Ontario suspends Large Renewable procurement

September 27, 2016

Moments ago, the Wynne government announced it is suspending its controversial Large Renewable Procurement program for sources of power such as wind and solar.

“Ontario will immediately suspend the second round of its Large Renewable Procurement (LRP II) process and the Energy-from-Waste Standard Offer Program, halting procurement of over 1,000 megawatts (MW) of solar, wind, hydroelectric, bioenergy and energy from waste projects. …

On September 1, 2016, the Independent Electricity System Operator (IESO) provided the Minister of Energy with the Ontario Planning Outlook, an independent report analyzing a variety of planning scenarios for the future of Ontario’s energy system. The IESO has advised that Ontario will benefit from a robust supply of electricity over the coming decade to meet projected demand.”

Wind Concerns Ontario (and two Auditors General for Ontario) has been saying for years that a cost-benefit analysis of the renewable energy program was never done, and should have been.

“Now, the impacts of this program are clear,” says President Jane Wilson.”We have unsustainable and punishing rises in electricity bills for the people of Ontario, with a corresponding rise in rates of energy poverty, while there is no evidence of any environmental benefit. In fact, there are widespread concerns about the damage being done to the environment from this high-impact form of power generation.”

Wind Concerns Ontario says that in addition to suspending the Large Renewable Procurement program, contracts for power projects not yet under construction need to be cancelled immediately.

“The government admits it has adequate power,” Wilson says. “There is no need to continue this assault on Ontario citizens, on our economy, and on the natural environment for little or no benefit.”

 

president@windconcernsontario.ca

Wind turbine leases need detailed legal review, lawyer says

3-MW wind turbine and house near Brinston, south of Ottawa. Lawyers need to review every word of contracts for their clients. [Photo: Ray Pilon, Ottawa]
3-MW wind turbine and house near Brinston, south of Ottawa. Lawyers need to review every word of contracts for their clients. [Photo: Ray Pilon, Ottawa]
Lawyer Garth Manning, a retired Queen’s Counsel, advises lawyers that their help is needed by clients considering signing wind turbine leases or options to lease. In an opinion piece in the current Law Times, Manning says that landowners may focus only on the amount of money they can receive by signing the document, and overlook many important features of the agreement.

“Typically, the wind power proponent incorporates a subsidiary for each individual project. Its agents obtain turbine sites from farmers who have limited understanding of what they’re being asked to do, which is to sign an Option to Lease many pages long; in this option may be a ‘further assurances’ clause that obligates them, if the option is exercised, to sign a form of lease.

“That document, many more pages long, is by far the most lessee-friendly imaginable to any real property lawyer, experienced or otherwise.

“Those farmers badly need legal advice; local law associations should emphasize this to their members,” Manning advises.

Manning emphasizes the impact of the agreement on farming practices, and on communities. Neighbours may not be too happy with the noise and effect on property value, he adds.

“Many of us went to law school in the belief that lawyers help people in trouble,” he concludes for the Law Times readers. “Here is a golden opportunity for lawyers to step up and provide the advice that is so badly needed.”

Read the full article here.

How to save $500 a year on hydro bills: cancel wind

wind contract banner

Parker Gallant has put up a list of recommendations on his Energy Perspectives blog which he says, if they were enacted by the  Wynne government, would save the average Ontario electricity customer $500 a year.

Chief among them is the cancellation of wind power contracts — the older ones that have missed or are about to miss key contract dates — and halting the new Large Renewable Procurement II process, which is, incredibly, still set to begin next year.

As an example of contracts that could be cancelled, the Amherst Island project for 26 turbines on the tiny island, where migratory birds stop over and Bandings turtles live, has no hope of meeting its Commercial Operation date. Cancelling it would save Ontario $500 million.

Cancelling the wind power contracts and the next bid process would stem the tide of surplus power, which Ontario sells at “fire sale prices” Gallant claimed recently in a radio interview on CFRA, and save millions.

So would cancelling Ontario’s egregious conservation program in which customers are urged (shamed?) by a comprehensive advertising campaign to cut back on electricity use. The campaign costs $300 million a year and what happens when consumers do cut back? (As we have.)  The rates go up anyway.

Good advice.

We’ll see if the Wynne government is actually interested in positive action and in helping people.

 

Stop digging the hole, utility company tells Wynne

Niagara On The Lake Hydro sent an open letter to Ontario Premier Kathleen Wynne, outlining the steps the government needs to take to get costs down, and halt the unsustainable rise of electricity costs. “When you are in a hole,” President Tim Curtis said, “the best thing is to stop digging.”

The news release and letter can be read here and an excerpt follows.

There are concrete actions that can be taken both immediately and in the medium term to reduce the cost of electricity or slow down the increase.  NOTL Hydro has the lowest delivery charge in the Niagara region not because of anything special we have done but because of a fifteen year focus on managing the business to keep costs low for our customers.  This focus can be replicated at the Provincial level. The chart above shows that the driver of the increase in costs is generally not at the municipal LDC nor transmission level (both in line with inflation) but at the generation level.

Immediate actions include:

  1. Announce that you will stop immediately signing any FIT and MicroFit contracts and move as soon as possible to net metering.  This will prevent encumbering the system with more expensive contracts.  As you are moving to net metering you are not repudiating your climate action plan but accelerating the move to its next phase.  As a sign of our commitment, if you announce this by the end of September 2016 we will cancel our FIT contract.
  2. Eliminate the MDM/R branch of the IESO and their activities.  This branch collects the smart meter data and all their activities are redundant as are duplicated by the local distribution companies who need the information for billing.  If you announce you are eliminating this cost you can also announce you will be removing the $0.79 monthly charge on every customer’s bill.  While not a large amount this would be a symbolic gesture of the new direction.
  3. Recognize that the earlier FIT and MicroFIT contracts were overpriced and transfer the excess cost to the OEFC.  While this will increase the debt of the Province it will also reduce the cost of electricity which is needed to sustain jobs and keep Ontario competitive.
  4. Meet with industrial business representatives such as in the steel industry to develop plans that mitigate the impact time of use pricing is having on the drivers of our economy. This needs to be done in a manner that does not just transfer the cost to residential customers.

 

See the full letter for more actions suggested by Niagara On The Lake Hydro.

Six years of energy assault on Ontario municipalities says Mayor

No justice for Ontario communities under the Green Energy Act: removing democratic rights and ignoring calls to end subsidies
No justice for Ontario communities under the Green Energy Act: removing democratic rights and ignoring calls to end subsidies

September 14, 2016

Now 112 Ontario municipalities have either passed a resolution demanding change to the wind power contracting process, or have endorsed a resolution to that effect, and it’s all because of “six years of energy assault,” says the Mayor of Enniskillen Township.
In a letter published in Ontario Farmer, Kevin Marriott says that “Rural people in the Province of Ontario have been under assault by the provincial government for about six years since the Green Energy Act (GEA) of 2009 was enacted.”

That legislation, says Marriott, was “the first ever to take away a municipality’s democratic right” to perform local land-use planning, “in this case, to say no to industrial wind turbines.”

That’s not all, says Marriott: the other right taken away is affordable electricity. He also points to the difference between how rural and urban residents are treated.
“Why should rural Ontario pay almost double for delivery when most electricity is actually delivered to the GTA from rural Ontario?”

Marriott concludes by saying the electricity policy has made electricity bills three times higher than they were eight years ago. The government “has ignored our pleas to stop subsidizing wind turbines by billions of dollars”.

More Ontario municipalities demand final say in wind power sites: more than 100 stand up to Wynne government

Ontario municipalities want local land-use planning control back
Ontario municipalities want local land-use planning control back

September 11, 2016

Now 111 municipalities in Ontario have either passed or formally endorsed a resolution at Council, demanding that municipal support be a mandatory requirement for contracts in the Wynne government’s next round of Large Renewable Procurement.

The municipalities include several urban municipalities with rural components including Ottawa, Hamilton, and Stratford.

“That number, 111, represents more than a quarter of all Ontario municipalities,” says Wind Concerns Ontario president Jane Wilson.

“They believe that they are the best judge of where important infrastructure should be sited, and that they are the voice of their community concerns about where power generation projects are located. Development is only sustainable and appropriate where there is community support — and as we are seeing, many rural communities don’t support the government’s policy of forcing these power facilities on people, and the environment.”

Local land-use planning for developments such as wind and solar power generation facilities was removed by the Green Energy Act in 2009.

Despite a surplus of power in Ontario, the cost of long-term contracts for renewable sources of power,  and province-wide protests about Ontario’s rising electricity bills, which have forced several hundred thousand residents into “energy poverty,” the Wynne government still plans to launch a new procurement process in 2017. The deadline for corporate wind power developers to file a request for qualification with the IESO was Thursday, September 8th.

Energy analyst Tom Adams told Global TV news last week that the government needs to cancel contracts where it can, and cancel the planned Large Renewable Procurement (LRP II).

Michigan’s economy benefits from cheap Ontario power

Two Auditors General in Ontario have noted that the government never did any cost-benefit study on its renewable energy program; moreover, wind power is produced out-of-phase with demand in Ontario, and is a significant portion of the surplus power the province is forced to sell off cheap. Parker Gallant comments on who is really benefitting from Ontario’s energy management policies.

Wind turbines near SS Marie: power supply sell-off  (National Post photo)
Wind turbines near SS Marie: power supply sell-off (National Post photo)

Michigan outperforms Ontario. And why not? They have our cheap power

Parker Gallant Energy Perspectives

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.

Read the entire article here.

Wind turbines may close busy airport: pilots launch political campaign

This is an excerpt from the August edition of COPA Flight, provided by a member of the Canadian Owners and Pilots Association.

So ridiculous, pilots can't believe anyone would put turbines at an airport
So ridiculous, pilots can’t believe anyone would put turbines at an airport

Windmills may close airport

By Russ Niles

The owner of an Ontario airport that will be in the shadow of a proposed wind turbine project fears Transport Canada [TC] will close his strip if the windmills are built.

Kevin Elwood says he’s been told by a senior TC official that the department will not intervene to prevent construction of the windmills but it will act to ensure public safety after the fact by restricting or even stopping operations at the affected airport.

“He said that if [the province of Ontario] chooses to put green energy before airports, that’s their choice,” he said. “We will respond by restricting airport operations and we will go so far as to close airports,” he {Elwood] quoted the official as saying.

That would seem to fit with the scenario now playing out over the so-called Fairview Project, a group of eight, 152-metre turbines planned for farmland adjacent to Elwood’s Clearview Aerodrome (also known as Stayner Airport). The huge windmills will be directly in the flightpath of aircraft in the circuit for his airport and the nearby Collingwood Airport.

TC has declined to oppose the project and that means the only hope Elwood and other opponents of the windmills have is the rarely used power on the Minister of Transport to unilaterally stop the project on safety grounds.

Minister Marc Garneau has so far been silent on the issue and COPA is calling on its 17,000 members (and voters) to apply their significant political influence to nudge him out of that complacency.

COPA has launched a full-scale letter writing campaign to draw attention to the issue that Elwood is convinced is an immediate threat to both airports and will set a precedent that could affect airports across the country.

The turbines would be in blatant violation of Transport Canada’s airport obstacle guidelines and Garneau, a long-time pilot and COPA member, has the power to stop their construction. In fact, because of the protection afforded such projects by Ontario’s Green Energy Act, Garneau is probably one of the few who can stop them. He won’t even talk about the issue, however.

“We really have a good working relationship with Transport Canada, very open and collaborative,” [says COPA President Bernard Gervais]. “As part of our regular discussions I presented the situation and possible course of action,” Gervais said. “Section 6.41 of the Aeronautics Act authorizes the minister to make an interim order to deal with such threats to aviation. If the minister is of the opinion that the windmills are hazardous to aviation safety, he (or his deputy) has the authority to stop such construction. … the lack of feedback from TC and knowing this is a very sensitive political issue, drives me to think that our only course of action at this point is to go on the political front.”

ERT members unfamiliar with aviation safety

COPA appeared at the original [ERT] hearings in the approval* process along with many other opponents, and all of the arguments were essentially ignored. … Complicating that process is the fact that the two members hearing the health arguments have no aviation background at all and have had to be schooled on airport operations and aviation terminology.

… [Elwood] says that if it plays out as he thinks it might, TC will either close his airport or make it so difficult and inconvenient to use that it might as well be closed. The aerodrome is home bas to Elwood’s business, an aircraft management and business charter operation. Over the years he’s invested heavily in hangars and other infrastructure and if the windmills go ahead, a lifetime of work might go down the drain.

[The wind turbines] will prevent pilots from using the recently re-invigorated [Collingwood Airport]. Ironically, the federal government has spent millions on improvements to the field, including a new terminal and lots of new pavement.

“Even people who don’t fly, [says Collingwood based pilot Austin Boake], they realize it’s just common sense …It’s just so ridiculous I can’t even believe it.”

*The author means the “appeal process.”

For more information on the COPA appeal go to: http://www.copanational.org/FeedFeds.cfm

Billion-dollar burden: how Ontario bungled green energy

Wind turbines near SS Marie: power supply saturated by Ontario buying more wind. (National Post photo)
Wind turbines near SS Marie: power supply saturated but Ontario buying more wind. (National Post photo)

Worthy of a repost, from the National Post, this opinion from a renewable energy insider.

September 2, 2016

Ontario set an all-time peak electricity demand of 27,005 megawatts (MW) 10 years ago this summer. At the time, rising demand and plans to retire its coal-fired power plants dominated provincial energy policy. What followed was optimism for a new energy policy, focused on the ambitious procurement of large wind and solar installations. I felt great pride in helping to lead an industry that would make Ontario’s power system clean, responsive and cutting edge.

What a difference a decade makes. Intrusive policy and poor implementation are largely responsible for the energy market debacle Ontarians face today. But there is no excuse now for buying more mega-projects when our power supply is saturated and hydro bills are skyrocketing.

Coal-fired power generation effectively disappeared after 2010, by which time Ontario’s electricity demand had already started to plummet. Demand has fallen 13 per cent in the past 10 years, including consecutive reductions in each of the past five years. In 2016, Ontario will consume less electricity than in 1997.

Peak demand exceeded 23,000 MW only one day this summer, despite parts of the province seeing 35 days with temperatures above 30 C. Yet our installed capacity approaches 40,000 MW. The system will have reserves above extreme summer peaks well into the 2020s. The Independent Electricity System Operator (IESO) reinforced this point recently when it confirmed “Ontario will have sufficient supply for the next several years.”

Against this troubling background, the Ontario government is procuring an additional 1,300 MW of large wind and solar generation under the Large Renewable Procurement (LRP) program. This decision is indefensible. It makes the frequency of negative pricing (paying our U.S. neighbours to take Ontario energy during periods of low demand) and curtailment (paying wind developers for energy production even when the grid can’t use the power) even worse. These problems have become billion-dollar burdens for Ontario electricity customers.

Sweet contracts, painful electricity bills

Offering sweet contracts to large renewable energy developers while demand stagnates has helped push hydro bills higher. Electricity prices have increased by seven per cent a year since 2009. Costs have risen faster than Ontario’s inflation rate in each of the past several years. The province’s electricity rates are increasing faster than any other jurisdiction in North America.

It’s clear that change must begin with the renewable industry, since our industry alone benefits from the continued overprocurement of electricity. The fact is large wind and solar developers have been pampered by Queen’s Park for far too long. Although solar installation costs dropped 70 per cent in the past decade, the government froze prices for years at a time. When permitting delays enabled projects to be built as much as five years after contracts were awarded, multi-millionaires were created overnight.

Today, with no logical reason to build more wind and solar mega-projects in Ontario, renewable developers must confront the economic damage they are doing to their families, friends and neighbours, and to the next generation of citizens who will bear the brunt of this green corporate welfare.

Renewable energy companies must confront the economic damage they are doing.

We need to make four changes. First, Ontarians must demand a return to basic electricity policy principles: safety, reliability and cost effectiveness. Second, the government should revisit the IESO’s legal obligations associated with the current LRP process and exit this procurement process without paying the ransoms that characterized Ontario’s gas plant debacles. Third, the IESO should restrict renewable procurement to the smaller rooftop and distributed energy projects that actually benefit customers. Fourth, Ontario renewable energy firms must learn to export their pioneering expertise and target new domestic and international markets.

The global renewable energy revolution has just started. Solar energy is increasingly the cleanest, cheapest and most environmentally sustainable option. The advent of battery storage, smart grids and the Internet of Things will catalyze innovative economies that embrace change. Renewables have a bright future in this world, but we need to regain control of Ontario’s failing electricity policies — and do it soon — to ensure we seize the energy opportunities of the 21st century.

National Post

Jon Kieran is a Toronto-based renewable energy consultant. He is  a member of the Canadian Solar Industries Association’s board of directors. He declines LRP work from clients.

Overkill: Ontario actions to replace closed coal plants cost billions every year

The annual cost of closing Ontario’s coal plants 

Part II of Parker Gallant’s series on how Ontario continues to mismanage the energy file.

The cost of over-replacing the limited capacity of coal power generation blows away the supposed health care savings
The cost of over-replacing the limited capacity of coal power generation blows away the supposed health care savings

The previous article in respect to Ontario’s decision to close our coal plants examined the MW (megawatt) capacity and the type of generating capacity added to our electricity grid since 2011. The added capacity replaced the 4,484 MW of coal-fired generation at the end of 2011 in anticipation of increasing demand.

What I’ve done is approximate the costs of the added capacity versus the 4.1 TWh generated by the 4,484 MW of coal-fired plants, which cost only $135 million (3.3 cents/kWh) in 2011. 

Nuclear instead of wind and solar

As an example, the 1,532 MW of emissions-free Bruce Nuclear refurbished generation, at a capacity factor of 90% supplying 12.08 TWh, easily covered the loss of 4.1 TWh of coal-fired generation and left 8.7 TWh for added demand due to its flexibility to steam off or bypass the turbines. The 12.08 TWh could have supplied most of the 2015 solar generation of 3.04 TWh and the 10.2 TWh of wind, which proved to be unneeded.   The latter two alone in 2015 added an additional $2.7 billion to generation costs before curtailment (wind) costs of $88 million.

Bruce Power supplies from the 1,532 MW would have cost ratepayers $800 million, reducing the ratepayer burden by almost $2 billion annually.  Additionally “nuclear maneuvers” (reductions),  of 897 gigawatt hours added about $60 million during surplus baseload periods, caused mainly by (unreliable) intermittent power generation from wind.

Too much gas? 

Let’s look at the gas plant addition of 602 MW:  In 2011 the 9,549 MW of gas generation produced 22 TWh,  operating at a capacity factor of 26.3%.  Fast forward to 2015: the 10,151 MW generated 15.5 TWh  operating at a capacity factor of 17.5%.  Gas plants are quite capable of operating at a capacity factor of 40% to 60% (combined or single cycle).  In either case, they are regarded as peaking plants and for that reason investors know they will be called on when needed. Their contracts pay them for simply being “at the ready.”  Those costs vary but generally payments are $7,000 to $15,000 per MW per month.  The additional 602 MW of gas added about $100 million annually to the costs.  With gas generation falling from 22 TWh in 2011 to 15.5 TWh in 2015, ratepayers were burdened with the costs of the drop of 6.5 TWh at a cost of approximately $100 million per TWh, raising the cost of gas generation by $750 million since 2011.

Adding costly hydro

The bulk of the 754 MW added to the grid since 2011 came from the Niagara tunnel, (“Big Becky”) with a promise of 150 MW, and the Mattagami expansion added 438 MW of run-of-river hydro. Both of these projects by OPG were hugely expensive, costing ratepayers $4.1 billion plus interest on the money borrowed to fund the projects. If one amortizes those costs over 50 years it adds about $80 annually to ratepayer bills and the interest costs annually add about $120 million at 3% per annum. So that is $200 million for those two projects, without adding their OMA (operations, management and administration) costs.

As well, OPG is frequently forced to “spill” water under SBG (surplus baseload generation) periods mainly due to excessive intermittent wind and solar generation. In 2015 the latter was 3.4 TWh which cost ratepayers $150 million.  The other event affecting hydro costs was an amendment to change “unregulated” hydro to regulated pricing.  This change added $474 million to ratepayers’ bills for 2015 for the 30.4 TWh generated by OPG versus 2011.  So hydro costs in the four years from 2011 jumped from a cost of $37.7 million/TWh to $53.3/TWh.  The total additional costs of hydro (OPG only) in 2015 was therefore over $800 million.

Coal conversion 

The Ontario Energy ministers also issued directives instructing conversion of the 200-MW Atikokan and the 300-MW Thunder Bay coal plants operated by OPG.  A 2005 directive from Dwight Duncan was the first and told OPG to convert Thunder Bay “to operate using a fuel source other than coal”.  Later on when Brad Duguid sat in the energy chair he ordered it converted to gas but in the end it became a shareholder direction from Bob Chiarelli, ordering it to be converted to “advanced biomass” and agreed to cover the annual $30 million operating costs.  As disclosed by the Auditor General, if Thunder Bay produces any power, it will cost $1,500 per megawatt hour (MWh).  In respect to the conversion of Atikokan it may produce cheaper power in the 20 cents/kWh range but will probably operate at 10% of capacity and generate an annual cost of about $35 million.  So collectively, both of these conversions will produce almost no power but will add approximately $65 million annually to ratepayers’ bills.

Conservation is expensive 

The long-term conservation budget for 2015-2020 is $2.6 billion, meaning IESO will allocate spending of $433 million annually to local distribution companies (LDC) to reduce consumption by 7 TWh.   Should the LDC be successful, their delivery revenue will drop.  Assuming the delivery charge represents about 35% (on average) the revenue drop for all LDC would be approximately $300 million.  Then the LDC will be entitled to apply for a rate increase based on the drop in revenue, meaning the $300 million may be fully recovered.  Adding that to the monies spent annually convincing us to reduce our electricity consumption via the “conservation budget” adds another $483 million annually ($433 million + [$300/6 years = $50 million] = $483 million).

$4 billion … a year

So the cost of replacing the 4.1 TWh of coal generated at a cost of about $135 million in 2011 is in excess of $4 billion annually.

Confirmation of the foregoing cost can be simply calculated. If one reviews the “average” cost of a kWh on the OEB “Historical Electricity Prices” as of November 1, 2011 was 7.57 cents/kWh versus 10.70 cents/kWh on November 1, 2015.  The increase of 3.13 cents/kWh (+41.3%) translates to an increase of $31.3 million per TWh and applied to the 143.6 TWh consumed in 2015 provides an annual cost increase of $4.5 billion to ratepayers since 2011.

The cost blows away the purported healthcare costs supposedly caused by coal generation.   At the same time, it removes about $1,000 of after-tax money from the pockets of the 4.5 million ratepayers in the province every year.

This is a sad commentary on what the Ontario Liberal government has done to Ontarians.

Parker Gallant,

August 29, 2016

Also available at Parker Gallant Energy Perspectives.