Tuesday, October 30, 2012

Spin, Spin, Spin: A Star Embarassment

Multiple Toronto Star writers made statements that deserve repudiation yesterday.

Liberal party propagandist Metro Martin Regg Cohn concluded "Where would Tim Hudak take Ontario?" with:
Whether your policy is colour-coded white, green or Tory blue, to lead is to choose. And disclose.
With no undue respect for Mr. Hudak, it's a remarkably stupid statement to be made after the non-disclosure, to the legislature, that would have brought an end to the Liberal government if Mr. Hudak and Ms. Horwath enjoyed respecting the electorate more than they enjoy bitching.  Mr. McGuinty was elected in part on the promise to eliminate coal by 2007 and a promise not to raise taxes.
We know that defined policy is irrelevant to electoral success in Ontairo.  Metro Martin is one explanation of how that is possible.

Saturday, October 27, 2012

The Weekend: Electricity Facts And Queen's Park Commentary

Quick comments from my review of data for the 42nd week of the year (ended Oct. 23).

Coal: Up - again (7th consecutive week)
Gas: Down
Nuclear: up.
Demand: Flat
Market Pricing: Down

One new thing is a surge in daytime imports from Quebec which, along with a drop in gas generation,  might indicate Quebec is now exporting at prices below the fuel component of gas generation.

In the press this week, efforts to close the door on the gas plant scandals lest the issue drags on and forces journalist to actually learn something about it..

Here's an excerpt from one report that was passed - as analysis of the downfall of Energy Minister Bentley:

Monday, October 22, 2012

The High Costs of Ontario's very provincial electricity debacle

Ontario's latest electricity sector fiasco is being credited as a major factor in Premier Dalton McGuinty's announcement that he is proroguing the legislature (done), and resigning (not done).  There are some important lessons the global community can learn from the poor example Ontario has provided.

Many regions of the world are struggling with an electricity sector design that can maintain sufficient reliable capacity to meet demand at all times while encouraging intermittent generation from renewable sources that may, or may not, be present when demand is.  The debate on how best to accomplish that in other jurisdictions exists - in Ontario it does not.
While globally jurisdictions weigh the pros and cons of an emergency reserve option, (such as in the Nord pool market), the option of capacity markets (used fairly widely in the United States), or more rigorous attempts at allowing a market to co-ordinate supply and demand (such as in Texas), Ontario displayed it's family compact heritage in providing secretive private contracts that guarantee a monthly net revenue to the lucky recipients of the contracts.
The Net Revenue Requirement (NRR) is a form of capacity payment.

Ontarians should get a full accounting of the cost of moving the plant, but that's not the big cost of the energy policies.

Saturday, October 20, 2012

Weekly Ontario Electricity Summary: We are getting coaled - and snowed

I updated my weekly reporting yesterday (Oct. 10- 16), and was presented with a familiar pattern in the graphing on the year-over-year generation/demand changes.

The growth of coal.

Coal-fired generation was up for the 6th consecutive week, repeating the performance seen in the spring.

Despite over 20% of Ontario's coal capacity being removed from service at the end of 2011 (Nanticoke units 1 and 2), the year-to-date total coal production is now up over the same period in 2011.

The Ontario government's mantra that 'wind is replacing coal' is increasingly farcical.  Germany is increasing coal builds; 4 times more hard coal-fired capacity is planned than natural gas capacity  (BNetzA .xls), and the boasts of the flexibility of their newest coal-fired units must create envy in Ontario's System operator (IESO) as they lament the planned elimination of flexibility in Ontario.

Wednesday, October 17, 2012

Comments on OEB Release of Winter Electricity Rates.

Some good news, of sorts, as rates for electricity in Ontario actually drop in November; from an average of 8.069 cents/kWh to an average 7.932 cents per hour.  Although this is a decline from October's Regulated Price Plan (RPP) rates, it is an increase of 0.367 cents/hour over November 2011, which is about 4.9%

The reason for the decline rests primarily in a variance account.  Without the benefit of the a positive variance  created by excess charges in the May-October RPP period, the increase would be approximately 10%: one year ago the variance clearance decreased the RPP costs by 0.006 cents/kWh (page 19 here), and this year the benefit was .41 cents/kWh (page 20 here).
One year ago the amount of the variance account surplus was $3 million, in April it was $56 million and the figure noted for the end of October is $230 million.  I must note the increase in the variance  seems matched by the overestimation of the global adjustment charge for July , with was $177.3 million.

My suspicion is the rates are held down because the anticipated expenses related to the settlement costs in transferring the gas plant from Oakville to Lennox were shifted to taxpayers from ratepayers.

I can't argue with that - the decisions were entirely political.
I can say this pause in rate increases is temporary.  The respite is only due to excessive hikes in the previous period, a hot summer, and Ontario's quirky faux market design that sees high usage rewarded with lower rates.

Related: Better Ontario Electricity Estimates For August

Tuesday, October 16, 2012

Thoughts on McGuinty Exit: Ms. Horwath, meet Mr. Hudak ...

Some quick thoughts upon news that Ontario's provincial Parliament has been prorogued until such time as the Ontario Liberal party has selected a new leader and that new leader has decided to reconvene the legislature.
The NDP leadear and the Progressive Conservative leader should find a way to put together a temporary government and set an election date for a time in 2013 that allows the Liberals to select a new leader (I'd suggest March).
There is not little doubt that the government will accomplish little in the intervening period regardless, so I think the relevant point is whether our democracy in Ontario - and democracies in B.C., and Canada in general - is well serviced by the cult of personality extending to leaders being able to discard the daily rituals of the democracy.

To be clear, all 3 of our traditional parties did poorly last election.

Monday, October 15, 2012

Developing A Culture of Incompetence in Ontario's Electricity Sector

On October 12 the Ontario Power Authority (OPA) released 20000 pages of documents related to the 'relocation' of a gas plant to service the southwestern GTA; from the southwestern GTA to hundreds of kilometres from the southwestern GTA (story here).  The 20000 pages are now added to the release of a number of heavily redacted documents weeks ago in what was, up until 20000 more pages,  a comprehensive sharing of documentation.  The interesting question, from my perspective, is not how 20000 pages were missed, it is how a culture came to exist where 20000 pages can be missed.

I'll start exploring that culture with some timely data following the latest meddling in Ontario's electricity market design.

Ontario's Independent Electricity System Operator (IESO) passed a rule change, effective October 1st, 2012, to prevent exporting electricity at negative prices.  Operators at the IESO had already been having some success at curtailing generation to control the occurance of negative pricing.  The most recent 12 month period (Oct. 1, 2011 to Sept. 30, 2012) had about half the number of hours with negative pricing as the same dates 3 years earlier.  The average negative price was 5 times greater [1]  than 3 years earlier, but still, in a market valued at roughly $10 billion per year, negative exports likely cost about $12 million.  There is no new market impetus for a new policy, and the stakeholder group exploring the issue did not suggest this policy.
It is another policy made for political reasons - in this case to avoid to optics of paying neighbours to take excess generation.
We've had 3 instances of negative Hourly Ontario Energy Price (HOEP) since the rule was to be effective - in each instance supply was curtailed by dispatching down nuclear units:
  • Oct. 1, hour 4, the price dropped to -$29.17/MWh.  Bruce B Unit 8 was dispatched down until hour 7
  • Oct. 4, hour 24, the price dropped to -$51.91/MWh, Bruce B Unit  7 was dispatched down until hour 6 of the 5th.
  • Oct. 9 hour 23, the price dropped to %-10.24/MWh, Bruce B Unit 7 was dispatched down until hour 4 of the 10th, and Pickering unit 4 suddenly dropped offline during that time.

Friday, October 5, 2012

Thanks for the plentiful bounty of electricity, but ...

The Thanksgiving holiday arrives in Ontario accompanied by lots of electricity supply - so much that the system operator (IESO) has surplus generation alerts posted throughout the long weekend.

Oct. 5 SBG report
Surplus baseload generation (SBG) is a problem that received notice in Ontario with the recession in 2009.  We've continued to commit to new supply since 2009, as demand remains stagnant, and consequently the Hourly Ontario Energy Price (HOEP) has dropped to new lows, with the 12-month moving average now under $25/MWh.

I've previously covered three methods the IESO uses to curtail generation when the supply committed to exceeds the ability to consume it.  My preliminary reporting for September (here) showed the the past two weekends the IESO has removed supply by curtailing production from non-utility generators (NUGs).  That will likely also be true this weekend.

Graph from Shadow Weekly Reporting
In addition to the NUG curtailment, my programming indicates some turbine output is being redirected to Quebec again - this was very common a year ago, but hasn't been as significant in 2012..

The third method I attempt to track is the curtailment of output at Bruce B (and soon also Bruce A) nuclear units.

Thursday, October 4, 2012

Bunking with Gipe: about Germany's Electricity Revolution

Paul Gipe is out with a particularly misleading post:  German Coal-Fired Generation of Electricity Falls While Renewable Generation Rises: Debunking Another Myth about Germany's Electricity Revolution:
The latest talking point is that Germany is burning more coal than ever because of all the intermittent renewables that have been added to the system.
So, let's have some fun with numbers and separate fact from fiction.
First, the source. All the data I'll use comes from the Work Group on the German Energy Balance (Arbeitsgemeinschaft Energiebilanzen) and can be downloaded from their web site.
Let's not have some fun with numbers.
Let's do some honest work with them instead.

The first point would be including natural gas and reporting on all fossil fuels in any analysis.  Using the AGEB data referenced by Gipe, the graph shows remarkably little movement - the totals for 1990 and 2010 are almost identical.
These figures don't capture an entire 12 months of data since March 2011, when German took offline a number of nuclear reactors.

Tuesday, October 2, 2012

In defense of Christopher Bentley

The Ontario legislature has just passed a motion of contempt against Minister of Energy Christopher Bentley (here).  The motion deals with the release of documents, .demanded by a legislative commitee, related to the cancellation (or relocation) of a natural gas-fired generation facility in Oakville.  The plant was cancelled before Mr. Bentley became the Minister of Energy.

The motion is justified in respecting both the power of the legislature and historical respect for ministerial accountability, but there are reasons the matter should now be settled as quietly as possible.

The Ministry of Energy has not been stable since Premier McGuinty first won office.  The only Minister with over 2 years in the portfolio was Dwight Duncan - the architect of the global adjustment scheme that I argue is transferring the value of Ontario's public generation assets to private parties favourable to the government.