Ontario weekend weather forecast: cloudy with 100% chance of lost millions

Almanac

Selling off surplus power: Loss, loss, and more losses

Ontario was once again busy exporting surplus power on the weekend of October 17-19. For every MWh (megawatt hour) we exported, we generated revenue equivalent to purchase one small “Timmies” coffee.  How bad was it? A MWh sold at an average price of $1.58 on the HOEP (hourly Ontario electricity price) market, but Ontario’s ratepayers paid upwards of $110 for that same MWh.   The beneficiaries of that cheap price were the electricity companies in New York, Michigan and Quebec.

That same weekend Ontario exported 186,000 MWh at a cost of about $20.4 million and sold it for $300K; the net cost to Ontario’s ratepayers was $20.1 million. That is without factoring in: the costs of constraining wind (around 10,200 MWh at a cost of $1.1 million) and solar, spilled clean hydro, steaming off Bruce Nuclear (around 70,000 MWh at a cost of $4.2 million), and the gas plants paid to simply idle!  The constrained and curtailed generation probably equaled or came close to the cost of the exports.

From the perspective of the ruling Liberal party in Ontario, the good thing about the cost of those exports is it doesn’t directly increase the deficit—it’s the ratepayers picking up the cost of the subsidy. Nevertheless, they should be aware that extracting the cost of a cup of coffee each day for the purpose of subsidizing exports takes away cash that those ratepayers could spent on other local goods. Removing that cash from our pockets makes the climb out of the high unemployment rates and the reduction of Ontario’s deficit much tougher.   No economist would or could dispute that!

The contracted developers of wind power produced 68,900 MWh on the three days, representing 37% of the total exported MWh. That generated $9.3 million of revenue for the owners, plus $1.1 million for constrained generation.  They operated at about 34.5% of capacity (40% if one includes constrained power) during that time-frame.

If wind power exports were a regular event for Ontario, the costs of just the wind exports would be $3.4 million daily and about $1.2 billion for a full year.

Imagine what $1.2 billion could have paid for—every year for 20 years.

©Parker Gallant,

October 23, 2014

Comments

Joe
Reply

The sale of excess power at cheap rates is not new. However, industrial wind farms have added to the problem. What I would like to know is, for last year as an example, looking over the entire year did hydro exports make or cost us money?

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