Sunday, August 12, 2018

Carbon Con: It's only economics

part 2 in a series imagining the participants at a 'Comic Con' like convention for reducing greenhouse gas emissions. The first post was ECO communication
"Assume I'm an economist..."

Way back when I began the second post to this blog with that ask. Over seven subsequent years of research, data analysis and communicating on electricity supply, emissions, and markets, I've since revised my perspective.
A man walks into a Doctor's office and says, "Doc, it hurts all over when I do this."
The doctor prescribes of a Pigouvian tax.
graph from Wikipedia 
In an April blog post I hinted at my envy of those utilizing richer media tools - from richer graphics to audio/podcasts to video. At that time a group called the EcoFiscal Commission had just released, on their attractive website, "Clearing the Air: How carbon pricing helps Canada fight climate change." A beautifully formatted .pdf provided more depth than the web page, and all were accompanied by short video explainers. The work features 3 case studies of jurisdictions with pricing of greenhouse gas emissions - only 1 of which has significantly reduced emissions. I was going to focus on these case studies but they're really a footnote to addressing a bigger issue, enunciated by in a video clip Ecofiscal Chair Chris Ragan:




"Canadians do care about climate change but they also care about the economy... until Canadians are presented with a solution that makes sense for both the environment and the economy they are not going to put this at the top of their list.
Carbon pricing is that solution."

As they say outside the hallowed halls, "to a hammer everything looks like a nail."

I am going to rebut the evidence supporting the "Carbon pricing is that solution" claim, while recognizing why there could be roles for economists to play following the introduction of The Paris Agreement.

I realize a credibility gap probably exists as the Ecofiscal Commission is stacked with prominent names whereas I am known by far fewer and often as an opponent of "green" energy - and/or a proponent of nuclear energy. To encourage reading on I'll note Ontario has greatly lowered its emissions since I began blogging - a fact which need not be credited to me to any extent, but it also has much less generating capacity from "green" energy, and more from nuclear, than was planned at when I started arguing for retaining nuclear and halting the wind and solar subsidies.[1] Certainly many names from Ecofiscal are recognizable, but I recognized none as being active and influential where emissions have been significantly reduced.

Saturday, August 4, 2018

Ontario's rotten wind era at its end

There are three stories from recent news indicating the poverty of competence in Ontario's industrial wind turbine tale. Two occur in bucolic counties near the eastern end of Lake Ontario, the other just south of the forest fire burning in French River Provincial Park - where the fire originated. Most discussion of industrial wind in Ontario is delivered in a narrative of good (renewables) and NIMBY (not in my backyard). Occasionally somebody wades in pretending there's a business angle, so I thought I'd rebut that ignorant assessment while commenting on the three recent wind stories.

The foundation for the post has to be a little dry.

The world of cost estimates for electricity is complex, but it's not hard to understand the capital expenditure (CapEx) per Watt of generating capacity is important element. This excellent graphic, from the respected National Renewable Energy Laboratory (NREL) 2016 Cost of Wind Energy Review, puts CapEx at the top of its cost parameters stack


At today's currency values the U.S. report's $1530-$2370/kW range equates to a $2000-$3100 in Canadian dollars.

The NREL report builds on figures from the U.S. Department of Energy 2016 Wind Technologies Market Report. Drilling into some numbers shared for that report reveals most projects were built with CapEx below $1800USD/kW ($2360CDN/kW), and that in real dollars that $2360CDN/kW is an above average cost over the past 20 years.


It is also notable that the highest pricing of the past 2 decades, per Watt of capacity, occurred about the time (2009-10) Premier Dalton McGuinty introduced Ontario's lucrative feed-in tariff contract mechanism - or perhaps it would be more correct to say Ontario's Premier introduced Germany's feed-in tariff contracts to Ontario.

The International Renewable Energy Ageny (IRENA) Renewable Power Generation Costs in 2017 report agrees with NREL's figures, and notes similar 2016 weighted average pricing for onshore wind in North America, Europe, South America (excluding Brazil), and Eurasia. Call it $2,400 Canadian per kilowatt of onshore industrial wind turbine (IWT) capacity.


This background on capital expenditures (CapEx) in constructing industrial wind turbine projects provides a basis for analyzing 3 Ontario projects that have recently been in the province's news.

Sunday, June 17, 2018

Ontario Electricity: Backgrounder and suggestions for Premier Ford

Ontario has a new Premier. Congratulations to Doug Ford who, despite my recent quiet, is receiving a lot of free advice on addressing costs in Ontario's electricity. Some of it good, but much of it not only bad, but based on flawed views of how Ontario's residential and small business consumers came to experience rapid rate growth.[2] I also have noted some advice - from academics - is oblivious to the new political reality of Ontario. Before getting into thoughts on controlling electricity costs, I'll provide my perspective on the politics of the situations that will determine which suggestions are actionable.

I wrote very little in the run-up to the election because it struck me as a race to the bottom. I used to write on things that angered me (to some extent), and then I'd hope to edit out my annoyance based on, "Nobody cares that I'm angry. What is my point?" This election the point seemed to be people were beyond angry with Kathleen Wynne. I'd call it disgusted. There's a saying in politics that "anger is not sustainable." That's probably true but around the time her government was introducing the ridiculous [un]Fair Hydro Plan I'd wondered if the Wynne policy team had let the anger of the first half of her mandate develop into disgust. Disgust is not an emotion, it's a sense. I was curious to see if I was wrong, and a climb up in the polls was possible for Premier Wynne. I don't think I was wrong - I do think the election was about this sense of disgust, and I found it so unpleasant I voted in the first hour of advanced polling and then tried to ignore it altogether.

I realize many of the angriest were people who follow my blog and know about the Liberal party's enormously wasteful performance in the electricity sector. The waste cost most Ontarians money, but not food, or housing, or heating. With the election over, and the previous governing party embarrassed by failing to win enough seats for official party status, I am hoping many will start the new era of Ford's rule by editing out their anger and trying to find their point. This is not a kumbaya moment though. A real cost reduction of the scope promised by incoming Premier Ford will require tough choices harming real people and angering numerous constituencies, but particularly the one known in the electricity sector as "stakeholders."

Political Constraints

The political reality of the election is pricing carbon is dead: Doug Ford took the leadership in the race for leading the Progressive Conservatives by opposing the recently implemented current cap-and-trade system in Ontario and the federal government's demand province's implement some regime. I'll try to avoid the topic - and fail (but hopefully only once).

Functional Constraints

Ontario's electricity, if mine is any indication, is pretty reliable (the lights stay on) and it is exceptionally clean, with very low emissions of greenhouse gases. My views on what can be done to control costs is influenced by two concerns that I don't see noted very often:
  • capacity
  • industrial electricity costs

Monday, April 16, 2018

Carbon-Con: ECO communication

A couple of weeks I was asked about potential ways to collaborate with reputable sites. I put some thought into that before responding that simply an association with me could bring a site to disrepute, but my thoughts on communication persist. From the belligerent uttering of a federal Minister on a Sunday talk show, to a media blitz from an organization marketing itself as expert on economic tools to reduce carbon emissions, to the Ontario report I'll feature in this commentary, it's been as if a convention of climate change alarm is occurring.

A Climate convention.

Comic Con (short for convention) is a really big event now, which makes some sense in this era of communication. Text is a low impact medium - the sites adding audio and video, integrating with podcasts, have a huge advantage. As the comic and related genres (science fiction, fantasy and superhero) grew from print to screens of all sizes, the graphics and sound growth has simply piled success onto success. The term "simply" recognized almost all characters can be grouped into good or bad.

Perhaps due only to my musing about communication, collaboration and branding, I thought the polarized nature of climate, and energy discussions, make Comic Con a model for communication and promotion in the 'clean tech' industry.

I'd prefer to be a hero, but realize the model needs villains too.

What I hope will be found in my little section of this Carbon Con is data-driven iconoclasm delivered through research, competent data handling, pointed if not visually appealing graphics, and full contact criticism of those blissfully unaware they deserve to be blisteringly opposed.

What many will find is villainy - I've been accused as anti-wind, anti-renewable, anti-conservation, pro-nuclear, disrespect and misogyny. I don't agree with that entire list, but I'm okay with being the villain if it makes for better heroes.

My concern with the profession of professing concern about carbon emissions begins, as most things do, with religion.

Monday, April 9, 2018

Base load and baseload generation

The term baseload gets thrown around frequently but seldom is associated with a base, or minimum, load. It occurs to me the level of knowledge in discussions on electricity supply could benefit from reviewing the level of total electricity that would be met by a mythical generator running throughout at a the year at the minimum system demand. The results are not surprising,but the current level of discourse indicates the results are not intuitive.

I’ve revisited hourly load data I’ve collected over the past year for two provinces and British Columbia (bce … or BC). Each data set measures “load”, or demand, differently, but the particulars are not important for this simple review. For each province’s data set, I’ve queried the minimum annual load along with the average. Upon reflection it’s obvious that the minimum load divided by the average load produced the percentage of annual supply that could come from the steady production of the minimum load.


Differences between years are minimal, but the difference between Alberta and the other 2 provinces is significant. Alberta’s flat load profile means 80% of annual generation could usually be met by consistent supply at the base load level. “Alberta Internal Load”, or AIL, is the statistic used, and it includes behind-the-fence generation which is large due to extensive cogeneration, particularly from oil sands operations. Large industrial loads tend to be far more consistent than, particularly, residential demands. In Ontario and BC the reported loads, which omit behind-the-fence generation, indicate over 2/3rd of supply requirements would be met by output at the base load level.

For reasons I’ll return to in discussing implication of this base load supply level review, I ran some figures estimating how much usable supply would come from increasing the base supply level to 10% above the annual base load level, and with base supply 20% above base load.

Monday, March 5, 2018

Transmission constraining Ontario's Niagara Hydroelectric potential

I was recently asked why I claim there are transmission constraints on electricity generation from Ontario Power Generation (OPG) Niagara river system generators.

I’ve written a number of times on production levels and argued the constraints largely because I have consistently found the actual output from OPG’s 5 Niagara system generators less than it could be. There are current reasons to revisit the issue:
  • In 2017 the total was 11.32 TWh[1], which is probably the lowest level since I first appeared, in 1965,
  • OPG reported 4.5 TWh of "forgone hydroelectric generation" due to surplus baseload generation (SBG) in the first 9 months of 2017, up 15% from 2016 when OPG's annual foregone generation was 4.7 TWh, 
  • OPG intends on adding 106 megawatts of capacity through an overhaul of  two idled old units at the Sir Adam Beck I Generating Station
I’ll review the annual generation data but acknowledge the lowered generation doesn’t prove a transmission constraint - so I’ll also build a timeline demonstrating increased transmission was deemed necessary a decade ago, and the need must have grown significantly, along with generating capacity in the region, since then.

My curiousity on the topic of foregone generation was piqued in June 2011 by an article in the Buffalo News.[2] The article discussed Canada’s inability to utilize all the water it had rights to in generating electricity on the Niagara river, and OPG's Niagara Tunnel project that was to address that, increasing generation by 1.6 TWh. In March 2013 the tunnel was declared, by OPG, to be in-service.

By 2014 I was utilizing Hourly Generator Output and Capability reporting from Ontario’s system operator (IESO) to collect data on individual generators[3], and U.S. Energy Information Administration (form EIA-923) data for the generators on the U.S. side. The comparisons showed OPG output falling far behind the U.S. generation on the Niagara river[4] - a trend which has since, surprisingly, accelerated.



When the output at OPG’s generators did not increase after the Niagara tunnel project completion, I looked for other causes.

Thursday, March 1, 2018

Review of 2017 electricity supply in Ontario

You purchase a  full 9-unit container of energy .
The 3 men who deliver it pour out 2 units out while lecturing on consumption. 
They imply you should make more yourself as they leave.

A couple of months have passed since I last posted to the blog. This may be due to writer's block, or a lack of ambition - or maybe I was wisely waiting until I had something nice to say!

With growing knowledge, and curiosity, I seem to muddle all little issues into the broad themes I deem important - and not only for energy. In this post I'll touch on metrics from 2017 the reader may be looking to this blog to find, with hopes of connecting the data to bigger issues.

There are many possible headlines from an annual analysis:
  • electricity "demand", as reported by the system operator was down, to levels not seen in decades
  • supply generated from fossil fuels (natural gas) was sharply down too, and again to levels probably not seen in over over half a century
  • prices for consumers on regulated price plans were sharply down in 2017 due to legislation and consequent debt (the [un]Fair Power Plan), but,
  • total costs for supply declined in 2017, although average unit cost was up slightly (as demand declined more)
  • nuclear supply was down as one unit (Darlington 2) was out of service for the entire year due to refurbishment, but the units remaining online largely took up the slack as Bruce Power had record output, as did the set of 9 units at Ontario Power Generation which operated during 2017, and
  • for the first year since the system operator reported on their system's wind output, in 2006, it reported a decline (albeit a very slight one)
I didn't wish to dwell on numbers in this post. During 2017 I learned some new data reporting tools which I put on on a site where I invite data-gluttons to learn the filters and views to generate the typical year-end summary statistics, such as the total annual biomass generation for the past decade.
I do wish, in this post, to combine commentary to statistics to demonstrate very good figures from one perspective can have bad implications from a broader perspective. This is particularly important to note as the reasons rates didn't rise sharply in 2017 aren't sustainable.

Friday, November 17, 2017

A benefit of Electricity trade - and what's reducing it

I was wrong.

I've been broadcasting a couple of messages about Ontario's electricity exports: that only the IESO can accurately report on the revenues, and that exports at negative prices are not allowed under market rules. It now seems neither of those is correct. Not only can export revenues be calculated, the analysis of export volumes, and revenues over time reveals benefits of markets, and trade. It's not at all clear Ontario's electricity powers understand the benefits.

I was recently alerted to a claim that the export revenues could be calculated from Intertie Schedule and Realtime Market Price reports. If that sounds confusing it'll gets worse before I'll try to ease off the jargon. As the Intertie Flows reporting is hourly, and the Realtime Market Price reports in 5 minute intervals some data manipulation is required to match the data sets. The IESO has posted annual files (.csv) with values from each of these reports for 2010 through 2016. To dispatch with the technical talk in one confusing swoop, I'll simply note that averaging the "ENGY" rate by delivery hour for each control area in the Realtime Market Price reports, and multiplying that by the "OFFT" value in Intertie Flows report for the same control area does result in the annual figures the IESO has released either to the Office of the Auditor General or in response to Freedom of Information Requests.
I can now extend my work from a previous post to include 2016 data.


Having worked the data down to the hourly time-frame by control area I can additionally summarize revenues, and costs, by jurisdiction. The results have some important messages about trade - as each "control area" has a separate market control price.

I won't discuss imports much in this post because there's nothing new to discuss. Most imports into Ontario are now from Quebec (over 82% since 2012 began), and those are valued in the new analysis almost exactly as the typical Hourly Ontario Energy Price (HOEP) valued them.

Messages about trade from this analysis may be hidden by the realities of communicating summaries of very large data sets. I posted some graphics on hydro(electric) generation by river system, and I received an e-mail from somebody who likely wanted to pursue a story, asking if the data was public knowledge. It was every bit as much public knowledge as what I am writing on today - summarized from hourly data captured from IESO hourly reporting since 2010. However, as most can't process the hourly information, and an official source had not published a summary, it wasn't the basis of a story. I think publication of a summary by an official source is what is required to be considered "public available".

The IESO once summarized volumes and revenues for exports and imports on a web page at www.ieso.ca/imoweb/siteshared/imports_exports.asp (long since a dead link). These monthly totals were meaningfully publicly available as they were both available and summarized by a trusted figure. Remnants of the IESO summaries remains in old government press releases, such as this from May 2012:
"Ontario's electricity market generated over $20 million in April by exporting electricity to other states and provinces, bringing total net export revenues to over $75 million this year.
That figure was, in hindsight, actually net exports ($28.6 million revenue from exporting less $8.1 million importing cost). In 2012 I noted:
[my] figures on export sales are estimates based only on the [Hourly Ontario Energy Price] ... in actuality export customers pay different rates. Because Ontario's market pricing is lower, sometimes much lower, than adjacent jurisdictions, it appears from both the ministry 'news' releases, and National Energy Board reporting, we generally export power about 10% above the HOEP  rates.
10% was the assumption I had when the IESO ceased summary reporting, but with the base data now summarized, I now know that assumption became wrong as they moved up and up, to nearly 70% above HOEP valuations by 2016.