What’s driving up hydro bills? Ontario’s renewable energy disaster: Tom Adams

OPINION: Ontario’s renewable energy ‘disaster’ is what drives up the cost of your hydro

Wind and solar energy can’t be delivered on demand so we pay twice to back it up with gas power

Bloor West Villager

Is renewable energy responsible for driving up Ontario’s electricity costs?

With the Ontario government introducing a new program severing the link between the cost of power and the price of power so it can shift 25 per cent of household power bills today to future generation by way massive new debts, it seems like a good idea to know why Ontario’s power rate crisis developed.

Ontario’s power rates were relatively stable until 2008, when they started steep yearly increases. With the fastest rising rates in North America since then, Ontario’s rates surpassed the U.S. average years ago. The largest single factor driving this increase has been new generating capacity from wind and solar renewable generation.

The Ontario government and its supporters commonly report the costs of different types of generation counting only payments made directly to particular forms of generation.

But, when renewable energy costs trickle down to consumers, those costs are much more than just payments to renewable generators. While it is true that the payments to generators for wind power – 14 cents per kilowatt-hour (kWh) – is cheaper than for gas power — 17 cents/kWh – not all electricity has equal value. (For context, the average rate households pay for the commodity portion of their bill is about 11 cents/kWh.)

Why don’t we replace wind power with gas power, save money and cut emissions?

Where gas power is delivered on demand, wind is fickle. Eighty per cent of Ontario’s wind generation occurs at times and seasons so far out of phase with usage patterns that the entire output is surplus and is exported at a substantial loss or squandered with payments to generators to not generate. Gas power in Ontario backs up unreliable wind and solar, a necessary function if the lights are to stay on, but we pay twice for the same service.

Direct payments to solar generators average 48 cents/kWh, but the output is similarly low value. Except for a few days per year, Ontario’s peak usage of power is just as solar panels shut down – in the evening.

Not only is Ontario’s renewable energy production driving massive losses to subsidize exports and payments to generators to not generate under the terms of contracts that obligate consumers to buy even useless power, but it is also driving costly but low-value “smart grid” projects required to accommodate renewables.

Rising power rates have driven down usage. Spreading rising costs over declining sales has amplified the pace of rate increases.

Again, government and its supporters have pumped their claim that using less will save us money. What has actually happened is that conservation in Ontario is indeed saving money but mostly for utilities and their customers in Michigan and New York State on the receiving end of our subsidized exports.

But didn’t renewables enable Ontario to get off coal, saving us from smog days, and slash health-care costs? Although endlessly repeated by the government and its supporters, none of these claims bear scrutiny.

Coal’s replacement in Ontario was achieved with increased output from nuclear and gas generators. Improvement in air quality in recent years has been the result of a massive conversion to gas power in the mid-western states upwind of Ontario as well as improvements in transportation fleets and industry. Most of the coal power Ontario produced in its last years came from plants with good new scrubbers, delivering effectively smog-free energy. Predicted health-care savings from the coal phaseout never materialized.

But isn’t the cost of renewable energy plunging?

Ten years ago, the average payment to Ontario wind generators was around 8.3 cents/kWh. Taking into account inflation, the average today is up 50 per cent.

THE OPPOSING VIEW: “Don’t blame renewable energy for Ontario’s electricity costs”

Wind and solar aren’t the only renewable energy ripoff. Recent additions to Ontario’s hydro-electric capacity have added billions in new costs but no additional production. Ontario’s most costly generator is a converted coal-fired station in Thunder Bay, now fueled with a wood product imported from Norway.

A bad smell emanates from renewable politics at Queen’s Park. Renewables developers who made the biggest donations to the provincial Liberals have tended to win the biggest contracts.

Ontario’s renewable energy program is not the only disaster on consumers’ bills. Excessive payroll costs and wasteful conservation programs also lurk, but no single factor has contributed more to the compounding semi-annual increases in rates since 2008 than renewables.

Most of the punishing cost consequences of Ontario’s radical renewables program are locked in with 20-year contracts. Children today will be paying these irresponsible contracts long into the future, along with current costs that the Wynne government has now decided will be added to this future burden.


Tom Adams is an independent energy and environmental advisor and researcher focused on energy consumer concerns, mostly in Eastern Canada. He has worked for several environmental organizations and served on the Ontario Independent Electricity Market Operator Board of Directors and the Ontario Centre for Excellence for Energy Board of Management.

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62 Comments

  • Pat Cusack
    Posted March 11, 2017 11:39 am 0Likes

    I assume Mz Wynne using her strange math can justify bringing a wood product from Norway to burn and produce electricity. I wonder how she determined that Canada is short of wood? Bernie

    • Barbara
      Posted March 11, 2017 2:18 pm 0Likes

      Norway has plenty of cheap hydro power and it takes energy to produce biocoal.
      A plant would have to be built in Ontario to produce biocoal or converted from a pellet production plant to biocoal pellet production.
      ————————————————————————————————–
      The Green Energy Act is an example of policy making at the sub-national level.

  • Sommer
    Posted March 11, 2017 3:26 pm 0Likes

    ‘Stranded assets’, ‘stranded debt’ is what intelligent investors are now calling this mess.
    With technological innovation occurring at accelerating rates these days, the thought of being stuck with this outrageous situation for 20 years is unthinkable.
    We can do better. We must.

  • Richard Mann
    Posted March 11, 2017 5:03 pm 0Likes

    The problem is Wind and Solar are not reducing C02 and our government will not admit this costly failure. Ontario’s professional Engineers, those tasked with generation, transmission and billing, have reported the problem. our government continues to build more wind and solar.
    Reference: “Ontario’s Electricity Dilemma – Achieving Low Emissions at Reasonable Electricity Rates”. Ontario Society of Professional Engineers (OSPE). April 2015.
    (Archived at: http://c.ymcdn.com/sites/www.ospe.on.ca/resource/resmgr/DOC_advocacy/2015_Presentation_Elec_Dilem.pdf)
    Page 15 of 23. “Why Will Emissions Double as We Add Wind and Solar Plants ?”
    – Wind and Solar require flexible backup generation.
    – Nuclear is too inflexible to backup renewables without expensive engineering changes to the reactors.
    – Flexible electric storage is too expensive at the moment.
    – Consequently natural gas provides the backup for wind and solar in North America.
    – When you add wind and solar you are actually forced to reduce nuclear generation to make room for more natural gas generation to provide flexible backup.
    – Ontario currently produces electricity at less than 40 grams of CO2 emissions/kWh.
    – Wind and solar with natural gas backup produces electricity at about 200 grams of CO2 emissions/kWh. Therefore adding wind and solar to Ontario’s grid drives CO2 emissions higher. From 2016 to 2032 as Ontario phases out nuclear capacity to make room for wind and solar, CO2 emissions will double (2013 LTEP data).
    – In Ontario, with limited economic hydro and expensive storage, it is mathematically impossible to achieve low CO2 emissions at reasonable electricity prices without nuclear generation.

  • Notinduttondunwich
    Posted March 11, 2017 6:25 pm 0Likes

    Now you know where I Sommer…. the turdbines for DD are the largest… tallest…. most powerfull turdbines available…. it will disrupt the environment for all… except the leaseholders… I’m terrified and am already starting to suffer from sleep loss…. might be a good defence for me later…. I am so disappointed and so angry at our provincial Liberals for ignoring common sense and basic %@$#÷%%# MATH…..
    If you burn your mouth while eating piping hot pizza… your brain SHOULD tell you next time …. HEY THAT’S HOT…. YOU’RE GONNA BURN THE ROOF OF YOUR MOUTH Ahhhhhhhhhhhhhhhhhhhhh!!!!!!!!! That’s hot!!!!
    This common sense thinking is absent with the Liberals… it’s quite apparent with each BILLION $$$ BOONDOGGLE they rack up (not just hydro) at our expense and now our kids and grandkids expense…
    The communities that the Liberal ideology has destroyed is despicable…. for dog sakes are we so stupid that we believe that using 4L. of desiel fuel to make 1 L. of green energy ethanol…. really!!!!
    to remove 4 coal fired generating stations that were 95% efficient…. seriously….. c’mon people… wake up!! Stop being so Canadian and start standing up for YOUR CANADA!!!!
    The one that use to NOT seize your rights to say “No Thanks” !!!!
    https://www.google.ca/amp/news.nationalpost.com/news/canada/geri-kamenz-likens-himself-to-a-hit-man-who-does-the-dirty-work-for-the-ontario-minister-of-agriculture/amp
    BOOM there it is again!!! Stripped of their RIGHTS!!!!!
    What are you gonna do about it!!!!????
    I’m going to cut firewood cause natural gas is getting pretty darn pricey….

  • Barbara
    Posted March 11, 2017 9:28 pm 0Likes

    National Geographic, Nov. 2015 issue.
    “Germany Could be a Model for How We’ll Power the Future’
    Scroll down 1/2 page to:
    “In 1998 Fell rode a Green wave and his success in Hammelburg into the Bunderstag. The Greens formed a governing coalition with the SPD. Fell teamed up with Hermann Scheer of solar energy to draft a law in 2000 took the Hammelburg experiment nationwide and has since been imitated around the world. Its feed-in tariffs were guaranteed for 20 years, and this paid well.”
    Read at:
    http://www.nationalgeographic.com/magazine/2015/11/germany-renewable-energy-revolution

  • Notinduttondunwich
    Posted March 12, 2017 12:32 am 0Likes

    All responsible renewable resource programs have a time and place… this may be the time but not the place…

  • Notinduttondunwich
    Posted March 12, 2017 10:00 am 0Likes

    Definition of insanity is continually doing the same thing over and over and expecting different results …
    It’s quite obvious that the remaining LRP1 contracts will be fulfilled…
    Some one keeps taking used rubber tires from the local tire bin…. wonder what for???

  • Notinduttondunwich
    Posted March 12, 2017 6:10 pm 0Likes

    Just starting to see pictures of the local damage to solar panels…. wow… I can see our insurance rates going up soon to pay for that!!!

  • Barbara
    Posted March 14, 2017 2:35 pm 0Likes

    The International Economic Forum of The Americas
    Toronto Global Forum, July 8-10, 2015
    ‘Creating Opportunities In A Connected World’, 17 page program
    P. 11, Energy for the Future: The Potential of Smart and Micro Grids
    P. 12, Energy Outlook: Responding to a New World Energy Map
    P. 13, Geopolitics and Energy: Interplay of Strategy and Technology
    Download the Program (.pdf) at:
    http://www.forum-americas.org/toronto/2015

    • Barbara
      Posted March 14, 2017 4:09 pm 0Likes

      Toronto Global Forum, Sept.12-14, 2016
      Program pdf, 56 pages including Biographical Notes:
      Including:
      Susan Kennedy, California Cap-And-Trade
      Mark Rothleder. Cal ISO
      Download the 2016 Program at:
      http://www.forum-americas.org/toronto/2016

      • Barbara
        Posted March 14, 2017 7:46 pm 0Likes

        EPRI Journal, Aug.8, 2016
        ‘ISO: A Multifaceted Strategy To Integrate Solar In California’
        Re: Renewable integration at Cal ISO.
        Article includes cloud movement forecasts but thunderstorms happen rapidly and new models are needed to address this problem.
        http://www.eprijournal.com/iso-a-multifaceted-strategy-to-integrate-solar-in-california
        Interview with Mark Rothleder, Cal ISO.

      • Barbara
        Posted March 15, 2017 12:53 pm 0Likes

        E&E News, June 2, 2016
        ‘Threats to U.S. bulk power grid revive reliability concerns’
        Re: A FERC conference, Washington, D.C.
        “Local utilities distributed resources, particularly customer-owned solar and solar storage facilities, may become large enough before long to pose potential threats to the interstate grid.”
        Read more at:
        http://www.eenews.net/stories/1060038174

        • Barbara
          Posted March 15, 2017 2:42 pm 0Likes

          FERC Conference, June 1, 2016, Washington, D.C.
          Related PDF files, right sidebar for presentations at this conference.
          Hendrzak, PJM
          Rothleder, CAISO
          Bradley, Canadian Electricity Assn.
          Read the PDF files at:
          https://www.ferc.gov/eventcalendar/EventDetails.aspx?ID=8233&CalType=%20

          • Barbara
            Posted March 15, 2017 2:59 pm 0Likes

            FERC Conference, June 1, 2016, Washington, D.C.
            Add: Panelists list PDFs
            Miranda Keating Erickson, Vice-President, Operations, Alberta Electric System Operator.

          • Barbara
            Posted March 16, 2017 5:21 pm 0Likes

            Alberta AESO appears to know that there are grid security issues. Read the presentation at the above FERC website.
            This is public information.

    • Barbara
      Posted March 19, 2017 8:38 pm 0Likes

      Climate Summit of the Americas, Toronto, July, 2015
      Sponsored by the Ontario Government.
      Note the speakers and the ENGOs they represented.
      List at:
      http://www.downloads.ene.gov.on.ca/files/climatesummit/CSA_SummitSpeakers.pdf
      By invitation only as far as is known.
      Not the same as the July ‘Forum of the Americas’ 2015 also in Toronto.

  • Barbara
    Posted March 17, 2017 2:47 pm 0Likes

    Health Care Without Harm, Reston, VA, USA
    US & Canada
    Climate Health Literacy Consortium
    RE: Increased health care costs & grid instability.
    Scroll down to:
    “At the same time, the healthcare industry will experience the climate crisis in its own operations, characterized by increasing energy costs, projected instability in the electric service provision grid, and intensified stressors placed on community health services, especially in times of disaster.”
    Consortium Participants include:
    NRDC/National Resources Defense Council
    The Climate Project
    EPA
    Read more at:
    https://noharm-uscanada.org/issues/us-canada/climate-and-health-literacy-consortium

  • Stan Thayer
    Posted March 17, 2017 8:51 pm 0Likes

    Is there anyone who can out-lie a trained Liberal? You know, Liberal, Entitled, and Scammers can all be interchanged in any sentence!
    Stan

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