Wind farm to be ‘fatal’ to Collingwood airport study shows

Wind “farm” approval serves “narrow private interest” over greater public interest in busy aerodrome

Simcoe.com, January 11, 2016

Wind project would be ‘fatal’ to Collingwood Regional Airport: study

The location of wind turbines in close proximity to the Collingwood Regional Airport would be “fatal” to the facility, according to an economic impact study.

The report, prepared by Malone Givens Parson at the behest of Clearview Township and the Town of Collingwood as part of their case against the turbines proposed by WPD Canada, determined the turbines would have a “significant negative impact on the operations” of the local airport.

The study is part of the two municipalities’ submission to the Minister of Environment and Climate Change and is intended to provide a thorough look at the potential economic impacts of the wpd Turbine Project, including the perception of the economic viability of the future of the airport for those looking to invest in the airport. The document was submitted to the ministry on Jan. 8, and released publicly on Monday.

“We conclude that the Collingwood Regional Airport is fulfilling its intended function as an economic engine and is attracting business expansion proposals that would deliver very substantial economic benefit to the South Georgian Bay region” Malone Givens Parson principal John Genest wrote in the letter to preamble the executive summary of the 190-page report. “Approval of the current wpd turbine project would be fatal to business expansion, such that, on balance, the offending turbines should be moved or wpd’s Renewable Energy Act Application denied.”

In the report, the consultants note the location of five turbines would “intrude, in several cases significantly, into the operating space” of the airport. While those ‘intrusions’ could be addressed to NAV Canada’s satisfaction by changes to operating procedures for pilots landing and taking off from the facility, the proposed changes “are expected to have consequences that are not reviewed as part of NAV Canada’s mandate, and were therefore not examined by that agency,” the consultant wrote.

The proposed turbine locations would have significant impact to the airport’s operating procedures that would significantly impair the airport’s attractiveness to the ongoing flight school, or any future aviation business operations, the report concluded.

“These impacts could be resolved by relocating the turbines to positions outside the airport’s air space, or by denying the wpd turbine project application,” the consultants stated. “The wpd turbine project, in its current configuration, risks the loss to the region of significant new investment in growing the regional economy and labour skillset.”

The consultants estimated the economic benefits of business expansion at the airport, which would notably include the Clearview Aviation Business Park, would create nearly 1,900 direct and indirect jobs, about $10.5 million in tax revenue and have a $152.6-million impact on the region.

The consultant’s report is particularly damning of a similar study submitted to the ministry last November by WPD Canada, noting it was of narrow scope and “narrowly executed by an author with no evident expertise or experience in economic impact analysis or economic development.

“It misses the single most important element in assessing the potential consequences of implementing the wpd turbine project – market and investor perceptions of the attractiveness of the facility as one enabling successful investment of risk capital, and its influence on current or prospective plans to invest.”

For the ministry to approve WPD’s renewable energy approval application in its current form, “would put a narrow and relatively small private interest ahead of the greater public interest in unimpeded operations at the [airport], and the future investment, job growth and related economic benefits the Airport could sustain in furtherance of local, regional, provincial and federal economic development objectives.”

WPD has acknowledged Simcoe.com’s request for comment, but has not yet responded to the comments in the report.

 

Canada’s wind power corporations are grateful for all your money

Big Wind is grateful to you for their success! You? Not so much...
Big Wind is grateful to you for their success! You? Not so much…

The Canadian Wind Energy Association (CanWEA) had this greeting on their website over the holidays:The industry reached a milestone of over 10,000 megawatts of installed capacity this year, and during the holiday season more than ever, our thoughts turn gratefully to all of you who have made our progress possible.”

Ontario is home to almost 50% of those 10,000 megawatts (MW) of industrial wind turbines (IWT) and CanWEA is right: they should be grateful. They should be grateful to the ratepayers of the province who have no choice but to pay for intermittent and unreliable wind power as it gets “first to the grid” rights, ahead of reliable power sources like hydro, nuclear and gas.

The source of the problem

The reason for CanWEA’s gratitude is evident when one reviews the Independent Electricity System Operator’s (IESO) 18-month Outlook for January 2016 to June 2017.  Due to low demand for electricity in Ontario, particularly during the spring and fall, IESO frequently experiences “surplus baseload generation” or SBG.  They note this as follows:  “Ontario will continue to experience surplus baseload generation (SBG) conditions during this Outlook period. The magnitude of SBG is trending higher with the addition of new renewable generation and decline in grid demand due to conservation and distribution-connected generation. SBG is expected to be effectively managed through existing market mechanisms, which include inter-tie scheduling, nuclear maneuvering or shutdown and the dispatch of grid-connected renewable resources.”

So, an official admission: Ontario’s power surplus “is trending higher” due to renewables!

In 2014 6.8 terawatts1. (TWh) of power was generated from wind turbines, and during 2014 OPG was forced to “spill” 3.2 TWh of clean hydro, while Bruce Nuclear was forced to “steam-off” 1.3 TWh of clean CO2-free nuclear (September 2014 to October 2015). At the same time, the turbines were curtailed from producing about 500,000 megawatt hours. All of the generated, spilled, steamed-off and curtailed generation was paid for by Ontario’s ratepayers along with the losses on our exports of surplus generation.

The costs of the 6.8 TWh and the curtailed 500,000 MWh was approximately $930 million (7.3 TWh at an average price of $125/MWh); spilled hydro’s costs were $179 million (3.2 TWh at an average price of $56/MWh), and the 1.3 TWh of steamed-off nuclear added another $87 million to the bills of Ontario’s ratepayers. That brought the cost of those 6.8 TWh of production from IWTs to almost $1.3 billion.   That alone translates to a cost per kilowatt hour (kWh) of over 19 cents — before charges for transmission, delivery, the Debt Retirement Charge2. etc. and before picking up the losses for surplus export generation. In 2014 that cost ratepayers $1.2 billion, and will end up at close to $2 billion in 2015.

The poor get poorer in Ontario

By November 2015 end, wind had already exceeded 2014 generation, at 7.9 TWh. Add its costs to constrained, curtailed, spilled and steamed-off power and the cost of electricity will continue its climb despite the false claim made by Ontario’s Energy Minister reported in Maclean’s in December 2013: “Looking to the future, we expect that rates will continue to increase, but we have taken very significant steps to mitigate those rate increases.”

Mitigation of rate increases is not in the immediate or near future: we just got hit with an increase effective January 1st, 2016 of 10% with the removal of the Clean Energy Benefit and a new charge to support the almost 600,000 Ontario households living in “energy poverty.”  We can also expect a further increase May 1, 2016 to pay for the costs associated with more renewable energy coming on stream (700 MW of wind and 300 MW of solar) in the next 18 months, exacerbating SBG and the cost of dealing with it.

CanWEA’s members certainly had a merry Christmas, but all the Dom Perignon was on you.

©Parker Gallant.

January 7, 2016

 

  1. 6.8 TWh is equivalent to 6.8 billion kilowatt hours.
  2. Small businesses will continue to be charged for the DRC.

Wainfleet Council protests changes to Niagara wind power project without public consultation

Newer turbines proposed will actually increase sound power levels, Alderman says. “They’re walking all over us.”

Erie Media, January 10, 2016

Ald. Betty Konc has requested a letter to be drafted from the Township of Wainfleet and sent to the Ontario Minister of Energy and the Deputy Minister of Energy.

“They need to hear from the municipalities,” Ald. Konc said in a later interview. “We need to stand up and fight for ourselves.”

This action is in response to a letter that was submitted to Wainfleet Township council from Shiloh Berriman, Project Coordinator – FWRN LP and J.A. (Al) Leggett, Project Manager – Stantec Consulting Ltd. The letter was in reference to proposed changes to the Niagara Region Wind Farm Renewable energy project.

“They are asking to change the entire project,” Ald. Konc said in the Jan. 5th Wainfleet Township Council meeting. “The whole 77 turbines, they’re asking to be switched out from E101’s and E82’s from a height of 135m down to 124m.”

“That may sound like it’s a win, but, it really isn’t,” she said. “It does have to do with sound power levels.”

“The province has stated in their EPR registry that taller turbines are quieter,” she said. “Though that’s not true, but that’s what they believe.”

“So this if particular project is allowed to go forward with these changes, which are massive, they have not submitted documentation for these changes,” she said. “It this is what they wanted to do why didn’t they ask for that when they were going through the REA process (Renewable Energy Approvals: http://www.ontario.ca/page/renewable-energy-approvals ).”

“So when they put the 135’s down to 124, you are actually increasing the sound power levels which means that people who are going to be closest to these turbines and affected by them are going to be listening to over 40dB of sound power which is against their own rules,” she said.

“We need to stand up as a community and stop being run over by these people,” she said.

According to the article Noise Pollution: A Modern Plague from Medscape  by Lisa Goines, RN, Louis Hagler, MD, “It is known, for example, that continuous noise in excess of 30 dB disturbs sleep.”

The article goes on to say “Long-term psychosocial effects have been related to nocturnal noise. Noise annoyance during the night increases total noise annoyance for the following 24 hours. Particularly sensitive groups include the elderly, shift workers, persons vulnerable to physical or mental disorders, and those with sleep disorders.”

The article also draws this conclusion regarding low frequency sound and vibration: “Other factors that influence the problem of night-time noise include its occurrence in residential areas with low background noise levels and combinations of noise and vibration such as produced by trains or heavy trucks. Low frequency sound is more disturbing, even at very low sound pressure levels; these low frequency components appear to have a significant detrimental effect on health.”

According to an article in  Environmental Health Perspectives, Wind Turbines: A Different Breed of Noise?  by Nate Seltenrich, “Multiple recent studies, including one coauthored by Daniel Shepherd, senior lecturer at New Zealand’s Auckland University of Technology, have demonstrated that sleep interference gets worse the nearer residents are to turbines. ‘Sleep is absolutely vital for an organism,’ he says. ‘When we lose a night’s sleep, we become dysfunctional. The brain is an important organ, and if noise is disturbing its functioning, then that is a direct health effect.’”

According to this article “Wind turbines generate lower frequencies of sound than traffic. These lower frequencies tend to be judged as more annoying than higher frequencies and are more likely to travel through walls and windows. Infrasound, or sound frequency lower than 20 Hz—inaudible to the human ear—has been associated in some studies with symptoms including fatigue, sleeplessness, and irritability, as well as with changes to the physiology of the inner ear that have poorly understood implications.”

“Because I work so closely with Mothers against Wind Turbines and the West Lincoln Wind Action Group (wlwag), they notified probably about a month-and-a-half ago that the changes were being requested,” Ald. Betty Konc said in a later interview. “I just saw red when I saw this in our correspondence package because we’re one of the municipalities that are going to be affected by the proposed changes and we are one of the last to find out.”

“This is so typical of wind developers, they have been given ‘carte blanche’ to come in and walk all over the municipalities,” she said.

“When I saw this, I thought ‘Really you want to wait till the last minute to tell one of the three municipalities you are working in that you want these changes?,’” she said. “They aren’t little changes, they’re huge!”

“It’s a whole new project,” she said.

“What’s the motive behind the company wanting to change the turbines from 135m down to 124m? I don’t know, it’s probably cheaper to produce for them or something like that, we will probably never know,” she said. “They will also change the output level as well from 3 megawatt to 2.9, only .1 difference.”

“So they are changing the whole project, if this what they wanted to do, why didn’t they submit the paperwork in the original REA process?” she said.

“In my mind and in the minds of the Mothers against Wind Turbines and wlwag, this is a whole new project and it needs to go through the REA process and the current one needs to be null and void,” she said.

“According to the rules that are coming out for 2016 with regards to the next intake of projects this (if started as a new project) would not be allowed under the new rules this year, so they are trying to slide it in,” she said. “So they submitted their paperwork for these changes back in October but, still, we didn’t get the notice until Dec. 16.”

“Because of the way they’ve done this, there’s no real formal comment time,” she said. “With an REA, the public and the municipality get 60 days to comment on the project.”

“I agree with you (Ald. Konc),” Mayor April Jeffs said in the council meeting when drafting the letter was discussed. “It’s been verified and there are other people concerned, I think this is a good idea.”

At the conclusion of the issue it was voted unanimously that officially Wainfleet Township council will be drafting and sending a letter to the Ontario Minister of Energy, the Deputy Minister and the Region of Niagara (on the Mayor’s suggestion) and copies will be sent West Lincoln and Lincoln as they too will be affected by the proposed changes.

“We’re standing up and saying ‘Look this is a whole new project, they’re walking all over us and we don’t want to see this happen,’” Ald. Betty Konc said.

 

Why TVOntario and The Agenda are no longer a trusted source of information

Formerly "impartial" journalist now an apologist for the Wynne government?
Formerly “impartial” journalist now an apologist for the Wynne government?

Here is a blog posting by energy analyst Scott Luft, based on the past week’s edition of Ontario public broadcaster TVOntario‘s The Agenda, which dealt with the Auditor General’s report on how the Ontario government has mismanaged the energy file. The panel was virtually a three-to-one set-up against the lone supporter of the AG’s report, Brady Yauch of the Consumer Policy Institute.

This is well worth a read.

It took Steve Paikin 4 seconds to mislead the viewers of Ontario’s public broadcaster last night.

“Auditor General Bonnie Lysyk’s year-end report found that Ontarians overpaid for electricity by 37 billion dollars. ” – podcast

No, The Auditor General’s year-end report stated, correctly:

Global Adjustment fees, which are the excess payments to generators over the market price, amounted to $37 billion from 2006 to 2014

Should this confuse Mr. Paikin?

The electricity issue is not a a new one in Ontario and the global adjustment, while complex in some respects, does essentially refer to the difference between what a generator is paid, by contract (say $100 per unit), and what the market valued that power at (say $20 per unit).

… “Joining us now to explore why rates keep rising and  other mysteries of the energy file…”

Of a three-person panel on Paikin’s show, one has a history of distracting people from understanding Ontario’s energy file, and another is actively paid by the government in multiple roles.

Martin Regg Cohn has been the Queen’s Park propagandist at the Toronto Star for long enough to have seen 3 annual auditor general reports critical of policies in the electricity sector. Of the 2011 Report he wrote:

Auditor’s aren’t infallible. This report is sloppy in its reliance on questionable foreign studies that claim every green job costs three or four jobs elsewhere when rates rise. These studies have long been discredited for their dubious methodologies and funding

Regg Cohn responded to the Auditor’s 2014 report by producing a distraction the morning of the report’s release.

Thanks to a whistleblower, we now have the secret details of how Ontarians are being hosed by The Beer Store…

This year Regg Cohn’s response to the 2015  AG report included the irrelevant but ominous:

… who watches the watchdog? Who audits the auditor to determine if Lysyk’s $16.5-million office budget delivers value for money?

$16.5 million is not a big worry among Ontario’s electricity consumers, who saw about $2 billion in charges added to their 2015 bills through the cost shifting of the global adjustment (the cost shifting is not discussed as it is complicated).

The second panel member was lawyer Lisa DeMarco. DeMarco’s attributes include:

These attributes don’t necessitate her being evil, but they do make Paikin’s first questions to her ridiculous:

  1. Do you think [Lysyk’s] criticisms are valid?
  2. So she got it all right except for all the things she forgot?

DeMarco produced pop platitudes predictably.

The third panel member was Brady Yauch, and I’m a fan of his, so I won’t dwell beyond advising all to follow the Consumer Policy Institute blog.

I don’t recommend listening to the show, but I did want to address the most blatant falsehoods presented.

Regg Cohn:

Saying we are paying a lot on conservation and then telling us we should not bother with conservation, or implying that, is I think taking things out of context.

context?

Ontario exported 22.6 billion kilowatt-hours (kWh) in 2015, at a loss of over $1.4 billion, and it probably paid to curtail another 5 billion kWh. The total usage of all Regulated Price Plan consumers (households and low consumption businesses) likely ended the year under 59 billion kWh.

Within the context of paying for 3 watt-hours from every 2 consumed, how does the conservation spending make sense?

Paikin mention Jatin Nathwani’s recent TVO contribution, which I previously rebutted with commentary from Jatin Nathwani. Again the claim Paikin focuses on, as have other establishment men, is that the auditor stupidly harps on the global adjustment. Here’s my prior response:

Today’s professor claims today’s auditor:

…gets unnecessarily tangled up with the global adjustment mechanism (GAM) and its relationship to the hourly Ontario energy price (HOEP).

By tangled, he could only mean, accurately describes:

… Generation costs have increased by 74% over the last decade, from $6.7 billion in 2004 to $11.8 billion in 2014, and they are expected to grow to $13.8 billion by 2022. In particular, Global Adjustment fees have increased significantly, from $650 million in 2006 to $7.03 billion in 2014. From 2006 to 2014, electricity consumers have already paid a total of $37 billion, and they are expected to pay another $133 billion in Global Adjustment fees from 2015 to 2032. Figure 9 shows the actual and projected total cost breakdown of electricity service in Ontario from the year 2006 to 2016.

image

It’s charted for goodness sake. The auditor states facts exactly as they are.

Worse… back to Regg Cohn (“Martin, add to that by informing us…”)

…[the auditor] argued that we have, I think, $8 or $9 billion dollars we’re paying in addition to the so-called market price.

Nope to both. That wasn’t a thought about what the auditor wrote,and the $9 billion wasn’t about that at all:

Expensive wind and solar energy—We calculate that electricity consumers have had to pay $9.2 billion (the IESO calculates this amount to be closer to $5.3 billion, in order to reflect the time value of money) more for renewables over the 20-year contract terms under the Ministry’s current guaranteed-price renewable program than they would have paid under the previous program. Before 2009, Ontario already had several successful procurement programs for renewable energy that achieved renewable generation targets in record time. Nevertheless, in 2009 the Ministry directed the OPA to create a new guaranteed-price program…

 

The figures refer to needlessly upping the contract offers with procurement program changes in 2009.

Paikin follows Regg Cohn’s ill-informed answer with a soft-ball to the lawyer to set up a slam on coal’s elimination being a factor in driving up costs.

But most of the costs of 2009’s Green Energy Act (GEA) appear after coal is gone. By the end of 2013, which was the end of coal-fired generation, about 1300 megawatts (MW) of the capacity contracted with GEA era prices was in service; by September 2015 three times that amount was in commercial operation (~3900 MW), and the total will grow by 50% again if lax enforcement of contracted completion timetables continues.

The signature contract of the heightened GEA rates saw no capacity enter commercial operation prior to coal’s phase-out.

The lawyer’s ramblings are an irrelevant follow-up to Regg Cohn’s ramblings.

Brady Yauch properly acknowledged the cost exports, and the political imperative to phase-out coal, but fumbled in attributing a promised 1% a year increase from 2009’s procurement policy changes to a Long-Term Energy Plan. The claim was made in 2009, by the Minister raising rates for solar and wind in the Green Energy Act’s switch of procurement policies – which is what the Auditor did attribute the “$8 or $9 billions” to. In committee, 2009:

We anticipate about 1% per year of additional rate increase associated with the bill’s implementation over the next 15 years. Our estimate of cost increases is based upon the way that we actually amortize costs in the energy sector…

That wrong claim was repeated again by that Minister.

 

The last statement I’ll note comes from the host, Mr. Paikin – in response to Yauch’s use of the term “lie”:

I just want to be clear here because I’m still of the generation that when you call somebody a liar I think that’s a big deal. So, who lied about what?

Well, Mr. Paikin, you stated up front the show would be used to explore “why rates keep rising” but it mainly seemed a hit piece on the Auditor General – and the panel seemed to be stacked with 2 personalities to ensure that.

I am not of a disposition where the best publicly paid people are apologists for the inept governments that pay them – but that does seem out of step with a generation.

I am of the opinion that when you give a person a job, you give that person the job. Most of the Auditor’s claims butchered in the program came in the auditor’s “Electricity Power System Planning” chapter.

The planning issue wasn’t discussed at all on the Agenda – but the disrespect for planning was.

The Green Energy Act changes occurred because a Minister disregarded the people paid to do planning for the public and turned to special interests to set public policy without any hint of respect for the public.

 

Illinois zoning board denies wind farm application, citing health impacts and property value loss

Red Covered Bridge.jpg

Bureau County’s famed 1863 red covered bridge: permit denied for wind “farm”

BCRNews, December 30, 2015

After 40 days of hearings, the Bureau County Zoning Board of Appeals (ZBA) recommended denial of all of the 127 applications of Walnut Ridge Wind LLC (WRW) to build industrial wind turbines. The ZBA considered the testimony of dozens of witnesses and experts on the impacts of such turbines. Six different people who live near projects in Illinois and Wisconsin testified the turbines cause extreme noise, flickering shadows, vibration and sleep deprivation. They suffered from symptoms commonly known as Wind Turbine Syndrome which involves feelings of motion sickness and vertigo. Three of the families abandoned their dream homes to escape the turbines.

An expert testified that neighbors will sustain up to a 50 percent loss in the value of their property. Nonetheless, WRW refuses to site turbines away from people’s homes nor will it agree to any property value protection plan. The ZBA unanimously found “the applicant has not produced sufficient evidence that the project will not diminish residential property values along the footprint.”

Project does not comply with noise regulations

The ZBA unanimously found “the applicant’s project does not comply with the noise regulations at the property lines as established by the Illinois Pollution Control Board and the Bureau County ordinance.” Two experts testified the data also showed the project will violate the maximum allowable noise levels at hundreds of homes.

Likewise, hundreds of homes in the area will be subjected to many hours of the strobe like effect caused by the shadows of the huge turning blades. The ZBA found WRW failed to design the project “to minimize shadow flicker,” and there was evidence that strobe effect can be particularly detrimental to children and adults with epilepsy, autism or those prone to motion sickness.

The Illinois Department of Natural Resources warned Bureau County the project is proposed to be built in an area containing several endangered species protected by both federal and state laws. Nonetheless, WRW refuses to move the project to avoid the endangered species or turn-off or curtail turbines as recommended by IDNR. Therefore, the ZBA unanimously found “the applicant has not produced sufficient evidence that the project would not affect endangered species native to the area.”

The evidence also showed the turbine company underestimated the cost to tear down the $400 million project by over $32 million, and the ZBA found “the decommissioning information presented (by the applicant) was insufficient.”

No real tax revenue for the community

A petition was presented by 245 people who own land in the footprint that oppose the project which is three times as many who favor the project. The only response by the turbine company to the overwhelming public opposition was to argue the project will create tax revenue. However, the law which allows the turbines to be taxed as real estate expires on Dec. 31, 2016. When the law expires, companies like WRW will argue turbines are actually personal property and not real estate resulting in no tax revenue.

Read more here.

“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.

Math lesson on power costs for Minister Bob Chiarelli: Parker Gallant

Don't despair Mr Chiarelli: Parker Gallant explains it all nice and slow
Don’t despair Mr Chiarelli: Parker Gallant explains it all nice and slow

Math lesson # 2 for Bob Chiarelli—Calculating the cost per megawatt hour of Ontario’s power

January 5, 2016

Open “Tongue in cheek” letter to:

The Honourable Bob Chiarelli, Minister of Energy, Queen’s Park, Toronto
Dear Minister Chiarelli:

First, I hope you and your family had a Merry Christmas and a Happy New Year.

Second, I hope you found the time to make it through the exercises I described in my recent letter so you now understand the difference between “profit” and “loss” in respect to the energy portfolio.

With that behind you, I believe it’s time for a second math lesson. We will again use the chart for November 12th, 2015 prepared by my friend Scott Luft. See below.

This lesson is focused on allowing you to understand how the cost per megawatt hour (MWh) by generating source can be calculated using the chart Scott prepared versus the IESO daily summary which is not at all as transparent as Scott’s.

Let’s start! Note the second portion of the chart with the subject line “IESO Transmission (Tx)”.  The first heading “Nuclear” is a reflection of the generation source and on this day it provided 58.1% of all generation.  How to get that calculation is simple.  Look at the first line; add the “Ontario” column of the generation of 429,668 MWh to the 2nd line “est. Distribution (Dx)1. giving you 447,177 MWh. Divide it into Nuclear total of 259,444 MWh and you get 58%!  Including curtailed it becomes 61.8%.

Now let’s calculate the cost of each megawatt hour of Nuclear generation. We will include “est. Curtailed” in our calculations as it is generation that could have been delivered, but because IESO was concerned with the grid crashing it was “curtailed” i.e., not produced.  Bruce Nuclear has the ability to “steam off” and that is what they were told to do, because wind/solar was generating too much power at a particular point in the day. Now the total of nuclear generation plus the curtailed (steamed off) nuclear is 276,301 MWh and that should be divided into the last line “Cost ($000s)” of $18.062 million —which demonstrates each MWh of nuclear cost $65.37/MWh.   Still with me, I hope!

OK, so let’s calculate the cost per MWh for hydro: that was 86,965 MWh + est. Distribution (Dx) of 1,867 MWh and curtailed (spilled) of 208 MWh for a total of 89,040 MWh. Divide that into the “Cost” of $4.671 million and you will see the cost per MWh was $52.46.  Hydro contributed 20.2% of Ontario’s total generation (ignoring curtailed generation) this day, so combined with nuclear those two sources generated or curtailed/steamed off 78.2% (365,341 MWh) of all electricity generated in the province, and 100.4% of total Ontario demand (refer IESO daily summary) of 363,960 MWh.

Hope you are paying attention Bob. Here’s why: our exercise up to now doesn’t include generation from wind, solar, gas, biomass or biofuel sources, yet they were were completely CO 2 free!   Worth pondering, eh?

Now, time to look at costs of those other sources of generation. Let’s start with gas and its role in providing “peaking power”!  On this day, gas provided 5.5% of Ontario generation (including “est. Distribution (Dx).”  The calculation: 24,511 MWh divided by 447,177 MWh = 5.5%.  The cost of those megawatt hours is simply: divide the “Cost” of $5.360 million by 24,511 MWh, giving a shocking total of $218.68/MWh!

Contracting for gas plants is to back up wind and solar generation when the wind doesn’t blow and the sun doesn’t shine!

Here is an example that requires some math calculation so read this carefully before trying the calculations. Specifically let’s review  the TransCanada 900-MW gas plant (planned but canceled) for Oakville (most of the $1.1 billion cost) and moved to Bath!  The OPA contract (negotiated by the OPA) will pay them $15,000 per MW per month to be “at the ready.” The annual cost of the 900 MW is $162 million (900 MW X $15,000 X 12 = $162 million).

Bob, what the foregoing means is that if that plant produced just one (1) megawatt hour of electricity in a year, the cost would be $162 million.

Now let’s do a “what if” exercise: assume it will operate at 10% of rated capacity of 900 MW which means it will produce 788,400 MWh (10% X 900 MW X 8760 [hours in a year] = 788,400 MWh).  Actual generation costs from the gas peaking plants are based on the cost of the natural gas fuel plus a small mark-up but we will ignore those latter two costs in the next calculation just to keep it simple.  Here we go: if you divide the annual cost of $162 million by 788,400 MWh, your answer should be $205.50/MWh.  Pretty expensive, eh?

The requirement to back up industrial wind turbines is old news as noted in a Memorandum submitted to the U.K. Parliament which stated:  “Dr Paul Golby CEO of E.On UK, says 90% whilst Mr Rupert Steele of Scottish Power says, “Thirty Gigawatts of wind maybe requires twenty-five GW of backup.”  In other words, that means, if you contract for 1,000 MW of industrial wind generation you need a 900 MW gas plant to “back-up” its capacity!

So, doing math is important: you can see that you are almost doubling up on the cost of producing a single MWh of electricity.

That brings us to the actual cost of wind generation on the chosen day in November.

On November 12, 2015 (refer to Scott Luft’s chart) wind produced 63,203 MWh, i.e., the lines “IESO Transmission (Tx)” + “est. Distribution (Dx)” equals 63,203 MWh. On this day wind produced 14.1% of Ontario’s generation at a cost of $153.55/MWh (based on the calculations applied above) —or at least this is what one would assume.  That is an assumption you shouldn’t make though, Bob, and I will try to explain why.  Adding curtailed wind production (13,500 MWh) to the 63,203 MWh produced would reduce the per MWh cost to $126.52/MWh, but, and it’s a big but—it doesn’t include gas back-up costs.   Now pay attention!

The outstanding contracts for gas generation total about 9,000 MW of capacity and the contracts guarantee them (including the 2,100 MW of  Lennox owned by OPG) a monthly price similar to the TransCanada contract mentioned above.   So, knowing that, let’s assume the “average” contracted price is only $10,000 per MW per month.  Bearing that in mind the backup for wind (solar to a lessor extent) is costing Ontario ratepayers $1.080 billion annually to be on “standby”!  In other words, if they produced one (1) MWh in a year the cost would be $1,080,000,000.   Shocking eh?  If operated at 100% of rated capacity (which they can’t) they would produce almost 79 TWh (terawatts2.) or over 50% (9,000 MW X 8760 hours in a year) of Ontario’s annual consumption.

OK, now back to Scott’s chart of November 12 and let’s figure out the full cost. On November 12, gas generators operated at around 11.3% of capacity (79 TWh divided by 365 days in a year = 216,438 MWh and 24,511 MWh divided by 216,438 MWh = 11.3%).  The cost of that day’s gas generation combined with wind generation would be $171.75/MWh, i.e., combined cost of $15,065,000 divided by combined generation of 87,714 MWh (ignore the curtailed generation) = $171.75/MWh.  Now that cost coupled with the losses of $7.9 million from our exports of 74,352 MWh (cost of $108 per/MWh3.) Nov. 12th, produces a combined cost of $279.75/MWh or 4.3 times the cost of nuclear generation.

At this point, Bob, I hope you have grasped the math so I won’t go through the exercise for Scott’s other headings of biofuel, solar etc. I will leave you to work those out on your own.

I certainly hope this exercise gives you sufficient math skills to at least understand the basic steps you should go through before making either rash remarks or issuing directives to IESO telling them what to do. Instead perhaps you could instruct them to produce information similar to what Scott Luft produces.  The latter would also back up your leader’s wishes or intent to be “transparent” for the taxpayers and voters in Ontario.

Good luck with the math exercises and with demonstrating your Ministry’s intention to become more transparent.

Regards,

 

©Parker Gallant

  1. Distribution (Dx) reflects the generation sources (principally small wind and solar) hooked up directly to local distribution companies (LDC).
  2. One Terawatt hour is equal to 1,000,000 MWh.
  3. Refer letter of November 17, 2015.
(C) Scott Luft
(C) Scott Luft

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.