Wind Concerns Ontario is a province-wide advocacy organization whose mission is to provide information on the potential impact of industrial-scale wind power generation on the economy, human health, and the natural environment.
Companies without a Notice To Proceed or who have not reached key milestones “have reason to be concerned”
July 6, 2018
In a just released review of the energy landscape in Ontario under the new Ford government, Mike Richmond, wind power contract specialist with law firm McMillan LLP, says the contracts between government and wind power developers can be cancelled in certain situations.
Wind Concerns Ontario has long maintained this to be true, even recommending to the Wynne government that an effective way to reduce electricity bills for Ontario consumers — or at least, not have them go higher — was to cancel the $1.3B of new wind power contracts and to cancel any others where significant milestones have not been met.
The government will be directing IESO to exercise termination rights
Developers, lenders, construction firms, installers, landlords and other clients with interests in contracts for projects which have not yet been granted Notice to Proceed (NTP) by the Independent Electricity System Operator (IESO) (or acceptance of Key Development Milestones for Large Renewable Procurement (LRP I) projects) have reason to be concerned.
While the [PC election] platform was not long on detail, it was absolutely clear that where pre-construction contracts contain provisions allowing the IESO to terminate at or prior to NTP or other equivalent milestones, before expensive capital equipment has been delivered and installed, the Government will be directing the IESO to exercise those termination rights.
Anticipating such a directive, the IESO had already begun holding back on the issuance of NTP approvals for Feed-In Tariff (FIT) projects prior to the June 29 swearing-in, instead electing to issue NTP Deferral Notices. By doing so, the IESO is able to limit its liability for the eventual termination of those projects to the “Pre-Construction Liability Limit”, which is set at:
$400,000 plus $2.00/kW for wind, biogas or biomass facilities;
$250,000 plus $10.00/kW for solar facilities; or
$500,000 plus $20.00/kW for waterpower facilities.
These figures only represent liability caps. To be eligible even for these amounts, developers will have to be able to demonstrate that they incurred, after being awarded a FIT Contract, “soft” costs up to these amount for items such as environmental approvals, EPC and financing contract negotiations, land rights, resource assessments, connection cost deposits, equipment deposits and permitting. Costs spent on generating equipment (other than reasonable non-refundable deposits), and amounts representing lost profits, are not eligible.
Some questions remain:
Given the stated election platform, and the fact these contracts were a key campaign issue, why then did the Wynne government issue a Renewable Energy Approval to Portugal-based EDPR for its unneeded 100-MW “Nation Rise” wind project just days before the writ was drawn up for the June election, and why did the IESO toss its termination rights overboard on the WPD “White Pines” project, during the active election campaign?
What pressures were brought to bear on the former government by the power developers?
And why are taxpayers now being forced to pay for the new government’s defence of a bad decision made by the Wynne government, in the Nation Rise appeal?
Expensive legal action will cost taxpayers more for unnecessary power project, community group says
OTTAWA July 3, 2018— The citizens’ group opposing the 100-megawatt “Nation Rise” wind power project asked Premier Doug Ford and his new government today to state its intention to cancel the project’s contract, and halt legal action related to its approval.
The power project, to be located just south of Ottawa, received Renewable Energy Approval just days before the writ for Ontario’s June election was drawn up.
The community filed an appeal of the approval, based on environment and health concerns, which is set to begin Thursday July 5 with a hearing in Finch, Ontario.
Given the new government’s campaign pledge to end contracts for projects which do not have final approval, however, the legal action is a waste of time and taxpayer money, says Margarent Benke, spokesperson for the Concerned Citizens of North Stormont.
Ministry of the Environment employees and lawyers must travel from Toronto and mount a defence of the approval, Benke says, which makes no sense if the government plans to cancel the unnecessary power project.
“We made an urgent request today for action on the Nation Rise project. It will cost the people of Ontario a base price of $500 million over 20 years, and add to our electricity bills,” says Benke. “The Environmental Review Tribunal Hearing will represent even more cost to the government and to the people of Ontario, and more financial and emotional strain to the people of North Stormont.”
The power project would expose citizens near Finch, Crysler and Berwick to environmental noise from huge, 3.2-megawatt wind turbines; most of the turbines would also be located on an area designated as a “highly vulnerable aquifer.”
Ontario currently has a surplus of electrical power; wind power projects produce power out-of-phase with demand, and Ontario’s Auditor General has criticized the contracts for their above market rates. Auditor General Bonnie Lysyk has said Ontario electricity customers overpaid for renewable power by $9.2 billion.
Now that Ontario’s election is over, and there is a majority government in place, plenty of political watchers are commenting on what happened to create such a dramatic change in Ontario government.
One factor that comes up is Ontario’s disaster plan for renewable energy — and by that, we mean WIND — and the effect it had on Ontario consumers’ electricity bills.
Two Auditors General told the government it was paying too much for renewable power, as much as twice the rate in other jurisdictions. Auditor General Bonnie Lysyk (who has had many problems with accountability and governance with the Wynne Liberal government) said Ontario consumers overpaid by more than $9 billion.
That’s not just a few dollars extra on the electricity bills — that’s multiples of previous bills, so much so that “energy poverty” became a new expression in Ontario. The Association of Food Banks of Ontario put a photo of a light bulb on their 2016 hunger report.
Here are a few articles popping up that look back at the damage done to a province that was once Canada’s “economic engine”, all for an unproven ideology.
Undoing the damage of the Green Energy Act won’t be easy, writes economist and public policy professor Jack Mintz, but it has to be done if Ontario is to save itself.
Worst of all for Ontario’s rural residents, are the comments and analysis of the wind power program: in terms of environmental benefits, it was all for nothing. Industrial-scale wind power has never demonstrated a benefit in cutting CO2 emissions. In fact, the way wind power was done in Ontario is now a “black eye” for green energy all over the world, says a journal in the renewables industry.
On June 8, after the Ontario election, Ontario’s new premier – whoever that is – will be thinking of selecting a new Minister of Energy. With the challenges in that portfolio, the immediate question for anyone considering accepting the job would be, how can one fix the electricity side of the portfolio after the damage done over the previous 15 years by my predecessors?
Here are a few “fixes” I would take that to try to undo some of the bad decisions of the past, if I were the new energy minister.
Green Energy Act
Immediately start work on cancelling the Green Energy Act
Knowing Ontario has a large surplus of generation we export for 10/15 per cent of its cost I would immediately cancel planned conservation spending. This would save ratepayers over $433 million annually.
Wind and solar contracts
I would immediately cancel any contracts that are outstanding, but haven’t been started and may be in the process of a challenge via either the Environmental Review Tribunal) or in the courts. This would save ratepayers an estimated $200 million annually.
Wind turbine noise and environmental non-compliance
Work with the (new) MOECC Minister to insure they effect compliance by industrial wind developers both for exceeding noise level standards and operations during bird and bat migration periods. Failure to comply would elicit large fines. This would save ratepayers an estimated $200/400 million annually.
Change the “baseload” designation of generation for wind and solar developments
Both wind and solar generation is unreliable and intermittent, dependent on weather, and as such should not be granted “first to the grid rights”. They are backed up by gas or hydro generation with both paid for either spilling water or idling when the wind blows or the sun shines.
The cost is phenomenal.
As an example, wind turbines annually generate at approximately 30 per cent of rated capacity but 65 per cent of the time power generation comes at the wrong time of day and not needed. The estimated annual ratepayer savings if wind generation was replaced by hydro would be $400 million and if replaced by gas, in excess of $600 million.
Charge a fee (tax) for out of phase/need generation for wind and solar
Should the foregoing “baseload” re-designation be impossible based on legal issues I would direct the IESO to institute a fee that would apply to wind and solar generation delivered during mid-peak and off-peak times. A higher fee would also apply when wind is curtailed and would suggest a fee of $10/per MWh delivered during off-peak and mid-peak hours and a $20/per MWh for curtailed generation. The estimated annual revenue generated would be a minimum of $150 million
Increase LEAP contributions from LDCs to 1 per cent of distribution revenues
The OEB would be instructed to institute an increase in the LDC (local distribution companies) LEAP (low-income assistance program) from .12 per cent to 1 per cent and reduce the allowed ROI (return on investment) by the difference. This would deliver an estimated $60/80 million annually reducing the revenue requirement for the OESP (Ontario electricity support program) currently funded by taxpayers.
Close unused OPG generation plants
OPG currently has two power plants that are only very, very, occasionally called on to generate electricity yet ratepayers pick up the costs for OMA (operations, maintenance and administration). One of these is the Thunder Bay, the former coal plant converted to high-end biomass with a capacity of 165 MW. It would produce power at a reported cost of $1.50/kWh (Auditor General’s report). The other unused plant is the Lennox oil/gas plant in Napanee/Bath with a capacity of 2,200 MW that is never used. The estimated annual savings from the closing of these two plants would be in the $200 million range.
Rejig time-of-use (TOU) pricing to allow opt-in or opt-out
TOU pricing is focused on flattening demand by reducing usage during “peak hours” without any consideration of households or businesses. Allow households and small businesses a choice to either agree to TOU pricing or the average price (currently 8.21 cents/kWh after the 17% Fair Hydro Act reduction) over a week. This would benefit households with shift workers, seniors, people with disabilities utilizing equipment drawing power and small businesses and would likely increase demand and reduce surplus exports thereby reducing our costs associated with those exports. The estimated annual savings could easily be in the range of $200/400 million annually.
Niagara water rights
I would conduct an investigation into why our Niagara Beck plants have not increased generation since the $1.5 billion spent on “Big Becky” (150 MW capacity) which was touted to produce enough additional power to provide electricity to 160,000 homes or over 1.4 million MWh. Are we constrained by water rights with the U.S., or is it a lack of transmission capabilities to get the power to where demand resides?
MPAC’s wind turbine assessments
One of the previous Minister’s of Finance instructed MPAC (Municipal Property Assessment Corp,) to assess industrial wind turbines (IWT) at a maximum of $40,000 per MW of capacity despite their value of $1.5/2 million each. I would request whomever is appointed by the new Premier to the Finance Ministry portfolio to recall those instructions and allow MPAC to reassess IWT at their current values over the terms of their contracts. This would immediately benefit municipalities (via higher realty taxes) that originally had no ability to accept or reject IWT.
Do a quick addition of the numbers and you will see the benefit to the ratepayers of the province would amount to in excess of $2 billion dollars.
Coincidentally, that is approximately even more than the previous government provided via the Fair Hydro Act. Perhaps we didn’t need to push those costs off to the future for our children and grandchildren to pay!
Now that I have formulated a plan to reduce electricity costs by over $2 billion per annum I can relax, confident that I could indeed handle the portfolio handed to me by the new Premier of the province.
Why buy wind power projects when Ontario has a surplus of power and when wind power is a factor in higher electricity bills leading to energy poverty, Wind Concerns Ontario asked in a letter. And why is Canada’s public pension fund investing in projects that are producing environmental noise?
April 4, 2018
Wind Concerns Ontario, the coalition of more than 30 community groups and hundreds of families and individuals concerned about the impacts of industrial-scale wind power development, has written a letter to the Canada Pension Plan Investment Board, expressing concern about an announcement to buy four Ontario wind power projects from US-based NextEra Energy.
The CPPIB announced it was buying for wind power projects and two solar facilities in Ontario for $741M CAD, and further assuming NextEra’s debt of over $800M.
In a letter to President and CEO of the CPPIB Mark Machin, sent to the Board’s office in Toronto, Wind Concerns noted that Ontario is in a situation of surplus power, which is costing Ontario citizens millions.
“The surplus power is either sold at below-cost rates or given away to neighbouring jurisdictions,” WCO said, “a practice that has caused Ontario’s electricity costs to balloon and is contributing to the energy poverty situation now being faced by many of the pensioners that your plan supports.”
There is also the troubling fact that the four NextEra wind power projects (Summerhaven, Jericho, Bluewater and Conestogo) have been the source of more than 120 official reports of excessive noise and vibration, some including staff notes on health impacts, made to the Ministry of the Environment and Climate Change. WCO obtained the Master Incident files under the Freedom of Information request process.
Citing one Master report from the Conestogo project in which MOECC staff noted that the mandated emissions and imissions audit were “incomplete at the time of submission” and also, that the Ministry had not provided resources for Provincial Officers to visit sites after hours and confirm or deny compliance, staff had no choice but to close the Incident Report file.
” Th[at] excerpt is typical of how noise reports are managed: there is no resolution, and the project is not compliant with key terms of its approval,” Wind Concerns Ontario told Mr. Machin.
WCO also referred to the Investment Board’s stated commitment to “Environmental, Social and Governance (ESG) factors” in investment choices, and said, “We would think you would share local residents’ concerns about the operation of these projects. In short, there are other factors in this investment decision beyond the financial.”
“A critical factor will be resolution of these [noise] reports,” Wind Concerns’ president Jane Wilson concluded in the letter, “management and resolution of citizen health impacts, and liability for property value loss and other negative effects.”
Being asked to do a presentation at Wind Concerns Ontario’s annual conference this past Saturday, to describe the costs associated with industrial wind turbines was something I relished!
The presentation I developed used IESO information for 2017.
Discovered in the preparation of my presentation was the fact that that nuclear and hydro power alone could have supplied over 100% of all grid-connected consumption for 2017, at a average cost of about 5.9 cents per kilowatt hour.
The cost for Class B ratepayers in 2017 however, was almost double, coming in at 11.55 cents per kwh.
So why the big jump? Have a look at the presentation to see why and look at Slide 6 in particular where you get an inkling of how IESO view the reliability of industrial wind generation in their forward planning process!
The final part of the ICI Radio-Canada series on wind power in Ontario aired December 8.
This is a translation of the E-zine version of the story.
[Photo: Nic Pham, ICI Radio-Canada]
Unserviceable wells, contaminated water, noise, citizens concerned about their health, wind farm issues are increasingly being blamed in southwestern Ontario, and many communities are mobilizing to oppose the development of their homes. New projects. Yet, for two decades, the number of wind farms has been increasing. So why do we need so many wind turbines?
Reportage and photos: Nicolas Pham Text: Marine Lefevre Edim and infographics: Vincent Wallon
Experts say that wind energy is not absolutely necessary in Ontario. The province has been experiencing energy surpluses for several years and the intermittent electricity produced by wind turbines is, at the present time, mainly an extra energy source.
A SATURATED MARKET
“We do not need these turbines for the moment,” says Jean-Thomas Bernard, visiting professor at the Department of Economics at the University of Ottawa. A message relayed by Pierre-Olivier Pineau, holder of the HEC Montréal Energy Sector Management Chair.
According to both researchers, demand in Ontario has declined significantly in recent years. The economic crisis of 2008-2009 brought down demand in the industrial sector, and rising prices at the residential level encouraged the public to save energy.
On the supply side, the province relies primarily on nuclear energy and hydroelectricity. The combination of these factors results in the production of wind farms being added to other energy production.
“With a low demand, we have surpluses. ” – Pierre-Olivier Pineau, who holds the Chair sector management Energy HEC Montreal
In addition to this, wind generation does not adequately meet the energy needs of consumers. In any case, this is indicated in a study published in June 2017 by the Council for Clean and Reliable Energy, which deals, among other things, with the effect of installing wind turbines on the province’s electricity grid.
“The analysis shows that the intermittency of the wind makes it an unproductive and expensive choice that does not meet the needs of customers and also compromises the price of electricity exports”, reads the introduction to the report by Marc Brouillette , Senior Consultant at Strategic Policy Economics (Strapolec)
Based on data from the Independent Electricity System Operator (IESO), the author indicates that in 2015 Ontario’s wind farms operated at less than one third of their capacity, approximately 60% of the time.
In addition, the report states that wind turbines are usually in operation when the province’s grid is least in need of electricity.
“Ontarians’ energy consumption is highest in winter and summer, and lowest in spring and late fall, which is almost a mirror image of wind generation models because the wind is the highest in spring and autumn, “says the author.
In conclusion, wind energy does not meet the needs and forces the use of other forms of energy to fill the gaps, but in addition this irregular production contributes to the average surplus of the energy production, which also has a cost.
In 2015, wind energy accounted for one-third of excess core production outside of peak periods in Ontario. That year, the only wind surplus cost consumers $ 370 million on a total bill of about $ 550 million.
In addition, these surpluses have an effect on the price of this energy, especially for exports, where this energy is sold at a loss because it is difficult to store. According to the author, this report puts into question the entire past, present and future deployment of wind resources in the province.
WHY INVEST IN WIND?
One of the reasons for this is the intention of Dalton McGuinty’s government (2003-2013) to make an industrial transformation in Ontario.
In a context where the province’s traditional industries such as pulp and paper, metal refining and even the automobile sector were losing their wings, the Liberal government of the day wanted to convert the province to renewable energy. solar and wind, to create a new industrial sector in Ontario.
At the same time, as the fight against climate change intensified, investments in this green energy sector became natural.
“It was done to encourage renewable energies when we were aiming for the closure of coal plants. ” – Jean-Thomas Bernard, a visiting professor in the Department of Economics at the University of Ottawa
For the government, massive investment in the sector also reflects a desire to diversify energy sources and protect Ontarians from unforeseen events, especially over the long term.
A reasonable approach even if it means having surpluses for several years, says Pierre-Olivier Pineau, particularly in a context where the objective is to have an electricity sector that no longer emits greenhouse gases.
“It may seem like a long time, but in electricity you invest for periods of 20 to 30 years. It is difficult to predict economic conditions and we always keep an extra capacity to be able to meet the demand, “he says.
According to him, the government announcements [were] a bit premature in the wind industry in Ontario, and elsewhere in Canada, a response to the positive perception of the electorate towards this [form of] energy.
“For politicians, we still have image gains to make by announcing green policies, focused on sustainable development. And pictures of wind turbines, and green energy contracts, these are beautiful images,” says the researcher.
THE FAILURE OF A POLICY
The wind shift did not happen as planned, however, explains Jean-Thomas Bernard. Ontario has been unable to create a new industrial sector.
“It did not work because Ontario produces little wind equipment. Major turbine manufacturers are Denmark, Germany, the United States and China. The Ontario market is not big enough to provide a foundation for development, “he says.
“We have invested in wind power, but the bill comes later, so it creates a political problem to announce an increase in the price of electricity. » – Pierre-Olivier Pineau
Wind power not justified by the market
The Ontario government put a halt to new project grants in 2016,* but it remains contractually bound to buy electricity from existing wind farms at fixed prices.
“There is no jurisdiction where the market price justifies wind energy investment. Once the government decides to have wind generation capacity, it is obliged to guarantee prices. » – Pierre-Olivier Pineau
This guarantee forces Ontario to purchase electricity at a fixed price, regardless of the demand and lower production costs associated with the technological evolution of the sector.
A difficult situation for the province, which has invested millions of dollars in a sector that looked promising as it faces an economic situation where electricity demand is lower.
“Electricity rates are increasing by 5% per year as a result of this firm price policy for renewable energy. If we had not developed them, today there would be a drop of 5% per year. “Adds Jean-Thomas Bernard.
Ontario is not unique, Quebec and Alberta have also had to guarantee prices to energy companies.
On the other hand, the manner of proceeding, by call for tenders in particular, made it possible to establish lower fixed prices. In addition, the importance of hydroelectricity in Quebec and oil in Alberta makes the wind industry very secondary in these provinces.
A COMPLEX SITUATION
For these experts, the energy sector in Ontario is generally in an unenviable position. Prices are high and the energy policies put in place for several years have not yielded the expected results.
“The current government has chosen to have both nuclear and wind power with the problems we know in terms of price. And these problems will not disappear in the future because the rehabilitation of nuclear power and wind will be very expensive in the years to come, “says Pierre-Olivier Pineau.
And even though over the last year the government has lowered rates twice, including reducing the sales tax, the real question remains: are we able to produce electricity at a lower cost? “Not today,” concludes Jean-Thomas Bernard.
WCO note: it is not correct to state the the Ontario government has halted its wind power procurement program. The Large Renewable Procurement program has been put on hold due to a surplus of power, but it is not gone. Meanwhile the Ontario Ministry of the Environment and Climate Change (MOECC) is currently processing five more applications for large-scale projects, for 300 megawatts of intermittent, unnecessary power.
The Auditor General for Ontario noted in her recent report that the government has hidden costs of electricity, and not created a fair cost reduction plan. Cancelling wind power contracts would be a good start, says Wind Concerns Ontario
Cancelling wind power contracts would bring real savings
The special report by Ontario’s Auditor General on the government’s Fair Hydro Plan not only stated concerns about the level of debt being incurred by the vote-getting “plan” it also contained this recommendation: the government should “use a financing structure to fund the rate reduction that is least costly for Ontarians.”
If the Ontario government was genuinely interested in reducing electricity bills for Ontario citizens, it would reduce costs.
It’s not doing that.
A case in point concerns the wind power projects given 20-year contracts in 2016, totaling $3.3 billion. Those wind power projects (Dutton Dunwich, The Nation, North Stormont, Otter Creek) will provide unnecessary intermittent power, and force industrial power plants on communities that are actively fighting them over environmental, health and economic concerns.
Cancelling other contracts not yet built, such as Amherst Island, Prince Edward County and North Kent, would save more than one billion, over 20 years.
Ontario has a surplus of power but more important, does not need more wind power which tends to be produced out of phase with demand. On the recently warm October 15th Sunday, for example, Ontario power demand was low, but we were forced to “constrain” almost record-breaking wind power production — we paid millions for power we didn’t need.
In fact, says a Commentary prepared for the Council for Clean & Reliable Energy, 70 per cent of Ontario’s wind power is wasted, because it is produced at night and in mild seasons. Very little of it reaches the urban areas that need power, yet the effects of industrial-scale wind power plants on rural communities are significant.
The Auditor General says the government is hiding the true cost of its politically motivated Fair Hydro Plan which pretends to bring a 25 per cent rate reduction, while actually putting off the costs to the future.
Ontario can make real savings in costs now, by cancelling contracts for unnecessary wind power.
Wind Concerns Ontario
This article appeared in Ontario Farmer, October 23, 2017.
October 15, 2017 was quite a windy Sunday. Being a mild fall day too, that meant Ontario’s demand for electricity was low according to the IESO’s Daily Market Summary. Total Ontario demand was only 313,000 MWh for the whole day.
Unfortunately for ratepayers, it was a beyond the norm windy day — industrial wind turbines spread throughout the province were spinning well beyond their yearly average of 29/30% of capacity.
According to the IESO’s daily generator report, the wind turbines could have supplied almost 84,000 MWh* of power, or about 27% of all the power consumed by Ontario’s ratepayers (approximately 83% of their capacity). As it turned out, IESO curtailed or did not accept 42,500 MWh for which wind developers were paid $120/MWh anyway, and the 41,200 MWh grid-accepted power generation got them the standard $135/MWh.
What the foregoing means is wind developers were paid approximately $10,660,000 for curtailed wind generation and grid-accepted power. That works out to a cost per MWh of $260 or 26 cents a kilowatt hour — almost double the current generation cost, for which 25% is being refinanced under the Fair Hydro Act.
As it turned out, the grid-accepted wind generation really wasn’t needed: as the IESO “Summary” report indicates, Ontario’s net exports averaged 2,110MW per hour or 50,640 MW at a negative price of $0.99. That means Ontario’s ratepayers picked up another $50K to provide our neighbours (principally Michigan and New York) with cheap power.
No doubt Ontario was also spilling hydro and steaming off Bruce Nuclear which ratepayers were also paying for on that windy October Sunday.
More proof that wind power provides costly, intermittent and unneeded power. More proof that the Green Energy and Economy Act should be tossed out!