Saturday, September 14, 2013

Ontario's Minister of Energy and 6 gazillion whatevers

Two days after I posted an array of estimates in Ways to estimate Ontario's losses on electricity exports, a Canadian Press article included a very different figure as coming from Ontario's Minister of Energy:
Chiarelli says Ontario is making a net profit of up to $6 billion a year on importing and exporting electricity
I was a little angered dishonesty might be the strategy to respond to fact, but recognized the possibility the minister may have been misquoted.

The next day a slightly different story was told by Bob Chiarelli on the CBC radio program "As It Happens" (3rd segment of 3rd clip here) as he claims, emphatically that the:
"province since 2006 has made between 5 and 6 billion dollars net profit on the sale of it's electricity"
Obviously I disagree, and the reader may not be interested in a prolonged "I said/liar said" exchange,  so I'll only briefly reiterate claims government entities have made on the issue:
Based on our analysis of net exports and pricing data from the IESO, we estimated that from 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario
-Auditor General of Ontario annual report 
Since 2006, the electricity market has generated $1.9 billion through net exports compared to 2002 and 2003 when Ontario paid $900 million to import power.
-Ministry of Energy Bulletin, September 13th, 2012
A claim of "6 billion dollars net profit" is billions on the crazy scale.

The Minister also strengthened some other fallacies in the "As It Happens" interview.

On the cost of curtailing industrial wind turbines

Ontario's system operator made a claim early in the year that NOT changing market rules to allow the the dispatching off of renewable resources would result in an additional systemic cost of $200 million (here). 
The claim is irrespective of what payments might exist to generators for curtailments - and it was made at a time generators were appealing to the Ontario Energy Board to claim they should be paid fully for the curtailments. market rules will allow the IESO to operate Ontario’s electricity system more effectively, resulting in about $200 million in savings per year. The OPA is continuing to negotiate with other wind suppliers. Savings resulting from these negotiations will be in addition to IESO’s estimated savings.   - the OPA
Chiarelli's claim on "As I wish it had Happened", of wind generators:
They are not going to be paying them as much ...
"estimated by the system operator that it would be $200 million a year less"
That's not what the $200 million figure was.  If wind generators got paid $200 million less, the rule change would be worth $400 million.
There has been no disclosure of what the payments for curtailment are (the OEB case was abandoned following an agreement between suppliers and the government - via the OPA),  but given the corporatist nature of the Liberal Party of Ontario, full payment is a pretty good bet.

I think the Minister also implies, during the CBC interview, that savings from cutting back a wind energy contract (the Samsung deal) will be used to pay wind generators not to generate.

Where did this guy come from - Escher?

I'll conclude by addressing Chiarelli's claim that it is "much more expensive to ramp down nuclear instead of wind."
Not only can Bruce nuclear ramp down production (through the use of condenser steam discharge valve) the market rules essentially force them to do so, when possible, prior to wind and solar being dispatched down.
However, in this case the Minister is probably right - it's rather silly to alter billion dollar assets while taking wind power onto the grid.

I'm glad the Minister and I might agree on one thing.

P.S.  Here's how I handled smaller, but still ridiculous claims, from a different politician two and half years ago: McGuinty Thinks This is Fun?

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