When wind power rises so do exports and electricity costs: Parker Gallant

Parker Gallant looks at five years of the Green Energy Act in Ontario, and what it has cost Ontario's electricity customers
Parker Gallant looks at five years of the Green Energy Act in Ontario, and what it has cost Ontario’s electricity customers

Wind output up, exports up, cost of electricity up— no coincidence

Five years ago, in 2009, George Smitherman, Minister of Energy during the McGuinty reign, rammed through the Ontario Legislature the Green Energy and Green Economy Act.  The Act ushered in the FIT (Feed In Tariff) and MicroFIT programs, attracting corporations from around the world who wanted the lucrative power contracts being let by the government-mandated Ontario Power Authority.

The result of the Act is now evident with huge chunks of rural Ontario covered with solar panels and spiked by 500-foot industrial wind turbines cranking out intermittent electricity, surplus to our demand, 99.9% of the time.

Early in 2010, the Independent Electricity System Operator (IESO) advised us of electricity generation    for Ontario by fuel type for 2009.  The headline in their press release stated: “Wind Power in Ontario Generates a New Record in 2009.” Wind produced 2.3 terawatt hours (TWh) or 1.6% of Ontario’s total demand of 139 TWh.   The same press release noted Ontario exported 15.1 TWh, and wind’s percentage of those exports was 15.2%.  The release also disclosed the average HOEP (hourly Ontario electricity price) for 2009 was $31.6 million per TWh, and the Global Adjustment (GA) $30.6 million/TWh.

That means, the costs of power generation (on average) were $60.2 million per/TWh.

Wind significant share of the loss

In 2009, Ontario exported 15.1 TWh generating revenue of $477.2 million (15.1 TWh x $31.6 million), but the TWh exported cost Ontario ratepayers $909 million (15.1 TWh X $60.2) — that means Ontario lost $432 million.  The cost of power production from wind was $283 million (2.3 TWh X $123 million/TWh), representing 65.5% of the losses on the exported TWh.

Fast forward five years to January 2015: IESO’s announcement indicated Ontario’s demand in 2014 was 139.8 TWh. Wind was 6.8 TWh, or 4% of all generation.  Exports grew to 19.1 TWh and wind’s percentage of exports shot up to 35.6%.   HOEP was $36 million/TWh and the GA jumped to $54.6 million/TWh, making the all-in-cost to Ontario’s ratepayers $90.6 million/TWh.   The cost to produce 19.1 TWh was $1,730 million (19.1 TWh X $90.6 million), and revenue generated from the sale was $688 million (19.1 TWh X $36 million). That left Ontario’s electricity ratepayers to pick up the $1.042 billion shortfall.  The cost for 6.8 TWh of wind was $836 million plus another $42 million1. for curtailed wind bringing its cost to $878 million, representing 84 % of export losses.

$4 billion

The all-in-cost of Ontario’s electricity generation jumped from 6.2 cents/kWh in 2009 to 9.06 cents/kWh in 2014, an increase of 46%. Ratepayers picked up an additional burden of $4,048 million for 139.8 TWh.

The extra .8 TWh (800 million kWh) Ontario ratepayers consumed in 2014 versus 2009 cost us over $4 billion or $5.06 per/kWh, much of it was caused by the push for renewable energy and the need to have back-up power plants for when the wind is not blowing or the sun isn’t shining.

Imagine how many subway stations or hospitals $4 billion might have built.

©Parker Gallant

April 13, 2015

Comments

Bob Lyman
Reply

Parker,

Thank you as always for monitoring, analyzing and reporting on the trends and statistics concerning the public policy disaster that is Ontario electricity policy. One hardly knows what to say about a situation that has gone on for so long and about which people like you have worked so hard to keep the public informed. What kind of cognitive dissonance causes the Ontario voter to go on ignoring the series of bad news stories, the scandals and the damning Auditor Generals’ reports? Only the complete blindness of the environmental fanatic should stop Ontario residents from rising up and completely condemning the current government and its green agenda. The challenge for all of us is to make our friends and neighbours more aware and to organize politically so that some day the current regime will end.

Sommer
Reply

I understand that ‘wilful blindness’ is a legal term to describe the unwillingness to look at the facts and take full responsibility.
Is this not a crime?
In the case of subjecting men, women, children and animals in rural Ontario to infrasound/radiation at levels above WHO acceptability standards, why is this not a crime?
In the case of increasing energy poverty and the serious debt load of every man, woman and child in Ontario when we are already so deeply in debt, is this not a crime?
Why are there no Liberal MPs who have the courage tho stand up and say, “Enough is enough!”?
What on earth is happening to Ontario?

Digger Dan
Reply

Premier Wynne come clean on the Solid Gold scandal, then resign.
A government swindle and coverup of historical proportion.

Put up windmills in the public back yard and People have no right to complain.
Try to drill a 3 inch hole into the rock on a mountain hundreds of miles from the nearest human and the Indians will stop it

Andre Lauzon
Reply

Thank you Mr. Gallant, for what you and all the people at WCO are doing for the Province. I wish someone could put up a few windmills on the lawn of the Provincial Legislature………….maybe, just maybe, the people that call themselves reporters would start investigating, and reporting, the enormity of this scandal.

Sommer
Reply

I was at the National Trade Centre at Exhibition Place in the lake front in Toronto, at an exhibition, the year the turbine at the gates were first running. Two thirds of the exhibitors became ill during the week long exhibition…coincidence? The public, en masse complained of being overwhelmed and exhausted. Some said the experience was “so stressful”…coincidence?
Now I understand that that turbine is no longer functioning. Why?

Gene Balfour
Reply

Kathleen Wynne government is a criminal organization backed by public sector labour unions. Follow the votes and you will find the money.i It may not be obvious, but the extra energy revenues go to fund the high wages, rich employment benefits and public sector pension obligations that have been committed to our public servants. And in spite of this ripoff, the public debt marches boldly to $300 billion. Until we get our government cost of operations in check, Wynne et al will continue to need this energy con and introduce new cons such as her cap and trade scheme. It continues to amaze me that our citizens are not rioting in the streets over the sins of government.

Amin
Reply

How could a government be so blind, so wrong? The answer is: government is mostly almost always wrong and blind. This is what happens when the leadership takes into its head to create or leave a legacy of its time in office. Nuclear proliferation in the Middle East will next the next example. Meanwhile, Ontario will be saddled with increased prices of everything because of cap and trade, the Wynne-lose legacy.

R Budd
Reply

I think we all get the fact wind energy is expensive. But its accepted by many (I’d say most) as reasonable if it improves emissions. It needs to be made very clear that Ontario’s wind development at the expense of our current nuclear is a loser on both those counts.
By just focusing on costs without pointing out the Long Term Energy Plan actually shows increased fossil reliance while we triple wind/solar, we give wind tacit credit where its not due.
Every time we point out the high cost of RE in On. we also have to point out we’re not reducing emissions with it and the impact on the landscape is huge.

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