Sunday, January 9, 2011

Comments on Release of IESO Annual Statistics for 2010

The IESO issued a release with the annual statistics for 2010. These events are a little anti-climatic for the data folks who check up regularly, with the exception of the totals by generation type. The big news was always going to be the increase in GHG emissions, over 2009, due primarily to the reduction in hydro output (simply from a lack of water), and also a minor growth in Ontario consumption.

We knew that from monthly reporting, but the IESO release has the annual figures, and adding the statistics for annual generation by fuel type to what I've got for the past 20 years, the trends continue.

I'll return to that.

One small surprise to me is the evolution of the vernacular at the IESO. This release states:

"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)."

The Hourly Ontario Energy Price (HOEP) is no longer cited as a market price, but has now become a mechanism for signaling suppliers to turn up, or drop down, supply levels (when the Energy Minister says our exports are at market prices, I still believe this is the best guess at what he means). The IESO now cites the 'cost' of power as the HOEP plus the Global Adjustment (GAM) – which is what this blog has been treating it as. So, once more with feeling, here's a graph of my estimate of the running 12-month total for the level of subsidy of exports - the difference between the cost of producing exports (GAM plus HOEP), and the HOEP only:

Most people who will have seen an article on the 2010 figures probably received it from either the Canadian Press article, or the Toronto Star article. Both, unfortunately, talk to the Ontario Clean Air Alliance's Jack Gibbons. In another blog entry today I've explained why the argument that exports can be related to a single type of generation is facile, and wrong.

I am very much opposed to wind capacity being gifted a prime place in our electricity supply. I've therefore, in the past, jumped to a conclusion all wind is exported. When I noted record exports, and a record low for the daily HOEP average, I also noted a wind high (as a spin), and when Tom Adams, who has frequently noted huge, and unpredictable costs with nuclear energy, as well as other issues related to nuclear generation, discussed the record exports he noted "the average rate of exports was greater than the output of three of Ontario's largest reactors at full power." Which is also true. When Jack Gibbons implies coal is responsible for export levels, it is not true.

The only replacement for coal, in Ontario's mix, is natural gas. It meets demand. This is not particularly complicated stuff, and comparing 2010 to 2008, ignoring 2009, the IESO figures show a decline of 6.5TWh in Ontario Consumption, a decline of 8.5 TWh in production, but only a small decline in the combined output of coal and gas, of 1.1 TWh; and an increase of over 400% in the Global Adjustment due to a policy wishing peaking production can be replaced by anything other than peaking sources.

And for that I will return to my existing data, now updated for 2010 – keeping in mind we export at an enormous loss now, and we did so in the early 1990's as well.

The more supply in the system that can match demand, the closer production matches supply. This graph shows natural gas and coal production at the bottom (hydro being about 40% always on baseload and the remainder peaking, it's third), with net imports as the line graph (right axis). The lower our use of peaking sources, the higher our exports.

The second graph shows the inverse – with the baseload sources on the bottom, and the line as net exports. As nuclear and hydro and wind shrink, so too does our need to export.


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