“Increasingly wrong”: wind power curtailment data shows wind not needed

 Curtailment of industrial wind power production in Ontario soars in 2015

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

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

WindCurtailmentByRegion

 

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

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

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

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

In 2015 potential output from IWTs 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.

On the other hand, new locations seem to be more heavily curtailed initially – and that could be a function of forecasting accuracy growing (as curtailment estimates are based on forecasts).

Here’s a look at my estimated percentage of curtailment for each IWT location the IESO reports on. …

Read more here.

Ontario moves to silence citizen participation in electricity issues

Ontario Energy Minister Bob Chiarelli put forward Bill 112, which would eliminate an essential layer of independent oversight of provincial energy policy, writes Brady Yauch. {Photo Toronto Star Richard J. Brennan]
Ontario Energy Minister Bob Chiarelli put forward Bill 112, which would eliminate an essential layer of independent oversight of provincial energy policy, writes Brady Yauch. {Photo Toronto Star Richard J. Brennan]

Toronto Star, January 4, 2016

By: Brady Yauch Published on Mon Jan 04 2016

Ontario’s desire for total control over all aspects of the electricity sector is nearly fulfilled.

The push to eliminate dissent and independent review of the province’s energy monopolies has been a decade in the making. Since 2004, many of the province’s largest and most expensive policies were implemented with little to no oversight — at great cost to ratepayers, as the Auditor General forcefully highlighted in her recent annual report.

But Queen’s Park is set to fully take over all decision-making regarding the province’s energy monopolies by solidifying its control over the province’s energy regulator, the Ontario Energy Board (OEB), with the recent passing of Bill 112. In doing so, Ontario is shutting down the last arena of independent public review of the billions of dollars being spent by the province and its many publicly owned utilities.

The legislation, “Strengthening Consumer Protection and Electricity System Oversight Act,” would deny independent intervenors the funds needed to hire the lawyers and experts needed at these hearings, effectively blocking their participation.

Prior to this legislation, any individual ratepayer or organization representing ratepayers — ranging from big, industrial groups to cottage associations or low-income organizations — could apply for funding and act as an intervenor in any rate application. The government would instead replace the independent intervenors with a new government-appointed consumer representative.

In other jurisdictions where this has occurred, the direct cost of this new bureaucracy has been far more expensive than the cost of reimbursing intervenors for their lawyers and consultants. The indirect costs of losing the ability to hold the utility monopolies to account by forcing them to justify their proposed rate increases before the OEB could be much greater still.

One study found that intervenors have been highly successful at paring back the monopolies’ rate requests, their lawyers and consultants costing ratepayers just 2 cents annually while helping to reduce rate increases by $28 per customer. Other studies found that intervenors account for 1 per cent or less of overall regulatory costs, which themselves are a small amount of total electricity costs borne by ratepayers.

Replacing these groups with a government-appointed consumer representative charged with questioning government-owned monopolies eliminates the last remaining voice of independent review of proposals by public monopolies to spend billions of dollars on capital projects.

The province’s new legislation also ensures that any new transmission line can be deemed a “priority project” by the ministry of energy and automatically approved by the OEB. In the past, the OEB would analyze such projects to determine whether they were necessary or cost-effective. Furthermore, the province is considering more legislation that will exempt all government-directed energy plans or projects to be exempt from the Environmental Assessment Act.

The province’s previous moves to sidestep independent review have been costly for ratepayers. The smart meter rollout — which cost ratepayers $2 billion and counting and still isn’t fully functional — was done without any review from the OEB or other regulators. Billions of dollars in contracts have been — and continue to be — given to renewable energy and natural gas generators without any review by the OEB or intervenors. And the long-term energy plans developed by the province’s own energy planning experts — the Ontario Power Authority (OPA) — were never implemented and, instead, were replaced with plans written by the ministry of energy that were, again, never fully reviewed at the OEB and were later criticized by the Auditor General as overly expensive.

More recently, the province collapsed the OPA into another energy agency, the Independent Electricity System Operator (IESO), which is in charge of operating the province’s wholesale electricity market, ensuring that even more political control is embedded in ever more parts of the electricity sector. There is no longer anything “independent” about the Independent Electricity System Operator.

In the end, the OEB and the intervenors were the last voice of criticism that wasn’t on the payroll of the province. By replacing them with a government-led consumer advocate, the province will control every step of decision-making on electricity policy and spending, those pesky checks and balances eliminated at last.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). He has acted as an intervenor at the OEB.

Ontario energy policy a shambles: editorial

Norfolk News

Norfolk News, January 2, 2016

The provincial Liberals have legalized an end to using coal to produce electricity, but it seems they’re not against leaving a few finals lumps in Ontarians’ stockings this Christmas.

Hydro ratepayers in Norfolk County recently received news that as of Dec. 31, the province will end the Ontario Clean Energy Benefit, which used to take 10 per cent off monthly hydro bills as a way to ease the sting of ever-higher rates.

“This rebate,” Hydro One explained, “was introduced five years ago to help customers through the transition to a cleaner, modern electricity system.”

Cleaner and more modern the system may arguably be, but as we learned this month from Auditor General Bonnie Lysyk, it’s also terribly managed and overly expensive.

After reviewing the utility, Lysyk found that electricity consumers shelled out $37 billion more than necessary from 2006 to 2014 thanks to mismanagement and shoddy service from Hydro One, plus unreasonably high green energy rates.

What’s worse, all that extra money hasn’t produced a flawlessly functioning system, as Lysyk bemoaned more frequent power outages thanks to spotty maintenance of Hydro One’s assets. “Hydro One’s customers have a power system for which reliability appears to be worsening while costs are increasing,” she said.

Paying more for poorer service

Paying more for poorer service is unacceptable, especially since the labour market has still not rebounded from the crash of 2008, and consumers don’t have extra money to burn on their hydro bills. It’s good that there exists a government program to help qualified low-income residents. But what about those residents who work multiple jobs and cut back on everyday frills so they can avoid ending up on the dole? A 10 per cent jump in hydro rates (made even worse by a 4.4 per cent increase to time-of-use prices mandated by the Ontario Energy Board in November) could be enough to push some residents into poverty.

The Clean Energy Benefit was a nice break for consumers reeling from the province’s notion that setting inflated rates for wind and solar projects – Lysyk said some rates set out in the Green Energy Act were double the U.S. market price for wind power and 3.5 times the rate for solar power last year – was a necessary move to get early adopters on board.

“With wind and solar prices around the world beginning to decline around 2008, a competitive process would have meant much lower costs,” Lysyk concluded.

Energy Minister Bob Chiarelli defended the high wind and solar rates, saying the province was “ahead of the way” and “prices are going to be down very dramatically” thanks to a new competitive process for large renewable energy projects to be announced in the new year.

Hard to trust this minister

Forgive our skepticism, but it’s hard to trust the minister’s word on this in light of the AG’s report, and the fact that only on Dec. 31 will consumers finally stop seeing a Debt Retirement Charge on their hydro bills (a move that will lower monthly hydro bills by 3.4 per cent).

Compounding our mistrust is the fact that two former Liberal staffers are up on criminal charges related to the cancellation of two gas-fired power plants in 2011, a purely political move that burdened ratepayers with another billion dollars of debt. These and many other missteps do not inspire confidence in this government’s honour. (And no matter who was in charge at the time, Premier Wynne, the accused wear your party’s colours, so you can’t pretend they don’t exist).

We haven’t even gotten to the ill-advised sell-off of 60 per cent of Hydro One, nor Lysyk’s sobering conclusion that paying to conserve energy during a time of surplus power will actually cost the government more than it saves.

The hydro story in Ontario is the latest example of bald-faced government spin that just doesn’t compute. Cancelling the clean energy rebate while the system remains in shambles is a move worthy of Scrooge himself.

 

A record-breaking November for Ontario’s hard-hit electricity customers

More wind power not needed as Ontario continues to sell surplus power at a loss
More wind power not needed as Ontario continues to sell surplus power at a loss

Figures on exports of surplus power show wind isn’t needed, yet the government plans on adding more

November once again had Ontario ratepayers picking up the bill for subsidized electricity exports to our neighbours in New York, Michigan, etc. With the Canadian dollar in a depressed state the costs to our U.S. neighbours was considerably less than the $230 million CAD subsidy1. provided, but nevertheless, it removed about $45 after-tax dollars from the average Ontario ratepayer’s pocket.

Total generation from Ontario’s various sources was 12.4 terawatts (TWh) for November, but Ontario’s demand was only 10.6 TWh, so the surplus was exported. That brought exports for the 11 months ended November 30, 2015 to a record 19.6 TWh, and that power was sold at an average of $24.72 million/TWh (based on the IESO November year-to-date Monthly Summary).  Total revenue (or “profit” according to Energy Minister Bob Chiarelli) to Ontario ratepayers for those 19.6 TWh was about $483 million.  According to the IESO summary those exported TWh cost on average $115.16 million/TWh, another record (net of the DRC)—gross revenues for their sale was $485 million while the cost to ratepayers was $2.257 billion.

Ontario’s energy policy cost you about $360 for 11 months in 2015

So the cost for the average Ontario ratepayer, assuming 800 kilowatt hours monthly, is about $360 each for the first 11 months of 2015.

The Global Adjustment (GA) of $1.119 billion was also a record,as was the allocated costs of the GA to Class A shareholders at $136.7 million, a record and to Class B shareholders at $982.6 million setting another record!

Wind power was 40% of exports—clearly, we don’t need it

Up to this date in 2015, wind has produced intermittent record power of 7.933 TWh and represents over 40% of total exports; it is clearly power we didn’t need.  IESO exports our surplus production to ensure the electricity grid doesn’t crash and excess generation from wind, in particular, is noted for its unruly fluctuations.  Without the excess wind production the hourly Ontario energy price (HOEP) would clearly have been “bid higher” meaning costs to Ontario’s ratepayers would be less for the remaining exports.

Despite the obvious, our Energy Minister Bob Chiarelli has plans to add additional wind capacity to Ontario’s grid. A further 300 megawatts in contracts will be announced early in 2016. The continued flagellation of Ontario’s ratepayers should be recognized by the Minister as something that he has the power to stop.

Minister Chiarelli, we the ratepayers of Ontario appeal to you to cancel the acquisition of more unreliable, intermittent and expensive industrial wind generation capacity!   Do the right thing!

© Parker Gallant,

December 31, 2015

 

  1. The sale price (HOEP) for November averaged just $10.34 million/TWh so revenue was about $20 million whereas the costs of generation for the exported 1.9 TWh was $250 million ($129.53 million/TWh net of the DRC).

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

EDITOR’S NOTE: The standard response from the Minister of Energy is that wind power is needed for when Ontario’s nuclear units go offline for refurbishment; the truth is, wind cannot replace nuclear, which supplies baseload power.