Tag Archives: renewables Ontario

The real cost of closing Ontario’s coal power plants (what the government didn’t tell you)

29 Monday Aug 2016

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Part I

Replacing coal in Ontario: what the government really did

There is so much mythology now around Ontario’s coal plants for power generation, it really is time to set the record straight on what really happened, how much it cost, and what was actually achieved. This is the first in a two-part series by Parker Gallant.

Intermittent, undependable wind power installed to replace coal-fired power generation. Seen here: a new turbine in the Algoma Highlands. Photo: Gord Benner
Intermittent, undependable wind power installed to replace coal-fired power generation. Seen here: road construction for a new turbine in the Algoma Highlands. Photo: Gord Benner

Back in 2011, Ontario had coal plant capacity of 4,484 MW but the plants really operated only occasionally, producing 4.1 terawatts (TWh) of power — just 10.5% of their capacity. The 4.1 TWh they generated in 2011 represented 2.7% of total power generation in Ontario of 149.8 TWh.  The cost  per TWh was $33 million or 3.3 cents/kWh, making the ratepayers’ bill for those 4.1 TWh $135 million.

As most Ontarians know, those coal plants were either closed (Lambton and Nanticoke) or converted to biomass (Atikokan and Thunder Bay). We were continually told closing or converting those coal plants would save Ontario’s health care system $4.4 billion, based on a study completed while Dwight Duncan was Ontario’s Energy Minister.  Duncan’s claim was a fictitious interpretation of the actual study, but it was repeated so often by Liberal ministers and MPPs that they all believed it and presumably felt the public believed it, too.  

Good PR but … the truth?

Whether one believes the Duncan claim, the fact is the coal plants were closed or converted and the ruling Ontario Liberal government made a big deal of it even to the point of obtaining an endorsement from Al Gore as the first jurisdiction in North America to end coal fired power generation.

The government never disclosed how much it cost the ratepayers/taxpayers of the province to close or convert those coal plants, and we certainly haven’t seen any improvement in our healthcare system since it happened, as one would expect from saving billions. So, was the claim of savings a falsehood? And what did closing the plants really cost?

Let’s start with looking at our electricity consumption level in 2011 and compare it to 2015. In 2011 Ontario generated 149.8 TWh and consumed 141.5 TWh.  In 2015 we generated 159.6 TWh, including 5.9 TWh of embedded generation, and we reportedly consumed 137 TWh, not including the 5.9 TWh of embedded generation consumed within the confines of your local distribution company (LDC).

The difference of 8.3 TWh in 2011 and 16.7 TWh in 2015 was exported.

Replacing coal-fired generation 

As noted, coal capacity was 4,484 MW in 2011 and in 2015 was zero — so what did we replace it with?   According to the Independent Electricity System Operator (IESO) Ontario Energy Report for Q4 2015, since the end of 2011 we have added:

  1. Nuclear supply increased by 1,532 MW (Bruce Power)
  2. 754 MW of hydro
  3. Natural gas generation increased 602 MW
  4. 2,580 more MW capacity of industrial wind turbines (IWT)
  5. Solar up by 2,078 MW
  6. Bio-mass increased by 481 MW (principally conversions of Atikokan and Thunder Bay from coal)
  7. “Other” increased by 10 MW

As well, residential ratepayers conserved 1.184 GWh1. , equivalent to 450 MW of wind turbines operating at 30% of capacity (generating electricity intermittently and out-of-phase with demand).

So altogether, Ontario added 8,037 MW of capacity to cover the loss of 4,484 MW of coal which, in 2011, operated at only 10.5% of capacity.

Ratepayers also reduced consumption by 6,553 GWh with residential ratepayers representing 1,184 GWh of that reduction.

It would appear the variations of long-term energy planning emanating from the Ontario energy portfolio continually overestimated future demand by a wide margin. Their numerous ministerial directives to the Ontario Power Authority (merged with IESO January 1, 2015) with instructions to contract more and more unreliable intermittent wind and solar generation with “first-to- the-grid” rights at high prices produced surplus energy.

This stream of directives and the acquisition of excess capacity resulted in increasing electricity costs for ratepayers due to surplus generation and payment guarantees for displaced generation.

They also added other expensive policies such as conservation initiatives that simply piled on unneeded costs.

Parker Gallant

August 28, 2016

  1. Interestingly, the OEB in a revision to the “average” residential ratepayers monthly consumption reduced it from 800 kWh to 750 kWh, yet suggests conservation achieved (2011 to 2014) was 1,184 gigawatts (GWh).   The total number of residential ratepayers suggests that consumption has declined by 2,739 GWh (4,564,835 residential ratepayers at December 31, 2015 X 50kWh [montly] X 12 = 2,739 GWh) since 2009.

NEXT: The second in this series will examine the additional costs associated with the various policies applied and how generation additions to Ontario’s energy mix continue to drive up Ontario’s electricity costs

 

[Reposted from Wind Concerns Ontario and Parker Gallant Energy Perspectives]

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Electricity bills go up again January 1

30 Wednesday Dec 2015

Posted by in Renewable energy, Wind power

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HydroShame

CBC December 30, 2015

Residential electricity users in Ontario are set to pay more for power in 2016 due to changes that take effect with the flipping of the calendar, according to one energy consultant.

“You can take a look at your electricity bill today,” said Tom Adams as 2015 draws to a close, “and these are the good old days.”

He estimated bills will go up from to six to seven per cent for power consumed starting Jan. 1. That would be on the heels of time-of-use rate hikes that took place Nov. 1, and ahead of more rate hikes planned for May 1, 2016.

The energy minister has said he’s focused on slowing the rate at which the cost of electricity is increasing. A statement from Bob Chiarelli’s office insisted bills are increasing more slowly than in neighbouring jurisdictions.

End of debt charge, clean energy rebate

After Dec. 31, 2015, the debt retirement charge comes off residential electricity bills, although other users such as those in business and industry will continue to pay down the debt incurred by the former Ontario Hydro through at least 2018.

On the same day, the province’s clean energy benefit expires. It was introduced in 2011 and has meant a 10-per-cent rebate on electricity bills.

The two changes do not offset one another, so people will end up paying more for electricity consumed in 2016, said Adams, who estimated the clean energy rebate has typically been double to triple the charge homes paid against the Ontario Hydro debt.

To help those with a low income deal with the loss of that 10-per-cent rebate, the province will begin the Ontario Electricity Support Program starting Jan. 1.

As of late December, people who could be eligible had been slow to apply to that program.

Seven weeks in, the Ontario Energy Board said 19 per cent of the 500,000 users it targeted had applied, which Brian Hewson, its senior manager of strategic policy, called “an excellent response to a program that has been open for such a short period of time.”

All electricity rate payers are being charged $0.0011 per kilowatt-hour to pay for the new credits for those on low incomes.

Province phasing in fixed distribution rates

The hydro bill becomes further complicated, Adams said, as Ontario moves toward a system where every home pays the same, fixed distribution rate.

Starting Jan. 1, the amount of electricity a household consumes will count less and less toward what it’s charged for using the grid.

“The network of poles and wires that are used in your community really don’t vary much in cost depending on how much you use them,” said Hewson of the Ontario Energy Board.

As more Ontarians install solar panels and other technologies, for instance, Hewson said their use of the grid shouldn’t be subsidized by others, who currently pay more for distribution because they use more.

Adams argued that change means a single-bedroom condo that uses very little energy will end up seeing an increase on their bills and a large, single home with many residents will see a decrease.

But large users of electricity will still pay more overall, said Hewson, who said it makes more sense for consumers to focus on the time-of-use line on their electricity bill because that’s where they can consider how they can conserve power.

The energy minister’s office said that a fixed charge will help companies “recover distribution costs” and “remove the disincentive utilities have to encourage customers to conserve.”

For the one in five electricity users that will see their bills go up because of a move to fixed rates, Chiarelli’s office said it will be limited to a hike of 4 per cent per year.

Editor’s note: translation–you pay and pay and pay. Conserve, you pay; use, you pay. Renewables contribute only a fraction of the power Ontario needs but account for a substantial portion of the cost to users. Help for families in “energy poverty”? You’re paying for that, too, though why we are in this situation in energy-rich Ontario (where we are selling surplus power at bargain basement prices) is a mystery of policy and ideology.