Tag Archives: Scott Luft

Wind power: 22% of the costs for less than 6% of the power

06 Tuesday Dec 2016

Posted by in Renewable energy, Wind power

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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 Perspectives blog. 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.

Here is the post by Parker Gallant.

For the cost to provide a small portion of Ontario’s power, wind is no bargain

Not a chance ...
Not a chance …

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.

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Ontario electricity bills up 97%; more wind power contracts to come

09 Tuesday Feb 2016

Posted by in Renewable energy, Wind power

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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

wind contract banner

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.

© Parker Gallant,
February 7, 2016

The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Year Net Intertie 1. Global Adjustment Cost to Ratepayers % of Renewables to Wind Solar &
TWh 2. Million of $/TWh GA X Net Intertie Net Intertie Biomass generation
(millions)
2015 16.86 TWh $77.80 $1,311 57.20%        9.65TWh
2014 15.15 TWh $54.59 $846 47.00%        7.12TWh
2013 13.40 TWh $59.22 $794 48.50%        6.50TWh
2012 9.90 TWh $49.23 $487 59.60%        5.90TWh
2011 9.00 TWh $40.48 $364 56.70%        5.10TWh
2010 8.80 TWh $27.18 $239 46.60%        4.10TWh
2009 11.30 TWh $30.56 $345 31.00%        3.50TWh
2008 10.90 TWh $6.12 $67 22.00%        2.40TWh
2007 5.10 TWh $3.95 $20 19.60%        1.00TWh
       Totals 100.40 TWh $4,473     37.00TWh

Power surplus in Ontario: another wind farm announced

03 Wednesday Feb 2016

Posted by in Renewable energy, Wind power

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$1.5 million spent paying off wind power developers NOT to add unneeded power to the grid already on February 3rd

From Wind Concerns Ontario:

100-MW North Kent wind farm posted despite surplus power in Ontario

Ontario electricity customers pick up the tab for unneeded power development, again

The huge, 100-megawatt North Kent 1 wind power project proposed by the Samsung-Pattern Energy consortium was posted yesterday on the Ontario Environmental Registry. The announcement comes despite the Ontario Auditor General’s report in 2015 that Ontario has a significant oversupply of electrical power, and that Ontario ratepayers are paying too much for “renewables.”

In just the first eight hours today, the day after the announcement for North Kent 1, the Independent Electricity System Operator or  IESO curtailed about 11,000 MWh of wind generation alone.  It could have provided power for 1200 average households; instead it has cost Ontario electricity ratepayers $1.5 million … for nothing.

The power developers claim the power produced from this project during its 20-year agreement with the province will generate “electricity equivalent to the annual electricity needs of 35,000 homes.”

Their use of the wording “equivalent to” is interesting because with Ontario’s current and significant surplus of power, the electricity generated from this project will almost certainly NOT go to Ontario electricity customers, but instead will be sold at a discount to neighbouring jurisdictions like Michigan and New York State.

As an example, Samsung-Pattern’s Armow wind project just began operation this week, and energy analyst and blogger Scott Luft commented: “the only drivers of price in Ontario are excess supply and supply rate increases (primarily at OPG). Samsung’s announcement states ‘Armow Wind is expected to generate enough clean energy to power approximately 70,000 Ontario homes each year’, but …  it’s unlikely it will have the opportunity to power a single one — it will power American homes or nothing at all.”

Energy commentator Parker Gallant also remarked: “The power [from the Armow project] delivered to Ontario will be charged to all average ratepayers at 13.5 cents/kWh whereas the power (probably about 50% of production) will be charged out to those NY & Michigan ratepayers at about 2.5 cents/kWh. Ontario ratepayers will pick up the difference between the 2.5 cents the surplus is sold for and the 13.5 cents/kWh the Armow owners will be paid.”

Although the project may be appealed (almost every wind power project in Ontario has been) Samsung-Pattern confidently announce that construction on the project will begin later this year, and operations will begin early in 2017.

Comments on the project are accepted by the EBR in writing or online until March 18. Comments must relate to environmental impact.

NoNewWind_FB

Data on wind power in 2015 shows new contracts not needed

05 Tuesday Jan 2016

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A report from energy analyst Scott Luft, released today, shows that curtailment of wind power in Ontario reached record levels in 2015. If the government proceeds with its plans to contract for 300 more megawatts of wind power under the Large Renewable Procurement (LRP) plan for 2015, and another 200 megawatts in 2016, this disastrous trend will continue.

Curtailment of industrial wind turbine production in Ontario soars in 2015

Posted on January 5, 2016 by Cold Air

A 2015 year-end review of my hourly estimates indicate the curtailment of output from industrial wind turbines (IWTs) soared in 2015. I show total curtailment exceeding 1 million megawatt-hours, which I assume Ontario ratepayers paid ~$127 million for regardless.

I show the potential supply curtailed rising to 10% from 6%.

WindCurtailmentByRegion

 

The increase in curtailment in the Bruce region is galling as an examination of output from one IWT location there revealed that during the peak electricity demand of summer it was often a net consumer of grid power rather than a contributor to supply.

Note in the above graphic that only the Northwest breaks a trend that sees higher curtailment equate to lower market valuation of the output of the zone’s IWTs, with a doubling of curtailment in the Bruce region matched by a halving of market value of production.

The increase in curtailment in 2015 is particularly relevant because the Large Renewable Procurement which the IESO (operator of the system) intends to proceed with in 2016 used about 6% as the level of curtailment it anticipated.

If more IWTs are added, they’ll be increasingly wrong.

In 2015 potential output from IWT’s could have increased by about 2,500 gigawatt-hours (GWh), while I estimate curtailment increased by about 575 GWh – which indicates 22% of new supply ended in curtailment of wind.

There are other reasons curtailment would change, particularly in 2016. Up until January 1, 2016 flexible nuclear at Bruce Power was dispatched previous to IWTs, but the rules have now been rationalized.

We may look back at 1 million MWh of wind curtailment as the good ol’ days. …

Read more HERE.

Lesson for Bob Chiarelli: how much wind power REALLY costs us

05 Tuesday Jan 2016

Posted by in Renewable energy, Wind power

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Re-posted from Wind Concerns Ontario with permission

Math lesson on power costs for Minister Bob Chiarelli: Parker Gallant

Don't despair Mr Chiarelli: Parker Gallant explains it all nice and slow
Don’t despair Mr Chiarelli: Parker Gallant explains it all nice and slow

January 5, 2016

Open “Tongue in cheek” letter to:

The Honourable Bob Chiarelli, Minister of Energy, Queen’s Park, Toronto
Dear Minister Chiarelli:

First, I hope you and your family had a Merry Christmas and a Happy New Year.

Second, I hope you found the time to make it through the exercises I described in my recent letter so you now understand the difference between “profit” and “loss” in respect to the energy portfolio.

With that behind you, I believe it’s time for a second math lesson. We will again use the chart for November 12th, 2015 prepared by my friend Scott Luft. See below.

This lesson is focused on allowing you to understand how the cost per megawatt hour (MWh) by generating source can be calculated using the chart Scott prepared versus the IESO daily summary which is not at all as transparent as Scott’s.

Let’s start! Note the second portion of the chart with the subject line “IESO Transmission (Tx)”.  The first heading “Nuclear” is a reflection of the generation source and on this day it provided 58.1% of all generation.  How to get that calculation is simple.  Look at the first line; add the “Ontario” column of the generation of 429,668 MWh to the 2nd line “est. Distribution (Dx)1.” giving you 447,177 MWh. Divide it into Nuclear total of 259,444 MWh and you get 58%!  Including curtailed it becomes 61.8%.

Now let’s calculate the cost of each megawatt hour of Nuclear generation. We will include “est. Curtailed” in our calculations as it is generation that could have been delivered, but because IESO was concerned with the grid crashing it was “curtailed” i.e., not produced.  Bruce Nuclear has the ability to “steam off” and that is what they were told to do, because wind/solar was generating too much power at a particular point in the day. Now the total of nuclear generation plus the curtailed (steamed off) nuclear is 276,301 MWh and that should be divided into the last line “Cost ($000s)” of $18.062 million —which demonstrates each MWh of nuclear cost $65.37/MWh.   Still with me, I hope!

OK, so let’s calculate the cost per MWh for hydro: that was 86,965 MWh + est. Distribution (Dx) of 1,867 MWh and curtailed (spilled) of 208 MWh for a total of 89,040 MWh. Divide that into the “Cost” of $4.671 million and you will see the cost per MWh was $52.46.  Hydro contributed 20.2% of Ontario’s total generation (ignoring curtailed generation) this day, so combined with nuclear those two sources generated or curtailed/steamed off 78.2% (365,341 MWh) of all electricity generated in the province, and 100.4% of total Ontario demand (refer IESO daily summary) of 363,960 MWh.

Hope you are paying attention Bob. Here’s why: our exercise up to now doesn’t include generation from wind, solar, gas, biomass or biofuel sources, yet they were were completely CO 2 free!   Worth pondering, eh?

Now, time to look at costs of those other sources of generation. Let’s start with gas and its role in providing “peaking power”!  On this day, gas provided 5.5% of Ontario generation (including “est. Distribution (Dx).”  The calculation: 24,511 MWh divided by 447,177 MWh = 5.5%.  The cost of those megawatt hours is simply: divide the “Cost” of $5.360 million by 24,511 MWh, giving a shocking total of $218.68/MWh!

Contracting for gas plants is to back up wind and solar generation when the wind doesn’t blow and the sun doesn’t shine!

Here is an example that requires some math calculation so read this carefully before trying the calculations. Specifically let’s review  the TransCanada 900-MW gas plant (planned but canceled) for Oakville (most of the $1.1 billion cost) and moved to Bath!  The OPA contract (negotiated by the OPA) will pay them $15,000 per MW per month to be “at the ready.” The annual cost of the 900 MW is $162 million (900 MW X $15,000 X 12 = $162 million).

Bob, what the foregoing means is that if that plant produced just one (1) megawatt hour of electricity in a year, the cost would be $162 million.

Now let’s do a “what if” exercise: assume it will operate at 10% of rated capacity of 900 MW which means it will produce 788,400 MWh (10% X 900 MW X 8760 [hours in a year] = 788,400 MWh).  Actual generation costs from the gas peaking plants are based on the cost of the natural gas fuel plus a small mark-up but we will ignore those latter two costs in the next calculation just to keep it simple.  Here we go: if you divide the annual cost of $162 million by 788,400 MWh, your answer should be $205.50/MWh.  Pretty expensive, eh?

The requirement to back up industrial wind turbines is old news as noted in a Memorandum submitted to the U.K. Parliament which stated:  “Dr Paul Golby CEO of E.On UK, says 90% whilst Mr Rupert Steele of Scottish Power says, “Thirty Gigawatts of wind maybe requires twenty-five GW of backup.”  In other words, that means, if you contract for 1,000 MW of industrial wind generation you need a 900 MW gas plant to “back-up” its capacity!

So, doing math is important: you can see that you are almost doubling up on the cost of producing a single MWh of electricity.

That brings us to the actual cost of wind generation on the chosen day in November.

On November 12, 2015 (refer to Scott Luft’s chart) wind produced 63,203 MWh, i.e., the lines “IESO Transmission (Tx)” + “est. Distribution (Dx)” equals 63,203 MWh. On this day wind produced 14.1% of Ontario’s generation at a cost of $153.55/MWh (based on the calculations applied above) —or at least this is what one would assume.  That is an assumption you shouldn’t make though, Bob, and I will try to explain why.  Adding curtailed wind production (13,500 MWh) to the 63,203 MWh produced would reduce the per MWh cost to $126.52/MWh, but, and it’s a big but—it doesn’t include gas back-up costs.   Now pay attention!

The outstanding contracts for gas generation total about 9,000 MW of capacity and the contracts guarantee them (including the 2,100 MW of  Lennox owned by OPG) a monthly price similar to the TransCanada contract mentioned above.   So, knowing that, let’s assume the “average” contracted price is only $10,000 per MW per month.  Bearing that in mind the backup for wind (solar to a lessor extent) is costing Ontario ratepayers $1.080 billion annually to be on “standby”!  In other words, if they produced one (1) MWh in a year the cost would be $1,080,000,000.   Shocking eh?  If operated at 100% of rated capacity (which they can’t) they would produce almost 79 TWh (terawatts2.) or over 50% (9,000 MW X 8760 hours in a year) of Ontario’s annual consumption.

OK, now back to Scott’s chart of November 12 and let’s figure out the full cost. On November 12, gas generators operated at around 11.3% of capacity (79 TWh divided by 365 days in a year = 216,438 MWh and 24,511 MWh divided by 216,438 MWh = 11.3%).  The cost of that day’s gas generation combined with wind generation would be $171.75/MWh, i.e., combined cost of $15,065,000 divided by combined generation of 87,714 MWh (ignore the curtailed generation) = $171.75/MWh.  Now that cost coupled with the losses of $7.9 million from our exports of 74,352 MWh (cost of $108 per/MWh3.) Nov. 12th, produces a combined cost of $279.75/MWh or 4.3 times the cost of nuclear generation.

At this point, Bob, I hope you have grasped the math so I won’t go through the exercise for Scott’s other headings of biofuel, solar etc. I will leave you to work those out on your own.

I certainly hope this exercise gives you sufficient math skills to at least understand the basic steps you should go through before making either rash remarks or issuing directives to IESO telling them what to do. Instead perhaps you could instruct them to produce information similar to what Scott Luft produces.  The latter would also back up your leader’s wishes or intent to be “transparent” for the taxpayers and voters in Ontario.

Good luck with the math exercises and with demonstrating your Ministry’s intention to become more transparent.

Regards,

©Parker Gallant

  1. Distribution (Dx) reflects the generation sources (principally small wind and solar) hooked up directly to local distribution companies (LDC).
  2. One Terawatt hour is equal to 1,000,000 MWh.
  3. Refer letter of November 17, 2015.
(C) Scott Luft
(C) Scott Luft

Citizen opposition to wind farms results in ratepayer savings

25 Monday Aug 2014

Posted by in Ottawa, Renewable energy, Wind power

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Here is a comment from Ottawa economist Robert Lyman, who is reflecting on a recent post by energy blogger Scott Luft.

Luft believes that citizen opposition to giant wind power projects has resulted in substantial savings for Ontario.

I thought I might extract a few of the more salient points that would be of interest to Wind Concerns Ontario.
The article is intended as a status report on industrial wind in Ontario, measured three years after the last batch of feed-in tariff contracts were awarded.  Three years ago, the contracted capacity from wind generators increased from around 4000 MW to around 5800 MW, according to the Ontario Power Authority (OPA). The OPA showed 1958 MW “in service” in 2011.
The Independent Electricity System Operator (IESO), in contrast, currently reports that “installed generation capacity” for wind is 1824 MW, well below the OPA’s figure for 30 months ago. The discrepancy between the two agencies is unexplained. Scott Luft’s interpretation is that actual generation from wind sites has been only about 12.5 % of the grid-connected wind sites. He also estimates, based on OPA data, that Ontario currently has about 2800 MW of generation capacity from industrial wind turbine generators. This is less than half the capacity that was contracted for three years ago.
He believes that the delays in construction of the contracted capacity is clearly the result of “rural NIMBYism”; in other words, the strong efforts of rural communities to push back against wind developers.
How much has this saved Ontario ratepayers?
The feed-in tariff contracts were to pay $135 per MWh. At 2850 MW, a delay of one year in construction pushes back about $1 billion in contract payments. However, the savings to be realized from wind opposition go further. Contracting, which was planned to go to about 8000 MW of capacity, was curtailed below 6000 MW three years ago, and the 2013 Long Term Energy Plan rolled back wind plans by an additional 1200 MW. The deferral on contracting 2000 MW of wind for three years is worth about $2.5 billion, and cancelling 1200 MW altogether could be worth another $8.5 billion over the 20 years of the contract term.

Wind and solar power: the hidden costs

20 Tuesday May 2014

Posted by in Ottawa, Renewable energy, Wind power

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Wind power: not free

Wind power: not free

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. …

Read the full analysis here: THE HIDDEN COSTS OF ONTARIO RENEWABLE ELECTRICITY GENERATION

Lyman: Ontario’s electricity prices continue to rise

03 Monday Mar 2014

Posted by in Ottawa, Renewable energy, Wind power

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Here from energy economist Robert Lyman, an analysis of what’s going on with the price of electricity in Ontario… and what’s to come.

The Ontario Electricity Tragedy – The Numbers for 2013

The average resident of Ontario has a difficult time even understanding his or her electricity bill, let alone comprehending all the costs borne by the Independent Electricity System Operator (IESO), the Crown Corporation that manages provincial electricity supply and demand.

Fortunately for the rest of us, one man spends a lot of time monitoring IESO’s purchases and costs. His name is Scott Luft, and he reports his analysis on a blog entitled “Cold Air.” He takes publicly available data from IESO and translates it into something meaningful. Two tables recently published by Scott Luft tell us a great deal about what has happened to the “commodity cost” of electricity in Ontario since 2006, and especially about the breakdown of costs in 2013. The commodity cost is the charges that IESO pays for the actual power that it purchases from generators plus additional costs that are added on by order of the provincial government. It excludes the cost of electricity transmission and distribution and other special charges like HST.

Read the full article here.Ontario’s Electricity Tragedy by the Numbers (revised)

Terence Corcoran: Millions of taxpayer dollars vapourized

02 Thursday May 2013

Posted by in Health, Ottawa, Renewable energy, Wind power

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With just 20 minutes to go until the Kathleen Wynne government presents its budget, we thought it was good timing to post this opinion from Financial Post editor Terence Corcoran this morning, on the Liberal government’s electricity policy–particularly its Green Energy program–and what the (disastrous) result has been for Ontario.

If you like this, be sure to read related pieces by Parker Gallant and Ross McKitrick.

Terence Corcoran: Ontario Liberals’ last power trip

Republish Reprint

Terence Corcoran | 13/05/01 7:23 PM ET
More from Terence Corcoran | @terencecorcoran

Kathleem Wynne’s current trick is to distance herself from the past ten years of mismanagement, policy bungles, grotesque waste, pro-union pandering, tax-gouging, big spending green dirigisme.

Canadian PressKathleem Wynne’s current trick is to distance herself from the past ten years of mismanagement, policy bungles, grotesque waste, pro-union pandering, tax-gouging, big spending green dirigisme.

Thursday’s Ontario budget  should be the last gasp of the McGuinty Liberals in a province that needs a premier who can say more about provincial affairs than “I didn’t have access to those financial parameters.”

The Ontario Liberal budget Thursday could be the last gasp of a decade-long governance disaster. It certainly should be. The current premier, Kathleen Wynne, was first elected as part of Dalton McGuinty’s Liberal sweep of the 2003 election.  Ms. Wynne’s current trick is to distance herself from the past ten years of mismanagement, policy bungles, grotesque  waste, pro-union pandering, tax-gouging, big spending green dirigisme.

As Ms. Wynne put it during questioning the other day over the rocketing cost of the Liberal government’s cancellation of two electricity- generating plants,  “I didn’t have access to those financial parameters.” She wasn’t told. Didn’t ask.  The cost of the power plant deals is now up to $600-million, money that served no purpose, vapourized for political reasons.

When it comes to the financial parameters of 10 years of bungled McGuinty statism that spans electricity, medical spending, green belts and transit,  Ms. Wynne has a lot of dodging to do. She apparently wasn’t there for the billion-dollar air ambulance crack up, the billion-dollar e-health meltdown. Nobody told her that all the spending — up 60% over the McGuinty years — would lead to a fiscal mess, even though she voted on the budgets that delivered the deficits that now loom for years to come.  She never saw the financial parameters of the Green Energy Act and the cost of wind and solar to taxpayers and ratepayers.  Kathleen Wynne missed it all.

As Parker Gallant and others have documented over the years in this Ontario’s Power Trip series, the $600-million cost of the gas plant cancellations is also mere kilowatts of waste compared with the megawattage imbedded in the green energy extravaganza, a staggering explosion of misguided investment that now threatens to raise Ontario electricity rates to the highest in North America. At the same time, as Mr. Gallant outlines elsewhere on this page, the green energy program is eviscerating Ontario Power Generation, the government-owned electric producer whose value is being eroded by billions of dollars.

Not only has Ms. Wynne missed the parameters of McGuintyism, she now seems poised to do the unthinkable, which is to say she appears set to do it all again.

Indications that Ms. Wynne is another McGuinty have emerged in the usual pre-budget leaks and scuttlebutt.  Her new finance minister, Charles Sousa, has announced the government will cave into NDP demands for a 15% reduction in auto insurance rates. It’s a page right out of the populist playbook run by McGuinty, who promised to cut auto insurance rates by 10%, and did sort of for a brief period.  The idea that the government will be able to issue a directive to insurance companies to cut rates by 15% is ludicrous.  Some reform of the heavily regulated sector is likely useful, but the government is said—by the Toronto Star—to be planning an across- the-board cut in insurance company profits.

The McGuinty Liberals raised corporate taxes, negotiated union-friendly contracts with civil servants, gave unions more power, brought in transit policies that promoted urban sprawl, imposed ethanol mandates. Ms Wynne promises more of the same.

On transit, she appears to be willing to engage in a round of tax increases,and bring in new taxes, to fund pubic transit expansion in the Toronto area. Another area that is destined to receive the same old dodgy policy moves is health care. A $300-million funding of home care related services is a pre-budget announcement that suggests cuts are coming in other areas that will need to be offset by Ontarians who will have resort to home care as the alternative.

But the biggest issue facing the province, aside from the dominant crisis surrounding spending and deficits over the next four years, remains electricity policy.  At some point the Premier of Ontario—whether it is Ms. Wynne or her successor following an election—will have to face the fact that the province’s economy is at some risk of being priced out of the world market.  Ontario power consumers are also being forced to pay high power rates for electricity that should be available at much lower prices.

With this Thursday’s budget, the stage may well be set for a new government with a new leader who has more to say about the state of the province’s fiscal and policy situation than “I didn’t have access to those financial parameters.”