While the Canadian Wind Energy Association, the trade association for the wind power industry and vested interests, continues to maintain that wind power cannot be contributing to Ontario’s rising and unsustainable electricity bills, the facts indicate otherwise. The figures for April 2017 show wind power produced out-of-phase with demand, causing power from other, clean sources to be wasted, and wind power producers paid not to add power to the Ontario grid.
Here is Parker Gallant’s analysis.
The Independent Electricity System Operator or IESO’s 18 month outlook report uses their “Methodology to Perform Long Term Assessments” to forecast what industrial wind turbines (IWT) are likely to generate as a percentage of their rated capacity.
The Methodology description follows.
“Monthly Wind Capacity Contribution (WCC) values are used to forecast the contribution from wind generators. WCC values in percentage of installed capacity are determined from actual historic median wind generator contribution over the last 10 years at the top 5 contiguous demand hours of the day for each winter and summer season, or shoulder period month. The top 5 contiguous demand hours are determined by the frequency of demand peak occurrences over the last 12 months.”
The most recent 18-month outlook forecast wind production at an average (capacity 4,000 MW growing to 4,500 MW) over 12 months at 22.2%, which is well under the assumed 29-30 % capacity claimed by wind developers. For the month of April, IESO forecast wind generation at 33.2% of capacity.
April 2017 has now passed; my friend Scott Luft has posted the actual generation and estimated the curtailed generation produced by Ontario’s contracted IWT. For April, IESO reported grid- and distribution-connected IWT generated almost 703,000 megawatt hours (MWh), or approximately 24% of their generation capacity. Scott also estimated they curtailed 521,000 MWh or 18 % of generation capacity.
So, actual generation could have been 42% of rated capacity as a result of Ontario’s very windy month of April 2017, but Ontario’s demand for power wasn’t sufficient to absorb it! April is typically a “shoulder” month with low demand, but at the same time it is a high generation month for wind turbines.
How badly did Ontario’s ratepayers get hit? In April, they paid the costs to pay wind developers – that doesn’t include the cost of back-up from gas plants or spilled or steamed off emissions-free hydro and nuclear or losses on exported surpluses.
Wind cost=22.9 cents per kWh
For the 703,000 MWh, the cost* of grid accepted generation at $140/MWh was $98.4 million and the cost of the “curtailed” generation at $120/MWh was $62.5 million making the total cost of wind for the month of April $160.9 million. That translates to a cost per MWh of grid accepted wind of $229.50 or 22.9 cents per kWh.
Despite clear evidence that wind turbines fail to provide competitively priced electricity when it is actually needed, the Premier Wynne-led government continues to allow more capacity to be added instead of killing the Green Energy Act and cancelling contracts that have not commenced installation.
* Most wind contracts are priced at 13.5 cents/kilowatt (kWh) and the contracts include a cost of living (COL) annual increase to a maximum of 20% so the current cost is expected to be in the range of $140/MWh or 14cents/kWh.
“Assertions are complete nonsense … only wilful blindness would suggest that wind and solar are low cost”
Recently, energy analyst and occasional columnist for The Financial PostParker Gallant wrote that the Canadian Wind Energy Association (CanWEA) was hitting back at allegations that wind power was contributing to Ontario’s rising electricity bills.
Ontario representative Brandy Gianetta said wind power was a low-cost energy source, and she referred to University of Waterloo professor Jatin Nathwani for support.
Trouble is, she was wrong.
Professor Nathwani took the time to correct CanWEA’s statements in an email to Parker Gallant, published on his Energy Perspectives blog today.
Here is Professor Nathwani’s email:
Dear Mr Gallant:
In your Blog, you have cited Ms. Giannetta’s post on CanWEA’s website on April 24, 2017 as quoted below:
Her article points to two articles that purportedly support the “myth” she is “busting,” but both require closer examination. She cites Waterloo professor Natin Nathwani’s, (PhD in chemical engineering and a 2016 “Sunshine list” salary of $184,550) article of March 6, 2017, posted on the TVO website, which supports Premier Wynne’s dubious claims of “a massive investment, on the order of $50 billion, for the renewal of Ontario’s aging electricity infrastructure.” Professor Nathwani offers no breakdown of the investment which suggests he simply took Premier Wynne’s assertion from her “Fair Hydro Plan” statement as a fact! It would be easy to tear apart Professor Nathwani’s math calculations — for example, “The total electricity bill for Ontario consumers has increased at 3.2 per cent per year on average” — but anyone reading that blatant claim knows his math is flawed!
First and foremost, the record needs to be corrected since Ms Giannetta’s assertions are simply incorrect and should not be allowed to stand.
If she has better information on the $50 billion investment provided in the Ministry of Energy’s Technical Briefing, she should make that available.
The breakdown of the investment pattern in generation for the period 2008-2014 is as follows:
Wind Energy $6 Billion (Installed Capacity 2600 MW)
Solar Energy $5.8 Billion (Installed Capacity 1400 MW)
Bio-energy $1.3 Billion (Installed 325MW)
Natural Gas $5.8 Billion
Water Power $5 Billion (installed Capacity 1980 MW)
Nuclear $5.2 Billion
Total Installed Capacity Added to the Ontario Grid from 2008-2014 was 12,731 MW of which Renewable Power Capacity was 6298MW at a cost of $18.2 Billion.
For the complete investment pattern from 2005 to 2015, please see data available at the IESO Website.
In sum, generation additions (plus removal of coal costs) are in the order of $35 billion and additional investments relate to transmission and distribution assets.
I take strong exception to her last statement suggesting that the 3.2 percent per year (on average) increase in total electricity cost from 2006 to 2015 in real 2016$. The source for this information is a matter of public record and is available at the IESO website.
Ms Giannetta’s assertion is complete nonsense because she does not understand the difference between electricity bill and generation cost. Let Ms Gianetta identify the “blatant flaw.”
As for the electricity bill that the consumer sees, there is a wide variation across Ontario and this is primarily related to Distribution.
The Ontario Energy Board report on Electricity Rates in different cities provides a view across Ontario:
For example, the average bill for a for a typical 750kWh home Ontario comes is $130 per month.
In Toronto it is $142, Waterloo at $130 and Cornwall at $106. On the high side is Hydro One networks is $182 and this is primarily related to cost of service for low density, rural areas.
Your Table 2 Total Electricity Supply Cost is helpful and correctly highlights the cost differences of different generation supply.
Only wilful blindness on Ms Giannetta’s part would suggest that wind and solar are coming in at a low cost.
Jatin Nathwani, PhD, P.Eng
Professor and Ontario Research Chair in Public Policy for Sustainable Energy
Executive Director, Waterloo Institute for Sustainable Energy (WISE)
Faculty of Engineering and Faculty of Environment Fellow, Balsillie School of International Affairs (BSIA)
Wind power contracts should be cancelled to control electricity costs: Mike Baggott of Ottawa Wind Concerns
Ottawa Wind Concerns was an invited guest speaker this week at a pre-budget consultation event held by Nepean-Carleton MPP Lisa MacLeod, at the Alfred Taylor Centre in North Gower.
Executive member with the group and North Gower resident Mike Baggott told the audience that while Ontario’s electricity bills are among the highest in North America, more costs, specifically expensive wind power contracts awarded to power developers, were yet to come.
“Everyone wants to do the right thing for the environment,” Baggott explained, “but has the Ontario government done the right thing?” Two Auditors General said there was never any cost-benefit or impact analysis for the province’s green energy plan, and the Wynne government pays twice as much for renewable energy as other jurisdictions do. The expensive wind contracts are among the factors pushing electricity bills up.
“As high as our bills are now,” Baggott said, “they will get worse if projects in Ontario recently awarded contracts are allowed to proceed.”
He noted the power projects in La Nation, east of Ottawa, and North Stormont –both opposed by the local communities — will cost Ontario ratepayers over $600 million for the 20-year contracts.
In all, Ontario is facing $5 billion in new wind power contracts, at a time when the province has a surplus of power. Wind power also cannot demonstrate any benefits to the environment, Baggott said.
“It’s time to stop digging the hole,” Baggott concluded.
The main speaker at the event was Parker Gallant, a former banker whose energy sector analysis is frequently published in The Financial Post, who explained line by line, “What’s in Your Hydro Bill.”
MPP MacLeod outlined steps that can be taken to control electricity costs, and answered questions from the audience.
“It’s hard not to get depressed when you hear, line by line, how we got here with our electricity bills,” commented Rideau-Goulbourn councilor Scott Moffatt.
Parker Gallant: what’s in your hydro bill? A lot of government mistakes
Special guest will be Parker Gallant. Mr Gallant’s commentary on energy issues is regularly published in The Financial Post and other media; he is a former international banker and vice-president at Toronto Dominion Bank. He is vice-president of Wind Concerns Ontario.
The second event will be in early March, location TBA.
Former banker and now energy analyst Parker Gallant has prepared a summary of submissions to the Ontario Ministry of Energy, which last fall asked for input to a new Long-Term Energy Plan (LTEP).
Aside from the vested interests in wind power, the stakeholder groups like the Canadian Federation of Independent Business, Canadian Manufacturers and Exporters, and the Ontario Society of Professional Engineers all recommended the government act now to get costs down. And that includes, getting rid of wind power.
From the article, an excerpt on two of the submissions made to the government.
Strategic Policy Economics – Marc Brouillette’s excellent submission on behalf of Bruce Nuclear also carries some sane observations such as “Wind generation has not matched demand since its introduction in Ontario” and, “Over 70% of wind generation does not benefit Ontario’s supply capability.” And this one, which is becoming more evident as ratepayers are forced to pay for curtailed generation: “Wind generation will not match demand in the OPO Outlook future projections as 50% of the forecasted production is expected to be surplus.”
The recommendation that will cause the most handwringing will be: “The LTEP should integrate the objectives of Ontario’s environmental, energy, industrial, and economic policies for the long-term future benefit of Ontarians.”
Wind Concerns Ontario – The coalition of community groups and individuals throughout Ontario had this to say by way of advice to the Ministry: “The government policy to promote “renewables” such as wind and solar have been a critical factor in the grave economic situation today. Wind power for example, now represents 22% of electricity cost, while providing only 5.9% of the power. Worse, that power is produced out-of-phase with demand, as has been detailed by two Auditors General; so much of it is wasted. This is unsustainable.
“Clearly,” WCO continued, “the direction for the Ministry of Energy is to formulate a new Long-Term Energy Plan that will take immediate action on reducing electricity costs. Those actions must include a review of all contractual obligations for power generation from wind, and action to mitigate further costs to the system, and the over-burdened people of Ontario.”
WCO called for cancellation of all the wind power contracts given in 2016, the FIT 5.0 program, and further, cancellation of all contracts for projects not yet built or which are not going to make a critical commercial operation date. In fact, all wind power contracts should be reviewed and paid out, as Ontario can save money by eliminating the need to dispose of the surplus electricity.
WCO vice-president Parker Gallant and president Jane Wilson speak on Ontario’s mismanaged electricity sector, energy poverty, wind turbine noise regulation, and what’s ahead for 2017
(C) Wind Concerns Ontario
Q:You’ve been telling people about the impact of renewables, specifically wind power, on Ontario’s electricity or hydro bills. How much of our electricity bills is due to the wind power/renewables program in Ontario?
Parker Gallant: I recently reviewed the cost of wind and solar generation relative to its contribution to Ontario’s demand for electricity and its impact on our electricity costs is shocking. Wind and solar in the first six months of 2016 delivered 8% of our generated power and represented 35% of the Global Adjustment which appears set to average over $1 billion per month. That represents a cost of over 36 cents a kilowatt hour (kWh), including the hourly Ontario energy price (HOEP).
Q: Parker, you’ve also been telling people about the Global Adjustment or GA, which is where a lot of charges are hidden. Do you think these charges should be detailed on our bills, or is that even possible?Parker Gallant: While I believe in principle the GA should be revealed on our monthly bills, in practice, that would require reams of paper. How will the local distribution company explain how much you are billed for curtailed wind generation or the meteorological stations that measure the amount of curtailed wind that might have been generated? How to explain, say, the cost of spilled hydro or steamed off nuclear or the water fuel fee, or how to tell the ratepayer how much they are subsidizing the rates for large industrial clients, or what it is costing under the rural and remote rate plan (RRRP) that transports diesel fuel to remote First Nations, among dozens of other items included in our monthly bills?
Q: The Premier and Energy Minister are now saying that parts of their policies have been a “mistake” and that they need to get bills down. Wind Concerns is saying that canceling wind power contracts is necessary for that to happen. Can you explain? How much are the 2016 contracts worth?
Parker Gallant: Interesting they are now admitting a “mistake,” but when George Smitherman was Energy Minister he was provided with a long-term energy plan that had been carefully developed by “experts” within the crown agencies. He chose to cancel the plan and instead, impose one developed in conjunction with outsiders who were NOT experts. Previous Energy Ministers (Dwight Duncan comes to mind for his “smart meter” for every ratepayer) made mistakes, as did those who followed such as Brad Duguid and were roundly criticized by both the media and by ratepayers. The canceling of wind power projects not yet built or even contracted is only “step one” and will slow the climb in our bills. The current Minister, Glenn Thibeault has only suspended Large Renewable Procurement or LRP ll, and needs to cancel it, as well as LRP I and any of those contracts now past their agreed-to start date. There are ways to reduce costs almost immediately.
Jane Wilson: Wind Concerns Ontario prepared a detailed document for the IESO on the Long-Term Energy Plan, suggesting ways they could save $1.7 billion annually. That would have an immediate cost reduction impact.
Q: The Energy Minister says that now, Ontario is a “net exporter” of electricity like that’s a good thing. He claims we’re making money: is that true?
Parker Gallant: Being a “net exporter” of 16.8 terawatts (TWh) in 2015 is simply a demonstration of being a bad planner and manager of the system. If one adds the spilled hydro and curtailed wind to the net exports, the 21.2 TWh could have provided over half of all average Ontario households with power for a full year, yet we sold it 2.36 cents/kWh while we paid 10.14 cents/kWh for its generation. Ontario contracted for far too much intermittent and unreliable wind and solar power creating a domino effect the increased our costs of generation. Paradoxically, if Ontario ratepayers consumed more of the annual excess power (15.5% in 2015) it would help reduce our per kWh cost.
Q: What is WCO’s stance on climate change?
Jane Wilson: Our position is that everyone wants to do the right thing for the environment, whether that is preventing air pollution or using the most efficient forms of power generation — but that isn’t industrial-scale wind. For example, the Ontario Society of Professional Engineers or OSPE says that the proliferation of large-scale wind will actually increase greenhouse gas emissions, therefore not achieving the government’s stated goals. In the OSPE’s most recent report, they say “Wind generation offers less GHG reduction value in Ontario because base-load generation is already carbon-free and wind generation often displaces hydroelectric and nuclear base-load generation.”
Q: Why does the Ontario government continue to force wind turbines on communities that don’t want them?
Jane Wilson: The government is acting on an ideology that is not supported by fact and to do that, it erased communities’ right to local land-use planning with the Green Energy Act. We think that’s wrong, and are supporting the now 116 municipal governments that have demanded a return of that control and also that community support be mandatory for wind power contracts. There is a concern too about communities in the North where there may not be elected municipal governments, where contracts can be awarded for wind power projects that have a significant negative impact on the natural environment, for little or no benefit.
WCO worked with Ontario municipalities on the mandatory support resolution.
Q:Can the government really cancel wind power contracts? Can a new government cancel the subsidy programs?
Jane Wilson: Yes. There are clauses in the contracts under LRP I that are “off-ramps” in the case of cancellation, and which set out the financial steps needed to do that. For example, the contract with EDP for the “Nation Rise” project south of Ottawa in North Stormont, worth $430 million over 20 years, would cost $250,000 plus reimbursement for development costs that must be justified, to a maximum of $600,000. And yes, government can cancel subsidy programs. The LRP II, now “suspended”, should be cancelled outright.
The other opportunity is to cancel wind power projects that do not have a “Notice-to-Proceed”: this is straightforward. WCO has also suggested to the IESO that the government look seriously at all contracts and review them for opportunities to cancel. Even costly negotiated buy-outs will reduce hydro costs significantly, due to the high cost of disposing of surplus power.
Q: What is WCO doing to help people already living with wind turbines, and the noise they produce?
Jane Wilson: We support the public health investigation being done by the Huron County Health Unit, and hope that other municipalities will take similar action. We are also looking at how research can be done to help change the Ontario regulations on noise –which are not based on current science and in fact, are completely inadequate to protect health. We prepared a detailed document on how to revise noise enforcement regulations, another on how the approval process must be changed to protect health, and we submitted a document to the World Health Organization which is preparing global noise regulations for wind turbines. In short, we take every opportunity possible to explain the situation for people living in communities where wind turbines and their noise emissions have been forced, without consent, on the people of Ontario, with the goal of having regulations and processes changed.
Q: What’s ahead in 2017?Jane Wilson: It’s a very different world for wind power now, than in 2009 when the Green Energy Act was passed. People are genuinely questioning the benefit of high-impact, large-scale wind power development, especially when there seem to be few, if any, benefits, and we are seeing the shocking results of the government’s complete mismanagement of the electricity sector such as lost jobs and rising energy poverty. We believe the government will have to take dramatic action if it is serious about getting electricity bills down. The fact that Ontario municipalities are speaking out on this issue and taking action will also have results, we believe. We are hoping for a complete halt to the ongoing damage of the government’s policies, and that there will be help for people already living with the noise and other impacts of industrial-scale wind turbines.
As for Wind Concerns Ontario, we are not stopping our work.
Former bank vice-president and vice-president of Wind Concerns Ontario was in Ottawa this past weekend, speaking at a Town Hall in Kanata on the details of Ontario’s electricity bills.
Today, he published an analysis of how much wind power is really costing us, on his Energy Perspectivesblog. When the well-financed wind power lobby claims wind power prices are low, they don’t factor in other costs such as wasted hydro, gas, and nuclear, he says.
This is really shocking, given the rise in energy poverty in Ontario.
For the cost to provide a small portion of Ontario’s power, wind is no bargain
Most electricity ratepayers in Ontario are aware that contracts awarded to wind power developers following the Green Energy Act gave them 13.5 cents per kilowatt (kWh) for power generation, no matter when that power was delivered. Last year, the Ontario Auditor General’s report noted that renewable contracts (wind and solar) were handed out at above market prices; as a result, Ontario ratepayers overpaid by billions.
The Auditor General’s findings were vigorously disputed by the wind power lobbyist the Canadian Wind Energy Association or CanWEA, and the Energy Minister of the day, Bob Chiarelli.
Here are some cogent facts about wind power. The U.K. president for German energy giant E.ON stated wind power requires 90% backup from gas or coal plants due to its unreliable and intermittent nature. The average efficiency of onshore wind power generation, accepted by Ontario’s Independent Electricity System Operator (IESO) and other grid operators, is 30% of their rated capacity; the Ontario Society of Professional Engineers (OSPE) supports that claim. OSPE also note the actual value of a kWh of wind is 3 cents a kWh (fuel costs) as all it does is displace gas generators when it is generating during high demand periods. On occasion, wind turbines will generate power at levels over 90% and other times at 0% of capacity. When wind power is generated during low demand hours, the IESO is forced to spill hydro, steam off nuclear or curtail power from the wind turbines, in order to manage the grid. When wind turbines operate at lower capacity levels during peak demand times, other suppliers such as gas plants are called on for what is needed to meet demand.
Bearing all that in mind, it is worth looking at wind generation’s effect on costs in the first six months of 2016 and ask, are the costs are reflective of the $135/MWh (+ up to 20% COL [cost of living] increases) 20 year contracts IESO, and the Ontario Power Authority awarded?
As of June 30, 2016, Ontario had 3,823 MW grid-connected wind turbines and 515 MW distributor-connected. The Ontario Energy Reports for the 1st two quarters of 2016 indicate that wind turbines contributed 4.6 terawatts (TWh) of power, which represented 5.9% of Ontario’s consumption of 69.3 TWh.
Missing something important
Not mentioned in those reports is the “curtailed” wind. The cost of curtailed wind (estimated at $120 per/MWh) is part of the electricity line on our bills via the Global Adjustment, or GA. Estimates by energy analyst Scott Luft have curtailed wind in the first six months of 2016 at 1.228 TWh.
So, based on the foregoing, the GA cost of grid-accepted and curtailed IWT generation in the first six months of 2016 was $759.2 million, made up of a cost of $611.8 million for grid-delivered generation (estimated at $133 million per TWh) and $147.4 million for curtailed generation. Those two costs on their own mean the per kWh cost of wind was 16.5 cents/kWh (3.2 cents about the average of 13.3 cents/kWh). The $759.2 million was 12% of the GA costs ($6.3 billion) for the six months for 5.9% of the power contributed.
But hold on, that’s not all. We know that wind turbines need gas plant backup, so those costs should be included, too. Those costs (due to the peaking abilities of gas plants) currently are approximately $160/MWh (at 20% of capacity utilization) meaning payments to idling plants for the 4.6 TWh backup was about $662 million. That brings the overall cost of the wind power contribution to the GA to about $1.421 billion, for a per kWh rate of 30.9 cents. If you add in costs of spilled or wasted hydro power to make way for wind (3.4 TWh in the first six months) and steamed off nuclear generation at Bruce Power (unknown and unreported) the cost per/kWh would be higher still.
So when the moneyed corporate wind power lobbyist CanWEA claims that the latest procurement of IWT is priced at 8.59 cents per kWh, they are purposely ignoring the costs of curtailed wind and the costs of gas plant backup.
22% of the costs for 5.9% of the power
Effectively, for the first six months of 2016 the $1.421 billion in costs to deliver 4.6 TWh of wind-generated power represented 22.5% of the total GA of $6.3 billion but delivered only 5.9% of the power. Each of the kWh delivered by IWT, at a cost of 30.9 cents/kWh was 2.8 times the average cost set by the OEB and billed to the ratepayer. As more wind turbines are added to the grid (Ontario signed contracts for more in April 2016), the costs described here will grow and be billed to Ontario’s consumers.
CanWEA recently claimed “Ontario’s decision to nurture a clean energy economy was a smart investment and additional investments in wind energy will provide an increasingly good news story for the province’s electricity customers.”
There is plenty of evidence to counter the claim that wind power is “a smart investment.” But it is true that this is a “good news story” — for the wind power developers, that is. They rushed to Ontario to obtain the generous above-market rates handed out at the expense of Ontario’s residents and businesses. And we’re all paying for it.
Wind power is produced out-of-phase with demand in Ontario, so the Wynne government is forced to export the surplus. The government claims this brings in revenue but the truth is, it costs Ontario ratepayers. How much? And how does that cheap power benefit others? Parker Gallant comments on his Energy Perspectives blog.
September 6, 2016
The state of Michigan is outperforming Ontario. That’s according to a recent study by the Fraser Institute. Since the end of the “’Great Recession” Michigan has out performed Ontario, increasing their GDP in 2013 by 2.8% versus Ontario’s growth of only 1.3%. Unemployment levels in Michigan are currently at 4.6% versus Ontario’s 6.4%. Those are two very important economic indicators.
That news plus the fact Ontario has become a “have not” province in Canada, it seems policies adopted by the Ontario Liberal government to “build Ontario up” is having the opposite effect.
One of those policies resulted in Ontario’s electricity sector focusing on acquisition of renewable energy from industrial-scale wind turbines, solar panels and biomass. The passing of the Green Energy Act (GEA) in 2009 resulted in adding intermittent and unreliable renewable energy that is unresponsive to demand (wind power is produced out-of-phase with demand in Ontario). This had the effect of driving down the price of electricity.
The free market trading (HOEP) of electricity has resulted in Ontario exporting a rising percentage of our generation to buyers in Quebec, NY and Michigan, with the latter the biggest buyer. In 2015 Michigan purchased 10,248 gigawatts (GWh) or enough to power1.1 million “average” Ontario residential households. We sold it at an average of 2.36 cents per kilowatt hour (kWh) and were paid $242 million, but it cost Ontario’s ratepayers just over $1 billion.
Michigan doesn’t have to pay the Global Adjustment. You do.
Michigan appears delighted to be able to purchase our cheap subsidized electricity. Now they are seeking further transmission links to Ontario with an eye on the grid out of Sault Ste Marie. Hydro One earlier this year announced they “entered into a purchase agreement to acquire Great Lakes Power Transmission LP from Brookfield Infrastructure for $222 million in cash plus the assumption of approximately $151 million in outstanding indebtedness.” One has to wonder, did Hydro One know about this, and see it as an opportunity to increase transmission revenue?
This new transmission line could send both cheap hydro and expensive bio-mass generation to Michigan.
Ontario Power Generation (OPG) operates 11 hydro stations with 680 MW of capacity and also two bio-mass facilities (Atikokan and Thunder Bay) converted from burning coal and now using wood pellets with a combined capacity of 358 MW in the region. The latter two facilities were focused on by the Auditor General (AG) in her November 2015 report. In the case of Thunder Bay, the report indicated the cost of generation was “$1,600/MWh—25 times higher than the average cost at other biomass facilities in Ontario.” For Atikokan the AG had this to say: “The plant is expected to generate 140,000 MWh for $74 million per year, putting the cost of electricity from this facility at $528/MWh—about eight times higher than the average cost of existing biomass from other facilities in Ontario.” Industrial wind turbines have also invaded the beautiful landscapes painted by the Group of Seven.
For the sake of Ontario ratepayers, one hopes Michigan will not access electricity from either of the two biomass plants as it will fall on us ratepayers to pick up the costs in excess of the HOEP price. In the case of Thunder Bay the cost to ratepayers could approach $1.60/kWh and for Atikokan it would be 55 cents/kWh.
Maybe the Ontario government staffers in communications should change their PR Slogan to “Building Michigan up”!
Earth Hour 2016 is tomorrow, March 19, 2016 from 8.30 PM to 9.30 PM when all the world is encouraged to turn off their lights for an hour of symbolic action. Specifically the goal is: “Earth Hour aims to encourage an interconnected global community to share the opportunities and challenges of creating a sustainable world.”
This is an admirable objective – everyone wants to do their best for the environment – but the truth is, much depends on how sustainability is positioned by politicians.
In Ontario the OEB (Ontario Energy Board) noted in a 45 page report dated December 22, 2014: “Using LIM1. as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households. The OESP is estimated to reach 571,000. This estimate recognizes that not all low-income households in the province pay their electricity bills directly (i.e., utilities included in rent).”That report led to the introduction of the OESP or Ontario Electricity Support Program start-up on January 1, 2016, expected to cost between $175 and $225 million, paid for by those 3.9 million households who don’t qualify for the OESP.
So did the Ontario government simply not understand creation of the Green Energy & Green Economy Act (GEA) would result in so many low-income households? It is now apparent the advent of the GEA played a major role, by raising the cost of the production of electricity by well over 70% since its enactment. The push for renewables in the form of industrial wind turbines, solar panels, etc., which require back-up from gas plants due to the intermittent and unreliable nature of renewables, added billions in costs. The transmission builds to bring wind and solar power to the grid added billions more and, coupled with the other billions spent trying to convince us to conserve, added even more costs.
The addition of almost 10,000 MW (so far) of renewable generation at prices over market impacted disposable income for all Ontarians living at, or close to, minimum wage and for many others living on fixed incomes. The other result of adding renewable power is that Ontario is now in the position of having surplus power generated at the wrong time of the year and night when demand is low. This surplus must be either sold off (exported), curtailed (wind and solar) or steamed-off (nuclear). Additionally, ratepayers and taxpayers are charged for the ideasNB: related to conservation such as paying for grants for electric vehicles and their charging stations.
March 13, 2016 is an example: it was a day when the sun shone and the wind was blowing. Ontario demand was low reaching only 320,000 megawatt hours (MWh) while generation, coupled with curtailed wind, idling gas plants, spilled hydro and even curtailed solar along with all of the distribution connected (Dx) power (principally wind and solar) was about 463,000 Mwh2.. Ontario’s ratepayers needed only 68% of that 463,000 MWh, so the other 32% was either exported or curtailed (to avoid blackouts) while being billed to Ontario ratepayers. Production costs (without the other items tossed into the “Global Adjustment pot) were over $100/per MWh, meaning the 143,000 MWh surplus picked ratepayers’ pockets for more than $14 million or $2.85 per ratepayer for just one day. (Bob Chiarelli, our Minister of Energy, would probably say that was just the cost of a “Timmies”!)
In 2015, Glen Murray, Ontario’s Minister of the Environment and Climate Change, said Earth Hour “Every passing year it becomes more infectious. It’s actually really doing what it intended to do, which is to get into the popular culture.”
Minister Murray should note we have turned off the lights, not because we want to but because we can’t afford to “keep them on.”
It appears to this Ontario ratepayer that what is really “infectious” is the Ontario government’s ability to create “energy poverty” for hundreds of thousands of Ontario’s households and, instead of promoting sustainability, it has instead driven many to a situation where they now have to decide whether to “heat or eat”.
Hardly the lofty goal that Earth Hour aspires to, and clearly not what well-meaning citizens wanted to happen.
Ontario gives away $4.5B in ratepayer dollars; Energy Minister Chiarelli persists in directive to add more intermittent, expensive wind power
Electricity costs up 97 percent in Ontario: power surplus exports rising
February 8, 2016. Reposted from Wind Concerns Ontario
The GA or Global Adjustment first made its appearance on IESO’s Monthly Market Report in January 2007. As noted in the chart below, that year, the GA finished 2007 at $3.95 per megawatt hour (MWh) which means it cost Ontario’s electricity ratepayers about $600 million for the full year. In, 2015 the GA was just shy of $10 billion.
To be fair, the GA includes the price of “contracted” power, less the value given to it on the hourly Ontario electricity price (HOEP) market. As a result of Ontario’s high surplus of generating capacity and the intermittent presentation of wind and solar in periods of low demand, has resulted in the HOEP showing declining values. Despite declining values the cost of a kilowatt hour (kWh) of electricity increased from an average of 5.43 cents/kWh to 10.7 cents/kWh from November 1, 2007 to November 1, 2015 — up 97%. The upsetting part, and a driving force behind the 97% increase is surplus generation sold to our neighbours. We sell excess output to New York and Michigan, etc. without inclusion of the GA. The GA lost on those sales is charged to Ontario ratepayers and has become increasingly large. The chart indicates the “intertie flows” (exports/imports netted) initially cost Ontario ratepayers $20 million for 2007, but that has increased, and representing more $1.3 billion for 2015.
It is anticipated the annual cost of subsidizing surplus exports will continue to climb.
Scott Luft notes results for January 2016 are 20% higher than January 2015 for the cost of electricity as the HOEP was lower despite what Ontario’s Liberal government says about pricing stabilizing. With plans to add 500 MW of capacity for wind and solar, the climb will continue for at least another two years. Energy Minister Bob Chiarelli recently stated: “Our government’s focus is now on preparations for the next long term energy plan and the ways in which we can continue to drive down costs for Ontarians”. (Note to the Minister: a 97% increase does not “drive down costs”!)
Further reference to the chart points out addition of more wind and solar over the past nine years has driven up the percentage of renewables exported. The “Net Intertie” (net exports) increased from 19.6% in 2007 to over 57% in 2015.
What the Energy Minister needs to accept is this: we don’t need more intermittent and unreliable power.
That message is not getting through, despite evidence presented by the Auditor General of Ontario on several occasions and by numerous critics in the media.
Costing ratepayers $4.5 billion in after-tax dollars to help our neighbours is what’s happened. Perhaps Minister Chiarelli could suggest to Finance Minister Charles Sousa, that the money extracted from ratepayers provides no benefits to Ontarians. Perhaps a tax receipt is in order — that would help cash-strapped citizens, but there is a better idea.
The Energy Minister needs to immediately recall his directive to the IESO to acquire another 500 MW of contracts for intermittent wind and solar power.