More turbines, more cost to Ontario electricity customers

Adding more power from wind at this point only benefits our U.S. neighbours, not Ontario citizens

 The ExPlace symbolic wind turbine. The reality is more turbines means more pain for Ontario consumers
The ExPlace symbolic “feel good” wind turbine. The reality is more turbines means more pain for Ontario consumers

It was a “WOW” headline for Cleantech Canada on their website: “180 megawatt Armow Wind project comes online in Kincardine, Ont.”  The article claimed Armow would power 70,000 Ontario homes each year. That’s a “stretch-goal” unless the average household in Ontario has reduced consumption from 800 kilowatts (kWh) per month to 675 kWh.  The Ontario Energy Board (OEB) maintains the average household consumes 800 kWh per month, but apparently, the anonymous author of the report did no research, and just assumed Armow would produce what he was told.

What will happen to the 475,000 megawatt hours (MWh) Armow might produce, probably in the middle of the night or in the spring and fall when Ontario’s demand for electricity is low?

If 2015 production from industrial wind turbines (IWTs) is the measuring stick, we should assume most of the generation we will pay the Samsung/Pattern partnership $135 per MWh for, will be exported!

The surplus power Ontario exported to Michigan, New York, etc. in 2015 was reported by IESO as 22,618 gigawatts (GWh). That’s enough to provide 50% (2.4 million) average Ontario households with the 9.6 MWh of annual consumption the OEB use as the basis for setting electricity rates. If Ontario was generating a profit selling surplus power we would all be happy, as it would reduce our rates. But that’s not how the Liberal government has reconfigured the system since first elected in 2003.

The average sale price of those GWh in 2015 was $23.58/MWh meaning their sale generated $533 million. Remember though, the sale price doesn’t include the Global Adjustment or GA (the price difference between the contracted rates of say, industrial wind, and actual market value1.).

The GA costs for those 22,618 GWh averaged $77.80/MWh in 2015, meaning the additional costs of generation picked up by Ontario’s ratepayers was $1,760 million. To be fair we also have to deduct the GA we saved by importing 5,763 GWh, which was about $450 million, reducing the ratepayer burden to $1.3 billion ($1,760 million less $450 million).   One would think the $265 per household subsidizing our neighbours should be treated as a tax-deductible gift, but the province instead levies a tax on the total GA for the exports via the HST. That means the province generated an additional $100 million for their portion of the HST, pushing the cost per household to $285.  And, the drop in the Canadian dollar in the past year made the purchase price for those U.S. buyers even cheaper.

Now if we look at generation from wind, solar and biofuel for 2015, you will note they were respectively 9,000, 250 and 450 GWh, representing 42.2% of all exports. If we include embedded generation, estimated at 4,500 GWh (principally solar), it would represent 62%.  If we look at the all-in costs of production with wind priced at an average of $130/MWh, solar at $500/MWh, and biofuel at $150/MWh, ratepayers are paying $2.4 billion or roughly $500 each per average household!

In short, adding more wind and solar power generation to Ontario’s mix only provides a benefit to our neighbours, but zero value to Ontario’s ratepayers.

Clearly, we don’t need more wind turbine or solar developments like Armow forced on rural Ontario, without consideration of the health and economic consequences. The province needs to back away from their plans to add another 500 MW of intermittent and unreliable wind and solar capacity now.

© Parker Gallant

February 3, 2016

 

  1. Market value is the value determined by the trading activity and the HOEP or hourly Ontario electricity price. Defined by IESO as: “The Hourly Ontario Energy Price, or HOEP, is the average of the twelve market clearing prices in each hour.”

 

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

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

$1.5 million paid out already today for curtailed wind power

The huge, 100-megawatt North Kent 1 wind power project proposed by the Samsung-Pattern Energy consortium was posted yesterday on the Ontario Environmental Registry. The announcement comes despite the Ontario Auditor General’s report in 2015 that Ontario has a significant oversupply of electrical power, and that Ontario ratepayers are paying too much for “renewables.”

In just the first eight hours today, the day after the announcement for North Kent 1, the Independent Electricity System Operator or  IESO curtailed about 11,000 MWh of wind generation alone.  It could have provided power for 1200 average households; instead it has cost Ontario electricity ratepayers $1.5 million … for nothing.

The power developers claim the power produced from this project during its 20-year agreement with the province will generate “electricity equivalent to the annual electricity needs of 35,000 homes.”

Their use of the wording “equivalent to” is interesting because with Ontario’s current and significant surplus of power, the electricity generated from this project will almost certainly NOT go to Ontario electricity customers, but instead will be sold at a discount to neighbouring jurisdictions like Michigan and New York State.

As an example, Samsung-Pattern’s Armow wind project just began operation this week, and energy analyst and blogger Scott Luft commented: “the only drivers of price in Ontario are excess supply and supply rate increases (primarily at OPG). Samsung’s announcement states ‘Armow Wind is expected to generate enough clean energy to power approximately 70,000 Ontario homes each year’, but …  it’s unlikely it will have the opportunity to power a single one — it will power American homes or nothing at all.”

Energy commentator Parker Gallant also remarked: “The power [from the Armow project] delivered to Ontario will be charged to all average ratepayers at 13.5 cents/kWh whereas the power (probably about 50% of production) will be charged out to those NY & Michigan ratepayers at about 2.5 cents/kWh. Ontario ratepayers will pick up the difference between the 2.5 cents the surplus is sold for and the 13.5 cents/kWh the Armow owners will be paid.”

Although the project may be appealed (almost every wind power project in Ontario has been) Samsung-Pattern confidently announce that construction on the project will begin later this year, and operations will begin early in 2017.

Comments on the project are accepted by the EBR in writing or online until March 18. Comments must relate to environmental impact.

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New witness statements on endangered species delays Amherst Island appeal

The 133-year-old St. Paul's Presbyterian Church on Amherst Island is the setting for this week's hearings by the Environmental Review Tribunal hearings for an appeal to the approval of a wind energy project on the island. (Elliot Ferguson/The Whig-Standard/)
The 133-year-old St. Paul’s Presbyterian Church on Amherst Island is the setting for this week’s hearings by the Environmental Review Tribunal in the appeal of a wind energy project on the island. (Elliot Ferguson/The Whig-Standard/)

“I don’t want to short-change any witnesses,” says Tribunal chair Robert Wright in extending the hearing

The Whig-Standard, February 2, 2016

By Elliot Ferguson

STELLA — A late influx of witness statements from Amherst Island residents had lawyers appearing before the Environmental Review Tribunal manoeuvring to find a way to incorporate them into this week’s hearings.

On the weekend, 14 more factual witness statements were submitted by lawyers representing the Association to Protect Amherst Island. They joined 30 other statements already filed.

Many of the statements include descriptions of sightings of the endangered Blanding’s turtle.

Additional expert witness statements and disclosure from the Ministry of the Environment and Climate Change were also submitted.

“We haven’t even had the chance to read these,” association lawyer Eric Gillespie said.

The tribunal had scheduled three days of hearings on Tuesday, Wednesday and Friday to deal with the resident witnesses, with the first residents to testify Tuesday morning.

The delay caused by the added witness statements, however, meant no residents took the stand Tuesday. Instead, Gillespie and Arlen Sternberg, a lawyer for Windlectric Inc., agreed that the tribunal would start an hour earlier on Wednesday and Friday to make up the lost time.

What was not agreed upon was the exact procedure for questioning and cross-examining so many witnesses in the shorter time frame.

Tribunal member Robert Wright encouraged both sides to figure out a way to both speed up the process and allow the witnesses to testify.

Please read the full story by Elliot Ferguson here.