Wind power’s hidden costs

Not such a great deal for Ontario
Not such a great deal for Ontario

This letter was written in response to a letter to the Ottawa Citizen by Robert Hornung, president of the corporate wind power industry’s lobby group, the Canadian Wind Energy Association (CanWEA). Mr. Hornung had asserted that wind power was among the lowest cost options for power generation.

We disagree.

Ottawa Citizen, May 31, 2014

Wind power comes with hidden costs

Wind power comes with hidden but significant costs: backup power is needed because wind is an intermittent source of supply, produced often when it is not needed, and inflexible to changes in demand. Ontario generation capacity now exceeds demand but because the Green Energy Act requires that renewable energy sources get first access to the provincial grid, we are forced to take wind power over lower-cost conventional supplies.

Readers may also be unaware of the cost of curtailing operations at existing plants, or of losses on export sales. In 2013, this was about $1 billion. Since Ontario started paying wind power corporations to not produce power in September 2013, ratepayers have picked up the cost of $16 million—money, literally, for nothing. The top non-producers are Enbridge, TransAlta, Brookfield and GDF-Suez.

The auditor-general stated in 2011 that no cost-benefit analysis was ever done for renewable sources of power; if it had been, no one would be talking about what a great deal wind power has been for Ontario.

Jane Wilson

president, Wind Concerns Ontario, Ottawa

Constraining wind power in Ontario

Making your head spin or, how Ontario’s energy sector is regulated

Enbridge Gas Distribution recently received the blessing of the Ontario Energy Board (OEB) for a 40% hike in what they charge Ontario’s consumers for distributing natural gas, claiming, because of the high demand during a cold winter they were forced to purchase it at a high market price.  The OEB granted the approval despite many objections by various interested parties who pointed out that Union Gas had requested a smaller increase.

This note was in the OEB’s approval:  “This means that Enbridge plans for lower storage deliverability requirements and transportation capacity” requiring gas purchases at higher spot prices on the open market.  One wonders why Enbridge is not required to maintain a larger storage capacity, which would have allowed them more prudence in purchasing the supply of gas, but that is presumably a question for the OEB to ask!

While the OEB was weighing their decision, another arm of Enbridge was constraining their production of wind-generated electricity.  That was to allow the Independent Electricity System Operator (IESO) to protect the grid and prevent blackouts or brownouts by requesting constraint.

Constraining wind power—and paying for it—started September 11, 2013. Since then Enbridge has been paid for not producing about 83,500 megawatt hours (MWh), which should have generated close to $9 million.

Enbridge was not alone: Brookfield didn’t produce over 29,000 MWh and IPC/GDF Suez (where the CEO is Mike Crawley) didn’t produce 12,800 MWh, and TransAlta didn’t produce 17,100 MWh.  In total about 161,000 MWh were constrained since IESO started paying wind developers—that means  ratepayers picked up the $16 million cost.  And that cost doesn’t include what ratepayers pay for remote meteorological stations to ensure wind developers don’t lie about what they may have produced.

Interestingly enough if one checks out Elections Ontario to determine what those wind developers contributed to the three major political parties in 2010, 2011 and 2012, you find that the NDP received nothing, the Ontario PC party received $1,080 from Enbridge and the Ontario Liberal Party or OLP received $8,000 from Enbridge, $14,840 from Brookfield and nothing from the rest.  The CEO of IPC did donate a total of $555 to the OLP.

The wind power lobby organization Canadian Wind Energy Association (CanWEA) contributed $16,620 to the OLP over the last three years and zero to the NDP or the Ontario PC party.  I wonder why?

This situation is a win-win for some of the parties involved, but a hit to the pocketbook of the average ratepayer.

©Parker Gallant,

May 22, 2014

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

 

 

 

What voters don’t know about Ontario electricity costs

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Here from Ottawa-based energy economist Robert Lyman, a summary of the “hidden” costs of generating electric power from renewable sources…what the government has done over the past five years.

THE HIDDEN COSTS OF ONTARIO RENEWABLE ELECTRICITY GENERATION

Ontario residents can be forgiven if they fail to understand the public debate during the current (2014) provincial election about the costs of different types of electricity generation and why these have caused electricity rates for consumers to rise so much over the past ten years. The complexity of the system makes it difficult to explain the costs associated with one source of supply, namely the renewable energy generation  (industrial wind turbines and solar power generators). In this note, I will nonetheless try to explain in layperson’s terms why these costs are significant.

Electricity supply in Ontario takes place within the framework of the policy and legislative framework established by the Ontario government, an important part of which is the Green Energy and Economy Act of 2009 (GEA). Historically, the goal of Ontario electricity policy was to keep electricity rates for consumers as low as possible consistent with the goal of maintaining adequate and reliable supply. Within the current framework, however, that is no longer the goal. The GEA seeks to stimulate investment in renewable energy projects (such as wind, solar, hydro, biomass and biogas) and to increase energy conservation.  To do this, it:

  • Changed the review process for renewable energy projects to reduce environmental assessment and hasten approvals
  • Created a Feed-in-Tariff that the Independent Electricity Systems Operator (IESO) must pay, guaranteeing the specific rates for energy generated from renewable sources (typically, the rates are fixed for the full term of the twenty year contracts, with inflation escalators)
  • Established the right to connect to the electricity grid for renewable energy projects and gave renewable energy source preferential access over other sources of generation
  • Implemented a “smart” grid to support the development of renewable energy projects
  • Eliminated local approval requirements that local governments previously could impose on renewable energy projects

The guaranteed rates paid under the FIT system are not negotiated based upon the actual costs of production. In fact, the actual costs of production are largely unknown…

Read more of Robert Lyman’s summary here: THE HIDDEN COSTS OF ONTARIO RENEWABLE ELECTRICITY GENERATION

Wind power: not free, not reliable

Last week the wind power industry lobby organization, the Canadian Wind Energy Association or CanWEA, put out a news release stating that wind power ought to be part of every government’s (or governments-in-waiting) energy strategy because it is inexpensive and reliable.

Not so, says this Alberta letter writer.

Wind power is neither reliable or inexpensive

By Letter to the Editor on May 17, 2014.

Re: Wind energy has proven to be reliable and cost competitive Herald May 6, 2014

Mr. Weis, representing the Canadian Wind Energy Association (CanWEA), told us that wind generation is reliable and inexpensive. Wind power is neither.

Weis failed to mention that over time, wind facilities produce a mere 32 per cent of their design capacity because they are so unreliable. Over the past half day, the output of wind turbines in Alberta has been less than one per cent of their design capacity! Reliable? And all of this “nothingness” for a few billion dollars? CanWEA also will not tell you that when the wind is blowing, coal and gas plants remain running to stabilize the power grid. As a result, there is little or no reduction of carbon dioxide.

You will recall the decades-old mantra, “Reduce. Reuse. Recycle.” However, installing wind facilities is the opposite of “reduce,” because wind farms duplicate existing generation capacity. They also require massive investments in new inefficient transmission lines. In 2012, Alberta Energy reported, “The existing capacity of the transmission system . . . is insufficient for additional wind-powered generation.” They estimated the cost, in the next four years, at $2.8 billion. Inexpensive? You and I will pay for these lines.

CanWEA does not want you to know that wind turbines are slaughtering thousands of bats and birds annually in Alberta. The Alberta government recently wrote, “Post-construction surveys (showed) . . . 16 bat mortalities per turbine.” Mitigation practices have been studied and proposed, but apparently best practices are not followed and wind companies are not monitoring mortalities at new wind facilities. If monitoring is being done, then animal deaths are being covered up by CanWEA members because they don’t want you to know the gory statistics.

“an expensive environmental scam paid for by Alberta’s citizens”

If we received actual economic or environmental benefits from wind turbines we would all support their development. But wind generation duplicates efficient conventional generation; wind facilities are expensive; wind generation does little or nothing to reduce emissions; wind generation compromises the stability of the power grid and turbines kill thousands of bats and birds in Alberta annually.

Reliable and inexpensive? Hardly. Wind electrical production is an expensive environmental scam paid for by Alberta’s citizens and businesses.

Clive Schaupmeyer

Giving points for honesty about Ontario’s economy (or, just how bad are things, really?)

From today’s National Post, editorial writer Kelly McParland, on Tim Hudak’s gamble with honesty, and Premier Wynne’s response.

Ontario Conservative Party Leader Tim Hudak buys flowers for Mothers Day with his daughter Miller at Growers Flower Market on Avenue Rd. in Toronto.

 

Kelly McParland: Hudak tests Ontario’s fortitude by offering an honest choice

| May 12, 2014 | Last Updated: May 12 1:19 PM ET
More from Kelly McParland | @KellyMcParland

Tim Hudak has done an odd thing, so odd most Ontarians probably haven’t quite grasped what he’s up to. In announcing his plan to take an axe to the public sector payroll – and admitting that teachers would be included along with everyone but police, nurses and doctors – he’s openly declared his intentions and offered voters a clear choice.

In doing so he’s rejected what has become the accepted norm of Canadian politics. Honesty is not usually viewed as a good policy among candidates seeking election. Spin is the rule of the day. Even if a candidate has a clear plan, it’s considered best to obfuscate the fact until after the votes are counted and it’s too late for voters to change their minds. You might hint that some sort of “restraint” will be needed if the economy is to avoid going over the edge, but you wrap it among promises that no jobs will be endangered, no impact will be felt, and spending can continue to grow at the same old unsustainable pace. That’s certainly been the Liberal party’s approach to winning elections in the province.
Kathleen Wynne says Liberal government made ‘mistakes’ (under McGuinty) and she’s the one to fix them

Premier Kathleen Wynne says there’s no doubt the Liberals have made mistakes in the past, but she’s committed to running an open, transparent government if elected next month.

In an interview on CBC Radio’s Metro Morning in Toronto, Wynne said she had a “good working relationship” with her predecessor, Dalton McGuinty, but didn’t always agree with him.

Wynne has faced tough questions in recent months about the cancellation of two gas plants when McGuinty was premier, which could cost up to $1.1 billion.

Mr. Hudak has rejected that approach. After 11 years of Liberal rule, and the precipitous decline of the economy that was once Canada’s strongest, Mr. Hudak has chosen to be straightforward about his intentions. His promise on Friday to chop 100,000 public sector jobs left no room for doubt. “I take no joy in this, but it has to be done if we want job creators to put more people on the payroll in our province,” he said.

In doing so, he is being honest, candid and — depending on your point of view — either courageous or foolhardy. He’s trusting voters to assess the situation and make their choice based on a full understanding of the options. He evidently believes voters understand the damage that’s been done to the province under the Liberals, and the danger of continuing down that path, and being mature enough to choose between repairing it, or continuing along the same route…
Read the full story here, including,  ” It would have been simple to blanket the province with images of Dalton McGuinty and the slogan  ‘Had enough?’ “

Institute for Energy Research: Germany’s green energy experiment a failure

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The Washington D.C.-based energy policy “think tank” the Institute for Energy Research (which receives no funding from either government or industry) has reported that Germany’s experience with “green” energy has been an economic failure.

The Institute reports higher energy prices, energy poverty for Germany’s citizens, and “lavish subsidies” for renewable power generators.

North America (including Ontario) has looked to Germany as an example of green power generation; we can only hope they now heed these lessons.

See the news story and report, here.

Economist Jack Mintz on Ontario: cancel FIT

Jack Mintz
Special to The Financial Post
April 8, 2014

Canada’s ‘sagging middle’ hurting the rest of Canada

With Quebec’s election over, we can turn to Ontario where a scandal-plagued Liberal government will soon present its 2014 budget – and possibly trigger a spring election. Ontario is sagging under the weight of monstrous public debt, uncompetitive energy prices and rising taxes. Given Ontario’s size, other regions of Canada are being hurt.

Ontario has only one way out: economic growth. Luckily, the American economic recovery will significantly benefit Ontario. However, it won’t be enough. The government needs to get its house in order.

Pushing aggregate demand with deficit spending won’t achieve growth. Economic stimulus might provide some short-term relief but won’t generate sustained expansion. Instead, growth will be attained with supply-side policies by reducing onerous regulations, providing some smart tax reforms and shifting to growth-oriented spending, especially to address the notorious Greater Toronto Area infrastructure problem.

Nor will growth come from expansionary public programs like the proposed Ontario pension plan. Forcing people to hold assets in a government-sponsored plan might be helpful to some but it will be just another form of new taxation for others, who are already have adequate savings for retirement.

Ontario’s growth has lagged the rest of Canada, averaging less than 1% annually since 2009. Employment since 2009 has increased by 375,000 but the employment rate has fallen to U.S.-levels of 61.4% as of March 2014, far less than Alberta’s at almost 70%.

Ontario‘s fiscal picture is also not pretty, with gross debt over $290-billion (net debt is $272-billion), requiring $10.6-billion in taxes to cover interest charges. This expense is enormous, about one-half of education expenditures.

The average Ontario debt interest rate is only 4% but interest rates are expected to rise within the next few years. Each point increase in interest rates will add at least another $3-billion in annual interest expense.

Ontario’s energy prices are soaring….

Read the full article here.