Thursday, March 7, 2019

Available low-cost electricity not utilized in Ontario

All figures are estimated (view in workbook)

In preparing my previous post I created a graphic posted separately on Facebook and Twitter. The graphic got more views than the post I edited it out of.

Comments on the original graphic included thoughts from the "electrify everything" perspective. I responded with too much caution, noting shrinking supply. Having given topic some more thought, I've added dumped exports as supply that has been available to Ontarians over the past years, on top of curtailed potential supply and under-utilized gas generators. In this post I hope to provide some context to the graphic, and show why coming changes in supply don't present a challenge for meeting Ontario's annual electricity needs, if not its capacity requirements.

Friday, March 1, 2019

Value lessons from Ontario electricity statistics

Data - and lots of it.

While I'll try to prevent this post from sliding into an abyss of Ontario electricity statistics, I'll be citing provincial data as the basis for discussion about public understanding being restricted by the presentation of data from official sources, and present new views of generally unreported data that would benefit literacy in valuations of electricity sources - an area where reckless ignorance blooms again and again.
but enough about academics, let's dive in!

The old standard of valuing generation sources is the Levelized Cost of Electricity (LCOE ). I was particularly pleased in late 2015 when a report from Ontario's Auditor General included a figure (5) indicating the cost and quantity of energy sources for 2014. I was more pleased a few years later when I received figures from a freedom of information (FOI) request with the same information for years 2007-2015. While I think the data is terrific, when I wrote about it I cautioned on presenting LCOE, "stressing these calculations deserve a big asterisk and lengthy footnote on the impacts of things such as curtailment and capacity payments." 

I have now done the data work required to add that lengthy footnote on curtailment and capacity payments.

I am certainly not unique in hoping for superior valuation tools to LCOE: the U.S. Energy Information Administration (EIA) has developed a  Levelized Avoided Cost of Electricity (LACE) metric, and the International Energy Agency (IEA) a Value-Adjusted Levelized Cost of Electricity (VALCOE - see pg 41). LACE is intended to value the cost (of alternatives) avoided by the generation, with the intent LACE > LCOE would signal a good project. VALCOE attempts to recognize the different capabilities of sources in providing firm capacity and flexibility. The specifics are less important than the principles: not all generation is of equal worth to systems that are intended to minimize loss-of-load situations. Concrete examples of LUEC's limitations will help conceptualize the issues that have people looking for better valuations.

Before I discuss my data I will note one other frequently cited source of Unit Cost in my province (I regard LUEC and LCOE as interchangeable terms): the Ontario regulator. Their most recent explanation of regulated rates includes a table (3) indicating hydro at 6.2 cents per kilowatt-hour, nuclear at 7.7, wind at 15.9, gas at 18.8 and solar at 51.3 c/kWh. I'll show replacing the OEB list's lower cost supply with gas is likely to lower total costs.

I have collected hourly data for the transmission-connected (Tx) generators reported by Ontario's system operator, including imports, and I've estimated (hourly) distribution-connected generation (Dx), curtailed supply, and contracted cost, either by unit generated (or curtailed), or by capacity required to be available. My base union query in working the data has over 16.4 million records. I will not repeat the word "estimate" in this post but simply note this one time it may be applied to everything (my work and the numbers from the IESO and OEB I cite).  

Here is my summary of annual generation and costs from 2008-2018:

Monday, February 18, 2019

A message from 2018 Ontario electricity statistics

Two notable aspects of 2018's electricity numbers in Ontario: average rates did not substantially increase, and demand did. Both of these buck the trend of the past decade. I'll explain how the trends broke.

The IESO's December reporting shows year-to-date Class B Wholesale Market rates of:

  • $114.94/MWh in 2018
  • $115.55/MWh in 2017
  • $113.18/MWh in 2016

That should be the most accurate source for this one consumer category, although the IESO did bungle November's rates due to an error in consumption figures (they compensated for it in December by pretending 688.6/8.695= 74.04). In 2017 they bungled June's consumption figures (which was accounted for in July, pretending 913.4/8.858 =112.8). These details demonstrate all IESO figures should probably be treated as estimates too - so I'll stick with my own data work here, and a graphic demonstrating the trends in different consumer segment pricing I developed, and explained in Trends in Ontario Electricity rates by Consumer Segments