Canada’s wind power corporations are grateful for all your money
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.
January 7, 2016
- 6.8 TWh is equivalent to 6.8 billion kilowatt hours.
- Small businesses will continue to be charged for the DRC.