What bites in Ontario’s power system (1)

Buzz buzz
Buzz buzz

In this, the last week of August and leading up to the Labour Day holiday weekend, Parker Gallant takes a look back a few things about Ontario’s power sector that have been bugging him like black flies! Here are today’s offerings, with more to come through the week…
These BITE!
July’s surplus electricity exports cost Ontario  ratepayers $163 million
IESO (Independent Electricity System Operator) released their July 2015 summary report and, once again, Ontario’s generation for the month exceeded our demand and 1.8 terawatts (TWh) was exported.  We sold it for an average of $22.20 per megawatt hour (MWh), but it cost Ontario’s ratepayers $112.50 per MWh to generate (including transmission, etc.) –that means we lost $163 million for the month.
That brings total losses for the first seven months of the year to $1.246 billion and total exports to 13.33 TWh … that would be enough to power about 1.4 million average Ontario households.  Gone.
IESO’s view of transparency
The July summary report from IESO included a new chart (Figure 23) titled “Total Global Adjustment by Components” on page 20. They seem to believe it provides more “transparency,” but  the truth is, it mixes apples with oranges and some fruitcakes.  They lump nuclear with gas and separate old wind and solar contracts (RES) and newer FIT contracts so that they show up as a lesser amount in the way they affect the Global Adjustment or GA.  They also fail to include the cost of embedded generation!  Why they fail to provide critical information easily understood by ratepayers is an insult.
Why is IESO trying to hide things from ratepayers? Are they are doing what our Minister of Energy Bob Chiarelli instructed them?
Interestingly enough, Scott Luft used his skills to show IESO how the chart(s) should look if the aim was to improve transparency.   IESO should emulate his recent post on Coldairings and one on Cold Air which does a much better job of showing the true costs of generation by MWh, generation by groups (OPG, Bruce Power and Other) and total supply costs.
IKEA, sustaining their sustainability
IKEA has become the world’s largest furniture retailer and quite possibly the world’s largest seller of LED light bulbs as a recent press release announced their intentions that “as of September 1, 2015, all IKEA stores will only sell LED bulbs and lighting to enable customers to live a more sustainable life at home.”  IKEA’s release included this additional claim:  At IKEA, we believe that everyone should be able to afford to live a more sustainable life at home and save money on their energy bills. Also using less energy reduces greenhouse gas emissions that contribute to climate change. Changing a light bulb may seem like a small action but many small actions can lead to a big change,” says Steve Howard, Chief Sustainability Officer, IKEA Group.
Sounds noble and, also, strangely, similar to a Chiarelli claim: a company with global sales of about $5 billion Canadian is out to save ratepayers money by selling only LED bulbs and contribute to “climate change” action!  Examining the issue at closer range, however, one should question the veracity of the press release: IKEA was touted by former Energy Minister, Brad Duguid, in 2010 when he spouted:  “It’s good business,” said Energy Minister Brad Duguid, who was on hand for the unveiling. “And it’s good for all of Ontario.”  At that time IKEA “jumped into electricity generation in a big way, unveiling the first of three big solar-powered electricity generation installations.”  Those installations, on three Ontario stores, were set to generate 960,000 kilowatt hours (kWh) for which IKEA would be paid 71.3 cents per kWh and annually generate revenue of $684,000.  IKEA (assuming they utilized that much electricity in the three stores) would purchase their power at an average of 6.84 cents/kWh meaning 960,000 kWh would cost them approximately $66,000, thereby generating a gross profit of $618,000.   If prices remained as they were November 1, 2010, the next 20 years would generate gross income for IKEA of $12.3 million.
I guess it’s easy “being green” when everyone else is paying the freight!
More tomorrow…
(C) Parker Gallant

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