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.
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%.
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. …
F or the first time in Ontario’s electricity history the early morning hours of October 3 saw industrial wind turbines outproduce hydroelectricity. Hours 1 a.m. to 5 a.m. showed wind turbines generated 12,481 megawatts (MWh) versus 11,736 MWh of hydroelectricity. Generation from wind turbines represented over 21 per cent of Ontario’s total demand for those five hours.
The advocates of renewable energy will presumably tout this as proof of the wonders of industrial wind power but before they do they should consider the facts related to those five hours and the resulting costs!
Ontario’s total demand averaged 11,663 MW during the time frame, meaning base-load power supplied by nuclear and hydro could have easily coped with the province’s needs, making wind’s production surplus. During those five hours Ontario exported 11,718 MWh at an average price of $3.43 MWh, meaning revenue generated was about $43,000 (less than half a cent per kilowatt hour) whereas the cost for their production (if we attribute all exports to wind) was $1.5 million (at an average price of $123.50/MWh) or 12.4 cents/kWh!
Ontario was probably also spilling clean hydro and perhaps even curtailing wind generation and ratepayers were forced to pick up the cost for those manoeuvres.
Conclusion: Wind continues to whip Ontario’s ratepayers!
Ontario ratepayer fatigue: covering the costs of bargain basement sale of surplus power from wind and solar
When will it end?
Another month goes by and another $168 million from Ontario ratepayer’s pockets went to subsidize surplus electricity exports to our neighbours in New York, Michigan and Quebec. The month of August saw another 1,759,000 megawatts (MWh) or 1.76 terawatts of excess electricity generation exported. That cost Ontario’s electricity ratepayers $209 million—the Independent Electricity System Operator (IESO) sold it for $41 million.
The 1.76 terawatts (TWh) sold at the big discount was enough to supply 183 thousand “average” Ontario households with power for a full year. That sale brings our exports to 15.09 TWh for the first 8 months of 2015, enough to supply almost 1.6 million “average” households with power for a full year!
The costs of those export losses fall to all ratepayers; for the eight months ended August 31st, that means a “green energy tax” of $1.4 billion, or about $300 per average household. Quick math will disclose that the average monthly cost is $177 million meaning the total cost for Ontario’s ratepayers in 2015 may reach $2.1 billion or roughly $460 per ratepayer. The 23 TWh we will probably export would have provided 2.4 million ratepayers with their average annual power needs.
What about wind power in all this? In August, wind produced 3.5% (459.3 gigawatts or GWh) of total generation (13.05 TWh) and just over 26% of our exports; solar produced about 29 GWh (not including “embedded generation”). Combined, they represented 27.7% of our exports which begs the question—what benefit do they provide and why do we keep adding more generation at subsidized rates, if we lose money because we must export our surplus generation?
That question is unfortunately not going to be answered any time soon, if we look at the recently released IESO 18 month outlook (Oct 2015 to March 2017). The IESO report notes:
“About 1,900 MW of new supply – mostly wind and solar generation – will be added to the province’s transmission grid over the Outlook period. By the end of the period, the amount of grid-connected wind generation is expected to increase by 1,300 MW to about 4,500 MW. The total distribution-connected wind generation over the same period is expected to be about 700 MW. Meanwhile, grid-connected solar generation is expected to increase to 380 MW, complementing the embedded solar generation capacity of about 2,200 MW located within distribution networks by the end of the Outlook.”
According to the IESO report, Ontario will add 1,700 MW of generation from wind and solar generation over the next 15 months, which brings wind turbine capacity to 5,200 MW and solar to almost 2,600 MW. This is clearly not needed or dependable.
The IESO report also highlights what we have been told by various business associations that have expressed concern about the effects of rising electricity costs: “For the three months, wholesale customers’ consumption posted a 5.9% decrease over the same months a year prior with Pulp & Paper, Iron & Steel and Petroleum Products accounting for most of the reductions.”
That’s evidence that our primary processors are exiting Ontario, in large part because of high electricity prices, taking jobs with them.
The Ontario Wynne government is bent on ensuring Ontario leads the way to the highest prices of electricity in all of North America; they have only a couple of jurisdictions to overtake.
Ottawa-based energy economist Robert Lyman has taken a critical eye to advertisements on energy conservation
This week, people living in Ottawa are being bombarded with radio and newspaper advertisements proclaiming that the electrical energy they “saved” over the past six years was enough to “power our arenas”.
How about some “truth in advertising”?
There is a big difference between reducing your energy use and “saving” money. When a residential householder in Ontario reduces electricity use, that may temporarily reduce his or her electricity bill, but it does not reduce the costs that are incurred by the various companies that are involved in generating, transmitting and distributing electricity. All of those companies are government-owned and regulated utilities. Unlike private companies that, faced with reduced demand for their services, have to cut back production and costs, the electrical utilities are completely protected by their regulated rate structures. When sales go down, they simply apply to the regulator (the Ontario Energy Board) to raise their rates per unit of sale, denominated in kilowatts per hour (kWh). So, the price for the consumer just goes up after the next rate hearing.
But it gets worse, far worse.
When the Ontario government advertises about “saving energy,” it is not talking about saving consumers money. It is talking about— in theory— reducing the costs associated with generating and transporting electrical energy to consumers. Reducing demand usually refers to two things: reducing the overall average use of electricity and switching the use of electricity from the peak periods of day and season to other times. Reducing the average use over time reduces the amount of generating capacity of all kinds that the electrical utilities need to build. Reducing the peak uses can, in theory, cut the amount of peaking capacity (electrical energy generation capacity that stands idle to be used when needed) that has to be built.
So, in theory, Ontario wants us all to use less electricity so that its utilities won’t have to build more expensive generating plants and transmissions lines. This is where things start to get bizarre. You see, back in 2002, people were justifiably worried that Ontario would not have enough generating capacity. So the province started to add more, and more, and more. In fact, Ontario has added more than 12,400 megawatts (MW) of generating capacity since 2002. As of March 2015, the Independent Electricity Systems Operator (IESO) had 18,458 MW of in-service generating capacity, not counting the significant amount of solar powered capacity that is contracted by the several distribution utilities in the province. The Ontario Auditor General, in his December, 2014 report, found that, while IESO is required to maintain an operating reserve of between 1,300 and 1,600 MW for contingencies, since 2009 the available surplus has been between 4,000 and 5,900 MW.
Meanwhile, IESO is busily contracting for immense amounts of additional capacity, mostly to meet the dictates of the 2009 Green Energy and Green Economy Act. In 2015 alone, newly contracted supply of renewable energy sources (wind, solar and biomass) totaled 1,700 MW, raising the amount of IESO contracted (but not necessarily built) supply to 21,000 MW. This contracted supply is on a path to reach 23,000 MW by the 2018–2022 period. Demand continues to fall every year.
With massive and costly oversupply and a legislated mandate to continue contracting for more, what does IESO do? Does it cut back on its “conserve, conserve, conserve” campaign? Why no, it ramps it up. The present focus is on two strategies — programs and pricing. The programs include plenty of advertising and financial inducements to get people to use less electricity, programs that cost hundreds of millions of dollars and are charged to — you guessed it — Ontario electricity ratepayers.
The pricing strategy is delivered though the use of “smart meters” and time-of-use pricing is to gouge ratepayers until they yell “uncle.” The rate for on-peak service went up on May 1, 2015 to 16.1 cents per kWh.
Despite all this activity, the surplus continues to grow. So the power is exported. In 2014, Ontario’s exports totaled 19.1 terawatt hours (TWh), sold at a loss of $1.4 billion. If current trends this year continue, export sales will reach an all-time high and an all-time maximum loss of about $2 billion. You already know who will pay for that.
In effect, every kWh saved is another kWh exported and more money lost. Keep that in mind when you hear the ads.
Land owners need to be socially responsible when deciding to sign leases for wind turbines, Wind Concerns Ontario tells Ontario Federation of Agriculture president
The following is a letter sent by Wind Concerns Ontario president Jane Wilson to OFA president Don McCabe, in response to remarks made by Mr. McCabe at a wind farm information meeting in Finch, Ontario. Several of Mr. McCabe’s comments to the audience, such as that there is no surplus of power in Ontario, were not correct, WCO said in the letter.
As well, while Mr. McCabe’s advice to landowners to “get a lawyer” is sound, Wilson said, the attitude that landowners need to concentrate only on getting everything they want in a lease is isolationist and archaic, and is helping to divide Ontario’s rural and small-town communities.
“Not one word was said about responsibility to community, and neighbours. This [attitude] does not represent the view of the contemporary and socially responsible farm operators that we work with; they are professionals who believe they are part of their communities and who are aware of—or at least consider—the effects of their actions on others,” Wilson said.
The letter was sent to Mr. McCabe, and the Board of Directors for the Ontario Federation of Agriculture.
Dear Mr. McCabe:
It was interesting to meet you last week in Finch, Ontario at the Lions’ Club event, where we both spoke, along with Mr. Levy of CanWEA.
I was relieved to hear your strong advice to those attending and contemplating signing a lease with a wind power developer, to “get a lawyer, get a lawyer, get a lawyer.” This is excellent advice: as you know, these contracts typically contain dozens of pages of various clauses outlining requirements and limitations…many people do not understand what they are being asked to sign.
I was disappointed, however, in other aspects of your presentation. First, there were a couple of statements made that are not correct and may even be misleading.
Power surplus in Ontario: in my presentation I had suggested that more wind power projects were not necessary, especially not for a form of power generation that is intermittent, produced out-of-phase with demand and is expensive, causing Ontario electricity rates to rise. You countered by saying that Ontario has no surplus of power. This is not correct: the Ontario Energy Minister himself admits that Ontario has surplus power and also says that the province will have a surplus for years to come. See his quotes and the forecast for power rates in a Globe and Mail article here.
“Net metering”: you told the audience that they should arrange in their lease to share in the wind power produced by any turbines on their land. This is not correct—it is unlikely one could get power from the wind turbine on a farm, and moreover, it would be in violation of the contract the wind power developer has with the Ontario government to obtain the Feed In Tariff to do that.
Turbine noise: you suggested to the audience that if the noise from turbines were to bother them, they could make sure that there is a clause in the lease so that the power developer would have to address that. This is extremely unlikely; at present, there are thousands of noise complaints in Ontario that go unresolved by either the developer or the Ministry of the Environment.
Community input to power projects: In response to several questions from the floor, you did advise people to go to the government website on the new Large Renewable Power Request for Proposal process, but you also suggested to at least one audience member that there is nothing communities can do, if a power proposal comes forward. That is not correct: people can work with their municipal governments, members of their community, and also choose not to sign the agreement required of adjacent property owners.
Contracts: I believe you also suggested to a farm owner who had signed a contract/option and was now having second thoughts that there was nothing he could do. This also is not correct, and would have been another opportunity for you to advise him to “get a lawyer, get a lawyer, get a lawyer.”
That brings me to the second area of disappointment in your presentation: the overarching theme of your remarks was that if people are going to sign a lease for a wind turbine project they should make certain that they get concessions from the power developer that benefit them. There was not a single mention in your remarks of the need for responsible consideration of other members of one’s community, including fellow farm operators, and neighbours.
This was a very narrow view that demonstrates no balance and instead indicates an archaic, “I can do whatever I want on my land” view. This does not represent the view of the contemporary and socially responsible farm operators that we work with; they are professionals who believe they are part of their communities and who are aware of—or at least consider—the effects of their actions on others.
Our concern with this isolationist view of farm ownership is that it will further divide Ontario’s rural and small-town communities.
OFA needs to clarify its position on this matter, and further, consider advising your membership that when it comes to deciding whether to participate in a wind power project, the responsible course of action is to balance their financial opportunities with the economic, health and social needs of others around them.
We would be pleased to meet with the OFA Board to discuss our concerns.
EDP Renewables Project Manager Ken Little, left, and Deputy Project Director Thomas LoTurco make a presentation to South Dundas council April 21, 2015. The company responsible for the South Branch Wind Farm is planning on building another farm east and north of Brinston, Ont. (Cornwall Newswatch/Bill Kingston)
MORRISBURG – The next wind farm in South Dundas could be up to four times the size of the South Branch Wind Farm, township officials heard Tuesday night.
EDP Renewables made a presentation to council to update the municipality on its next steps to build another wind farm in the county and ask for its support for the project through a “community support resolution.”
While no decisions were made Tuesday night, it’s unlikely that South Dundas will put pen to paper to back the wind farm as it signed a resolution in the fall of 2013 to tell the Ontario government is was a non-willing participant in wind energy.
EDP already has a 10 turbine, 30 megawatt operation – the South Branch Wind Farm – near Brinston.
Spokesman Ken Little says they will have a better idea how big the project will be when the Independent Electricity System Operator (IESO) publishes the grid connection availability, expected on May 22, 2015.
But, based on EDP calculations, they are assuming the capacity will be 50-100 megawatts, which could be serviced by 40 windmills.
Unlike the South Branch Wind Farm, this next farm is part of a competitive bid process and not under the Ontario government’s feed-in-tariff (FIT) program.
It would be east of the South Branch Wind Farm and would stretch in a northeasterly direction toward Winchester Springs.
Little says it’s likely the area would also be eligible for a community investment fund, similar to the one in Brinston, of $1,000 per megawatt per year for 20 years.
He also alluded to jobs, saying the operations are supported right now out of their New York office. “If we were to have another project in the area we would be talking about our own fully-dedicated operational staff full-time for those projects as well.”
“We’re going to start our public open houses in late May,” Little told council Tuesday night. “These will be general in format just to discuss the project and folks to ask questions.” Dates haven’t been set but they will mostly like be held at Matilda Hall or the Dixons Corners Municipal Center.
Little says there’s going to be a bigger demand for wind power in the years ahead. “With the Ontario energy surplus, it’s always a hot topic for discussion, it’s something where were closely getting to a window where that surplus will no longer be a surplus,” he said. The Pickering nuclear plant will be shut down in 2020 and 10 Bruce and Darlington nuclear plants, will be cycled off for rebuilds between 2017-2028, he explained.
For the green energy skeptics and the curious, EDP officials say the existing operation in Brinston is open for tours from the public at any time.
EDITOR’S NOTE: EDP is referring to the issue of surplus power in Ontario because that is the fact that the South Dundas unwilling host motion hinges on. The truth is, wind power–produced out-of-phase with demand, intermittent and unreliable–cannot replace the nuclear plants during their period of refurbishment. That would more likely be achieved by the natural gas plant at Lennox, and hydro.
An information evening will be held May 6th in Finch at the Lions Arena, at 7 PM.
Wind output up, exports up, cost of electricity up— no coincidence
Five years ago, in 2009, George Smitherman, Minister of Energy during the McGuinty reign, rammed through the Ontario Legislature the Green Energy and Green Economy Act. The Act ushered in the FIT (Feed In Tariff) and MicroFIT programs, attracting corporations from around the world who wanted the lucrative power contracts being let by the government-mandated Ontario Power Authority.
The result of the Act is now evident with huge chunks of rural Ontario covered with solar panels and spiked by 500-foot industrial wind turbines cranking out intermittent electricity, surplus to our demand, 99.9% of the time.
Early in 2010, the Independent Electricity System Operator (IESO) advised us of electricity generation for Ontario by fuel type for 2009. The headline in their press release stated: “Wind Power in Ontario Generates a New Record in 2009.” Wind produced 2.3 terawatt hours (TWh) or 1.6% of Ontario’s total demand of 139 TWh. The same press release noted Ontario exported 15.1 TWh, and wind’s percentage of those exports was 15.2%. The release also disclosed the average HOEP (hourly Ontario electricity price) for 2009 was $31.6 million per TWh, and the Global Adjustment (GA) $30.6 million/TWh.
That means, the costs of power generation (on average) were $60.2 million per/TWh.
Wind significant share of the loss
In 2009, Ontario exported 15.1 TWh generating revenue of $477.2 million (15.1 TWh x $31.6 million), but the TWh exported cost Ontario ratepayers $909 million (15.1 TWh X $60.2) — that means Ontario lost $432 million. The cost of power production from wind was $283 million (2.3 TWh X $123 million/TWh), representing 65.5% of the losses on the exported TWh.
Fast forward five years to January 2015: IESO’s announcement indicated Ontario’s demand in 2014 was 139.8 TWh. Wind was 6.8 TWh, or 4% of all generation. Exports grew to 19.1 TWh and wind’s percentage of exports shot up to 35.6%. HOEP was $36 million/TWh and the GA jumped to $54.6 million/TWh, making the all-in-cost to Ontario’s ratepayers $90.6 million/TWh. The cost to produce 19.1 TWh was $1,730 million (19.1 TWh X $90.6 million), and revenue generated from the sale was $688 million (19.1 TWh X $36 million). That left Ontario’s electricity ratepayers to pick up the $1.042 billion shortfall. The cost for 6.8 TWh of wind was $836 million plus another $42 million1. for curtailed wind bringing its cost to $878 million, representing 84 % of export losses.
The all-in-cost of Ontario’s electricity generation jumped from 6.2 cents/kWh in 2009 to 9.06 cents/kWh in 2014, an increase of 46%. Ratepayers picked up an additional burden of $4,048 million for 139.8 TWh.
The extra .8 TWh (800 million kWh) Ontario ratepayers consumed in 2014 versus 2009 cost us over $4 billion or $5.06 per/kWh, much of it was caused by the push for renewable energy and the need to have back-up power plants for when the wind is not blowing or the sun isn’t shining.
Imagine how many subway stations or hospitals $4 billion might have built.
What the Easter Bunny brought Ontario’s neighbours
Ontario’s ratepayers won’t care much for what the Easter Bunny delivered over the long weekend.
Over Friday, Saturday and Sunday on the weekend of April 3, 2015, the Independent Electricity System Operator (IESO) reported we exported 250,500 megawatt hours (MWh) of electricity to our friends and neighbours, but they gave us only $6.21 per/MWh for power that cost us at least $90 per/MWh to produce.
The exported power over those three days was equivalent to almost 24% of total Ontario Demand of 1,009,700 MWh.
On top of that, IESO indicated via their Planned Outage Report they constrained, spilled, idled or steamed-off another 238,000 MWh from a variety of generators which represented 23% of total Ontario Demand. Between exports and the outage requirements, ratepayers picked up the tab for 488,000 MWh or 51% of power we didn’t have a demand for.
So, why are we all told to conserve more?
Wind over that weekend generated about 58,000 MWh and represented 23% of exports. The cost of production was $7.1 million ($123 per/MWh) for which we were paid $360K ($6.21 per/MWh) — that’s a loss of $6.7 million.
Ratepayers also picked up the cost of the other 192,500 MWh exported at a cost of $17.5 million and the constrained production at a cost of about $12 million.
$36 million in losses
In those three days, Ontario’s electricity customers paid for all this and saw no benefit. Yet we are obligated to pick up almost $36 million in losses. Doing this every day would results in annual costs of $3 billion, with no benefit!
We need the Liberal government to tell the Easter Bunny to stay home next time and dole out the Easter treats to Ontario’s ratepayers and taxpayers, instead of our neighbours.
Here from former bank VP Parker Gallant, now VP of Wind Concerns Ontario, a review of Ontario’s green energy policy which has resulted in a surplus of power produced when we don’t need it, and the government’s sell off to neighbouring jurisdictions.
Anyone reading an excerpt from the November 18, 2014 Standing Committee on Estimates text of Energy Minister Bob Chiarelli might have trouble discerning what his message was. And, specifically, what his answer had to do with MPPRandy Hillier‘s question on whether Ontario loses money exporting surplus electricity.
Chiarelli had danced around the question, claiming Ontario needed “surplus generation,” but Hillier kept hounding him and finally, Chiarelli responded.
Mr. Randy Hillier: “Listen, I understand that we want to have a margin of surplus. We all can understand that, because you don’t know specifically and exactly how much is going to be needed at any particular point in time. But let’s get back to the question. What are our estimated losses—do you have an estimate—for this year and next year, cumulatively, in our losses of trades?”
Hon. Bob Chiarelli: “Can I ask you to give me 30 seconds without interruption? Just a few seconds, okay?”
Mr. Randy Hillier: “Well, if you can answer the question—60 seconds.”
Hon. Bob Chiarelli: “Walmart buys snow blowers. They expect to sell X number of snow blowers in a winter. At the end of the winter, if they haven’t sold those snow blowers, they sell them at a discount. They’re selling them for less than their costs. That’s part of doing business.
The electricity system is exactly the same as Walmart. Why do they have sales? Why do they sell a product that is worth X number of dollars in November for less when they’re selling it in March or April? Why do they do it? They’re giving it away. They’re losing money. How much have they lost?”
Walmart. Ontario’s electricity system is “exactly the same” as Walmart.
Here’s what the Ontario Auditor General’s report for 2011 said about what Ontario lost by exporting electricity surpluses.
“Based on our analysis of net exports and pricing data from the IESO, we estimated that from 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario.”
The losses highlighted in the AG’s report are related to the creation of the Global Adjustment or GA. The buyers of our surplus electricity only pay the HOEP (hourly Ontario electricity price) and Ontario’s consumers pick up the difference between the contracted price for generation and the HOEP. It was that difference, the GA, that the AG’s report highlighted.
Ontario has seen three more years of generation since that report and each one has meant increasing costs to Ontario’s electricity consumers. For 2012, IESO reported our exports were 14.6 terawatt hours (TWh) and generated an average price of $24.1 million/TWh, but the costs to Ontario’s consumers for that generation included the GA which was an additional $49.6 million/TWh—that resulted in a cost of $724 million. 2013 was worse: Ontario exported 18.3 TWh generating $26.5 million/TWh with the GA cost at $59.0 million/TWh for a cost of $1.007 billion. 2014 was slightly worse again, with exports of 19.1 TWh generating $36.0 million/TWh, costing ratepayers $53.5 million/TWh for the GA, creating a loss of $1.022 billion.
So, those three years cost ratepayers $2.75 billion for the 52 TWh (11.3% of total generation of 459.8 TWh) of exported power we didn’t need, bringing losses since creation of the GA to $4.550 billion.
Ontario’s ratepayers might be much better off if Walmart really was running the electricity system in Ontario. At least Walmart isn’t continually running at a loss.