Green energy and wind farms fleecing Ontario consumers

New study explains why Ontario has gone from affordable electricity rates to among the highest in N America. Photo: Bloomberg
New study explains why Ontario has gone from affordable electricity rates to among the highest in N America. Photo: Bloomberg

Ross McKitrick and Tom Adams, The Financial Post, October 30, 2014

Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers

Ontario’s green energy transformation – initiated a decade ago under then-Premier Dalton McGuinty – is now hitting consumers. The Nov 1 increase for households is the next twist of that screw. As Ontario consumers know all too well, the province has gone from having affordable electricity to having some of the highest and fastest-increasing rates in Canada.

Last year, in a report for the Fraser Institute called “Environmental and Economic Consequences of Ontario’s Green Energy Act,” one of us (McKitrick) explained how the Green Energy Act, passed in 2009, yielded at best tiny environmental benefits that cost at least ten times more than conventional pollution control methods, and was directly harming growth by driving down rates of return in key sectors like manufacturing.

But complex financial structures and a lack of official disclosure around large embedded costs have let supporters of the green energy act deny that green power is responsible for the price hikes. Green industry advocates, including the consulting firm Power Advisory and advocacy group Environmental Defense, have added up the direct payments to new renewable generators, and concluded that since those costs are relatively small, the impact of renewables on the total cost of power is likewise small.

However, such analyses ignore the indirect costs that arise from the way renewables interact with the rest of the power system. Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers through a mechanism called the Global Adjustment. Our new study, released Wednesday by the Fraser Institute, quantifies the impacts of different types of new generators on the Global Adjustment. The analysis pinpoints what causes the raw deal for consumers.

Here’s how it works: over the last decade, Ontario closed its coal-fired power plants and built a rapidly expanding portfolio of contracts with other generators including renewable energy companies producing power from hydro, wind, solar and biomass. These companies charge the Ontario Power Authority (OPA) higher-than-market-value prices for energy. To make up the difference, the OPA slaps an extra charge – called the Global Adjustment – on the electricity bills of Ontarians.

The Global Adjustment adds to the commodity portion of rates, which combined with charges for delivery, debt recovery, and regulatory factors constitute the overall rate. Elements of the Global Adjustment that are not disclosed include payments to generators to not generate, rates paid to historic non-utility generators, and costs for new hydro-electric developments.

Since 2007, the Global Adjustment has risen six cents per kilowatt-hour in inflation-adjusted terms, pushing up the commodity portion of bills by 50%. Not long ago, Ontario’s total industrial rate was less than six cents per kilowatt-hour. The rising Global Adjustment is by far the biggest driver of the resulting 21% increase in the overall average cost of power in the province over the period 2007-2013. The Global Adjustment’s upward path is a direct consequence of government intervention in the electricity market. Our analysis unpacking the costs of different types of generation shows that the consumer impact of new renewables substantially exceeds the direct payments to those generators by as much as 3 to 1. And renewables are a big part of the problem: Wind and solar systems provided less than 4% of Ontario’s power in 2013 but accounted for 20% of the commodity cost paid by Ontarians.

Getting to the bottom of the rate implications of adding renewables gained new urgency when Premier Wynne declared last month that the 2013 fleet of wind and solar will almost triple by 2021. This is an incredibly reckless decision. In his National Post column recently on the 2014 Ontario Economic Summit, co-chair Kevin Lynch, Vice-Chair of BMO Financial Group, stated bluntly “That Ontario has a serious growth problem is rather difficult to deny, or debate.”

What’s the solution? If the Province wants to contain electricity rate increases it needs to halt new hydroelectric, wind and solar projects. In order to reverse rate increases, the province should seek opportunities to terminate existing contracts between renewable energy companies and the OPA. Alas, as the Premier has indicated, that’s not where they’re headed.

Alternatives to costly new renewables include using some imported electricity from Quebec while Ontario refurbishes its nuclear power plants and maintaining 4 of 12 coal-fired power units at Lambton and Nanticoke that had been outfitted with advanced air pollution control equipment just prior to their closure, making them effectively as clean to operate as natural gas plants. Costly conservation programs encouraging consumers to use less electricity make particularly little sense these days in Ontario. Right now, Ontario is exporting vast amounts of electricity at prices that yield only pennies on the dollar, and also paying vast but undisclosed sums to generators to not generate.

Many European countries made costly commitments to renewable energy but are now winding them back. Germany is investing in new smog-free coal power generation. Environmentalists often suggested that following Europe is the way to go. Perhaps Ontario should consider following them now.

Ross McKitrick is a Professor of Economics at the University of Guelph and Senior Fellow of the Fraser Institute. Tom Adams is an independent energy consultant and advisor.

Ontario: wind farms contribute to $20-million power sell-off

Another $20-million autumn weekend with Ontario power sold off cheap to neighbouring states and province

Another October weekend has come and gone—and so has at least another $20 million of Ontario ratepayer dollars, due to selling off surplus Ontario power cheap.

This past weekend of October 24-26 saw Ontario sell off another 189,000 megawatt hours (MWh)  of electricity to our neighbours in Michigan, New York and Quebec.   Those MWh went for a song generating, $4.31 each and earning about $820K. The flip side is, ratepayers paid over $110 per MWh for that power generation.  We lost $106 for each MWh (10.6 cents per kilowatt hour); that means the subsidized cost of those megawatt hours  was over $20 million, or a one-time hit of about $4.50 for each of Ontario’s average electricity ratepayer.  The trouble of course is that it is not a one-time hit, as this situation occurs frequently during spring and fall when demand for power is low.

Included in that $20 million we paid to export our surplus is the cost for the spasmodic production of electricity from thousands of industrial wind turbines throughout the province and, presumably, some solar production.   Wind turbines produced over 52,000 MWh Octover 24-26, and wind power producers were paid for not producing another 17,000 MWh.   That 69,000 MWh cost Ontario’s ratepayers half of the $20 million. It doesn’t  include what Ontario Power Generation spilled in hydro, what gas generators were paid to idle, or what Bruce Nuclear was paid to steam off nuclear power.

What this past weekend and others before it should be telling the Ontario Liberal government and the Minister of Energy Bob Chiarelli is that Ontario’s ratepayers are consuming less of this expensive commodity.  Premier Wynne’s  “Conservation First” initiative, as Tom Adams notes in a recent post titled “Crock of Conservation,” has driven demand down but the energy ministry keeps adding more inefficient renewables to Ontario’s grid.

During the past weekend, Ontario exported 20% of its average electricity demand.   If each Ministry of the Ontario government wasted 20% of their budget, the main stream media might pay attention but it seems that the Minister of Energy is allowed to waste ratepayer dollars without any serious oversight because the money is simply extracted, without effect on the Ontario deficit.

We can only hope for the day when it is recognized that ratepayers are also taxpayers, and that their money is being wasted with regularity due to Ontario’s energy policy.

©Parker Gallant,

October 27, 2014

WCO: wind farms cannot fulfill environmental promises

Wind Concerns Ontario is mentioned in an article on Forbes.com, referring to the Hatcher Report, on the need for fossil-fuel back up for wind power…which means it can’t really fulfill all the wonderful promises made for it.

The Nuclear Gap In Obama’s Clean Power Plan

If we want to arrest climate change, all we need are more renewables like wind and solar, right? Not exactly, according to a newly published Canadian report on lifecycle greenhouse gas emissions (“GHG”). In fact, the report, which is based on 246 studies covering various power generation scenarios and constraints, concluded that nuclear power beats wind and natural gas on an ‘apples-to-apples’ basis for battling climate change.

Full disclosure: The report, from Hatch Ltd., a Toronto-based consultant, was commissioned by the Canadian Nuclear Association. It compares lifecycle GHG emissions from nuclear power, natural gas-fired power, and wind power, all the way from fuel extraction through to plant construction, operation, and decommissioning.

How is possible that nukes have a smaller carbon footprint than the wind-natural gas duet? Well, wind power is intermittent and needs back-up from natural gas-fired electricity. Nuclear is a 24/7/365 power generation with zero carbon emissions. This is no back-of-the-envelope calculation. The methodology used by Hatch was in conformance with ISO 14040, the international standard governing lifecycle assessments. You can read more about the solid methodology on pages 2 and 3 of the report.

Wind turbines are a great source of energy, but a Canadian nuclear industry study raises questions about whether they're the only solution.

When the wind blows, wind turbines are a fine source of GHG-free energy. But a Canadian study suggests that nuclear power is a more reliable solution.

Below is some meat from the report itself:

On average, emissions from wind and nuclear are similar within the accuracy of the study for all emissions except GHG emissions, where wind produces distinctly less GHG emissions on average than the combination of nuclear technologies considered.

No surprise there. But let’s dig a little deeper. Nobody disputes that wind is an intermittent power source. Hatch says that in a typical wind-natural gas hybrid, wind makes up 20% of the generation mix, with natural gas shouldering the other 80%.

If you’re wondering how much less GHG emissions are coming from nuclear power generation than the wind/natural gas duo, Hatch says a lot. In fact, per kilowatt-hour of generation nuclear power emissions are 18.5 grams of GHG, while emissions for wind backed by natural gas are 385 grams of GHGs. That’s 20 times more GHGs for the wind backed by natural gas scenario.

Hatch’s numbers may even be on the conservative side. Because wind comes and goes, backup generating plants have to cycle up and down more often. This stop-and-start cycling burns up more feedstock and increases emissions across the board. Bentek, a Colorado energy analytics firm, found that 1,327 such cycling events happened in Colorado in 2009, which released up to 6.8 million pounds of extra sulfur dioxide (“SO2”), 3.1 million pounds of nitrogen oxide (“NOX”), and 147,000 pounds of carbon dioxide (“CO2”).

The Canadian Wind Energy Association has criticized the report’s focus only on one power generation scenario: wind and natural gas in tandem. The Association says, “There are many potential mixes that can facilitate significant amounts of wind energy penetration in Canada and the vast majority of them are much less greenhouse gas intensive than the scenario described in the study.”

On the other hand, Wind Concerns Ontario, a coalition of individuals and grassroots citizens groups that advocates for responsible, environmentally sound solutions to energy issues, says that, “We share [Hatch’s] concerns on this issue and have been speaking about this for years. We have taken advice from engineers in the power industry, who say that wind power cannot fulfill any of the environmental benefit promises made for it, because it needs fossil-fuel backup.”

So what does all of this mean, especially to us down here in the U.S.? If we have any hope at achieving success at lowering GHG emissions, all renewables and clean energy sources have a role to play, including nuclear power, and we have to get that right by treating them equally.

The Clean Power Plan calls for a near 20% reduction in U.S. carbon emissions from 2012 baseline levels by 2030. But here’s how the Clean Power Plan works—or doesn’t work, in the case of nuclear power. The draft rule sets forth an emissions rate baseline of CO2 emitted per megawatt-hour of fossil fuel generation. Each state can then lower that rate using the various so-called building blocks provided in the draft rule, which include: (1) tweaking fossil plants to be more efficient; (2) changing dispatch patterns of power sources so lower GHG plants are used more frequently; (3) using more zero and low-emitting sources like renewables (wind, solar, and geothermal) and nuclear; and (4) implementing energy efficiency measures. The draft rule allows for a 100% credit for all existing wind, solar, and geothermal sources, but only a 6% credit for nuclear. There’s no room at the inn for the other 94% of nuclear.

It’s puzzling why the Clean Power Plan is drafted this way given the key role that experts say nuclear will need to play in getting us anywhere close to the goal set forth in the Plan itself.  Even more puzzling is that another federal agency, the Energy Department, has scenarios that project the retirement rate of nuclear as high as 33%. Even the Clean Power Plan’s own 6% figure for retirement would increase atmospheric emissions from 200 million to 300 million tons in the next ten years.

Nuclear power is the work-horse of power supply and of zero-carbon generation.  Nuclear plants operate around the clock in all weather, providing nearly 20% of the nation’s electricity supply and comprising about 63.3% of all clean (zero carbon emissions) energy, which is more than all other clean energy sources put together.

In formulating the final rule, the Environmental Protection Agency would do well to take a look at the Hatch report, seriously consider its findings, and put nuclear on par with other zero carbon generating sources.

Michael L. Krancer is Partner & Energy, Petrochemical and Natural Resources Practice Group Leader at Blank Rome LLP and a former secretary of the Pennsylvania Department of Environmental Protection. His blog, Energy Trends Watch, follows developments in energy, petrochemical and natural resources.

See the full article online here.

Ontario weekend weather forecast: cloudy with 100% chance of lost millions

Almanac

Selling off surplus power: Loss, loss, and more losses

Ontario was once again busy exporting surplus power on the weekend of October 17-19. For every MWh (megawatt hour) we exported, we generated revenue equivalent to purchase one small “Timmies” coffee.  How bad was it? A MWh sold at an average price of $1.58 on the HOEP (hourly Ontario electricity price) market, but Ontario’s ratepayers paid upwards of $110 for that same MWh.   The beneficiaries of that cheap price were the electricity companies in New York, Michigan and Quebec.

That same weekend Ontario exported 186,000 MWh at a cost of about $20.4 million and sold it for $300K; the net cost to Ontario’s ratepayers was $20.1 million. That is without factoring in: the costs of constraining wind (around 10,200 MWh at a cost of $1.1 million) and solar, spilled clean hydro, steaming off Bruce Nuclear (around 70,000 MWh at a cost of $4.2 million), and the gas plants paid to simply idle!  The constrained and curtailed generation probably equaled or came close to the cost of the exports.

From the perspective of the ruling Liberal party in Ontario, the good thing about the cost of those exports is it doesn’t directly increase the deficit—it’s the ratepayers picking up the cost of the subsidy. Nevertheless, they should be aware that extracting the cost of a cup of coffee each day for the purpose of subsidizing exports takes away cash that those ratepayers could spent on other local goods. Removing that cash from our pockets makes the climb out of the high unemployment rates and the reduction of Ontario’s deficit much tougher.   No economist would or could dispute that!

The contracted developers of wind power produced 68,900 MWh on the three days, representing 37% of the total exported MWh. That generated $9.3 million of revenue for the owners, plus $1.1 million for constrained generation.  They operated at about 34.5% of capacity (40% if one includes constrained power) during that time-frame.

If wind power exports were a regular event for Ontario, the costs of just the wind exports would be $3.4 million daily and about $1.2 billion for a full year.

Imagine what $1.2 billion could have paid for—every year for 20 years.

©Parker Gallant,

October 23, 2014

Ontario Energy Board: strange math behind time-of-use pricing

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Magic tricks: how the OEB explains electricity bill increases

The Ontario Energy Board’s (OEB) news release of October 16, 2014 tells us that our rates will once again increase on November 1, 2014, but only by 1.7% on the total bill. In their Backgrounder, the OEB tells us that  “Electricity prices make up about half the total of an average household bill.”

If they are telling us they have increased “electricity prices” they should be explaining how much rates are going up in dollars and percentages, and not relate it to the total bill—but maybe that’s a way to lessen the visual impact.  If they were truthful they would annualize the increase.  If they had done that, the story would then be that the electricity portion of our bills has increased 13.2%, measured from the prices applicable on October 31, 2013.

The On-peak rate as of October 31, 2013 was 12.4 cents/kWh and effective November 1, 2014 will be 14 cents/kWh. That’s an increase of 12.9%.  Mid-peak rates one year ago were 10.4 cents/kWh and on November 1, 2014 will be 11.4 cents/kWh, an increase of 9.6%. Off-peak rates will jump to 7.7 cents/kWh from 6.7 cents/kWh, an increase of 22.3%.

Taken together, those increases in the price we pay for electricity increased 13.2 %, or $8.87 a month, and $106.44 for a full year.

OEB not coming clean

The OEB has also never come clean about the requirement to no longer include “line losses” on the electricity line of ratepayers’ bills.  That should have driven time-of-use/TOU pricing down by 5.2%, but didn’t!  Those line losses, effective August 2013 should have reduced electricity costs and increased the delivery line on ratepayers’ bills by an equivalent amount, yet were “forgotten” in the explanations offered by the OEB.  The 5.2% line loss reallocation would represent 33.3 kWh on an average (800 kWh) monthly ratepayer bill. In dollar terms, that’s a $3.95-per-month decrease or $47.40 annually—but it didn’t.  Taken together, the hidden line loss increase, coupled with the approved OEB increase, raised average electricity prices by $12.82 monthly or $153.84 annually.

In just one year, the 4.6 million residential ratepayers in Ontario will have had another $707.7 million removed from their disposable income just to cover the cost of electricity. That’s way over the rate of inflation.  Added to that will be the dollars extracted for rate increases for distribution and regulatory charges for  the other “half the total of an average household bill.

Energy poverty in Ontario

For stay-at-home parents, seniors living on fixed incomes, or the disabled, the increases will affect their ability to simply put food on their tables!

Time for the OEB to come clean with ratepayers and issue “transparent” news, rather than abuse the ratepayers by hiding the true costs of the “greening” of Ontario with wind and solar intermittent generation.

©Parker Gallant

October 19, 2014

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

 

 

Brown County WI: Shirley wind farm is a health hazard

nbc26

Health Board Says the Shirley Wind Project is a Health Hazard

By Eric Crest. CREATED Oct 17, 2014

GLENMORE, WIS- This week the Brown County Health Board went on record declaring that wind turbines “are a human health hazard.”

Folks living in the Glenmore area near the Shirley Wind Project have been saying this for years though, and now they have the health department on their side. By state statute wind turbines can be within 1250 feet of a home. The Brown County Board of Health says that’s too close for comfort. But Duke Energy, the company that owns the Shirley Wind farm disagrees.

Glenmore farmers won’t touch this topic with a ten foot pole. But Audrey Murphy the Chairman of the Brown County Board of Health says it’s her duty. “We didn’t take this lightly this was a serious thing and we all struggled with it,” says Murphy.

Potential lawsuits and good neighbor agreements signed with Duke Energy is keeping most people silent around the wind farm. So Brown County is doing the talking for them. “It’s not so much that we’re trying to get information out there we’re trying to help those citizens because they’re impacted by wind turbines,” says Murphy.

After several local and national studies the health board made one of the first decisions of its kind in the country. They have declared that the Shirley Wind Project is a human health hazard. “Ear pain, ear pressure, headaches, nausea, many are suffering from sleep deprivation,” adds Murphy. Today Duke Energy released this statement saying: “A third party scientific test has already determined… That they could not document any link between turbine noise and adverse health impacts.”

The Brown County Health Board alleges however that these turbines are emitting acoustical energy too close to homes. They are waiting for the next step when the Director of the Health Department makes an appointment with the corporate council to decide how to proceed from here.

Read the full story and watch the video from NBC news here.

Read the noise study at the Shirley wind project here.

Ontario’s expensive electricity week: what could $44M have bought?

What the lost $44 million could have bought: 293 family docs, 580 nurse practitioners
What the lost $44 million could have bought: 293 family docs, 580 nurse practitioners

Blowing Ontario’s ratepayer dollars

Money lost in just one week could have paid for 580 nurses

So far this October, Ontario’s electricity sector has been blowing our money away at an awesome pace.

Scott Luft, whom I admire for his ability to assimilate comprehensible data, posted on Tumblr some disturbing information about the first 10 days of electricity production (and curtailed production) in Ontario.  Because the fall means low demand for electricity, our current surplus energy supply (principally, wind, solar and gas) was curtailed to the extent that it cost ratepayers $20 million, while the HOEP (hourly Ontario energy price) generated only $8.2 million.  That $20 million of curtailment cost will find its way to the Global Adjustment (GA) pot and onto ratepayers’ bills.

I took a different route and looked at the cost of Ontario’s exports for the week of October 3rd to October 9th —those numbers are also disturbing.  During those seven days, Ontario exported 399,048 MWh (megawatt hours) which was 15.7% of total Ontario demand.   Wind turbines generated and delivered 184,204 MWh, which was surplus to our needs and probably exported.  The money generated via the HOEP from all of the export sales was $56,300 or 14 cents a MWh.  Wind turbines produced just $15,164 and we sold that production for just 8 cents a MWh.

To put this in perspective, the exported production’s cost all-in (contract value per MWh + regulatory + transmission + debt retirement charge) averaged $110/MWh, according to the latest monthly IESO Market Summary August 2014 report’s findings.  Using $110/MWh the 399,000 MWh exported in those seven days hit Ontario’s ratepayers with about $44 million (less the $56,300) via allocation to the GA—that will show up on the electricity line on our bills.

Wind generation alone at the contracted rate of $135/MWh cost ratepayers $24,900,000 plus another $5 to $6 million for their curtailed production, according to Scott Luft.  That $30 to $31 million plus the cost of steaming off Bruce Nuclear, paying idling gas plants, etc., and the additional cost of solar generation, would confirm the $44 million is a reasonable estimate.

What has Ontario missed out on by having ratepayers subsidizing those exports by $44 million for those seven days?

  •  the annual salary of 293 family physicians, or
  • 580 nurse practitioners, or
  • repairing all the Toronto District School Board’s school roofs, or
  • one and a half days of interest on Ontario’s public debt, or
  •  all of Ontario’s 301 MPP salaries for a full year, or
  • 40 MRI machines, or
  • 100 months of mortgage payments on the empty MaRS Phase 2 building, or
  • increasing funding for autistic children by 30% over current levels.

Just a few examples of how the wasted subsidy money that cost each Ontario ratepayer $10 for just one week could have been used!

© Parker Gallant

October 13, 2014

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

Wind isn’t green: Canadian Nuclear Association

Wind's dirty little secret: fossil fuel backup essential
Wind’s dirty little secret: fossil fuel backup essential

JOHN MINER | QMI AGENCY

October 13, 9:52 PM

Canadian Nuclear Association blasts wind energy green claim

LONDON, Ont. — I’m green, you’re not.

The battle to be embraced as the best environmental choice for Ontario’s power supply is getting down and dirty.

Fed up with the wind-farm sector enjoying what it considers an undeserved reputation as a pristine energy supplier, Canada’s nuclear industry — it generates the lion’s share of electricity in Ontario — has launched a public relations assault against wind.

Both nuclear and wind are major players in the power mix of Southwestern Ontario, home to one of the world’s largest nuclear plants — Bruce Power, near Kincardine — and many of Ontario’s biggest wind farms.

“Wind power isn’t as clean as its supporters have claimed. It performs unreliably and needs backup from gas, which emits far more greenhouse gas than either wind or nuclear power,” said Dr. John Barrett, president and chief executive of the Canadian Nuclear Association, in an e-mail to QMI Agency.

The Canadian Nuclear Association hired Toronto-based Hatch Ltd., a global consulting and engineering firm, to compare wind farm and nuclear energy.

Hatch reviewed 246 studies, mostly from North America and Europe. Its 91-page report concludes wind energy over the lifetime of an installation produces slightly less greenhouse gas — implicated in climate change — than nuclear and both produce a lot less than gas-fired generating plants.

But Hatch says it’s an entirely different picture when wind energy’s reliance on other generating sources is considered.

The engineering firm calculates wind turbines only generate 20% of their electrical capacity because of down time when no wind blows.

When gas-fired generating stations are added into the equation to pick up the slack, nuclear produces much less greenhouse gases, the Hatch study concludes.

Its analysis is that for every kilowatt-hour of electricity produced, nuclear power emits 18.5 grams of greenhouse gases. Wind backed by natural gas produces more than 20 times more — 385 grams per kilowatt hour.

The nuclear industry attack on wind might not be a welcome message for the Ontario Liberal government that has justified its multibillion-dollar investment in Southwestern Ontario wind farms on the basis it’s providing green energy.

But its a position that resonates with Ontario’s anti-wind farm movement.

“We share their concerns on this issue and have been speaking about this for years. We have taken advice from engineers in the power industry, who say that wind power cannot fulfill any of the environmental benefit promises made for it, because it needs fossil-fuel backup.,” said Jane Wilson, president of Wind Concerns Ontario.

On the other side of the debate, the Canadian Wind Energy Association said it has had an opportunity to review the Hatch study.

It said there’s no surprise that when wind and natural gas generation are paired that the mix creates more greenhouse gases than nuclear. But when wind is paired with other potential electricity suppliers, the results are different.

“Unfortunately, by choosing to focus on only one scenario, the study failed to consider a broad range of equally or more plausible scenarios for the evolution of Canada’s electricity grid,” the Canadian Wind Energy Association said.
WHERE ONTARIO’S POWER COMES FROM

For the year 2013:
Nuclear: 59.2%
Hydro: 23.4%
Gas: 11.1%
Wind: 3.4%
Coal: 2.1%
Other: 0.8%

For one minute in time:
(Oct. 13, 2014, 8 a.m.)
Nuclear: 65.8%
Hydro: 24.6%
Wind: 5.9%
Gas: 2.7%”

Source: Ontario Independent Electricity System Operator

How much to take down a wind turbine?

Bonanza in scrap, or millions to demolish?
Bonanza in scrap, or millions to demolish?

Tom Collins, Farmers Forum, October 2014

Scaremongers say it will cost millions

Brinston–While some critics of wind turbines howl that the cost of the eventual teardown of a turbine is astronomical, the actual cost today would be $30,000 to $100,000, per turbine.

The bigger issue is, who is going to pay for it.

Municipalities are on the hook to ensure companies tear down or, in industry jargon, decommission a turbine, unless they’ve got a binding agreement with the wind power company. Some municipalities demand from wind turbine companies ongoing payments into protected (or escrow) accounts or bonds to set money aside annually to pay for decommissioning.

Some municipalities require a letter of intent from wind turbine companies to ensure they will be responsible for decommissioning. Some municipalities have no agreement at all, including Wolfe Island, said its mayor, Denis Doyle. TransAlta communications manager Stacey Hatcher said the decommissioning plans are between the company and the landowner and because of that, the info is confidential. [See editor’s note #1]

The 86 turbines on Wolfe Island, on the St. Lawrence River at Kingston, were built by Canadian Hydro Developers, later purchased by Trans Alta and there is no bond or escrow account in place. The company does, however, reimburse the island about $100,000 per year for hosting the project. Based on current decommissioning projects around the world, it can cost $30,000 to $10,000 [sic] to dispose of a turbine. If it were to cost $50,000 to remove each turbine on Wolfe Island, it would cost $4.3 million to remove them all. Of course, that price goes up over time. [See Editor’s note #2] Hatcher said the company plans to repower or recontract when they [sic] current contracts are up.

There are 10 three-megawatt wind turbines at Brinston, between Kemptville and Winchester, and the power company ProWind [see Editor’s note #3] pays $1,000 per megawatt per year over the next 20 years into an escrow account that will rack up $600,000 to pay for decommissioning. [Editor’s note #4]

Windlectric Inc. wants to build 36 turbines on Amherst Island where Statec Consulting said that decommissioning costs are up to Windlectric. Typically, decommissioning will not remove all of the concrete base, but that’s only the first few feet of concrete that went into the ground. [We’re done adding editor’s notes at this point.]

One of the most infamous decomissionings involved 37 decrepit turbines in Hawaii that stood unused for six years before they were taken down in 2012. Tawhiri Power estimated that the take-down cost $30,000 per turbine. [OK, one more; see Editor’s note #5]

The seven-turbine community-owned Black Oak Wind Farm in New York State will start construction in late 2014. The decommissioning plan would currently cost about $55,883 per turbine, although the project expects to generate at least $50,000 per turbine by selling it as scrap metal. The municipality agreement means the power company must pay $140,000 per turbine in escrow but also means the payment can be reviewed and changed if decommissioning estimates change.

….

WCO Editor’s notes:

1. Many landowners were told that it was to their benefit to decommission the turbines themselves as there is so much scrap value in the turbines; this is untrue due to the quality of metal being used, and also the other costs of decommissioning such as crane rental, and disposal of the toxic components.

2. So, that would be the millions then…

3. ProWind, properly “Prowind,” does not own the Brinston project, and hasn’t for several years. It is now owned by EDP Renewables.

4. In the original negotiations with Prowind, the developer wanted the landowners and the municipality to be responsible for decommissioning costs. It was the local community group that brought these costs to the attention of the municipality, and played a significant role in the agreement now in place.

5. US dollars? Canadian dollars? Also, the size of the turbines and the machinery involved is a factor. The turbines erected in Hawaii over a decade again, and the turbines at Wolfe Island are now miniscule compared with the 500-foot-plus, 3 -MW behemoths being built and proposed.

Write to Farmers Forum at editor@farmersforum.com

 

Wind farms power 7,000 homes! In Michigan…

 

Michigan: a state with cheap power, courtesy Ontario ratepayers
Michigan: a state with cheap power, courtesy Ontario ratepayers

The 2,483 MW of rated capacity of wind generators reported by Independent Electricity System Operator (IESO) in the past three days (October 6 to 8) generated 67,000 MWh (megawatt hours), or enough power for 7,000 average homes.

They just weren’t in Ontario.

The province exported over 145,000 MWh to New York, Michigan and elsewhere over those three days.   The wind power developers were being paid $135/MWh for power that was surplus to our needs because demand was low.  The price we received for our exports averaged $2.29/MWh on October 6, $1.88/MWh on October 7, and on October 8 we paid our neighbours $3.31/MWh to take our exports.

Not included in that price is the money paid to the wind power developers for “curtailed” generation.

Wind power tends to be produced out-of-phase with demand, or when we don’t need it (spring and fall and middle of the night).   As a result, the HOEP (hourly Ontario energy price) has been driven down meaning those surplus exports represent a significant cost to the ratepayers of Ontario. The cost for just the wind exports in the past three days was in excess of $9 million.  Add another $9 million for the other exported power, and it becomes $18 million.   The latter doesn’t include the cost of the curtailed wind power, steamed off power from Bruce Nuclear, spilled hydro losses, idling gas plant costs; the total approaches $30 million, or $10 million per day.

People all over Ontario are asking, what else could have been done with that money?

©Parker Gallant,

October 9, 2014

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