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.

Comments

windbuddy
Reply

well I see Gallant is back at it again. The self-appointed guru of the anti-wind movement is an excellent wordsmith if nothing else. He cherry picks just a few facts from the production report, sprinkles in a dash of his own guess work, and bakes a commentary that his followers eat up with enthusiasm. WCO was emphatic when they posted a comment that wind energy was given first-to-the grid status. Gallant say that wind generators are paid to curtail wind. Which is it? As far as possibility of blackouts and brownouts, these used to occur when there was not enough production to meet demand. Gallant seems to think there is the same threat with his estimate of over production. Which is it? Does he not know that the production/demand response on the grid is managed in milliseconds of time? The advances being made in energy storage will soon solve the problem of matching production to demand? Utility scale storage facilities are already in use in Ontario.

Bert Zegers
Reply

Don’t you dare to use your real name “windbuddy’?

Adding storage only further increases prices. It is inefficient because of high losses and only used to store intermittent wind power. Who pays for this storage? Is there not enough damage done to our economy already?

Barbara
Reply

Renewable energy such as wind and solar projects require a guaranteed flow of money or they won’t be built.

First on the grid or payment for not producing will work for supplying the guaranteed flow of money.

John Vincent
Reply

Whoever “windbuddy” is, you obviously have no comprehension of the operation of a power system. Aside from pumped storage at Niagara, there is no meaningful commercial electrical storage system in place. No ,matter how you cut it, wind and solar are intermittent and non planable. That alone makes a sysem unstable the more are in place. That’s a no brainer. Even when backed up by gas generators, that could carry the system reliably by themselves, your millisecond response times become more difficult to achieve as more variable generation comes into place. there is nothing good about wind and solar no matter who you cut it, that is unless you are the recipient of the cash flowing from the public purse.

windbuddy
Reply

The Fox/Gallant article you direct me to is almost 5 years old. Unfortunately, wind lost it’s first-to-the grid privilege about 2 years ago. Solar and bio remain having first status. WCO should know this!!

Wind Concerns Ontario
Reply

The contracts under the FIT program gave wind generators the “first to the grid” rights but as IESO grew more concerned with managing the grid to prevent brownouts or blackouts from the variable generation coming from wind (and solar) they negotiated the agreement to curtail wind (the reason they erected met stations) for a price (never disclosed). That agreement was started mid September 2013. In other words they still get first to the grid rights but may be curtailed when we are running surpluses that can’t be exported because of a lack of demand.

Parker Gallant
Reply

windbuddy:

Just to set the record straight.

The contracts under the FIT program gave wind generators “first to the grid” rights but as IESO grew more concerned with managing the grid to prevent brownouts or blackouts from the variable generation coming from wind (and solar) they negotiated the agreement to curtail wind (the reason they erected met stations) for a price (never disclosed but estimated to be $120/MWh). That agreement was started mid September 2014.

This from a CanWEA letter to the IESO tells the story:

““In Ontario, the IESO concluded a successful stakeholder engagement on renewable generation integration in 20145 that resulted in transmission-connected wind generation transitioning into full dispatchable market participant status. The capability of wind generation to be a dispatchable market participant means that the IESO can use the same market functions and operational processes as they typically do with other dispatchable generation.”

Dispatchable means curtailed! In other words they still get first to the grid rights but may be curtailed when we are running surpluses that can’t be exported or stored for future use because of a lack of demand. Ratepayers pick up the cost of that dispatched generation and pay the GA if that generation is exported!

Wind generation is dependent on the weather meaning they cannot be called on to produce power when it may be needed!

Wind Concerns Ontario

Links are allowed, thanks. (We did love the original note about a “stakewielders” meeting though—probably closer to the truth!)

Sommer
Reply

“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”!”

This kind of madness must stop! Who would tolerate this sort of poor management in their own household? Why are people willing to pay taxes to a government that is wasting their money?

Sommer
Reply

Reliable, abundant and cheap energy, with a constant goal of refining technology and processes to keep it as clean and safe as possible is the highest imperative of a functional society.

When ill informed politicians mismanage the energy portfolio innocent people suffer and die as a result.
Why is this happening in Ontario?

Super p.o.'d
Reply

Windbuddy is another Liberal scum sucking piece of crap.
I’ve said it before Ontario: making your declaration of being an unwilling host is all it is. The government is laughing their butts off at the bunch of pussies the Ontario people are.
Stand up and defend yourselves. Where is your honor and respect for those who fought in the World Wars? They gave their lives for us. Shame on Ontario. Double shame on the Liberal government.

Barbara
Reply

Not a willing host helps because this becomes public information.

Noticed that in Essex County Kingsville and Leamington have not signed. Both communities can be badly affected by not signing on.

Bill
Reply

What will Thibeault do? He’ll do nothing but be another stooge of the Evil Queen and her useless minions.

This mismanagement has to stop and Ontarians need to wake up and oust Kathleen Wynne and now.

David
Reply

Funny..I think cornwall buys its power out of Either Quebec or New york state..while at the same time were building a huge solar power park in the north east part of the city……I used too pay $450/month for the electricity (when I lived in Bainesville Ontario ) that i don’t feel I used…I now live in BC and pay about $85/ month.

Thats a lot of money that could of been spent elsewhere…I sure do not miss Ontario Hydro

John Vincent
Reply

Small point perhaps, but Ontario Hydro hasn’t existed for close to twenty years, so you can’t blame them. BC gets most of their power from hydraulic stations and not wind or solar. Consequently you don’t have the obscienly subsidised usless “green energy”. Instead you have useful “green energy” that is low cost and works….hydraulic.

Steve
Reply

So just saying here after a meeting with the new hydro ombudsman and finding out exactly what is going on. We are screwed.

Remember the 37 billion that was taken from us as reported by the auditor general. Well that wasn’t enough. They want another 100 billion more to pay for mcguintys green energy plan from 2009. You know the one where they were paying .80 a kW hour for people to put solar on your house. Yep they signed up enough people to pretty well bankrupt the province over twenty years. So since they haven’t made enough to cover this they are coming after us. This is the bottom line here folks. They can throw up all kinds of smokescreens or whatever they can to try to baffle us but this is the facts.

The conservatives say they have a plan to limit some of the load but are not going to release any plans till the election. Yeah thanks guys.

My best advice that I can see right now is put solar on your house through the micro fit program or go completely off grid if you can. We are not coming back from this. The price is only going to go higher. We have to pay this back in twelve years. Lord help us all.

Ps: they don’t give a damn if you don’t have enough money to pay. They will cut you off. I know right now anyone making under 25,000.00 cannot afford hydro, probably within two years that amount will be up to 30,000.00 prepare yourselves they don’t care on any side. Sorry for the bad news but better that everyone that can’t afford hydro now is prepared for what’s coming next.

John Vincent
Reply

If you put solar on the roof and do it through MicroFIT, you’re contributing to the over cost problem just as much as any wind or large commercial solar plant. You’re taking money from the rest of us electrcity users to eleviate your financial problem and not contributing anything worth while back to the grid or our pockets
If you go off grid and pay for it yourself, no problem.

Albert Rogers
Reply

Obviously, “first on the grid” is the killer clause. If an intermittent generator has priority over a less expensive one, there needs to be a damn’ good reason for it, AND THERE ISN’T

Tony Bridgens
Reply

I suppose when we are all driving electric cars, their batteries will provide some kind of storage for electricity.
Although Ontario Hydro was a government thing, Im not sure it was as bad as what we are going through, with business and politicians running things instead of professional engineers.

Bert Zegers
Reply

If someone has a electric car, and Hydro One uses the car battery as storage, than the person wants to drive, but sorry. The wind didn’t blow so Hydro One emptied the battery.
Better disconnect from the grid while the battery is still full.
Maybe Wynne want us all to buy storage- batteries that can be used as cars when she doesn’t need the electricity.

Cliff Huber
Reply

the rural folk on Hydro One are being gouged compared to the cost of power for city and town customers. This undue punishment is embellished by Hydro One making a profit, and the Green Energy Act which promotes wind and solar farms, as previously mentioned, which have first dibs to the grid, whose transmission connections are paid for by the customers, and need to be backed up by 100% by nuclear, water, gas, or biofuel plants.. The initial mandate of Ontario Hydro was to provide power at cost, but that went out the window beginning with the dissolution of Ontario Hydro in 1999. I am tracking the monthly electricity cost of 8 retired couples in Thunder Bay on Lake Superior (pop. 110 000). Their average monthly bill is $80 via Thunder Bay Hydro. Many rural customers in this region of NW Ontario average a base cost of $300 a month, much more if on electric heating. Several of us only 2 km from Kakabeka Falls power plant (25 MW) pay a delivery charge of over $150 a month. Rural folk pay by geography, unlike the previous system which set the cost akin to the same price of beer across the province.

Barbara
Reply

Shift the costs onto others and buy votes that way!

Costs including where renewable projects are located.

John Vincent
Reply

Wynne isn’t interested in rural votes, she’s already proven that over and over. Urban Ontario carries her day. She’d sooner see us in concentrated urban areas. Easier to control us while she rapes rural Ontario for her misbegotten policies.

notinduttondunwich
Reply

It’ll be interesting when they start ripping up the roads here in Dutton Dunwich. …. inveridiots are still pressing to jam 29 megawindwills into the tiny municipality…. it’ll take someone getting hurt out here before anyone really opens their eyes and ears to what rural municipalities really want or in this case don’t want… I really don’t think the liberals and inveridiots understand the scope of what is about to happen in this quiet farming community…… after the blood spills out here then and only then will the government have to stop and ask us….. What is the matter with you Dutton Dunwich folks???? The liberals will have blood on their hands then and it will be too late for some of us…….

Barbara
Reply

Another UNEP “Gem”

World Resources Institute Ross Center for Sustainable Cities

web.unep.org/climatechange/buildingsday/world-resources-institute

More on the internet about UNEP & WRI/World Resources Institute.

WRI’s 2015 Annual Report: Donors

$1 million or more donors include:
UNEP
Michael Polsky Family

Michael Polsky is also on the Board of the World Resources Institute.

wri.org/about/donors. Just add the www. to the URL

Barbara
Reply

The Chair. & CEO of WRI also serves on the Executive Board of the UN Secretary General’s Sustainable Energy for All initiative/SE4All.

High level connections are also present in the background. Effect?

Barbara
Reply

World Resources Institute/WRI

The $1 million or more donors list also includes: Shell Foundation.

Big Oil.

http://www.wri.org/about/donors

Bert Zegers
Reply

I wonder how Invenergy is going to protect the equipment during construction and the turbines when the project is running in Dutton Dunwich were 84% voted against. Who pays the costs of 24/7 security?
I read somewhere that repair of bullet damage in a blade could cost up to $50.000 Now wind company GDF Sues and others want to ban hunters from turbine sites!.

notinduttondunwich
Reply

That’s the downfall of this whole farce Mr. Zegers…. we the rate payer… Hydro None customers pay the cost of protection and repair of vandalism…. if not then the municipality …… we all know shat runs downhill so you guessed it….. we pay either way…
If the turbines are up and running in Dutton Dunwich then we are all too late unfortunately…. this has to stop now….. everywhere. … the numbers are not there to support cost factors…
you’re not even allowed to submit infrasound data from inside people’s residence that live amongst the turbine projects!!! ! !!! Absurd!!!! Unconstitutional!!!!! Unhealthy!!!!! Uneconomical!!!! Unethical!!!!!

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