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.
Scottish electricity customers are upset that they are paying millions to wind power producers not to produce — Parker Gallant says Ontario has that beat … by a long shot.
Here’s his latest on how Ontario pays millions (added to our electricity bills) to wind power producers, because wind power is produced when it’s not needed.
And the winner (loser) is … Ontario
A recent article appearing in Energy Voice was all about the costs of “constraint” payments to onshore industrial wind developments in Scotland. It started with the following bad news:
“According to figures received by Energy Voice, the cost of paying wind farm operators to power down in order to prevent the generation of excess energy is stacking up with more than £300million* paid out since 2010.” (£300 million at the current exchange rate is equal to about CAD $500 million. )
What Scotland refers to as “constrained” Ontario calls “curtailed,” but they mean exactly the same thing. Ontario didn’t start constraining/curtailing generation until mid-September 2013, or almost three full years after the article’s reference date for Scotland. Curtailment prevents the grid from breaking down and causing blackout or brownouts.
The article from Energy Voice goes on: “In 2016 alone, Scottish onshore wind farms received £69million in constraint payments for limiting 1,048,890MWh worth of energy”.
Ontario in 2016, curtailed 2,327,228 MWh (megawatt hours). That figure comes from Scott Luft who uses data supplied by IESO (Independent Electricity System Operator) for grid-connected wind power projects and conservatively estimates curtailed wind for distributor-connected turbines to compile the information.
What that means: in 2016 it cost Ontario’s ratepayers CAD $$279.2 million** versus £69 million (CAD equivalent $115.2 million) for Scottish ratepayers. So, Ontario easily beat Scotland in both the amount of constrained wind generation as well as the subsidy cost for ratepayers who in both cases paid handsomely for the non-delivery of power!
The article went on to note: “By August 2017, the bill had already reached in excess of £55million in payments for 800,000MWh”!
Once again Ontario’s ratepayers easily took the subsidy title by curtailing 2.1 million MWh in the first eight months of the current year, coughing up over $252.5 million Canadian versus the equivalent of CAD $92 million by Scottish ratepayers.
In fact, since September 2013, Ontario has curtailed about 5.5 million MWh and ratepayers picked up subsidy costs of over $660 million.
Ratepayers in both Ontario and Scotland are victims of government mismanagement and wind power industry propaganda, and are paying to subsidize the intermittent and unreliable generation of electricity by industrial wind turbines.
(C) Parker Gallant
* One British Pound is currently equal to approximately CAD $1.67.
**Industrial wind generators are strongly rumored to be paid $120 per MWh for curtailed generation.
Rick Conroy, editor of the independent Wellington Times news paper in Prince Edward County, has had a front-row seat to at least three, probably four, wind power projects in The County. All have been vanquished save for the “White Pines” unwanted, unneeded power project which has been reduced from 29 turbines to 27 then to nine, and still, the power developer threatens to proceed.
Conroy has an interesting perspective, including a view across the water to nearby Amherst Island, where a tiny island community will almost certainly be destroyed by the Windlectric unwanted, unneeded wind power project … that will take a whole lot of wildlife down with the island, too.
Here is his editorial from the most recent edition of the paper.
Ontario is currently working toward another electricity import deal with Quebec. It is likely a good thing. Most of our neighbour’s electricity is generated by massive hydro dams on the James Bay and St. Lawrence watershed—so, by today’s convoluted meaning of the word, it is clean. It is also reliable and manageable—the opposite of the wind and solar power sources in which Ontario has invested billions over the past 15 years. The deal is expensive, however, about 40 per cent richer than Quebec earns from other exported electricity contracts.
But here is the interesting bit.
Coincidentally, the quantity of imported power represented in this deal, combined with another with Quebec in 2015— equals almost precisely the total electricity generated by wind and solar in Ontario. Ten terawatt hours of wind and solar are being made redundant by ten terawatt hours of hydro electricity. Maybe coincidence is the wrong word.
Put another away—the nearly useless intermittent power generated by wind and solar has been replaced by two power deals with Quebec. Electricity that is cheaper, cleaner and manageable.
It’s a sign, perhaps, the adults have wrested control of the province’s energy management away from the politicians.
The deal illustrates rather bluntly that Ontario’s wind and solar power projects are like costume jewellery—showy and glittery to a distracted public, but bearing little actual value.
Worse, these intermittent electricity trinkets are a persistent headache to the electricity system operator. Each year we spill enough electricity through exports to neighbouring jurisdictions, including Michigan and New York, to power a large part of their economies. We regularly export this power at a loss—sometimes we pay them to take it.
Sickeningly we spend as much as a $1 billion each year for others to take our unwanted electricity. Without these outlets, however, Ontario’s power grid would succumb to the variability of wind and sunlight on an electrical grid ill-equipped to endure it. And electrical systems operators in Michigan and New York know it.
So, they take advantage.
It is sophisticated modernday larceny. Here is how it works. Lacking formal purchase agreements, Michigan buys Ontario electricity mostly on the spot market, typically paying between one and two cents per kilowatt hour (kWh)—a fraction of what it costs the state to generate its own electricity. (The County’s Parker Gallant does a much more thorough job of explaining how this works in his regular contributions to the Wind Concerns Ontario blog, the Financial Post and other publications.)
To its credit and downfall, Ontario’s electricity market is utterly transparent—anyone with a computer can monitor the demand for electricity and the supply available at any given moment (as well as many other facets of the system). They can see plainly when the province is headed for a critical system overload— when Ontario must shed power or risk catastrophe. Folks in Michigan know it too. They know when Ontario will be calling them to offload electricity. They are happy and ready to oblige.
From time to time, the imbalance between too little demand and too much uncontrollable supply in Ontario’s electricity system becomes so precarious that grid operators in Michigan and New York can actually compel Ontario to pay them to take it the power. It is how it came about that today Ontario now powers about 10 per cent of Michigan’s electricity needs. And we lose money on every kilowatt.
All this has been said and explained before by others. The facts are uncontested. It is all easily verifiable thanks to Ontario’s transparent electricity operations.
Yet we continue to build useless wind and solar projects. We continue to make the problem worse.
Across the channel from Cressy, Amherst Island residents are bracing for a disheartening defeat. Their local government has recently conceded that it has secured the most it is likely to get from the developer of 26 industrial wind turbines and the province in order to protect the residents, the delicate waterway, the roads and other infrastructure as well as the endangered species that reside there. Any lingering regret over its own shortcomings at Loyalist Township hall, however, is likely to be eased by the $500,000 payment it has been promised each year by the industrial wind project owner.
Meanwhile on the ground, the developer’s actions sometimes bear little resemblance to the plans it submitted and promises made when asking from provincial approvals. For example, it told the Environmental Review Tribunal that it would widen only about three kilometres of road. Now it figures it will need to widen more than six times that length—a threat to the Blanding’s turtles and other animals. It is also threatening to fundamentally change the character of this pastoral island for a generation or more.
Folks on Amherst Island have begun to mourn the looming decimation of the quiet, rural island life that drew them to this place. We mourn with them.
Michigan residents, meanwhile, are likely unaware of the sacrifices that some Ontario residents on a wee island are making to subsidize their electricity bills.Will we connect these dots next June?
Surplus, exported power in April could have powered half of Ontario’s homes. Instead, it’s gone … and so is your money.
Ontario’s Minister of Energy claims that Ontario needs a “reliable, efficient and clean electricity system that comes from a number of sources” [sic] but the stats from this past April put the boots to any notion of wind power being “reliable” or “efficient.”
Parker Gallant and Scott Luft have both looked at the report from the Independent Electricity System Operator or IESO, and found that not only was demand at an all-time low that month (the lowest since the IESO began keeping records) but also that curtailed wind power (power we pay the wind power developers for, but do not accept on the grid because it isn’t needed) was at an all-time high.
Two Auditors General have noted that wind power is produced out of phase with demand in Ontario—it seems things are just getting worse.
Here’s how Parker Gallant describes it on his Energy Perspectives blog:
For the month of April 2017, wind power generated and curtailed (521,056 MWh) was 1,374,873 MWh, for a cost of approximately $182 million.
Curtailed wind in April was the highest on record since we began paying for it back in September 2013!
Here’s the fatal math:
net exports of 1.3 million MWh +
the 521,000 of curtailed wind = 18.7% of total Ontario demand.
Combined, the 1,832,176 MWh at the HOEP price of $11.14/MWh and 1.11 cents/kWh and what do you get? Enough power for more than 2.4 million average households (over 50% of all households in the province) with their average need for power at a cost of only $8.35 — for the whole month.
Curtailment of wind is getting worse, as Scott Luft documents, in a chart from his Cold Air Online blog. Curtailment has doubled in the past three years–money for power we don’t need.
Analyst Marc Brouillette in a report prepared for Strategic Policy Economics on the supply mix for power in Ontario, said that ” over 70% of wind generation does not benefit Ontario’s supply capability, and wind generation will not match demand in the OPO Outlook future projections as 50% of the forecasted production is expected to be surplus.” (Page 20)
Seventy percent of wind does not benefit us, and fully 50% is surplus.
Meanwhile, the Ontario government claims they are trying to get electricity bills down, but it appears they are not considering the option of cutting costs.
The contracts given out for $3.3B in new wind power in 2016 should be cancelled, as well as contracts for any projects not yet built, such as the Amherst Island project which has been dubbed “the worst place” for wind turbines because of its effect on migratory birds and other wildlife, to say nothing of a heritage Loyalist community.
Parker Gallant compares power output from wind and the cost to consumers between 2010 and 2016: we’re paying more for intermittent wind power, produced out-of-phase with demand
In 2010, industrial wind turbines (IWT) in Ontario represented total installed capacity of approximately 1,200 megawatts (MW); they generated 2.95 terawatt hours (TWh*) of transmission (TX) and distributed (DX) connected electricity. The power from wind cost Ontario’s ratepayers about $413 million for those 2.95 TWh, about 2.1% of total 2010 consumption. The cost of IWT generation in 2010 was 3.1% of total generation costs (Global Adjustment [GA] + Hourly Ontario Energy Price [HOEP]) and represented 33.5% of “net exports”** of electricity to our neighbours in Michigan, New York, and others.
Jump to 2016: wind turbines represented installed capacity of almost 4,500 MW, and generated and curtailed*** TX and DX connected electricity totaling 13.15 TWh. The cost to Ontario’s ratepayers jumped to $1,894.3 million — about 12.2 % of total generation costs. The 13.15 TWh of generation was 7.9% of Ontario’s total consumption but 94.9% of net exports.
The cost per kilowatt hour of electricity generated by wind in 2010 was 14 cents and in 2016 it had increased to 17.5 cents, despite downward adjustments to the contracted values between 2010 and 2016. That cost doesn’t include the back-up costs of gas generation when the wind doesn’t blow and we need the power, nor does it include costs associated with spilled hydro or steamed off nuclear, but it does include the cost of curtailed wind, which was 2.33 TWh in 2016 and just shy of total wind generated electricity in 2010.
In the seven years from 2010 to 2016, Ontario’s electricity ratepayers picked up total costs of $7.746 billion for 56.9 TWh of grid-accepted and curtailed (4.9 TWh) wind-generated electricity. The actual value given to those 56.9 TWh by the HOEP market was just shy of $570 million meaning ratepayers were forced to pick up the difference of $7.166 billion for power that wasn’t needed. The foregoing is based on the fact we have continually exported our surplus generation since the passing of the Green Energy Act and contracted for IWT generation at above market prices.
During those same seven years, Ontario had “net exports” of 85.95 TWh while curtailing wind, spilling hydro and steaming off nuclear. And, at the same time, we were contracting for gas plant generators that are now only occasionally called on to generate electricity yet are paid considerable dollars for simply idling!
Refinancing wind payments
As noted above the cost of wind generation in 2016 was almost $1.9 billion and represented 15.3% of the Global Adjustment pot. That cost was close to what was inferred in an Energy Ministry press release headlined: “Refinancing the Global Adjustment” but suggesting it was taxpayer owned “infrastructure”: “To relieve the current burden on ratepayers and share costs more fairly, a portion of the GA is being refinanced. Refinancing the GA would provide significant and immediate rate relief by spreading the cost of electricity investments over the expected lifecycle of the infrastructure that has been built.”
What’s really being refinanced is a portion of the guaranteed payments to the wind and solar developers who were contracted at above market rates! So, what is being touted as a 25% reduction includes the 8% provincial portion of the HST and a portion of annual payments being made to wind and solar developers for their intermittent (and unreliable) power.
Premier Wynne’s shell game continues!
May 22, 2017
Note: Special thanks to Scott Luft for his recent chart outlining the data enabling the writer to complete the math associated with this Liberal shell game!
* One TWh equals 1 million MWh and the average household in Ontario reputedly consumes 9 MWh annually, meaning 1 TWh could power 111,000 average household for one year.
** Net exports are total exports less total imports.
*** Ontario commenced paying for “curtailed” wind generation in September 2013.
Re-posed from Parker Gallant’s Energy Perspectives
How badly were ratepayers hit? Millions upon millions for power produced out of phase with demand…
While the Canadian Wind Energy Association, the trade association for the wind power industry and vested interests, continues to maintain that wind power cannot be contributing to Ontario’s rising and unsustainable electricity bills, the facts indicate otherwise. The figures for April 2017 show wind power produced out-of-phase with demand, causing power from other, clean sources to be wasted, and wind power producers paid not to add power to the Ontario grid.
Here is Parker Gallant’s analysis.
The Independent Electricity System Operator or IESO’s 18 month outlook report uses their “Methodology to Perform Long Term Assessments” to forecast what industrial wind turbines (IWT) are likely to generate as a percentage of their rated capacity.
The Methodology description follows.
“Monthly Wind Capacity Contribution (WCC) values are used to forecast the contribution from wind generators. WCC values in percentage of installed capacity are determined from actual historic median wind generator contribution over the last 10 years at the top 5 contiguous demand hours of the day for each winter and summer season, or shoulder period month. The top 5 contiguous demand hours are determined by the frequency of demand peak occurrences over the last 12 months.”
The most recent 18-month outlook forecast wind production at an average (capacity 4,000 MW growing to 4,500 MW) over 12 months at 22.2%, which is well under the assumed 29-30 % capacity claimed by wind developers. For the month of April, IESO forecast wind generation at 33.2% of capacity.
April 2017 has now passed; my friend Scott Luft has posted the actual generation and estimated the curtailed generation produced by Ontario’s contracted IWT. For April, IESO reported grid- and distribution-connected IWT generated almost 703,000 megawatt hours (MWh), or approximately 24% of their generation capacity. Scott also estimated they curtailed 521,000 MWh or 18 % of generation capacity.
So, actual generation could have been 42% of rated capacity as a result of Ontario’s very windy month of April 2017, but Ontario’s demand for power wasn’t sufficient to absorb it! April is typically a “shoulder” month with low demand, but at the same time it is a high generation month for wind turbines.
How badly did Ontario’s ratepayers get hit? In April, they paid the costs to pay wind developers – that doesn’t include the cost of back-up from gas plants or spilled or steamed off emissions-free hydro and nuclear or losses on exported surpluses.
Wind cost=22.9 cents per kWh
For the 703,000 MWh, the cost* of grid accepted generation at $140/MWh was $98.4 million and the cost of the “curtailed” generation at $120/MWh was $62.5 million making the total cost of wind for the month of April $160.9 million. That translates to a cost per MWh of grid accepted wind of $229.50 or 22.9 cents per kWh.
Despite clear evidence that wind turbines fail to provide competitively priced electricity when it is actually needed, the Premier Wynne-led government continues to allow more capacity to be added instead of killing the Green Energy Act and cancelling contracts that have not commenced installation.
* Most wind contracts are priced at 13.5 cents/kilowatt (kWh) and the contracts include a cost of living (COL) annual increase to a maximum of 20% so the current cost is expected to be in the range of $140/MWh or 14cents/kWh.
(Re-posted with permission from Parker Gallant Energy Perspectives)
“Assertions are complete nonsense … only wilful blindness would suggest that wind and solar are low cost”
Recently, energy analyst and occasional columnist for The Financial PostParker Gallant wrote that the Canadian Wind Energy Association (CanWEA) was hitting back at allegations that wind power was contributing to Ontario’s rising electricity bills.
Ontario representative Brandy Gianetta said wind power was a low-cost energy source, and she referred to University of Waterloo professor Jatin Nathwani for support.
Trouble is, she was wrong.
Professor Nathwani took the time to correct CanWEA’s statements in an email to Parker Gallant, published on his Energy Perspectives blog today.
Here is Professor Nathwani’s email:
Dear Mr Gallant:
In your Blog, you have cited Ms. Giannetta’s post on CanWEA’s website on April 24, 2017 as quoted below:
Her article points to two articles that purportedly support the “myth” she is “busting,” but both require closer examination. She cites Waterloo professor Natin Nathwani’s, (PhD in chemical engineering and a 2016 “Sunshine list” salary of $184,550) article of March 6, 2017, posted on the TVO website, which supports Premier Wynne’s dubious claims of “a massive investment, on the order of $50 billion, for the renewal of Ontario’s aging electricity infrastructure.” Professor Nathwani offers no breakdown of the investment which suggests he simply took Premier Wynne’s assertion from her “Fair Hydro Plan” statement as a fact! It would be easy to tear apart Professor Nathwani’s math calculations — for example, “The total electricity bill for Ontario consumers has increased at 3.2 per cent per year on average” — but anyone reading that blatant claim knows his math is flawed!
First and foremost, the record needs to be corrected since Ms Giannetta’s assertions are simply incorrect and should not be allowed to stand.
If she has better information on the $50 billion investment provided in the Ministry of Energy’s Technical Briefing, she should make that available.
The breakdown of the investment pattern in generation for the period 2008-2014 is as follows:
Wind Energy $6 Billion (Installed Capacity 2600 MW)
Solar Energy $5.8 Billion (Installed Capacity 1400 MW)
Bio-energy $1.3 Billion (Installed 325MW)
Natural Gas $5.8 Billion
Water Power $5 Billion (installed Capacity 1980 MW)
Nuclear $5.2 Billion
Total Installed Capacity Added to the Ontario Grid from 2008-2014 was 12,731 MW of which Renewable Power Capacity was 6298MW at a cost of $18.2 Billion.
For the complete investment pattern from 2005 to 2015, please see data available at the IESO Website.
In sum, generation additions (plus removal of coal costs) are in the order of $35 billion and additional investments relate to transmission and distribution assets.
I take strong exception to her last statement suggesting that the 3.2 percent per year (on average) increase in total electricity cost from 2006 to 2015 in real 2016$. The source for this information is a matter of public record and is available at the IESO website.
Ms Giannetta’s assertion is complete nonsense because she does not understand the difference between electricity bill and generation cost. Let Ms Gianetta identify the “blatant flaw.”
As for the electricity bill that the consumer sees, there is a wide variation across Ontario and this is primarily related to Distribution.
The Ontario Energy Board report on Electricity Rates in different cities provides a view across Ontario:
For example, the average bill for a for a typical 750kWh home Ontario comes is $130 per month.
In Toronto it is $142, Waterloo at $130 and Cornwall at $106. On the high side is Hydro One networks is $182 and this is primarily related to cost of service for low density, rural areas.
Your Table 2 Total Electricity Supply Cost is helpful and correctly highlights the cost differences of different generation supply.
Only wilful blindness on Ms Giannetta’s part would suggest that wind and solar are coming in at a low cost.
Jatin Nathwani, PhD, P.Eng
Professor and Ontario Research Chair in Public Policy for Sustainable Energy
Executive Director, Waterloo Institute for Sustainable Energy (WISE)
Faculty of Engineering and Faculty of Environment Fellow, Balsillie School of International Affairs (BSIA)
Parker Gallant and Scott Luft have put together the numbers for the electricity sector over the Easter weekend … and it’s nowhere near as pretty as an Easter bonnet.
Demand is so low that 99,000 megawatt hours (MWh) of wind power had to be “curtailed” or constrained at a cost of $11.9 million for the three days, and the total cost of wind power was estimated to be $20 million. That brings the cost of delivered wind power to 33.5 cents per KWh.
The nice weather on Easter weekend in Ontario disguised the fact that April 14th, 15th and 16th were really bad days for electricity customers.
Scott Luft’s daily reports detailed the bad news, even before the Independent Electricity System Operator or IESO got out their daily summary for April 12th. Some of the information in Scott’s reports are estimates, but they have always proven to be on the conservative side. These three reports paint a disturbing picture of what’s going on, and how badly the Ontario government is mismanaging the electricity file.
Here are a few of the events that our Energy Minister Glenn Thibeault and Premier Wynne should find embarrassing. They also confirm what many of us have been telling them for several years.
First, Thursday April 13th saw a disclosure from the Energy Ministry that Ontario paid out $28,095,332 including about $240,000 in interest to Windstream Energy to satisfy the award made to them under the NAFTA (North American Free Trade Agreement) tribunal, due to cancellation of a 300-MW offshore industrial wind turbine project.
Wasted, unneeded wind power
Second, the HOEP (hourly Ontario electricity price) market, traded all of Ontario’s generation over the three days at “0” (zero) or negative value. While total demand for electricity was 1,031,448 MWh over the three days the HOEP market valued it at -$869,220 or an average of -.84 cents/MWh. The “0” and negative values for the HOEP lasted 77 continuous hours, breaking a prior record of 62 hours.
Third, during the three days, ratepayers picked up the bill for 99,109 MWh of curtailed wind which exceeded the transmission (TX) and distribution (DX) connected wind by 60.2%. Curtailed wind at an estimated $120/MWh alone cost ratepayers $11.9 million, driving the price of delivered wind (61,882MWh) to a cost of $335.34/MWh or 33.5 cents a kWh. Total wind costs were $20.8 million.
Fourth, solar power over the three days generated and curtailed (1,124 MWh) 35,539 MWh at a cost of $16.8 million, which works out to $472.86/MWh or 47.3 cents/kWh.
Fifth was the cost of gas which in three days produced 18,433 MWh, but the cost was $12.5 million and $676.56/MWh or 67.7 cents/kWh. The 9,943 MW of IESO grid-connected gas operated at 2.6% of actual capacity during the three days.
Sixth was the generosity shown to our neighbours in New York, Michigan and Quebec who took delivery of 157,768 MWh of free power along with a payment of $132,525.
The quick math on the above indicates a cost of wind, solar and gas generation plus the payment for exported power comes to $50.2 million.
Nuclear and hydro was all we needed
That’s bad enough, but if you look at nuclear and hydro generation during those three days, clearly the $50.2 million was “money for nothing” paid for by Ontario’s ratepayers. Nuclear (including steamed-off of 49,118 MWh) was 688,981 MWh and combined with hydro generation of 324,001 MWh of could have provided 1,012,982 MWh versus Ontario’s demand over those three days of 869,232 MWh leaving 143,750 MWh of surplus. Three days of nuclear and hydro cost $61.9 million or 6.1 cents/kWh.
Bottom line? Ontario ratepayers picked up the bill for not only the $28.1 million paid to Windstream for a canceled offshore wind project, but also another $50.2 million, making the past four days very expensive for everyone.
The $78.3 million could have been better spent on health care or so many other pressing needs!
It’s time to kill the Green Energy Act and cancel any uncompleted wind and solar contracts before all our weekends turn out like this one!
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.
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.”