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.
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”!
Parker Gallant on his Energy Perspectives blog, has summarized some of the comments made to the Ontario Ministry of Energy, when it requested input for the new Long-Term Energy Plan (LTEP).
Predictably, the wind power trade association and lobbyist said more wind power is needed, but other organizations such as the Canadian Taxpayers, the professional engineers, and the Ontario Chamber of Commerce have different ideas. They think the new plan should focus on cost — otherwise, as the Canadian Manufacturers and Exporters warned, investment and jobs will go elsewhere.
The comments from Strategic Policy Economics were pointed: wind doesn’t work.
Marc Brouillette’s excellent submission on behalf of Bruce Nuclear also carries some sane observations such as “Wind generation has not matched demand since its introduction in Ontario” and, “Over 70% of wind generation does not benefit Ontario’s supply capability.” And this one, which is becoming more evident as ratepayers are forced to pay for curtailed generation: “Wind generation will not match demand in the OPO Outlook future projections as 50% of the forecasted production is expected to be surplus.”
WCO vice-president Parker Gallant and president Jane Wilson speak on Ontario’s mismanaged electricity sector, energy poverty, wind turbine noise regulation, and what’s ahead for 2017
Wind Concerns Ontario
Q:You’ve been telling people about the impact of renewables, specifically wind power, on Ontario’s electricity or hydro bills. How much of our electricity bills is due to the wind power/renewables program in Ontario?
Parker Gallant: I recently reviewed the cost of wind and solar generation relative to its contribution to Ontario’s demand for electricity and its impact on our electricity costs is shocking. Wind and solar in the first six months of 2016 delivered 8% of our generated power and represented 35% of the Global Adjustment which appears set to average over $1 billion per month. That represents a cost of over 36 cents a kilowatt hour (kWh), including the hourly Ontario energy price (HOEP).
Q: Parker, you’ve also been telling people about the Global Adjustment or GA, which is where a lot of charges are hidden. Do you think these charges should be detailed on our bills, or is that even possible?
Parker Gallant: While I believe in principle the GA should be revealed on our monthly bills, in practice, that would require reams of paper. How will the local distribution company explain how much you are billed for curtailed wind generation or the meteorological stations that measure the amount of curtailed wind that might have been generated? How to explain, say, the cost of spilled hydro or steamed off nuclear or the water fuel fee, or how to tell the ratepayer how much they are subsidizing the rates for large industrial clients, or what it is costing under the rural and remote rate plan (RRRP) that transports diesel fuel to remote First Nations, among dozens of other items included in our monthly bills?
Q: The Premier and Energy Minister are now saying that parts of their policies have been a “mistake” and that they need to get bills down. Wind Concerns is saying that canceling wind power contracts is necessary for that to happen. Can you explain? How much are the 2016 contracts worth?
Parker Gallant: Interesting they are now admitting a “mistake,” but when George Smitherman was Energy Minister he was provided with a long-term energy plan that had been carefully developed by “experts” within the crown agencies. He chose to cancel the plan and instead, impose one developed in conjunction with outsiders who were NOT experts. Previous Energy Ministers (Dwight Duncan comes to mind for his “smart meter” for every ratepayer) made mistakes, as did those who followed such as Brad Duguid and were roundly criticized by both the media and by ratepayers. The canceling of wind power projects not yet built or even contracted is only “step one” and will slow the climb in our bills. The current Minister, Glenn Thibeault has only suspended Large Renewable Procurement or LRP ll, and needs to cancel it, as well as LRP I and any of those contracts now past their agreed-to start date. There are ways to reduce costs almost immediately.
Jane Wilson: Wind Concerns Ontario prepared a detailed document for the IESO on the Long-Term Energy Plan, suggesting ways they could save $1.7 billion annually. That would have an immediate cost reduction impact.
Q: The Energy Minister says that now, Ontario is a “net exporter” of electricity like that’s a good thing. He claims we’re making money: is that true?
Parker Gallant: Being a “net exporter” of 16.8 terawatts (TWh) in 2015 is simply a demonstration of being a bad planner and manager of the system. If one adds the spilled hydro and curtailed wind to the net exports, the 21.2 TWh could have provided over half of all average Ontario households with power for a full year, yet we sold it 2.36 cents/kWh while we paid 10.14 cents/kWh for its generation. Ontario contracted for far too much intermittent and unreliable wind and solar power creating a domino effect the increased our costs of generation. Paradoxically, if Ontario ratepayers consumed more of the annual excess power (15.5% in 2015) it would help reduce our per kWh cost.
Q: What is WCO’s stance on climate change?
Jane Wilson: Our position is that everyone wants to do the right thing for the environment, whether that is preventing air pollution or using the most efficient forms of power generation — but that isn’t industrial-scale wind. For example, the Ontario Society of Professional Engineers or OSPE says that the proliferation of large-scale wind will actually increase greenhouse gas emissions, therefore not achieving the government’s stated goals. In the OSPE’s most recent report, they say “Wind generation offers less GHG reduction value in Ontario because base-load generation is already carbon-free and wind generation often displaces hydroelectric and nuclear base-load generation.”
Q: Why does the Ontario government continue to force wind turbines on communities that don’t want them?
Jane Wilson: The government is acting on an ideology that is not supported by fact and to do that, it erased communities’ right to local land-use planning with the Green Energy Act. We think that’s wrong, and are supporting the now 116 municipal governments that have demanded a return of that control and also that community support be mandatory for wind power contracts. There is a concern too about communities in the North where there may not be elected municipal governments, where contracts can be awarded for wind power projects that have a significant negative impact on the natural environment, for little or no benefit.
WCO worked with Ontario municipalities on the mandatory support resolution.
Q:Can the government really cancel wind power contracts? Can a new government cancel the subsidy programs?
Jane Wilson: Yes. There are clauses in the contracts under LRP I that are “off-ramps” in the case of cancellation, and which set out the financial steps needed to do that. For example, the contract with EDP for the “Nation Rise” project south of Ottawa in North Stormont, worth $430 million over 20 years, would cost $250,000 plus reimbursement for development costs that must be justified, to a maximum of $600,000. And yes, government can cancel subsidy programs. The LRP II, now “suspended”, should be cancelled outright.
The other opportunity is to cancel wind power projects that do not have a “Notice-to-Proceed”: this is straightforward. WCO has also suggested to the IESO that the government look seriously at all contracts and review them for opportunities to cancel. Even costly negotiated buy-outs will reduce hydro costs significantly, due to the high cost of disposing of surplus power.
Q: What is WCO doing to help people already living with wind turbines, and the noise they produce?
Jane Wilson: We support the public health investigation being done by the Huron County Health Unit, and hope that other municipalities will take similar action. We are also looking at how research can be done to help change the Ontario regulations on noise –which are not based on current science and in fact, are completely inadequate to protect health. We prepared a detailed document on how to revise noise enforcement regulations, another on how the approval process must be changed to protect health, and we submitted a document to the World Health Organization which is preparing global noise regulations for wind turbines. In short, we take every opportunity possible to explain the situation for people living in communities where wind turbines and their noise emissions have been forced, without consent, on the people of Ontario, with the goal of having regulations and processes changed.
Q: What’s ahead in 2017?
Jane Wilson: It’s a very different world for wind power now, than in 2009 when the Green Energy Act was passed. People are genuinely questioning the benefit of high-impact, large-scale wind power development, especially when there seem to be few, if any, benefits, and we are seeing the shocking results of the government’s complete mismanagement of the electricity sector such as lost jobs and rising energy poverty. We believe the government will have to take dramatic action if it is serious about getting electricity bills down. The fact that Ontario municipalities are speaking out on this issue and taking action will also have results, we believe. We are hoping for a complete halt to the ongoing damage of the government’s policies, and that there will be help for people already living with the noise and other impacts of industrial-scale wind turbines.
As for Wind Concerns Ontario, we are not stopping our work.
The Day Ontario’s wind tyranny ends, there will be dancing in the streets
The editor of the magazine North American Windpower, recently marked the demise of Ontario’s wind industry. His article was titled “Eulogizing Ontario’s Wind Industry.” Apparently the eulogy was a result of Ontario Energy Minister Glenn Thibeault’sannouncementof Sept. 27 that he was “suspending” the acquisition of 1,000 MW (megawatts) of renewable energy under the previously announced LRP ll (Large Renewable Procurement).
Thibeault explained that “IESO (Independent Electricity System Operator) had advised that Ontario had a robust supply of electricity over the coming decade to meet projected demand.” Thibeault didn’t express surprise at this sudden turn of events or explain what led to the realization. To put some context around the suspension, only a few months earlier former Energy Minister Bob Chiarelli had issuedthe directiveto acquire the 1,000 MW that Thibeault shortly after “suspended.”
The Windpower article opens with: “Ladies and gentlemen, we are gathered here today to pay our respects to Ontario’s utility-scale wind industry, which has passed away from unnatural causes (a lack of government support).”
If Ontario’s wind industry had truly passed away, the celebrations among hundreds of thousands of Ontario ratepayers would have rivaled the scale of celebrations exhibited in Florida byCuban exilesafter hearing that Castro died. As it is, Ontarians are hardly celebrating. We will be forced to live with and among industrial wind turbines for at least the next 20 years. The “government support” alluded to in the eulogy isn’t dead. It continues to get pulled from the pockets of all Ontario ratepayers and has caused undue suffering.
The wind industry rushed to Ontario to enjoy the largesse of government support via a government program that granted above-market payments for intermittent and unreliable power. Industrial wind turbines have so driven up electricity prices that Ontario now suffers thehighest residential ratesin Canada and the fastest growing rates in North America. The Ontario Association of Food Banks in its recent 2016 “Hunger Report” noted: “Since 2006, hydro rates have increased at a rate of 3.5 times inflation for peak hours, and at a rate of eight times inflation for off-peak hours. Households across Ontario are finding it hard to keep up with these expenses, as exemplified by the $172.5 million in outstanding hydro bills, or the 60,000 homes that were disconnected last year for failing to pay.”
Beyond that, the cost of energy affects businesses and, as noted by the Canadian Federation of Independent Businesses, “fuel, energy costs” ranks for their Ontario members as the second-highest “major cost constraint” behind “tax, regulatory costs.”
Until the day we actually see Ontario electricity consumers dancing in the streets one day, the eulogy for this province’s wind-power tyranny is unfortunately premature.
Parker Gallant is a former bank executive who looked at his power bill and didn’t like what he saw.
“The significant increase in wind capacity is questionable …”
December 14, 2016
As part of the Long Term Energy Planning process, a report that contains information that is highly critical of wind turbines’ role in generating electricity has been produced in response to the Ontario government’s consultation process on the LTEP in the context of the government’s climate change initiatives.
The report, titled Ontario’s Emissions and the Long-Term Energy Plan, is available at this link:
The author is Marc Brouillette of the strategic consulting firm Strategic Policy Economics; the report and analysis was funded by Bruce Power, the Organization of Canadian Nuclear Industries, Powerstream and the Power Workers Union. The report documents the case for nuclear as the long-term stable solution for electrical generation in Ontario and as a cost effective solution to reach the Liberal government’s carbon emission goals.
Expanding Ontario’s wind power generation capacity is “questionable” the authors say, for three reasons:
Wind generation has not matched demand since its introduction in Ontario;
Over 70% of wind generation does not benefit Ontario’s supplycapability: and,
Wind generation will not match demand in the OPO Outlook future projections as 50% of the forecasted production is expected to be surplus.
It has been well documented that wind turbines generate power that is out of sync with Ontario’s power demands. This report provides data on the extent of this problem confirming its statement that over 70% of wind generation does not benefit Ontario’s supply capability (page 20).
The report goes on to confirm that when wind generation is available it causes “curtailment (waste) of both nuclear and hydro, exports of wind generated electricity at prices well below the cost of production and reduction of natural gas fired generation” (page 21). This situation may improve going forward, but still, the report concludes, over 50% of wind generation in Ontario is not productively used by Ontarians” (page 22). Further, “it could be viewed as wasted through curtailments and/or via uneconomic exports to neighbouring jurisdictions.”
Cancel the contracts
Wind Concerns Ontario and now more than 116 municipalities as well as other stakeholders and interest groups have repeatedly called for the cancellation of wind turbine contracts. The information in this detailed report supports the case for cancelling the contracts under Large Renewable Procurement I (LRP I) and halting LRP II and FIT 5.0 as well as all wind power projects not yet in commercial production (e.g., White Pines, Amherst Island, Fairview). The government of Ontario will find it difficult to justify these contracts in the context of this data, and in the context of what the Energy Minister has said is an existing “robust” supply of power in Ontario at present.
Parker Gallant in his role as an energy observer estimated that wind power, which has an average contract price in the range of 13.3 cents, actually ended up costing the Ontario electrical system about 30.9 cents over the first six months of 2016.
These data, plus information from the 2015 report by the Ontario Auditor General, indicate that there is substantial benefit for the people of Ontario in cancelling wind power contracts.
The report includes the recommendation that the Ontario LTEP should “seek out the lowest cost, emission-free energy solutions that reflect the integrated costs of generation, transmission, and distribution.”
Wind Concerns Ontario will continue its call to cancel the wind power contracts; our response to the Long-Term Energy Plan will be published shortly.
Most electricity ratepayers in Ontario are aware that contracts awarded to wind power developers following the Green Energy Act gave them 13.5 cents per kilowatt (kWh) for power generation, no matter when that power was delivered. Last year, the Ontario Auditor General’s report noted that renewable contracts (wind and solar) were handed out at above market prices; as a result, Ontario ratepayers overpaid by billions.
The Auditor General’s findings were vigorously disputed by the wind power lobbyist the Canadian Wind Energy Association or CanWEA, and the Energy Minister of the day, Bob Chiarelli.
Here are some cogent facts about wind power. The U.K. president for German energy giant E.ON stated wind power requires 90% backup from gas or coal plants due to its unreliable and intermittent nature. The average efficiency of onshore wind power generation, accepted by Ontario’s Independent Electricity System Operator (IESO) and other grid operators, is 30% of their rated capacity; the Ontario Society of Professional Engineers (OSPE) supports that claim. OSPE also note the actual value of a kWh of wind is 3 cents a kWh (fuel costs) as all it does is displace gas generators when it is generating during high demand periods. On occasion, wind turbines will generate power at levels over 90% and other times at 0% of capacity. When wind power is generated during low demand hours, the IESO is forced to spill hydro, steam off nuclear or curtail power from the wind turbines, in order to manage the grid. When wind turbines operate at lower capacity levels during peak demand times, other suppliers such as gas plants are called on for what is needed to meet demand.
Bearing all that in mind, it is worth looking at wind generation’s effect on costs in the first six months of 2016 and ask, are the costs are reflective of the $135/MWh (+ up to 20% COL [cost of living] increases) 20 year contracts IESO, and the Ontario Power Authority awarded?
As of June 30, 2016, Ontario had 3,823 MW grid-connected wind turbines and 515 MW distributor-connected. The Ontario Energy Reports for the 1st two quarters of 2016 indicate that wind turbines contributed 4.6 terawatts (TWh) of power, which represented 5.9% of Ontario’s consumption of 69.3 TWh.
Missing something important
Not mentioned in those reports is the “curtailed” wind. The cost of curtailed wind (estimated at $120 per/MWh) is part of the electricity line on our bills via the Global Adjustment, or GA. Estimates by energy analyst Scott Luft have curtailed wind in the first six months of 2016 at 1.228 TWh.
So, based on the foregoing, the GA cost of grid-accepted and curtailed IWT generation in the first six months of 2016 was $759.2 million, made up of a cost of $611.8 million for grid-delivered generation (estimated at $133 million per TWh) and $147.4 million for curtailed generation. Those two costs on their own mean the per kWh cost of wind was 16.5 cents/kWh (3.2 cents above the average of 13.3 cents/kWh). The $759.2 million was 12% of the GA costs ($6.3 billion) for the six months for 5.9% of the power contributed.
But hold on, that’s not all. We know that wind turbines need gas plant backup, so those costs should be included, too. Those costs (due to the peaking abilities of gas plants) currently are approximately $160/MWh (at 20% of capacity utilization) meaning payments to idling plants for the 4.6 TWh backup was about $662 million. That brings the overall cost of the wind power contribution to the GA to about $1.421 billion, for a per kWh rate of 30.9 cents. If you add in costs of spilled or wasted hydro power to make way for wind (3.4 TWh in the first six months) and steamed off nuclear generation at Bruce Power (unknown and unreported) the cost per/kWh would be higher still.
So when the moneyed corporate wind power lobbyist CanWEA claims that the latest procurement of IWT is priced at 8.59 cents per kWh, they are purposely ignoring the costs of curtailed wind and the costs of gas plant backup.
22% of the costs for 5.9% of the power
Effectively, for the first six months of 2016 the $1.421 billion in costs to deliver 4.6 TWh of wind-generated power represented 22.5% of the total GA of $6.3 billion but delivered only 5.9% of the power. Each of the kWh delivered by IWT, at a cost of 30.9 cents/kWh was 2.8 times the average cost set by the OEB and billed to the ratepayer. As more wind turbines are added to the grid (Ontario signed contracts for more in April 2016), the costs described here will grow and be billed to Ontario’s consumers.
CanWEA recently claimed “Ontario’s decision to nurture a clean energy economy was a smart investment and additional investments in wind energy will provide an increasingly good news story for the province’s electricity customers.”
There is plenty of evidence to counter the claim that wind power is “a smart investment.” But it is true that this is a “good news story” — for the wind power developers, that is. They rushed to Ontario to obtain the generous above-market rates handed out at the expense of Ontario’s residents and businesses. The rest of us are now paying for it.
[Reposted from Parker Gallant’s Energy Perspectives blog.]
Global TV News published a summary of opinions by several commentators on how the Government of Ontario might deal with the crisis in electricity bills, which is causing unprecedented energy poverty.
Wind Concerns Ontario was pleased to be asked to contribute to the special news feature found here and excerpted below.
The following is by both Parker Gallant, a retired banker who now analyses Ontario’s energy sector and is the author of the blog “Energy Perspectives” as well as Jane Wilson, the president of Wind Concerns Ontario.
The Ontario government undertook its program to add renewable power without proper cost-benefit or impact analysis.
Now we have electricity bills that are the fastest rising in North America. The rich contracts awarded to huge corporate wind power developers are a factor.
Here’s what we suggest:
Immediately cancel Large Renewable Procurement (LRP) II that is currently “suspended.” With its target of acquiring 1,000 megawatts (MW) of more renewable capacity — it’s not needed and will further add to consumers’ power bills.
Cancel the five wind power contracts awarded in 2016 under LRP I and save electricity customers about $65 million annually or $1.3 billion over 20 years. Cancellation costs will amount to a small fraction of the annual cost. Cancelling approved but not yet built wind power projects and the new FIT 5.0 program will also save money.
Cancel “conservation” spending of $400 million annually. Ontario has already cut back on power use by more than 12 per cent since 2005 when consumption was 157 tWh to 2015 when it had fallen to 137 tWh. Do this and save immediately on electricity bills.
Move the Ontario Electricity Support Program to the Ministry of Community and Social Services, where this social assistance program really belongs. Electricity customers should not bear the burden of its costs. The move would create a budget shortfall so we recommend the following action:
Levy a tax on wind (and solar) power generation. The auditor general reported that 20-year wind and solar contracts exceed thosein other jurisdictions — the tax would help correct that.
Last, reduce the Time of Use (TOU) off-peak rate. This would encourage the shift of power consumption from peak to off-peak time in order to flatten daily demand, with less waste of hydro and nuclear power, and intermittent wind.
Let’s stop adding expensive, intermittent power to our system and stop punishing Ontarians.
It’s been quite windy the last few days in Ontario, as it often is in the fall. Temperatures have been mild, too — all that stacks up not only to a beautiful fall but a very expensive few days for Ontario’s electricity customers, already hard-hit by their power bills which are the fastest rising in North America.
Parker Gallant has done the analysis on a single day last week, November 10, which he says points out everything that is wrong with Ontario’s electricity policy. Too much power produced when we don’t need it means cheap exports to our neighbours and more expense for Ontarians.
November 10th serves as a perfect example of what’s happening to electricity customers in Ontario: that day, the government’s electricity policy shows we reward huge corporate wind power developers and it also highlights the intermittent nature of power generation from wind — it is out of phase with demand.
November 10 should be the basis of a message to the Minister of Energy, Glenn Thibeault on the Large Renewable Procurement (LRP) program: Ontario should cancel both the LRP I contracts awarded last April and cancel the now “suspended” LRP II process. The Minister has already admitted our electricity supply is more than adequate for the next 10 years (“robust” in fact, he says) so acquiring more wind generated power (and solar) should be immediately suspended. It does nothing other than drive up the costs for “average” households.
The $9.4 million of ratepayer dollars handed out November 10 neither reduced emissions nor provided useful electricity. Time for a complete overhaul of electricity policy in Ontario, starting with those contracts and the LRP process.
When the subject of cancelling contracts (which is government’s right) comes up, the immediate response from the influential wind power lobby is that to do so will incur lawsuits, and wreck Ontario’s reputation in the business/investment world. The fact is, anyone knows that building your business on a subsidy program is not good planning; it’s also true that the Ontario government included “off-ramps” in the latest contracts, so that it could change its mind if the power is not needed, and pay out the power developers’ documented expenses.
Here are the details for the five contracts awarded by the IESO last spring.
20-yr cost $
Max payout liability $
Source: data from IESO contracts
So, in the case of Strong Breeze, for example, in the community of Dutton Dunwich which resoundingly expressed its Not A Willing Host status but got a wind power project anyway, the government could get out of a $250-million contract by paying, at most, $515,000. Similarly, Nation Rise, in another unwilling host community, could be cancelled for a maximum liability of $600,000 and save Ontario electricity ratepayers from having the $436 million cost added to their bills.
Let’s go farther! Among the projects with Renewable Energy Approvals (REAs) but not yet operating, are the much contested White Pines in Prince Edward County and the Windlectric project on Amherst Island, both of which are in legal battles and both are in danger of not meeting their contracted Commercial Operation date. Cancelling them would save a lot of wildlife and also save Ontario electricity customers almost $1 billion.
Mr Gallant says that November 10 is emblematic of what’s wrong with Ontario’s electricity policy; we add, why buy more power Ontario doesn’t need and inflict more damage on the natural environment and Ontario’s rural communities, when the answer is so simple.
Energy Minister Glenn Thibeault was busy this past week dancing around issues plaguing his portfolio. The issues are: rising electricity bills, energy poverty and polls showing falling voter approval of the Ontario Liberal Party. In an effort to stem the bad news Minister Thibeault announced the suspension of his predecessor’s directive to IESO ordering up another 600 megawatts (MW) of wind and 300 MW of solar.
Minister Thibeault issued a news release, delivered a speech to the Ontario Electricity Association, and held a press conference. He looked somewhat embarrassed to be claiming that, because the Large Renewable Procurement or LRP II was not proceeding, the average electricity ratepayer will not have to pay an additional $2.45 per month in the future. About 4 million of those average ratepayers, however, will have to pay from $6-$8.00 more per month if they use gas as a source of warmth (gas furnace) or hot water to cover the costs of the cap and trade tax starting January 1, 2017. Those same ratepayers will also see the benefits of the removal of the 8% provincial sales tax and a drop of $6-8.00 in their monthly electricity bill meaning they shouldn’t see an increase in their energy costs. Or will they?
Let’s examine the ministerial pronouncements about “suspending” LRP II to see if the actions will really stop rate increases.
First, put the suspension of 600 MW of wind and 300 MW of solar in context. A look at the 2016 Ontario Power Generation (OPG) 2nd Quarter report helps. If wind operated at 30% of capacity and solar at 15% they could have produced 986,000 MWh of intermittent electricity or enough to supply about 220,000 average Ontario households for the six months in that report. That in itself is interesting but it doesn’t highlight what else was happening with existing generation facilities. For example, “During the six months ended June 30, 2016, OPG lost 3.4 TWh of hydroelectric generation due to SBG [surplus baseload generation] conditions, compared to 1.5 TWh during the same period in 2015.”
In other words, 3.4 terawatts hours of electrical power was dumped because we had too much.
$150 mil wasted
If it hadn’t been “spilled,” (the technical term) that steady reliable hydroelectric power could have supplied 750,000 average households with power for six months. And even though the power was “spilled,” ratepayers were charged for it at a rate of 4.4 cents per kilowatt hour — at a cost of $150 million for the 3.4 TWh! Ontario’s 4.5 million ratepayers picked up an annual cost of $33 for spilled power, while Minister Thibeault was suggesting those same ratepayers would “save” future rate increases of about $30 annually!
What about even more spilled hydro, increasing amounts of curtailed wind, and steamed off power coming from Bruce Nuclear?
As we ratepayers continue our conservation efforts and demand for power remains flat, or falling, wind and solar generation contracted but not yet constructed will enter service producing more surpluses. The spilled, curtailed and steamed off power will be added to our bills once again driving rates higher.
Minister Thibeault should cancel any unbuilt wind and solar projects, and complete a cost-benefit study before launching the revision of the long-term energy plan (LTEP) as Premier Wynne has instructed him in her recent Mandate Letter.
Ratepayers would be delighted to experience a year or even six months without a rate increase.
(C) Parker Gallant
The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.
Parker Gallant has put up a list of recommendations on his Energy Perspectives blog which he says, if they were enacted by the Wynne government, would save the average Ontario electricity customer $500 a year.
Chief among them is the cancellation of wind power contracts — the older ones that have missed or are about to miss key contract dates — and halting the new Large Renewable Procurement II process, which is, incredibly, still set to begin next year.
As an example of contracts that could be cancelled, the Amherst Island project for 26 turbines on the tiny island, where migratory birds stop over and Bandings turtles live, has no hope of meeting its Commercial Operation date. Cancelling it would save Ontario $500 million.
Cancelling the wind power contracts and the next bid process would stem the tide of surplus power, which Ontario sells at “fire sale prices” Gallant claimed recently in a radio interview on CFRA, and save millions.
So would cancelling Ontario’s egregious conservation program in which customers are urged (shamed?) by a comprehensive advertising campaign to cut back on electricity use. The campaign costs $300 million a year and what happens when consumers do cut back? (As we have.) The rates go up anyway.
We’ll see if the Wynne government is actually interested in positive action and in helping people.