Parker Gallant: let’s cap electricity trade in Ontario
Let’s cap Ontario’s trade in electricity
Comparing 2008 to 2015 shows significant losses to Ontario’s electricity consumers
On Wednesday, November 19, 2008, the year before the Ontario Legislature passed the Green Energy and Green Economy Act (GEA), the total demand for electricity in Ontario for the day was 434,000 MWh and, according to IESO’s summary, the market (hourly Ontario electricity price or HOEP) placed a value on that demand just shy of $30 million. Ontario exported 24,600 MWh and received $1.6 million for those exported megawatts. At the time the average price Ontario ratepayers were paying for a kilowatt hour (kWh) of power was 6.02 cents according to the Ontario Energy Board.
Seven years later on Thursday, November 19, 2015 IESO reported Ontario’s total demand was 351,000 MWh (83,000 MWh less) perhaps reflecting the 78% increase in the average cost per kWh to 10.7 cents/kWh in those seven years! The market value IESO recorded for the day of the “Total Market Demand” (425,000 MWh) had a negative value of -$1,092,000.
That day IESO reported Ontario exported 75,000 MWh paying New York, Michigan, and others $2.57 per MWh to take it off our hands. That means it cost Ontario’s ratepayers an additional $200,000 over and above the monies paid to the generators of $9.4 million for those exports. The $9.6 million estimated cost doesn’t include monies paid to generators for idling gas plants, steaming off power from Bruce Nuclear, spilling hydro or paying wind generators to curtail their production.
In the latter case, wind1. could have produced about 73,000 MWh, or almost 100% of the day’s exports; however, it appears that IESO forced/asked the generators to curtail 27,000 MWh for which they were paid just a few dollars short of their contracted2. price. An estimate of the cost to ratepayers for the day’s generated and curtailed production would put it close to what it cost ratepayers for those exports, in the neighbourhood of $9 million.
While annual Ontario ratepayer demand fell over 5% in the seven years from 2008 to 2014 from 148 terawatts (TWh) to 139.8 TWh, the price increased at a rate exceeding inflation by a factor of 5:1. Much of it has to do with the addition of wind and solar generation to the grid, requiring it to be backed up with gas plants (a couple of which have been moved at a cost of $1.1 billion), transmission builds to bring both generation sources to urban communities, and spending (in excess of $3 billion) on conservation programs … all of these costs are absorbed by Ontario’s ratepayers!
Couple that with the cost of exporting our surplus generation to our neighbours and you have today’s outlook: Prices of electricity in Ontario are high and heading higher!
Time to cap the addition of more wind and solar generation, instead of burdening Ontario with a carbon price to further impact disposable income(s) while we are all trying to cope with the relentless climb in electricity prices.
Throwing $10 million a day over the fence to our neighbours has gone on long enough!
© Parker Gallant
- In 2008 wind generated .9 TWh and in 2015 to the end of September it has produced 5.9 TWh.
- IESO has not disclosed what wind generators are paid for curtailed production but rumour indicates it is only a couple of dollars less than the contracted rate.
The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy