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.
Parker Gallant looks at recent promises made by the Energy Minister and Premier and still has a question: where did the money actually go?
Last September 13, Minister of Energy Glenn Thibeault issued a press release announcing the Ontario Liberal government would reduce electricity bills for five million families, farms and small businesses. The relief granted was equivalent to the 8% provincial portion of the HST. The press release also claimed Ontario had “invested more than $35 billion” in new and refurbished generation.
Fast forward to March 2, 2017 and that $35 billion jumped to $50 billion in a press conference the Premier jointly held with Minister Thibeault. An increase of $15 billion in six months!
The press conference was to inform us the 8% relief announced by Minister Thibeault would be added to, with a further 17% reduction. A Toronto Star op-ed Premier Wynne wrote March 7, 2017 reaffirmed the $50 billion investment claim made the previous week, and further claimed: “By delivering the biggest rate cut in Ontario’s history and holding rate increases to inflation for at least four years, this plan provides an overdue solution.”
That made history alright, but not the way she meant. What the Premier forgot to say was that her government had brought us the biggest rate increases in Ontario’s history. In March 2011 the Ontario Energy Board (OEB) website shows the average electricity rate was 6.84 cents per kilowatt hour (kWh) and on May 1, 2016 it had increased to 11.1cents/kWh. In just over five years, the price of the commodity — electricity — increased 62%, a multiple of the inflation rate during that five years, which added about $400 to the average consumer bill.
Electricity price goes down, your bills go UP
From 2010 to 2015 Ontario demand fell by 5 TWh (terawatt hours) to 137 TWh.* That is enough to provide electricity to 550,000 “average” Ontario households for a year, yet the price for residential consumers increased 62%. The increase was not driven by the trading value via the hourly Ontario electricity price (HOEP) market. In fact, the market treated Ontario generated electricity badly as it fell from an average of 3.79 cents/kWh in 2010 to 1.66 cents/kWh in value for 2016 — a 56.2% drop.
As to how they were achieving this “relief,” Wynne and Thibeault told us they were pushing the payback period for the 20-year contracts (wind and solar) out another 10 years. Those generation sources are the principal cause of the increase in electricity prices. (For further proof of that, read Scott Luft’s recent analysis on the costs of “other” generation in 2016 which confirms its effect on our rising electricity rates.)
Where did the money go?
What the Wynne/Thibeault announcement means is, ratepayers will pay for the intermittent and unreliable power for their 20-year contracted term(s), and continue to pay for the same contracts which, by that time use equipment that will be heading for, or already in the scrap yard.
It is time for Minister Thibeault to disclose what is behind his claim of $35 billion invested and for Premier Wynne to disclose the details of the $50 billion she says went to “necessary renovations” to rebuild “the system.”
Time to come clean.
(C) Parker Gallant
* Ontario consumption remained at 137 TWh in 2016.
The opinions expressed are those of the author and do not necessarily represent policy on Wind Concerns Ontario
Editor’s Note: The Ontario government has $5 billion in new wind power contracts that have not yet been added to consumers’ electricity bills.
From Parker Gallant’s Energy Perspectives, a view of how much wind power is costing Ontario.
Almost a week after Premier Wynne announced her plan to reduce our electricity bills by 25%, the wind was blowing! On March 8th, six days after the cost shifting announcement (from ratepayer to taxpayer), potential power generation from wind was forecast by IESO to produce at levels of 80/95% of their capacity, for many hours of the day. IESO was concerned about grid stability and as a consequence, curtailed much of the forecasted generation.
When the Premier made her announcement about reducing hydro bills, she also claimed “Decades of under-investment in the electricity system by governments of all stripes resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable.”
It is worth noting that much of that $50 billion was spent acquiring wind and solar generation and its associated spending on transmission, plus gas plants (to back them because the power is intermittent), and distribution assets to hook them into the grid or embed them with the local distribution companies. It would have been informative if Premier Wynne had had Energy Minister Glen Thibeault provide an accounting of exactly what the $50 billion was spent on.
As it turned out the amount of curtailed wind generated on March 8th was 37,044 megawatt hours (MWh) was just short of the record of 38,018 MWh set almost a year ago on March 16, 2016 (estimated by my friend Scott Luft). The curtailed wind on March 8, 2017 cost Ontario’s ratepayers $120/MWh or $4,445,280.
The cost on March 16, 2016 was $4,562,160.
What does it mean? Curtailing or restricting power output but paying for it anyway means a portion of the $50 billion spent was simply wasted money. It went to the corporate power developers that rushed to sign those above-market contracts for renewable power.
Millions here, millions there= a whole lot of wasted money
The other interesting aspect of the surplus power generation on March 16th, 2016 and March 8th, 2017 is revealed in IESO’s Daily Market Summaries: the hourly Ontario energy price (HOEP) March 16th, 2016 was negative at -$1.25/MWh and on March 8th, 2017 was also negative at -.49 cents/MWh. This meant ratepayers paid for surplus exports sold to our neighbours in New York and Michigan, etc. Net exports (exports minus imports) on March 16, 2016 were 52,368 MWh, and on March 8, 2017 were 37,944 MWh. Total costs of their generation (HOEP + GA) fell to Ontario’s ratepayers along with the cost of any spilled hydro, steamed off nuclear and idling gas plants.
So, bear with me here, if we price the cost of the net exports at $110/MWh for those two days, ratepayer costs were approximately $9.8 million with $5.7 million for March 16, 2016 net exports and $4.1 million for March 8, 2017 net exports, not including the $84,000 we paid our neighbours to take our power.
How much did it cost you? Two days out of 729 (2016 was a leap year) cost Ontario ratepayers about $18.1 million for power not delivered (curtailed wind) or needed (net exports).
I hope this helps Minister Thibeault in his calculations for a long overdue accounting of where the other $49.982 billion went.
Is renewable energy responsible for driving up Ontario’s electricity costs?
With the Ontario government introducing a new program severing the link between the cost of power and the price of power so it can shift 25 per cent of household power bills today to future generation by way massive new debts, it seems like a good idea to know why Ontario’s power rate crisis developed.
Ontario’s power rates were relatively stable until 2008, when they started steep yearly increases. With the fastest rising rates in North America since then, Ontario’s rates surpassed the U.S. average years ago. The largest single factor driving this increase has been new generating capacity from wind and solar renewable generation.
The Ontario government and its supporters commonly report the costs of different types of generation counting only payments made directly to particular forms of generation.
But, when renewable energy costs trickle down to consumers, those costs are much more than just payments to renewable generators. While it is true that the payments to generators for wind power – 14 cents per kilowatt-hour (kWh) – is cheaper than for gas power — 17 cents/kWh – not all electricity has equal value. (For context, the average rate households pay for the commodity portion of their bill is about 11 cents/kWh.)
Why don’t we replace wind power with gas power, save money and cut emissions?
Where gas power is delivered on demand, wind is fickle. Eighty per cent of Ontario’s wind generation occurs at times and seasons so far out of phase with usage patterns that the entire output is surplus and is exported at a substantial loss or squandered with payments to generators to not generate. Gas power in Ontario backs up unreliable wind and solar, a necessary function if the lights are to stay on, but we pay twice for the same service.
Direct payments to solar generators average 48 cents/kWh, but the output is similarly low value. Except for a few days per year, Ontario’s peak usage of power is just as solar panels shut down – in the evening.
Not only is Ontario’s renewable energy production driving massive losses to subsidize exports and payments to generators to not generate under the terms of contracts that obligate consumers to buy even useless power, but it is also driving costly but low-value “smart grid” projects required to accommodate renewables.
Rising power rates have driven down usage. Spreading rising costs over declining sales has amplified the pace of rate increases.
Again, government and its supporters have pumped their claim that using less will save us money. What has actually happened is that conservation in Ontario is indeed saving money but mostly for utilities and their customers in Michigan and New York State on the receiving end of our subsidized exports.
But didn’t renewables enable Ontario to get off coal, saving us from smog days, and slash health-care costs? Although endlessly repeated by the government and its supporters, none of these claims bear scrutiny.
Coal’s replacement in Ontario was achieved with increased output from nuclear and gas generators. Improvement in air quality in recent years has been the result of a massive conversion to gas power in the mid-western states upwind of Ontario as well as improvements in transportation fleets and industry. Most of the coal power Ontario produced in its last years came from plants with good new scrubbers, delivering effectively smog-free energy. Predicted health-care savings from the coal phaseout never materialized.
But isn’t the cost of renewable energy plunging?
Ten years ago, the average payment to Ontario wind generators was around 8.3 cents/kWh. Taking into account inflation, the average today is up 50 per cent.
Wind and solar aren’t the only renewable energy ripoff. Recent additions to Ontario’s hydro-electric capacity have added billions in new costs but no additional production. Ontario’s most costly generator is a converted coal-fired station in Thunder Bay, now fueled with a wood product imported from Norway.
A bad smell emanates from renewable politics at Queen’s Park. Renewables developers who made the biggest donations to the provincial Liberals have tended to win the biggest contracts.
Ontario’s renewable energy program is not the only disaster on consumers’ bills. Excessive payroll costs and wasteful conservation programs also lurk, but no single factor has contributed more to the compounding semi-annual increases in rates since 2008 than renewables.
Most of the punishing cost consequences of Ontario’s radical renewables program are locked in with 20-year contracts. Children today will be paying these irresponsible contracts long into the future, along with current costs that the Wynne government has now decided will be added to this future burden.
Tom Adams is an independent energy and environmental advisor and researcher focused on energy consumer concerns, mostly in Eastern Canada. He has worked for several environmental organizations and served on the Ontario Independent Electricity Market Operator Board of Directors and the Ontario Centre for Excellence for Energy Board of Management.
An Ottawa-area grower, who tried to install energy-efficient systems in his greenhouse operation, has been forced by the Ontario government’s energy policies to cut back his operations. The increase in electricity bills and now the carbon tax, SunTech owner Bob Mitchell says, have forced him to take drastic steps to cut costs. Even then, his business plan for this year is to “break even” not make a profit, which is “stupid” he admits.
How long can he, and other Ontario businesses such as this one, providing locally grown food, go on?
Part of the reason for Ontario’s high electricity bills is the expensive contracts signed for intermittent wind power, which the Auditor General has said Ontario is paying above market prices for.
$% billion more wind power contracts are due to come onstream, soon.
The Premier of Ontario put out a news release on March 2, claiming the government was going to reduce Ontario’s electricity or “hydro” bills substantially.
“I’ve heard from you loud and clear,” Kathleen Wynne said in her statement. “Nobody should have to choose between keeping the lights on or buying groceries.”
The Ontario Liberal government still claims the high electricity prices were because of improvements it “had to” make to the system. The news release concluded with these statements.
“We are – and always will be – committed to making Ontario a fairer and more inclusive place for everyone. And fairness means ensuring government investments don’t disproportionately affect today’s electricity ratepayers. One generation of ratepayers should not have to pay for the sins of the past and for a system that will benefit Ontario for decades to come. So our plan reduces costs today and stretches out costs over the long term so rates are fairer for everyone.”
Fairness. We’ve heard that before, like “transparency.” But again, the government is being disingenuous. Its latest move is simply stretching out the costs of its policy decisions, not taking action to reduce costs. (Our favourite pronouncement on this comes from electricity analyst Bruce Sharp who calls this tactic, “delay and pray.”)
Not reducing costs
The truth is, the government has signed more expensive wind power contracts for power the province doesn’t need.
At the moment, these six contracts, awarded in 2016, total $3.3 billion in costs over 20 years. In addition, there are five more contracts for wind power projects that were approved but which are not yet on the grid –including White Pines, Amherst Island and Fairview Wind which are all in legal contests– that add up to another $1.8 billion.
The total for wind power contracts awarded, which represents new costs no yet on Ontario electricity ratepayer bills, is $5.1 billion.
That is not “reducing costs today”.
The government needs to cancel the 2016 wind power contracts (which contain clauses for pre-construction liability should the government cancel), and buy out of other contracts.
Energy analyst Steve Aplin takes aim at an Op-Ed piece published recently in the Toronto Star, on his website Canadian Energy Issues.
The Star article, which contained a hilarious error right in the headline, was written by Bruce Lourie, whose connections throughout the Liberal Party of Ontario and the renewables industry are legendary.
“The body of the op-ed constitutes about the worst litany of error-laden BS I have come across in my forays through the Ontario electricity file,” Aplin writes. “It was written by Bruce Lourie, a former director of the Ontario Power Authority and Independent Electricity System Operator, and most importantly, drafter of the Ontario Green Energy Act.”
“It is rare to encounter propaganda that contains a falsehood in just about every paragraph. The Lourie op-ed contains twelve paragraphs. Each one contains at least a minor falsehood, and at least seven contain major ones.”
Aplin also directs readers to a 2012 article on Mr Lourie and his connections written by Parker Gallant, and an analysis by Scott Luft of some of Mr Lourie’s statements.
“We can make electricity cheap again,” Aplin says, “by cancelling the contracts Bruce Lourie got us into.”
The need for mandatory community support and proper mitigation of harmful effects from wind turbines is acknowledged, but there is still no definition of who is “local” or a community, Wind Concerns Ontario says.
February 13, 2017
A Western University PhD candidate and a professor at the university have produced a “toolkit” on wind power development in Nova Scotia and Ontario, which purports to summarize social responses to wind power projects, and offer a set of recommendations.
The document is based on a survey of residents living near several selected wind power projects. It was prepared in association with Communities Around Renewable Energy Projects or COAREP, a “project” designed to “produce original research and outputs to contribute to constructive and sustainable dialogue within and between rural communities and other wind turbine stakeholders.” COAREP is funded by the Metcalf Foundation.
The authors Chad Walker and Jamie Baxter explain the “toolkit” initiative: “The toolkit also explores some novel forms of planning mechanisms and benefit packages based on the preferences of those residents. We find high levels of support for systems that would allow for independent experts during planning stages, investment opportunities for local residents, and discounts on electricity for those living close to turbines. The paper closes with a list of nine principles which are intended to summarize the key points of the document.”
Significant differences were noted between the people surveyed in Nova Scotia and Ontario, the authors noted.
Wind Concerns Ontario had the opportunity to view the toolkit in draft form several weeks ago; we were very concerned about the complete lack of any discussion of adverse health impacts, property value loss, and the fact that the wind power program in Ontario was launched without any cost-benefit or impact analysis (a fact pointed out by two Auditors General) — the situation in Ontario today is that the province has a surplus of power, the cost of signing expensive contracts for renewables like wind power has been a significant factor in driving electricity bills up, yet communities are being forced to “host” the power projects with little or no benefit locally, or to the province.
Wind Concerns Ontario also noted that there was very little real community consultation performed as part of the toolkit development process.
The authors acknowledged Wind Concerns Ontario’s contribution: “Wind Concerns Ontario submitted a 23-page report in response to the toolkit, outlining a range of issues not covered in much detail in the toolkit, but highly relevant to the issue of wind turbine facility siting. We have edited the toolkit considerably as a result …”
“While the creation of a ‘Toolkit’ is a worthwhile objective, it needs to be aligned with the realities being experienced by the host communities if it is to be useful as a framework for assessing interactions with these communities,” Wind Concerns Ontario said in its comment paper to Walker and Baxter.
“It is a concern to us that the work done in developing this ‘Toolkit’ seems to have included very limited communication with Ontario communities. To understand the full impact of wind turbines on a community, the contents of the current draft suggest that the authors need to have more direct contact with the people who are being affected by wind turbines. These are the people that are coming to WCO for information and assistance and forming local support groups to deal with the problems being created.”
While the Toolkit authors maintain that better communication (and money) is all that stands between communities and acceptance of wind power projects, WCO said that for the communities forced to lived with the power plants, the false mythology of wind power has been disproved.
“Over the past six years, the government claimed a number of benefits from the green energy program, including the following:
The investment in wind turbines allowed coal plants to be closed. Fact: the Asthma Society this year presented a certificate to Bruce Nuclear in Kincardine recognizing the role of the refurbished nuclear facilities in allowing this change to be implemented.
The investment in renewable energy technology creates jobs. Fact: Most jobs created are lower-skill, short-term construction jobs. In the 2011 report, Ontario’s Auditor General warned that studies in other jurisdictions which showed two to four jobs were lost due to increased electricity costs for every job created.
Surplus electricity is being sold to other jurisdictions at a profit. Fact: the IESO’s reporting shows that the revenue recovered is below the rates provided for in the wind turbine contracts. Neighbouring jurisdictions are now promoting their lower electricity rates to lure Ontario businesses to relocate.”
WCO pointed out flaws in the research behind the Toolkit development, in particular the fact that the power projects studied were small compared to many developments in Ontario. The use of the Gunn’s Hill wind power project was particularly questionable, WCO said, because while nominally a “community” group invested in the power project, in fact few locals were in the investment group—at the same time, residents fought the project from the beginning, even launching an appeal before the Environmental Review Tribunal.
“It is odd to suggest that this outside group hiding behind the façade of a community organization, will change local population’s perception of the project,” WCO wrote. The situation is confirmed by the survey results which indicate that the project, even in its new format, does not have community support. Concerns about impact of the noise emissions on the nearby resident population take precedence over sham organizational structures.
This situation raises the question of how the authors have defined ‘community involvement’ in its analysis of the benefits. To be considered as having an impact on project acceptance, it would seem appropriate to include only groups that are located within a limited distance of the wind turbine project. There also should be some measure of how the group reflects all the residents in an area. In many wind turbine projects, a small group of landowners agree to participate and impose a project on a community despite the wishes of the wider community. Creating a ‘community’ structure around these landowners does not change the basic relationship.”
Perhaps as a result of the WCO comment submission, the authors added an eighth principle to the document, related to adverse health effects and other issues with industrial-scale wind turbines:
Principle 8: Financial benefits are not a replacement for proper mitigation
Though residents living near turbines are dissatisfied with the amount of benefits and particularly how they are distributed among the people living closest to turbines, this does not mean that paying residents will quell concerns. Addressing the mitigation of negative impacts from turbines e.g., noise, vibration – and clearly establishing the need for new facilities – should still be viewed as priorities.
Principle 6 also acknowledges support for mandatory community support as part of the wind turbine siting process (i.e., as WCO says, contracts should not be awarded without community support as a mandatory requirement) and further, that any discussion in a community about he possibility of a wind power facility should occur BEFORE lease negotiations. In Ontario, the practice is to sign up leaseholders and by the time the community is aware of a potential power development, all the documents have been signed.
We remain disappointed that many in the academic world seem to be unmoved from the ideology of wind power development, while the real world community experience provides a different view.
Last week, the wind power communications machinery was touting the virtues of the Gunn’s Hill wind power project which they claim is Ontario’s first real “community” wind power project, half-owned by the local community.
The project’s success was owed to its partners, the Oxford Community Energy Cooperative, a (non-local) First Nation, and Bullfrog Power as well as the Germany-based power developer, Prowind.
The story was repeated on CBC’s Ontario Morning.
Community-based? Not so fast.
Retired engineer William Palmer wrote to correct the CBC on their assumptions, with this letter.
I listened with interest this morning as Wei Chen spoke with Miranda Fuller, Communications Director of the Gunn’s Hill Wind Project about this “community project” of the Oxford Community Energy Cooperative.
– it is a project with 49% community ownership
– 33% of the members of the cooperative live in Oxford County
We heard also learned of the other owners, ProWind Canada, and Six Nations of the Grand River Development Corporation.
Let’s look a little deeper at this community involvement.
The Cooperative Web Site says, “The present membership consists of 160 individuals and organizations that live in the project vicinity, Oxford County and all of Southern Ontario,” to whom $9 million in shares and debentures were sold. Yet, to be a member of the cooperative the minimum share is $100, so not every member needs to be a major investor. It is interesting to read who some of the other members of the cooperative are – including the project developers. Elsewhere the website says there are 186 members.
So that means there are about 33% of 186 = 62 members of the cooperative that live in Oxford County … which Wikipedia tells us had some 105,719 residents in 2011, so we can see that 0.06% of the county population are supporters. It’s not exactly a wide support base in the county.
You might be interested in knowing that at the Environmental Review Tribunal the Township of Norwich Councillor for the impacted ward, Mr. Wayne Buchanan spoke of the Township of Norwich’s past and ongoing objections to the Project. He presented three letters to the Tribunal, one from the Township to Premier McGuinty asking for a moratorium on wind turbine developments, one to the Approval Holder (developer) asking for a delay in the development until noise and health studies are available, and one to Premier Wynne noting that the Township of Norwich was an unwilling host of industrial wind turbines.
You might also be interested in knowing that the office of the participating Six Nations of the Grand River Development Agency is located over 50 km from the wind turbines. It is a financial investment, but not exactly in their neighbourhood. (A similar case occurred in the community of Dutton Dunwich, where the participation of First Nations groups included First Nations located near the Manitoba Border or James Bay, but not the local First Nation.) “Points” are received by the Ontario Renewable Energy Approvals process for “community involvement, or for First Nations involvement, even if they are not from the impacted community.
Now, why would folks invest in such a development? Well, the 10 turbines of Gunn’s Hill will be paid some (10 x $135 a MWh x 1.8 MW x 8760 hours a year x 24% capacity factor) = $5,108,832 a year for the estimated 37,843 MWh they will produce – whether the electricity they produce is needed or not (as wind developers can be paid to curtail operation or not produce when the electricity is not needed). Interestingly, had the power been produced instead by Bruce Power, the payment would have been less than half as much. That $5 million a year for a 20 year contract, is pretty good return for a project with a total investment of perhaps $40 million. Few other (government supported) investments will return some 12.5% a year on a guaranteed basis for 20 years. Sadly, the power consumers of Ontario, including those who cannot afford to pay their electricity bills, are the payees of that investment return.
Wei Chen started to ask a question that deserved an answer … about how people will think when their electricity bills arrive. Ontario simply cannot keep paying twice as much for a product that is delivered best at times when it is not needed … and then pay Michigan or New York State to take the excess off our hands (or at the very least give them the electricity for free to power their industries) without adversely impacting power rates in Ontario. It is no wonder that Ontario rates are climbing so rapidly.
I thought that Wei Chen or other Ontario Morning staff might be interested in scanning what concerns I would have presented to the Environmental Review Tribunal where I was accepted as an expert witness, had they chosen to accept all my testimony. (They did not, and what was presented was only a fraction of what was initially prepared for them). A copy of my presentation as initially offered to the Environmental Review Tribunal is attached, and signed as a Professional Engineer. I note that many others in the community also made presentations – again with only partial acceptance by the Environmental Review Tribunal.
I have blind copied a few of the local participants and interested bodies who may not have heard your interview this morning and who may wish to contact you to confirm if what you were told was accurate that “once the turbines are in operation the project is accepted” or as Miranda Fuller noted, people see the turbines as “majestic.”
Rural residents and farm owners attended a meeting in Goderich with the Hydro One Ombudsman and told her hydro bills have to come down.
January 25, 2017
The Hydro One Ombudsman Fiona Crean recently attended a meeting in Goderich, hosted by MPP Lisa Thompson where she heard a lot of stories from Ontario’s farmers about hydro bills, and the government’s electricity policies.
Time of Use rates for power make no sense for agricultural operations, she was told. Power use is driven by requirements — if the weather is hot, barns must be ventilated or livestock will be lost. And growers must harvest crops when they are ready, not when it might be cheaper to run equipment.
People in agriculture are being harmed by the increasing electricity bills and are now choosing other options to run their operations. Grain growers are converting their drying equipment to propane or natural gas, and many are converting or supplementing their home heating with wood. These moves run counter to the government’s policy goal to get off fossil fuel use.
Other residents commented on the unfairness of the low-density residential rates and delivery charges.
The Hydro One vice-president of Customer Relations also attending that day had some interesting responses: people just don’t “understand” their electricity bills, Warren Lister said, and relief is coming for low-density customers. He also said that now, an “independent” Hydro One represents its customers to government.
Here’s the message Hydro One should give the Wynne government: you must get costs down.
While the Energy Minister proudly claims that Ontario is now a “net exporter” of power because we have a surplus, what he fails to explain is that we pay a premium price for renewable energy, which is usually produced out of phase with demand, and we then sell it off at a significant discount. This past November, for instance, Ontario bought power for $169 million, then sold it for a “profit” of $21 million. Ontario’s electricity customers picked up the difference of $147 million – that is a cost that we must reduce.
It’s worth noting too, that the surplus electricity sold last November would have powered half of Ontario’s customers’ homes for the month.
The Minister has promised rate relief, including change for rural residents living in low-density areas, via the RRRPP or Rural or Remote Electricity Rate Protection Program. True, reducing rural customers’ bills might add up to several hundred dollars a year, but where is the money for the $116-million cost coming from? It, like the other costs, is being added to your bill in the regulatory line.
Similarly, the Ontario Electricity Support Program or OESP is being paid for by electricity customers.
Meanwhile, the government gave out contracts last year for five more large-scale wind power projects, for power we don’t need, that will cost ratepayers over $3 billion over 20 years. That cost has yet to hit our electricity bills.
Ironically, the government’s green energy program isn’t even achieving its stated goals. According to the Ontario Society of Professional Engineers, wind power has “relatively little economic value” and because of its intermittent nature it needs back-up from natural gas, which means more fossil fuel use for power, not less.
Rather than telling us we don’t “understand” our bills, and spending money on costly conservation advertising that claims to save us money, the Ontario government needs to take bold steps to get costs down. That means cancelling wind power contracts awarded in 2016, cancelling the entire wind power procurement program, and taking a hard look at all other contracts to determine whether buying them out is a better option than losing millions selling surplus power off cheap.
Parker Gallant is a former international banker who now analyzes Ontario’s electricity sector. He is vice-president of Wind Concerns Ontario.
Electricity sold off cheap could have powered 50% of Ontario homes; wind clearly not needed
The line of poetry “it’s an ill wind that blows nobody any good” was a reality in November for Ontario ratepayers. The IESO (Independent Electricity System Operator) finally released their November 2016 Monthly Market Report on Friday, January 13, 2017 and there was not much good news in it.
While net exports* were down compared to the same month in 2015, it wasn’t related to the amount of wind power generated and curtailed (estimates of the latter from Scott Luft); that exceeded November 2015 by about 152,000 megawatts (MWh) and clocked in at 1,363,000 MWh. Generated and curtailed power exceeded Ontario’s net exports in 2015, representing 102.7% versus 72.9% the previous year. One should suspect November 2016 also saw spilled hydro and steamed off nuclear, but at 102.7% of our net exports, it is obvious that power generation from wind was clearly not needed.
November 2016 was not the month with the highest combination of generated and curtailed wind, but rather the second highest. The highest, according to Scott’s estimates, was December 2016, but we will save that report for another day.
Exported power could have served half of Ontario
Net exports in November 2016 were equivalent to the power that approximately 150,000 “average”** Ontario households would use in a year, or to put it another way, was sufficient to supply 2.4 million of those same households for the whole month of November. That is slightly more than 50% of all Ontario households.
The net exports of 1,326,960 MWh in November 2016 cost Ontario ratepayers $169 million to generate and sold at an average price of $16.69 per/MWh, resulting in income of $21.4 million. What that means is, Ontario’s electricity ratepayers subsidized the sale, picking up the difference of $l47.4 million, along with another $30.8 million for the 254,000 MWh of curtailed wind. Past and present Energy Ministers in the Wynne-led government would probably claim the deeply discounted sale price for those exported MWh was actually a “profit” but most ratepayers recognize that claim to be untrue.
Cancel the contracts
Current Energy Minister Glenn Thibeault has a chance to make his mark by halting all planned acquisition of wind power generation in LRP I and LRP II, as well as cancelling any wind power projects that have not commenced construction, or which have passed their critical “operational” dates.
Time to treat industrial-scale wind power development as that “ill wind”!