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.
Public declaration demands cancellation of wind power procurement, and re-focus of energy policy by the Wynne government
January 9, 2017
The Ontario Multi Municipal Group has issued a public declaration stating it wants the “exploitation” of rural Ontario by the wind power industry, aided by the Ontario government, to end.
“The implementation and expansion of renewable energy (industrial-scale wind turbines and large solar power projects) has developed to the point that it has caused hydro costs to increase, caused a division between rural and urban municipalities, and caused the citizens of Ontario to lose faith in democracy,” says Ron Higgins, Mayor of North Frontenac, in the document.
The municipal group was formed at the last meeting of the Association of Municipalities of Ontario (AMO) after 115 municipalities, or 25 percent of all municipalities in Ontario, passed resolutions demanding that municipalities get final say in the siting of renewable power projects.
“We are now speaking out on behalf of all those communities,” Higgins says.
Rights of communities ‘neutralized’
The Green Energy Act of 2009 removed the right to carry out local land-use planning for power projects –the Multi Municipal Group says that’s wrong. “It neutralizes the rights of residents of rural Ontario to advocate for, rely on and claim the benefit of sound land-use planning principles,” Higgins says. “It amounts to a form of discrimination.”
In the public declaration document, the group lists the impact of Ontario’s wind power program, saying it has not brought the economic benefits promised by the McGuinty government and in fact has resulted in an economic burden and energy poverty. They also say that no environmental benefit has been demonstrated and that “the natural world is suffering” because of large-scale turbines which are disrupting the natural environment and harming wildlife such as migratory birds and endangered species of bats.
Wind power a ‘false hope’ for the environment
Wind power has created “false hope” of steps to be taken to combat climate change and protect the environment, says the Multi Municipal Group. And, the Government of Ontario has ignored knowledge of the negative impacts of invasive wind power technology.
The group demands that all procurement of wind power be stopped, and the Green Energy Act repealed. They also recommend that the government base future policies on generation capacity and conservation, and use current energy supply assets.
“Our rural communities are unprotected against the exploitation [by] renewable energy,” Higgins concludes. The municipalities have no choice but to declare their position to the government and the public formally.
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.
Here is a paper from the Energy Collective, which includes a summary of noise regulations and setbacks. The writer’s conclusion is that worldwide regulation is needed, otherwise local regulation of noise is developed, with heavy influence from the wind power industry.
December 19, 2016
Europe and the US have been building onshore wind turbine plants in rural areas for more than 25 years. Anyone living within about 1.0 mile of such plants would hear the noises year-round, year after year. Those nearby people would be experiencing:
Decreasing property values.
Damage to their health, due to lack of sleep and peace of mind.
Living with closed windows and doors, due to year-round noises.
Exposure to infrasound.
The wind turbine noise problem is worldwide. Due to a lack of worldwide guidelines, various political entities have been developing their own codes for the past 30 years. The World Health Organization is finally addressing the lack of detailed guidelines regarding such noises.
World Health Organization Noise Guidelines: WHO, publishes detailed guidelines regarding various, everyday noises, such as near highways and airports, within urban communities and in work places. The guidelines serve as input to local noise codes.
In general, wind turbines are located in rural areas. When they had low rated outputs, say about 500 kW in the 1960s and 1970s, they made little audible noise, and the infrasound was weak. However, when rated outputs increased to 1000 kW or greater, the audible and infrasound noises became excessive and complaints were made by nearby people all over the world.
Worldwide guidelines regarding wind turbine noises are needed to protect nearby rural people, such as regarding:
The maximum outdoor dBA value, how that value is arrived at, such as by averaging over one hour, where that value is measured, such as near a residence, or at the resident property line to enable that resident to continue to enjoy his entire property.
How to measure, or calculate the outdoor-to-indoor sound attenuation of a residence.
How much setback is needed, such as one mile to minimize infrasound impacts on nearby residents.
The maximum dB value of infrasound, how that value is arrived at, where that value is measured.
How to determine the need for a 5 dB annoyance penalty.
The lack of such guidelines has resulted in various political jurisdictions creating their own codes. That process has been heavily influenced by well-financed, pro-wind interests, which aim to have the least possible regulation to maximize profits.
Comparison of Wind Turbine Codes: Below are some highlights from the noise codes of various political entities to illustrate their diversity:
1) DENMARK: Because Denmark was an early developer of wind turbine plants, its noise code is more detailed than of most political entities. It has a buffer zone of 4 times total height of a wind turbine, about 4 x 500 = 2,000 ft, about 0.61 km (no exceptions), and it also has the following requirements regarding outdoor and indoor noise:
For dwellings, summer cottages, etc.: 39 dBA (wind speeds of 8 m/s, 18 mph) and 37 dBA (wind speeds of 6 m/s, 13 mph)
For dwellings in open country: 44 dBA (wind speeds of 8 m/s) and 42 dBA (wind speeds of 6 m/s)
The belowregulations describe the methods and time periods over which sounds are to be measured:
Page 4, par 5.1.1 mentions averaging over various periods. Only the worst average readings of a period are to be considered for compliance.
Page 4, par 5.1.2 mentions a 5 dB annoyance penalty must be added to the worst average readings for a period for clearly audible tonal and impulse sounds with frequencies greater than 160 Hz, which would apply to wind turbine sounds.
Page 6, par 5.4 mentions limits for indoor A-weighted low frequency noise 10 – 160 Hz, and G-weighted infrasound 5 – 20 Hz.
“If the perceived noise contains either clearly audible tones, or clearly audible impulses, a 5 dB annoyance penalty shall be added to the measured equivalent sound pressure level” That means, if a measured outdoor reading is 40 dBA (open country, wind speed 6 m/s), and annoyance is present, the reading is increased to 45 dBA, which would not be in compliance with the above-required 42 dBA limit.
In some cases, a proposed wind turbine plant would not be approved, because of the 5 dB annoyance penalties. The noise of wind turbines varies up and down. The annoyance conditions associated with wind turbines occur year-round. The annoyance conditions associated with other noise sources usually occur much less frequently.
NOTE: The 5 dB penalty does not apply to indoor and outdoor low frequency and infrasound noises, i.e., 160 Hz or less.
– For both categories (dwellings, summer cottages, etc.; open country), the mandatory limit for low frequency noise is 20 dBA (Vermont’s limit is 30 dBA), which applies to the calculated indoor noise level in the 1/3-octave bands 10 – 160 Hz, at both 6 and 8 m/s wind speed. The purpose of the regulation is to ensure neither the usual noise, nor the low frequency noise, will annoy nearby people when the wind turbines are in operation.
Denmark’s Controversial Noise Attenuation Calculations: The controversy in Denmark is regarding the Danish EPA assuming high attenuation factors for calculating attenuation from 44 dBA (outdoor) to 20 dBA (indoor, windows closed) for frequencies above 63 Hz, which yield calculated indoor noise levels less than 20 dBA. The Danish EPA prefers assuming high factors, because they result in compliance, which is favorable for wind turbines.
However, acousticsengineers have made indoor field measurements (supposedly “too difficult to measure”, according to the Danish EPA), which indicate many houses near wind turbine plants have lower than assumed attenuation factors, which results in indoor noise levels greater than 20 dBA, i.e., non-compliance, which is not favorable for wind turbines.
However, the final arbiters should not be government personnel using assumptions, but the nearby people. Increasingly, those people are venting their frustrations at public hearings and in public demonstrations.
2) POLAND is considering a proposed a law with a 2.0 km (1.24 mile) buffer zone between a wind turbine and any building. That means at least 65% of Poland would be off limits to wind turbines. Future wind turbine plants likely would be offshore. …
Wind power a significant portion of punishing electricity bills, community coalition says. Cancel contracts wherever possible, immediately.
The Ontario Ministry of Energy asked for input to its new Long-Term Energy Plan (LTEP) both online and through a series of consultations held throughout the province in October and November.
Wind Concerns Ontario filed its formal comment document this week on behalf of its membership, and recommended the Ministry do everything it can via the LTEP to get costs down. That includes cancelling the wind power contracts awarded past spring, cancelling contracts for wind power projects not yet built, cancelling contracts for projects already operating that are not meeting the terms of their Renewable Energy Approvals, and permanently cancelling the Large Renewable Procurement (LRP) II process, which is currently only “suspended.”
“I was horrified by the comments about the growing energy poverty in this province and the fact that social assistance agencies like the Food Bank association and the United Way are pointing at electricity bills as a major factor,” says Wind Concerns Ontario president, Jane Wilson.
“We are in a situation of surplus power, and the past few years have clearly shown that not only is large-scale wind power development a poor source of power, it is also unaffordable, and has few benefits for the environment. More than half of wind power produced is unusable, but we’re paying for it anyway. Poor families, and people on fixed incomes like seniors are paying for it — this has to stop.”
While the corporate wind power lobby maintains that wind power is a low-cost option for power, Wind Concerns Ontario’s analysis shows that the real cost is far higher than the industry and government say. Costs such as wasting nuclear and hydro power to accommodate wind power when it shows up in times of low demand are often not included in promotional material.
It’s also a myth that the government actually makes money on selling surplus power, WCO says.
Ontario electricity customers are bearing costs that they shouldn’t be, the report also says, such as the Low-Income Energy Assistance Program which should properly be funded by the ministry responsible for social assistance, not already over-burdened electricity customers. Inequities between urban and rural power customers also need to be addressed: rural Ontario is being penalized by being forced to host wind power projects and then charged more money for electricity.
“The Premier and the Minister of Energy have both said that the energy policy has failed, and that the government now needs to get electricity bills down,” Wilson said. “That should be the focus of the new Long-Term Energy Plan: to find lowest cost sources of power and to do proper planning based on cost-benefit analysis.”
Wind Concerns Ontario’s recommendations:
Reduce costs by cancelling contracts for wind turbine projects. The supply of power in Ontario is “robust” and additional capacity is not required. The action affects LRP I and II, FIT 5.0 and projects without a Notice to Proceed.
Reduce costs by reviewing contracts for operating projects being paid excessive rates. Assess potential to buy out all contracts to eliminate cost over the medium term, while achieving immediate savings by eliminating the need to dispose of surplus electricity.
Reduce costs by removing non-electricity costs from consumer charges, ending ineffective conservation programs and funding for speculative innovation.
Reduce costs by reassessing delivery costs and improving customer service.
Reduce costs through improved procurement processes.
Four years ago, Dr Robert McMurtry (former Dean of Medicine and Western University, companion of the Order of Canada) and independent health researcher (retired pharmacist and health care executive) Carmen Krogh published a “case definition” and diagnostic criteria as a diagnostic tool to help family physicians and others caring for patients who may have been exposed to wind turbine noise emissions. The paper was first published in the Journal of the Royal Society of Medicine, in 2014.
The diagnostic criteria, McMurtry and Krogh explain, were “intended to be used by licensed medical practitioners trained in diagnostic procedures. The case definition requires application of professional medical judgment and diligence including the conduct of a thorough history, physical examination and investigation to rule out alternative explanations” for the patient’s symptoms.
Dr. Robert McCunney and Dr David Colby, with two other authors, published a critique of the case definition which was published in 2015. Among other comments, the doctors alleged that Dr McMurtry and Carmen Krogh failed to give any “indication of potential conflicts of interest” in their original article.
McCunney and Colby fail to disclose wind industry payments
In the article published yesterday, McMurtry and Krogh responded that as health care professionals both were quite aware of the need to disclose any conflict of interest … there simply wasn’t any. Moreover, they wrote in rebuttal, “the obligation to state potential conflicts of interest would also extend to the authors McCunney et al. Any statement should include Drs McCunney, Mundt and Colby relationships with the wind industry including, but not limited to, payments received from the wind industry to serve as experts and/or prepare reports. ”
“The declaration by McCunney et al. is incomplete,” McMurtry and Krogh conclude, “as it omits disclosure of payments received for other services …”
Mathematical exercise could mislead
Other aspects of the McCunney group critique are discussed and refuted, and McMurtry and Krogh make the particular point that the “display of combinatorics” by McCunney and colleagues was an exercise in math that had the potential to “mislead readers as it fails to use the case definition as it is presented and intended.”
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.
Ottawa-based energy economist Robert Lyman has provided this summary of a recent paper on energy subsidies in the United States.
December 12, 2016
The Energy “Subsidy” Debate – Some Additional Fuel for the Fire
One of the recurring side debates that always seems to rage between those who favour large public spending to reduce greenhouse gas emissions and those who argue that such expenditures are not justified, concerns whether energy markets are already “distorted” by existing subsidies to fossil fuel industries.
There are many complex elements to this debate, including the question of what actually constitutes a “subsidy”, who benefits from it (producers or consumers?), whether the costs of environmental effects caused or avoided should be included in the calculations, whether tax subsidies (i.e., deductions and credit that provide incentives for investment) should be weighed against the revenue received by governments when the investments occur, and so on. There are few simple answers.
With that preamble, I think John Petersen, a lawyer and investment analyst with special expertise in energy storage technologies, has provided some valuable additional information in his recent article on the subsidies provided by United States governments to Tesla Corporation and its counterpart SolarCity (both owned largely by Elon Musk). Tesla manufactures electric cars (EVs) and SolarCity manufactures the batteries needed by EVs and other users. The details of Petersen’s calculations can be found in his article here:
The combined U.S. federal subsidies to Tesla and SolarCity per vehicle sold in 2015 include $2,400 for the solar panels, $2,100 for energy storage technologies, $2,250 for GHG emission credits, and $7,500 for EV investment tax credits, for a total of $14,250. In addition, in states like California that offer zero emission vehicle (ZEV) tax credits, each vehicle sold qualifies for a $7,750 tax credit. The combined federal-state subsidy is thus $22,000.
If you assume that an average EV will save 600 gallons of fuel per year during a ten-year useful life, the combined subsidies work out to $3.67 per avoided U.S. gallon in ZEV states and $2.38 per avoided gallon in non-ZEV states. That is equivalent to $413 per tonne of GHGs avoided in ZEV states and $268 per tonne avoided in non-ZEV states.
Petersen also offers some comparative information on federal subsidies provided to different energy sources produced in the United States, based on data from the Energy Information Administration for 2013 (the most recent year available).
The following table shows the subsidies paid, the energy produced in 2013 from that source, and the subsidy per million British Thermal Units (BTU) to provide a common standard of comparison.
U.S. Federal Subsidies to Energy Production 2013
Energy Source Subsidies Energy Production Subsidies per
(millions) (trillion BTU) MMBTU
Coal $1,085 20,209 $0.05
Oil and Natural Gas $2,346 43,695 $0.05
Hydropower $395 2,579 $0.15
Nuclear $1,660 8,117 $0.20
Biofuels $2,445 4,495 $0.54
Geothermal $345 220 $1.57
Wind $5,936 1,549 $3.83
Solar $5,328 286 $18.63
For comparison, the current spot price of natural gas in the United States is $2.96 per MMBTU.
Petersen notes that it is not entirely fair to compare subsidies in one year to the production in that year, as the subsidies are intended to increase production over time, and it takes several years in some cases before the up front investment results in production. Still, the difference in magnitude between the per-BTU subsidies to conventional fossil fuels and the renewable fuels is striking. For example, the per-BTU subsidies to wind producers are 76 times as high as the subsidies to coal, oil and natural gas.
It is unfortunate that comparable information is not available for Canada.
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.