Wind farm December bonanza in Ontario: great for wind developers, bad for consumers

What does he know that you don't? You're just gave multi-million-dollar Christmas gifts to wind power developers
What does Santa know that you don’t? You just gave multi-million-dollar Christmas gifts to wind power developers

Why December was the cruellest month if you pay hydro bills in Ontario

Special and exclusive to Wind Concerns Ontario—

The Independent Electricity System Operator (IESO) measures their weeks from Wednesday to the following Tuesday when issuing their weekly summaries.   As it turned out, the week of December 24, 2014 to December 30, 2014 was a wonderful week— for wind developers, that is.

The approximate 3,000-megawatt (MW) capacity of wind turbines operating in Ontario pumped out almost 209,000 MW hours (1,244 MW per hour) of electricity; that represents about 8.4% of Ontario’s total demand of 2.5 million MWh.  That also meant the developers generated $25.8 million in revenue (average of $123.50 per MWh) for the week, providing them with a great Christmas present.

The name on the gift card was Ontario’s electricity ratepayers who were obliged to pick up the costs of the contracts for the wind power generation as it found its way onto that big Santa sleigh known as “Global Adjustment.”  While the wind turbines were producing 8.4% of Ontario’s demand for electricity, Ontario was exporting an average of 3,017 MW per hour, or about 507,000 MWh for the week to Michigan, New York, Quebec, etc.  The 507,000 MWh represented 20% of Ontario’s demand.

The volume of those exports resulted in the “weighted average HOEP” (hourly Ontario electricity price) which came in at a lowly $5.66 per MWh for the week, generating just under $2.9 million.

The utility-scale wind turbines, as noted above, produced 209,000 MWh which was 41.3% of the export volumes while generating electricity at about 41% of their capacity.  Ontario didn’t need that power.  So while exported surplus power nets a few million, the sad part of this Christmas story is that the “bare bones” cost of wind’s generation was $24.6 million ($25.8 million in payments to wind developers, less $1.2 million generated from the sale of the 209,000 MWh via the HOEP) all paid for by Ontario’s ratepayers.

Not included in the (one week) cost of $24.6 million to subsidize wind developers were the additional levies hitting ratepayers through payments required for back-up for wind generation for idling gas plants, spillage of clean hydro and steamed-off nuclear and the additional cost of those meteorological stations to measure how much we ratepayers pay for constrained wind.

The cost of the Christmas present to the wind developers was about $5.00 for each Ontario ratepayer (just the $24.6 million).  Most of that Christmas gift will be transferred to foreign banks in countries (South Korea, USA, Germany, etc.) where the developers’ head offices are located along with a big ho-ho- ho from our Energy Minister, Bob Chiarelli.

©Parker Gallant,

January 11, 2015

Comments

Barbara
Reply

Pursuing the present policy of curtailing and selling power in this manner is at the very least unethical since the people own the power system, IMO.

If Hydro One comes up for sale, maybe the people should consider buying shares in this company. Then hire people who know how to run a power distribution company which can then make its own power contracts?

Johana
Reply

Please let us know as soon as this windfall [pun intended] is imminent.

Leave a comment

name*

email* (not published)

website