Wind power continues to affect Ontario electricity bills

Eulogy for the wind power industry is premature … unfortunately.

December 15, 2016

Parker Gallant in today’s Financial Post

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’s announcement of 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 issued the directive to 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 by Cuban exiles after 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 the highest residential rates in 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.

Wind cannot meet power demand: new report on Ontario’s power mix

“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 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.
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.
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The real cost of wind power

Ontario's Auditor General said Ontarians overpaid billions for renewable power; then Energy Minister Bob Chiarelli said that wasn't true. Parker Gallant details the costs.
In 2015, Ontario’s Auditor General said Ontarians overpaid billions for renewable power; then Energy Minister Bob Chiarelli said that wasn’t true. Parker Gallant details the costs.

December 6, 2016

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.]

Suggestions for Ontario’s power bill crisis

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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.

Read More: Kingston Hydro cuts off single mom who chose groceries over utility bill

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 those in 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.

Ontario: paying for power not delivered, paying for wasted power, and paying to help with skyrocketing bills

In short, just paying and paying. Parker Gallant reviews the first five months in the electricity sector in Ontario, and asks what new Energy Minister Thibeault will do about the impact of the province’s renewable energy policy.

Energy Minister Glenn Thibeault: what will he do about paying for power we don't need, paying for power we don't get, and paying for the economic impact of constant increases?
Energy Minister Glenn Thibeault: what will he do about paying for power we don’t need, paying for power we don’t get, and paying for the economic impact of constant increases?

 

The Independent Electric System Operator (IESO) a few days ago released the 18 Month Outlook; sifting through the pages one finds some alarming comments such as this one: “The need for greater flexibility is related to our current supply mix. Forecast uncertainty from increased quantities of VG [variable generation] is compounded by demand forecast uncertainty.”

More alarming is this quote: “The need for additional flexibility increases as the VG fleet grows.

“Variable generation” is of course a reference chiefly to wind and solar which is causing IESO grid management grief; the situation may well lead to blackouts or brownouts as more power generation in Ontario is variable.

Coincidentally, IESO also released a quarterly publication called “A progress report on contracted electricity supply” which highlights that IESO had, as of March 31, 2016, contracted for 5,814 MW of wind generation and 2,490 MW of solar generation. In fact, 1,434 MW of wind and 334 MW of solar were classified as “Under Development”.

Immediately following, IESO released the May 2016 Monthly Market Report which contained some disturbing facts such as disclosure that the “Weighted Average” for the month for Class B ratepayers was $133.81 per megawatt hour (MWh), or 13.4 cents/kWh (excluding the Debt Retirement charge). That is 20.7% above the average price of 11.1 cents/kWh levied by the OEB as of May 1, 2016.

What that means, is we are heading for another significant rate increase commencing November 1, 2016.

With this in mind let’s look at some events in the first five months of 2016.

The Global Adjustment climbed by over $1.7 billion from the same period in 2015 with Class A clients (large industry) seeing an increase of $310 million or 88%, and Class B ratepayers a $1.435 billion increase (43,3%). That happened even though consumption was virtually flat!

Another hit was related to curtailed wind (paid at an estimated $120/MWh) and, according to Scott Luft’s conservative estimates, was 730,000 MWh for the five months of 2016. The cost to ratepayers of almost $88 million is about 44% of the estimated $200 million annual cost for the OESP (Ontario Electricity Support Program) which kicked in January 1, 2016. That means, Ontario ratepayers are paying mainly large foreign-owned wind generating companies to cut back on power production at the same time as we pay to support as many as 571,000 households suffering from “energy poverty”!   The irony? Intermittent power generation from wind, produced out-of-sync with demand, is causing households to pay for power not delivered and also pay for power needed by low-income households!

In the first five months of 2016 the average intertie (exports minus imports) was 6.570 million MWh; Ontario generated revenue of $68.4 million from the average HOEP (hourly Ontario electricity price) sale price.   The ratepayers in Ontario, however, were obliged to pick up the Global Adjustment costs of $674 million (average GA cost per MWh was $102.61), meaning it cost almost $150.00 per “average” household just to support surplus export sales.

While all this was going on, OPG was also spilling hydro (1.7 million MWh1) as they report in their 1st Quarter results, Bruce Nuclear was steaming off nuclear power, and wind power generators were being paid an average of $133/MWh to produce out of sync with demand intermittent power that is now apparently causing IESO grief in ensuring they can manage the grid.

The waste and expense: does new Energy Minister Glenn Thibeault know that his predecessor instructed the IESO to acquire another 600 MW of wind in the next procurement phase?

One might ask, will Energy Minister Thibeault have the intestinal fortitude to cancel that directive and save Ontarians from paying for power that is clearly not needed?

© Parker Gallant

June 24, 2016

 

 

  1. OPG were paid for spilling the 1.7 TWh of hydro which could have supplied almost all of the low-income households with free power for those five months.

Ontario spills cheap hydro for expensive wind –and wants more

Ontario continues its buy-high, sell-low policy for electricity by wasting cheap hydro in favour of expensive, intermittent wind. And the government is contracting for more, says Parker Gallant.

Your energy future: losses by the million
Ontario’s economic future: losses by the million

Ontario Power Generation or OPG just released their first quarter 2016 results; while revenue increased 9.1% or $123 million, net income was down from $234 million in the 2015 first quarter — a drop of 47.4%.   The blame for the drop in net income was principally laid on the “Regulated-Nuclear Waste Management segment” caused by lower income from the “Decommissioning Segregated Fund.”

But they didn’t blame water spillage for hydroelectric power. Why? Because OPG now are paid for wasting what would cost ratepayers a miserly 4.4 cents a kilowatt hour (kWh) delivered to the grid.

The spillage and waste of cheap hydroelectric power increased from .3 terawatts (TWh) in 2015 to 1.7 TWh in 2016; the OPG quarterly statement makes reference to that stating “Reducing hydroelectric production, which often results in spilling of water, is the first measure that the IESO uses to manage SBG [Surplus Baseload Generation] conditions.”

Bear in mind that power generation from wind which has “first to the grid” rights in Ontario, is the real reason for spilling hydro. That means ratepayers pick up the costs of spilled hydro at $44 million per TWh and at the same time, customers paid for surplus wind generation at $133 million per TWh or $226 million for the spilled 1.7 TWh. Ontario’s benevolent electricity ratepayers also picked up the cost of idling gas plants tasked with backing up wind and solar generation.  A rough estimate of those gas plant costs (we pay from $10K to $15K per MW per month) would be 9 cents/kWh, or about $150 million (to back up 1.7 TWh of wind generation). That  brings the total cost of wind generation displacing 1.7 TWh of spilled hydro to a cost of $450 million or 26.5 cents/kWh.

Do the math, Bob

Calculations are:

Wind generation cost @ $133/MWh (1.7 TWh @ $133 million per TWh = $226 million)

+ gas generation backup of 330 MW (assuming an average of $12,500 per MW per month and 60% capacity generation per MW) = $150 million

+ the cost of spilled hydro @ $44 million per TWh = $75 million for 1.7 TWh.

The total cost (without inclusion of steamed-off nuclear, cost of solar power, losses of revenue for exports, etc.) is

$451 million for the 1.7 TWh OPG spilled.

 

Cost to Ontario ratepayers for the 1.7 TWh OPG spilled cost ($451 million/1.7 TWh) = an average of 26.5 cents per kWh.

What this means: the Green Energy Act and its many flaws has created a situation where publicly and privately owned generators suffer no consequences from producing power “out of sync” with demand, and as a result, electricity ratepayers are penalized by paying six times the actual cost for a kilowatt of electricity (including a built-in profit).

Our Energy Minister, Bob Chiarelli appears to lack the ability to apply basic math to the management of his portfolio, as is apparent from his April announcement that he wants another 600 MW of power we don’t need from wind.

© Parker Gallant

May 16, 2016

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

Energy policy in Ontario: botched planning and bad forecasting

Ontario, you just can’t win, says Parker Gallant

Energy Minister Chiarelli (centre) and IESO's Campbell (R) at wind power lobbyist event: announcing  more money for Big Wind. For you? More pain.
Energy Minister Chiarelli (centre) and IESO’s Campbell (R) at wind power lobbyist event: announcing more money for Big Wind. For you? More pain.

One would think that recent revelations such as from Germany where it was stated “Wind Farms Paid €500 million-a-year-to-stand-idle” and China where they have put “a Chill on New Wind Energy Projects” would give Energy Minister Bob Chiarelli pause.

Instead in his luncheon speech at the CanWEA Spring Conference he announced Ontario would seek another 600 MW of wind capacity.  Maybe it was a way to obtain donations to the Ontario Liberal Party (OLP) from CanWEA and its members before rules on political donations are amended to the detriment of his party.

But if Minister Chiarelli had waited or inquired of the Independent Electricity System Operator (IESO) he might have discovered that wind played a big role in the unwelcome announcement from the OEB about the electricity rate increase that came into effect May 1, 2016.

The 2016 first quarter results, compared to 2015, might have opened his eyes. Alas, there was no pause, his eyes are not open, and Ontario ratepayers will feel the effects of his wind power announcement in the future.

Looking at 2016’s first quarter compared to 2015 shows wind generation from grid-connected and distributor-connected sources, coupled with curtailed generation (see above on the cost to Germany’s curtailment), in Ontario increased by 26.3% (772,500 megawatt hours [MWh] to 3.7 million MWh). This jump occurred as Ontario ratepayers were curtailing their demand, reducing consumption by 6.2% (2,308,000 MWh) or enough to supply one million average ratepayer households.

You might think Minister Chiarelli would tout his “2013 Conservation First” document as the reason for the drop in demand, but instead, he blamed the milder winter as compared to the prior two as the reason for the latest increase in electricity rates.  Because Ontario ratepayers didn’t use as much electricity, there was a shortfall in the forecast of revenue.

It is worth a look at the revenue generated in the 2016 first quarter versus the 2015 comparable quarter:

In the first quarter of 2016, Ontario Demand, as recorded by IESO, was 35,159,000 MWh and the cost of that power based on IESO’s record of both the HOEP (hourly Ontario energy price) plus the Global Adjustment (GA) paid out $3.847 billion for that demand.

The first quarter of 2015 saw Ontario Demand of 37,467,000 MWh and the cost of that power, HOEP plus the GA, paid out by Ontario’s ratepayers was $3.276 billion.

Those who can’t get the point of “paying more for less” will quickly note, in spite of consuming 6.2% less power in 2016, it cost $571.1 million more.  Quick math shows revenue jumped 17.4% despite the consumption drop, but it apparently wasn’t enough, hence the increase come May 1, 2016.  Had Ontario demand matched 2015, the cost to ratepayers would have been $875 million higher for the three months.

The other missing ingredients include: the 13% HST collected on the additional revenue which put $50 million into Minister of Finance Charles Sousa’s coffers, and the second benefit was he no longer had to budget for the 10% Ontario Clean Energy Benefit — that reduced the cost of the electricity line in 2015 by $328 million reducing our electricity bills by a like amount while increasing the provincial debt.

Wind power generation played a significant part in the cost to ratepayers producing power surplus to Ontario demand. The cost of wind’s generation in 2016 was about $494 million versus $391 million in 2015, an increase of $103 million. Its generation in 2015 of 2,941,000 MWh grew by 26.3% in 2016 to 3,713,000 MWh and represented 60.1% of Ontario’s gross power exports, up from 46.2% in 2015.  Ontario’s exports in 2015 generated revenue of $270.1 million in 2015, but only $67.3 million in 2016.  The cost to ratepayers to produce those exports in 2015 netted out to $280 million and grew to $609 million in 2016, an increase of $328 million or 117.2%.

What the first quarter clearly demonstrates: there is no need for more intermittent and unreliable industrial wind turbines producing out-of-sync with demand electricity, adding to ratepayer costs.

It also demonstrates the Wynne government’s conflicted messaging.  Wynne and Chiarelli both insist their policy is “conservation first” but when we comply, Chiarelli he blames rising prices on lower consumption. Ontario, you can’t win.

It is time Mr. Chiarelli examined the obvious: botched planning and bad forecasting by the agencies his Ministry directly manages or controls. The public is not being served.

© Parker Gallant

May 2, 2016

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

False promises of electricity bill relief from Ontario energy minister

Time the Energy Minister looked beyond the fund-raising dinner parties.
Parker Gallant: Time the Energy Minister looked beyond the fund-raising dinner parties.

In an effort to determine what track Energy Minister Chiarelli’s electric train is on I took a brief look at his ministerial forecast, “Achieving Balance”.  My interest was piqued by a recent article suggesting China has put a chill on new wind power projects.  As it turns out, China is having trouble because industrial wind turbines are “churning out power that’s being wasted” and they are being forced to curtail wind to ensure stability in some of the country’s grids.

Having recently noted the costs to Ontario ratepayers for just one day when power from wind was being curtailed, I decided to examine costs on a longer term. Thanks to Scott Luft, who does an incredible job of logging estimated curtailments of industrial wind turbines (IWT), I was able to determine the results for the final quarter of 2015.  Total estimated curtailments for the Quarter ended December 31, 2015 were 434,750 megawatt hours (MWh).

An Independent Electricity System Operator (IESO) report released a couple of weeks age claimed IWT-generated 3.0 terawatts (TWh) in the last quarter of 2015, so, if one includes curtailed wind, ratepayers were obliged to pay for 3,434,750 MWh. That represents  93.9% of net exports (exports of 5.401 TWh less imports of 1.742 TWh) or 63.6% of gross exports.

What this means is that in the fourth quarter of 2015, wind-generated electricity was all surplus to our needs, without including steamed off nuclear, or spilled hydro!

The 3,434,750 MWh is estimated to have cost ratepayers approximately $460 million. The 3 TWh of electricity IWT delivered to the grid cost about $405 million and the curtailed cost was almost $55 million.  During the quarter, the HOEP1. averaged $1.50/MWh, meaning if all of generated and curtailed wind was a part of the 5.4 TWh exported, it would have generated only a shade over $5 million —that would have reduced the cost to ratepayers to $455 million.   With 92 days in the last quarter of 2015, the money paid by Ontario ratepayers averaged daily was almost $5 million.

Back to Energy Minister Chiarelli’s “Achieving Balance” long-term energy plan, we should be captivated by the promise made: “Significant ratepayer savings will be realized as a result of reduced Feed-in Tariff (FIT) prices, the ability to dispatch wind generation, the amended Green Energy Investment Agreement, and the decision to defer new nuclear.”

Clearly the “significant ratepayer savings” promised by Minister Chiarelli was for the benefit of our neighbours who purchase our surplus electricity at a fraction of the costs to Ontario ratepayers.

It is well past the time for Minister Chiarelli to look at China’s position and to cease any further procurement of IWT generation, or is the Ontario Liberal Party too dependent on party donations from the IWT developers as suggested in a recent article emanating from Queen’s Park?

©Parker Gallant,

April 5, 2016

  1. The Global Adjustment is not levied for exported electricity.

The views expressed are those of the author.

Green energy done badly: stories from around the world

WEEKEND READING

April 2, 2016

We present a collection of stories that review the manner in which strategies that are supposedly positive for the environment have been enacted (usually without any sort of cost-benefit or full impact analysis), and what the results are to date.

From Terence Corcoran’s review in The Financial Post, to a review of German energy policy (this is a sad, sad story worthy of Dickens), an article in Prince Edward County’s Wellington Times (one of the last independent newspapers in Canada) on a wind power developer’s arrogance, and last, an opinion on what the real effect on the local environment green energy policies are in reality, the collection deserves a read … and consideration by the Ontario government.

Will they? In the words of the team of academics lead by the University of Ottawa’s Stewart Fast, writing recently about the disastrous implementation of the Green Energy Act on Ontario communities, “Our recommendations will unfortunately remain unaddressed, without further consideration or assessment of the lessons that could be learned.” [Fast et al. Lessons learned from Ontario wind energy disputes, January, 2016]

Terence Corcoran, The Financial Post, “Clean, green, and catastrophic.” (Note: our Parker Gallant provided some figures for this article.)

Handelsblatt (Global edition) “How to kill an industry”. (Thanks to energy economist Robert Lyman in Ottawa for sending this in.)

Rick Conroy, The Wellington Times, “There’s always a catch.” (“The wolf has been sent to find out what’s killing all the lambs …” Conroy writes.)

Last, this letter to the editor of Ontario Farmer, excerpted here.

“Off-grid will make a bad situation worse for reluctant grid payees”

A farming friend recently took me on a “crop tour” of rural businesses that are partially or fully off-grid. We saw a sawmill, a pressed-steel manufacturer, a maker of wood-burning stoves, a cabinet-maker and an ethanol plant. Finding it progressively more difficult to remain profitable in the agricultural business with skyrocketing electrical costs, my friend is seriously looking at more cost-effective alternatives. If going off-grid works for others, perhaps it will work for him.

“Off-grid” means that these business owners are no longer victims of usurious hydro rates the Ontario Green Energy Act (GEA) has imposed on the vast majority who obtain electricity from Hydro One and other such utility companies. Are these enterprises trailblazers illuminating a path to greater energy independence for other beleaguered hydro ratepayers?

Or are they creating an even greater financial burden for those who remain on the grid?

And what may be the environmental impact if a great many businesses follow suit?

Operating the Ontario power grid has become exorbitantly expensive under the GEA. It is becoming ever more expensive as greater numbers of windmills spring up to further sully our rural landscapes. … Operating costs of a centralized generation and distribution system are borne by all users. The more users there are, the less share of fixed costs each user pays. Businesses fleeing to off-grid energy alternatives leave fewer users on-grid bearing fixed costs; thus, each user pays more. While going off-grid may financially benefit those who do it, greater economic burden falls on those remaining on-grid, and most have no choice.

Fossil fuels are the primary energy source for off-grid users. Electricity to run their businesses must be generated by some sort of power plant, typically an internal combustion engine driving and electrical generator. It’s far removed from the most cost-effective or environmentally friendly way to generate and distribute electricity —the way we used to do it — but the GEA has made grid power so prohibitively expensive off-grid generation has become economically viable for major energy users.

Dave Plumb

Belmont, Ontario

 

 

 

Spilled hydro adds millions to Ontarians’ electricity bills

Wind power gets first rights to the grid, so clean renewable hydro is wasted [Photo: OPG]
Wind power gets first rights to the grid, so clean renewable hydro is wasted [Photo: OPG]
OPG spills hydro and $150 million goes “down the drain” 

OPG released their 2015 annual report  Friday March 4, 2016; it confirms that 3.2 terawatts (TWh) of water that could have been used for power was spilled last year. (This is similar to the spilled amount in 2014 year.)

How much is 3.2 TWh? Enough to supply about 350,000 average Ontario households with electricity for a full year … but it didn’t!

Here is what OPG’s annual report had to say:

“Baseload generation supply surplus to Ontario demand continued to be prevalent in 2015. The surplus to the Ontario market is managed by the IESO, mainly through generation reductions at hydroelectric and nuclear stations and grid connected renewable resources. Reducing hydroelectric production, which often results in spilling of water, is the first measure that the IESO uses to manage surplus baseload generation (SBG) conditions. During each of 2015 and 2014, OPG lost 3.2 TWh of hydroelectric generation due to SBG conditions.” 

The principal reason we have surplus baseload is due to wind and solar being granted “first to the grid” rights. And, because wind and solar are intermittent (and unreliable) OPG is forced to spill clean renewable hydro power.

While spilling hydro in itself is disturbing in Ontario, especially considering our hydro-electric history, the fact we are now obliged to pay for the spilled hydro at the same time we are paying wind developers 13.5 cents a kilowatt hour (kWh) and solar generators as much as 80 cents a kWh simply adds more costs to our monthly hydro bills.

OPG received $47 million per TWh (4.7 cents/kWh) for the spilled hydro. That means electricity ratepayers’ pockets were picked for over $150 million, or about $31.00 per ratepayer.   Our reward for absorbing that cost was zero.

This month, Energy Minister Bob Chiarelli will likely announce that Ontario will add even more intermittent, unreliable wind and solar generation. Your pockets are not safe yet.

© Parker Gallant

March 7, 2016

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