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

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

$1.5 million paid out already today for curtailed wind power

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.

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Comments

Scott Luft
Reply

Appreciate the mention.

I will note in 2015 the average market value of wind was below 2 cents/kilowatt-hour ($20/MWh).
If was $18.34/MWh only calculating what the IESO shows as generated – when I include my estimates of curtailment (~10% of potential transmission-connected wind generation), the average value of the wind we purchased drops to $16.44/MWh.

Barbara
Reply

Samsung may have been guaranteed contracts and Pattern joining in with Samsung became part of this guarantee?

Need the actual contracts to determine what the situation is.

snowball
Reply

Try Smitherman Barbara. Probably has a copy in his safe.

Greg Latiak
Reply

The genius of what Ontario has done is to have the subsidies embedded directly in the cost of power. So the more they contract for the higher our power bills go. And even better, they pay for power that could have been generated, as well as forcing us to eat the difference for the notional losses when the excess gets dumped. Makes Enron look like amateurs.. but as destructive as this is to the economy there is no danger of anyone going to jail. No wonder everyone is smiling…

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