sources (typically, the rates are fixed for the full term of the twenty year contracts, with inflation escalators)
Established the right to connect to the electricity grid for renewable energy projects and gave renewable energy source preferential access over other sources of generation
Implemented a “smart” grid to support the development of renewable energy projects
Eliminated local approval requirements that local governments previously could impose on renewable energy projects
The guaranteed rates paid under the FIT system are not negotiated based upon the actual costs of production. In fact, the actual costs of production are largely unknown. …
From the December 3rd edition of Ontario Farmer, an excerpt from the Stories from Eastern Ontario feature by Ottawa area writer Tom Van Dusen. Powerless
I recently listened to one of the most horrifying hours of radio programming I have ever heard.
I was driving the truck at the time and almost leapt out of the seat I became so incensed. I was receiving information I already knew in general terms but that didn’t make it any less tormenting.
The show wasn’t about disaster or disease. It wasn’t about the Senate. It wasn’t even about Rob Ford.
It was a discussion about that outrageous cash guzzler Hydro One, its stunning rates and the crippling effect they are having on all aspects of Ontario commercial and residential life.
It was a tale of gross mismanagement, incompetence, political interference and total indifference for consumers–you and me–in Hydro One’s grossly inflated charges…charges poised to make Ontario the most expensive place to buy electricity in North America.’
Listeners were calling in to tell horror stories about dealing with Hydro One, of having their service cut off because they could no longer pay, of planning to move because their electricity bills had become too exorbitant to manage.
There was an overall feeling of helplessness, of being able to do nothing but stand by as the bandits running Hydro One and related government agencies continue to jack prices without explanation. …
The radio show* featured guest energy analyst Tom Adams, who was a pleasure to listen to, a man who seemed to know his stuff and who pulled no punches in describing how Ontario’s electricity future is being burdened with “stupidly expensive junk generation.”
Adams and callers raised several of the issues particularly frustrating to the people who have to pay for all the blunders–that would be you and me–including compensating electricity producers to remain idle and selling off surplus power at cut rate prices to other jurisdictions.
Let’s take wind power. I’m a great fan but enough is enough…taxpayers can’t justify any more subsidized turbine erection under the Green Energy Act when a surplus is being produced for the grid.
Ottawa city council has passed a motion asking the province to give communities more say in where wind power projects are installed.
A little way south in Brinston, 10 turbines are in the works with little backing from neighbours or local government, South Dundas Township. Council passed a motion that additional turbines won’t be supported until a need is proven. With no legal clout behind the move, more than 70 Ontario municipalities have officially become “unwilling hosts” for turbines. Yet this provincial government continues to push its alternative energy agenda while failing to curb Hydro One’s scandalous misuse of our money.
The waste can only be shut off with an election and a complete makeover of the shirt circuiting Ontario Hydro bureaucracy.
tomvandusen@sympatico.ca
*Editor’s note: this sounds like Ontario Today hosted by Rita Celli with guest Tom Adams. A podcast of the show is available at cbc.ca
