Wind power industry claims Canada needs more wind power–with a hefty price tag for electricity customers
Wind industry trade association study says Canada needs more wind power. Well, they would, wouldn’t they? Problem is, it doesn’t help anything, least of all the environment, says Parker Gallant. But it does plenty to hurt your pocketbook.
The Canadian Wind Energy Association (CanWEA) press release of July 6, 2016 was headlined “Canada can integrate large amounts of wind energy reliably, cost-effectively, says report” followed by the industry trade association’s assertion that “Canada can get more than one-third of its electricity from wind energy without compromising grid reliability – and at the same time realize economic and environmental benefits”.
The claims were based on a study they undertook (using a chunk of taxpayer dollars to co-fund the study) which GE (General Electric), a major manufacturer of industrial wind turbines, executed.
I recall the story that a wise engineer recounts. A senior research engineer gave him this advice when he joined a large electricity generating company’s “research studies” sector: “Remember to always ask your client what answer they expect to get before you start the experiment. You will need to know that information so you can carefully design the experiment to ensure it will not produce results that prove the opposite.”
One should expect with the objectives of CanWEA and GE so closely aligned the conclusions reached in this study did not produce results that prove the opposite.
Interestingly, only days before, the IESO (Independent Electricity System Operator) posted their 2016-2020 nine-page Strategic Plan which said the opposite of the CanWEA/GE study and its claim about not “compromising grid reliability.” Specifically, “Increasing variable generation, integration of distributed energy resources, and changing demand and supply patterns are creating operability challenges with respect to regulation, voltage control and flexibility.”
So, variable generation (wind and solar) are creating challenges and what CanWEA/GE propose in this study is to add more wind capacity and to urge Ontario to increase its industrial wind to 16,124 MW … and then back that capacity up with 2,500 MW of combined cycle and 600 MW of single cycle gas.
Based on the study’s suggestions we would expect the HOEP (hourly Ontario energy price) market to show further deterioration and the GA (Global Adjustment) to jump higher with exports increasing and ratepayers picking up those GA costs.
The experience of two recent July days makes this very point. Canada Day, July 1st was a moderate demand day for Ontario, but a relatively high generation day for Ontario’s 3,900 MW capacity of industrial wind turbines (IWT), operating at about 38.5% of their capacity. As a result, the combined cost of IWT (output and curtailed) generated payments to the IWT operators was almost $4.7 million. The HOEP averaged a miserly $4.21 per megawatt hour (MWh), meaning the 53,500 MWh exported, generated revenue of only $225,000. Meanwhile ratepayers were required to pay the GA ($113.03/MWh average as at May 31, 2016) which created a subsidy for New York, Michigan, and others of $5.8 million.
In short, the 4.8 million Ontario electricity ratepayers got dinged for about $1.20 each for those exports for that one day.
One week later, July 7th was a relatively high demand day and a typical summer generation day for those 3,900 MW of IWT operating at only 7.5% of their capacity. The cost of the MWh generated by the IWT dropped to about $650,000 for the day, and the HOEP averaged $35.95/MWh, meaning the cost of exports for Ontario ratepayers for that day was $1.5 million or only 30 cents each.
What this means is, simply, power from wind is intermittent and unreliable. It is also not needed and has a bad habit of driving down the value of the HOEP. The effect of the latter simply increases the subsidy Ontario’s ratepayers pay to cover the GA costs of our surplus exports.
Here’s the bottom line: More industrial wind turbines will compromise grid stability and will not result in economic and environmental benefits, contrary to the claims in the partially taxpayer-funded study.
Here’s what Ontario’s new Energy Minister, Glen Thibeault, needs to understand: Ontario doesn’t need to acquire another 600 plus MW of new wind power generation, and he should cancel the recent Chiarelli procurement directive, to save ratepayers the associated expense of over $200 million every year.
© Parker Gallant,
July 15, 2016
The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario Policy.