Saturday, March 21, 2020

COVID-19: data, information and opinion

I've been following reporting on the coronavirus COVID-19 both for specific personal reasons and out of the general interest in data-driven communication I've tried to practice on this site. Realizing the shelf life of this post is likely to be incredibly short, I thought I'd take some time to write down which media is proving useful to me in explaining the situation, some sources of data on the spread of the virus, and what actions I'd hope to see taken.

I am the spouse of a paramedic - which is among the professions most likely to contact the coronavirus. We are both past our half-century mark, and we're fortunate that all of our parents are alive. We can't visit them without being confident we don't have the virus. I've felt unwell, with mild systems that could fit this virus, or a number of other things: my wife's symtoms were bad enough that we were directed to drive over an hour (each way) for testing this weekend, not so bad they performed the testing, but bad enough she was to quarantine for 2 weeks.

I won't attempt to communicate how the virus operates (there is a video for that) - but the specifics aren't necessarily what is driving the actions of, in Ontario anyway, the past 8 days. One of the most-viewed pages ever on the Washington Post site explains exponential growth with a model of a fictitious virus spreading. The paper, using four scenarios to address the speed at which the virus spreads, is credited with making "'social distancing' easy to understand." From that post: "If the number of cases were to continue to double every three days, there would be about a hundred million cases in the United States by May." It doesn't mention that the number would grow to include the entire US population within 5 more days, but ...

Maybe the most impactful graphic of the growth in the impacts to Canadians is the graphic on number of confirmed cases from Our World in Data reporting, filtered to show only Canada:

Thursday, March 5, 2020

Ontario Electricity Distributor data can be informative, but lacks consistency

I recently updated a database I'd created with annual data from the Ontario Energy Board (OEB) yearbooks of electricity distributors. Viewing my reporting driven by the updated data now with records from 2005 to 2018 data I was struck by a couple of things I felt worthy of comment, but in researching as I wrote this post I discovered the trends that looked particularly striking were exaggerated by data reporting changes. The discussion on trends may still be useful both in itself, and in setting up some closing comments on data reporting discipline.

The OEB yearbook data isn't strictly comparable to data developed by the Independent Electricity System Operator (IESO). But looking at trends the growing discrepancies in summer peak demand appears to be quite extraordinary. In this first graphic the total of the summer peak demands at all local distribution companies (LDC's) are shown against the peaks of the IESO's "Ontario Demand" (which is actually demand for supply generators on the IESO-connected grid). I've added a, "Revised LDC peak" which I calculated to attempt to make the data from the yearbooks from 2016-2018 comparable to previous yearbooks' data.

While all LDC's need not have peaks at the same time, the relationship between LDC peaks and IESO peaks has changed since 2005. Although the total of all distribution companies' summer peaks has reportedly been higher than the IESO's summer peak in each of the past 3 years, this is only due to Hydro One Inc. boosting its peak by including IESO wholesale consumers that receive their electricity through Hydro One's distribution network. I suppose there's a judgement call as to whether the report is on distribution networks or distribution consumers, but I don't suppose the judgement should change from one year to the next.

Changes in procurement and consumer demand management explain why the gap is narrowing (if not eliminated) in the reporting of peaks in the IESO's "Ontario Demand" data, and the distribution reporting.

Supply to local distribution companies is only one element of the system operator's "Ontario Demand," which also includes consumption at generators, transmission losses, and supplying large wholesale consumers. About 85% of the IESO's "Ontario Demand" is due to supplying LDC's.

Sunday, February 23, 2020

Ontario's Legislated Terribly Energy Plans

"The law is an ass," Dickens wrote - anticipating the Electricity Act in Ontario.

In writing on how the IESO's stakeholder-infested processes are working to prevent costs from being controlled I stated:
There are external, legislated, and political reasons for the IESO’s focus on efficiency, which seem to corrupt all analysis coming from it.
As with the global adjustment debacle, the architect of the dysfunctional law is Dwight Duncan - although neither vehicle would likely exist in their current form if he had remained as minister of energy long enough to see the abuse of ratepayers his policies have facilitated.

Prior to 2005, the purposes of The Electricity Act were:
(a) to facilitate competition in the generation and sale of electricity and to facilitate a smooth transition to competition;
(b) to provide generators, retailers and consumers with non-discriminatory access to transmission and distribution systems in Ontario;
(c) to protect the interests of consumers with respect to prices and the reliability and quality of electricity service;
(d) to promote economic efficiency in the generation, transmission and distribution of electricity...
I've added some emphasis to illustrate changes in the stated purposes of the law that took effect in 2005 - changes which removed "facilitating competition" as the main purpose of the act and demoted other priorities behind requiring central planning, conservation, demand response, and the promotion of "cleaner energy":
a) to ensure the adequacy, safety, sustainability and reliability of electricity supply in Ontario through responsible planning and management of electricity resources, supply and demand;
(b) to encourage electricity conservation and the efficient use of electricity in a manner consistent with the policies of the Government of Ontario;
(c) to facilitate load management in a manner consistent with the policies of the Government of Ontario;
(d) to promote the use of cleaner energy sources and technologies, including alternative energy sources and renewable energy sources, in a manner consistent with the policies of the Government of Ontario;
(e) to provide generators, retailers and consumers with non-discriminatory access to transmission and distribution systems in Ontario;
(f) to protect the interests of consumers with respect to prices and the adequacy, reliability and quality of electricity service;
(g) to promote economic efficiency and sustainability in the generation, transmission, distribution and sale of electricity...
The stated purposes in the current version of the law are similar, although an "a.1" is added "to establish a mechanism for energy planning." This mechanism connects the IESO's planning outlook to long-term energy plans from a Ministry including energy.

The changes to the act made back in 2005 explain the IESO's lack of competency in operating a competitive market and related abandonment of the main cost savings promise from Ontario's last long-Term Energy Plan. Which brings me to putting the IESO's newest publication, the first Annual Planning Outlook, in the context of the current Electricity Act's "mechanism for energy planning."

Saturday, February 22, 2020

Records for wind and solar output on same day fail to reduce Ontario emissions.

Friday February 21, 2020 saw 2 record hourly production records on the IESO-controlled grid (ICG):

  • 426 megawatt-hours (MWh) from solar in hour 14 (1-2 pm) and,
  • 4,393 MWh in hour from industrial wind in hour 19.
Including hydro, and embedded generation (not on the ICG), production from renewables could have climbed above 10,000 MW in hour 11 and stayed above that level until hour 23.

That's the good news.

The bad news is the system operator didn't reduce natural gas-fueled generation from noon to 9 pm despite its Hourly Ontario Energy Price (HOEP) remaining below the cost to fuel generation from gas.

For the 10 hours following the HOEP dropping to $0, gas generators produced an average of 1,655 MW. According to the IESO gas generation totaled 9.6 million MWh in 2019, or approximately 1,100 megawatts per hour. Yesterday, as records were being set for renewables, contracted supply being curtailed, electricity being exported below the cost of even the fuel for gas turbines, generation with natural gas was 50% higher than the average from 2019.

Which begs this question of the IESO: "What were you doing?"

Tuesday, February 11, 2020

The threat/promise of more electricity from natural gas in Ontario

presentation during the planning period of the IESO’s recently released Annual Planning Outlook (APO) included this line:
“Over time, production from [Ontario’s gas-fueled generator fleet] could exceed the utilization levels expected from those facilities (generally 40-60% capacity factor for [combined-cycle gas turbines]).“
The low utilization of generators contracted on capacity terms is something I tried to report on when writing of Available low-cost electricity not utilized in Ontario. We have been very far from 40-60% capacity factors over the past decade, and a breakdown of cost should demonstrate why that’s relevant to controlling expenses.

Sunday, February 9, 2020

An outlook against lower electricity costs

Can anything be done to reduce the costs of electricity in Ontario?

I get the question more frequently lately.The answer is “yes". Something, theoretically, could be done. 

In reviewing 2019’s electricity figures I estimated the average cost of procuring one megawatt-hour (MWh) of supply was $94, and showed how that became $126/MWh for most Ontario consumers. That is an indication there’s plenty of room to find savings, so much room that there’s a more important question than how to reduce costs.

It's also possible to prevent costs from falling. Having written on excess supply, cost shifting away from unimportant consumers to influential "stakeholders", high contract costs, and may other issues for nearly a decade, I'm not inspired to address the question of what could be done - the more interesting question I will address is, "What is being done to prevent costs from falling? 

The current government was elected on a platform that included the claim they’d, “Cut hydro rates by 12% for families, farmers, and small businesses.” Over their first year and a half in office there’s been little to inspire confidence they’re capable of delivering on that promise. A recently released provincial finance report noted the cost of electricity programs ballooning another $1.5 billion as they head towards $5.6 billion for 2019-20 (ending March 31). The hit on the provincial treasury is largely due to subsidies preventing consumers on regulated price plans (RPP) from seeing rates increase on their electricity bills.

The 12% cut in the Progressive Conservative’s platform was in addition to the [un]Fair Hydro Plan (FHP) of the previous Liberal government - which promised (and did) reduce bills 25% in the present by deferring costs to the future. I developed a great contempt for that plan, but I could also view it as an unpleasant distraction. The Liberal government did deliver a long term energy plan (LTEP) that promised cost controls through improving what is whimsically referred to as Ontario’s electricity market.
Market Renewal will ensure the province has appropriate sources of electricity at the lowest possible price. This initiative could save Ontarians up to $5.2 billion over a 10-year period. -Glenn Thibeault, Minister’s message introducing 2017 Long-Term Energy Plan, October 2017
The plan - the long-term energy plan - was to improve the market for consumers.

Then, the nominally Independent Electricity System Operator (IESO) consulted stakeholders/insiders. In 2 short years they’ve reduced potential savings to consumers - which might be considered costs to the IESO’s stakeholders/insiders- by over 80%.
The Market Renewal Program is an important piece of the equation for us. With the approval of the high-level designs of the energy work stream, and a business case that estimates we can achieve $800 million in net benefits over the first 10 years alone, we’ve built a very strong foundation for change. - Peter Gregg, IESO President and CEO, November 2019
A $4.4 billion drop in the promised decadal value of market renewal, in under 2 years, is only one way the IESO is maneuvering to prevent a reduction in spending on electricity supply in Ontario. Others include inflating demand forecasts, lowering performance expectations from existing generators, raising capacity reserve desires, and exaggerating the threat of rising emissions.

Thursday, January 30, 2020

Ontario electricity demands - an appendix.

Last week Ontario's Independent Electricity System Operator (IESO) released its first Annual Planning Outlook (APO), which is pertinent to the next article I wanted to write. This isn't that article - it's an explanation of graphics I created for the article I want to write.

While the APO the first of the new thing, it's just the latest in a line of forecasts intended to guide electricity planning in the province. This graphic shows 5 previous forecasts, but I felt I should explain their origins, and note they may not be strictly comparable. "Demand" is, in Ontario, a word that is, by itself, not very definitive.

Tuesday, January 7, 2020

Review of Annual Ontario Electricity Data

It's that time of year. This will be the tenth time I've produced a post on year-end electricity data. In my first such post I quoted the IESO's release on data for 2010:
"The cost of power in 2010 was 6.52 cents per kilowatt hour (kWh), as compared to 6.22 cents/kWh in 2009. This cost includes the average weighted wholesale market price of 3.79 cents/kWh and the average Global Adjustment of 2.73 cents/kWh (preliminary)."
It's a little higher than that this year. A similar sentence for 2019:
The [class B] cost of power in 2019 was 12.63 cents per kilowatt hour (kWh), as compared to 11.51 cents/kWh in 2018. This cost includes the average weighted wholesale market price of 1.8 cents/kWh and the average Global Adjustment of 10.8 cents/kWh (preliminary).
The prices aren't strictly comparable for two reasons, but for most consumers the difference will still be significant.
The numbers are nominal, but there was little inflation in Ontario over the decade (approx. 18%, and 1.85% in 2019) so the real "cost of power increase" for most consumers was still 65% over the decade, and 7.8% last year, which means last year was worse than average!
The "class B" distinction is necessary as two - or three - distinct consumer classes were created over the past 10 years.

I'll look at three distinct areas of supply: the reported generation figures on the IESO-controlled grid (ICG), distributed generation, and curtailed generation (which is supply Ontarians will pay for but was not accepted onto the ICG). I'll look at costs by the fuel, or supply type, as the IESO reports for generation. I'll look at "the cost of power" by consumer groupings, and provide an average cost of power. Most of these figures are estimated, and even figures produced by the IESO will often differ from one another due to minor differences in the origin of the data.
I will not generally try to reconcile my estimates to figures reported by the IESO due to limiting my time - and not agreeing with the IESO on discrepancies I've found in the past. Please interpret numbers as illustrative, and not gospel. This should be particularly obvious for cost break-downs which are not available anywhere else: most contracts are private and rates are estimated as best I can. I will briefly discuss the IESO's monthly global adjustment component cost file, which is one place you could find some confidence in the quality of my estimates, and/or their accounting.

I'll try to maintain a focus on providing a basis for analyzing opportunities to reducing the cost of electricity in Ontario in preparation on a future post on impediments to cutting costs.

A first metric for those who see little opportunity for cost cuts:

The average price paid to a supplier for a single megawatt-hour (MWh) was less than $94 (or 9.4 cents per kilowatt-hour), 35% below the average rate paid by Class B ratepayers. 

Now for the many numbers needed to make that conclusion.

View these estimates with Google Sheets