Ontario Electricity Act Being Re-Written - and Other Thoughts for Santa

I stumbled across something yesterday that jolted me away from Christmas planning.  I've not posted much this month as I've been suffering from writer's block in attempting to write Santa my list.  I don't wish  for stuff anymore - I generally mix up the old gift holiday with my murky religious philosophy. It's a season where a muddled mind is unavoidable - so I usually hope for wisdom.
For others
What attribute should I wish for this year?

I was thinking about this when I saw the CBC's Mike Crawley tweet:

At 4pm on Fri before Xmas, McGuinty govt announces proposed changes to how it reports on hydro debt retirement http://bit.ly/uzexC3 #sl

Kyoto a no-go: Canada exits

There's a lot of press, and commentary, on Canada's long-anticipated withdrawal from the Kyoto Protocol.
I've visited the International Energy Agency (IEA) site to grab a spreadsheet of CO2 Emissions from fuel combustion (the bulk of emissions), and done a couple of brief calculations to develop illustrations of why Canada exited Kyoto, and when we fell behind on our targets.

The Kyoto Protocol was signed in December of 1997.  It set a base year of 1990 - some would say because of the skill of negotiators from countries that didn't have growing GHG emission between 1990 and December 1997.  Especially countries with recovering eastern bloc ecosystems.

Secret Deals between Public Power in Ontario and Quebec

There have long been suspicions that Ontario has been dumping hydroelectric production.    Earlier this year a report  indicated Americans were generating power with the Ontario water allocation we were unable to use.  As the year progressed and water levels of the great lakes remained well above 2010 levels, it became apparent that Ontario’s hydro levels were producing at new lows as the year progressed.  I reviewed generation figures by site for September, and noted a big drop in the output from the unregulated segment of the Ontario Power Generation (OPG)  Ottawa/St. Lawrence Plant Group .  I made inquiries as to whether the water sharing agreements from the Niagara River were mirrored for rivers shared with Quebec at the time, which went unanswered.  Now I believe I’ve stumbled upon the proof that we have agreements with Quebec resulting in exports, and generation, that are not being reported.

A Dubious Distinction: Another Wind Record For Ontario

Sunday November 27th saw a record for hourly electricity production from Ontario's wind turbines.
Hour 10 has 1427MW recorded, which is 1MW higher than the 1426 recorded for hour 9 only two Sundays before.(endnote 1)  The day was also notable as mild temperatures further reduced Ontario's demand, which had already been trending down for the previous 6 weeks.


Comparing hourly production data from Sunday November 27th, 2011, to the production from Sunday, November 28th, 2010, and estimating hourly demand from intertie activity, shows that the additional wind generation of 20,119 MWh coincided with a drop in demand of approximately 38,365MWh of demand.(endnote 2)   That required over 58GWh  of other supply to be curtailed, or exported, which is essentially all production from natural gas and coal that occurred in 2010.  Cas and coal reductions were only about 25.6GWh, nuclear 22.1GWh, and exports were upped by 10.5GWh.

	Nuclear	Hydro	Wind	Gas	Coal	Other	Ontario Demand	Net Exports
2010	240,696	83,415	6,782	52,156	8,082	2,424	371,778	21,008
2011	218,610	81,907	26,901	29,280	5,242	3,046	333,413	31,573
Variance	-22,086	-1,508	20,119	-22,876	-2,840	622	-38,365	10,565

Perspective on Ontario's Electric System Operator 18-Month Outlook

On our American neighbour's Day of Thanksgiving, the Ontario's Independent Electric System Operator (IESO) released it's latest 18-Month Outlook, to May 2013.  The headline summary from the press release 
was that "Over the next 18 months Ontario will continue to have an adequate supply of electricity to meet consumers' needs."
That hasn't been an issue for years, and the present's premier problem was emphasized as the calendar changed over to the US Black Friday, the day American retailers allegedly move from the losses of the previous portion of the year to the profits of the holiday season. Ontario was paying $31.80/MWh to any market that would accept our exports, and, finding limited takers, Bruce Power was being forced to reduce output from it's nuclear units.  Between the 1100MW we found export markets for, and the 300MW we would pay Bruce to prevent the production of, the IESO managed to compensate for the inconveniently high wind output of  1413MW.

New Report Demonstrates The Market Impact of Renewable Energy Policies

The press release for the OntarioEnergy Board's Market Surveillance Panel (MSP) Monitoring Report on Ontario'sElectricity Markets  noted four recommendations, including: “an increase in the frequency with which interties are scheduled, and the associated frequency of demand and intermittent generation forecasts as well as pre-dispatch schedules” and; "accelerating efforts to make wind generators dispatchable ...”  The MSP report's information supports the claims (argued previously here), that the depressed market prices, and dumping of excess generation, will not simply continue, but grow over the next decade if Ontario's supply procurement policies persist.

The Market Surveillance Panel (MSP) report delivers an analysis of “low-price” hours (defined as the Hourly Ontario Energy Price – or HOEP – being below $20/MWh).  In comparing the Ontario Energy Board (OEB) seasons, where winter begins November 1^st and summer begins May 1^st, the report notes; 

“The greater frequency of low-price hours in this year and in the past two years mirrors the general trend of lower Ontario demand and also reflects the increase to Ontario baseload supply, or generation that is offered like baseload supply (i.e. generators with fixed price contracts per MWh delivered). “

Reviewing Ontario's Feed-In Tariff: Part 2

Click Here for Part 1

The current feed-in tariff (FiT) review in Ontario provides an excuse to explore some larger topics - like markets, efficiency, climate change and polices intended to lower emissions. FiT programs will drive up the price of electricity which threatens to reduce the movement of energy consumption towards increased use of electricity - a necessity in the eyes of many if overall carbon emissions are to be meaningfully reduced. FiTs, especially those offered with protectionist requirements, discourage trade in electricity, and that, in turn, further reduces efficiency and, therefore, affordability.

The premise that increased electricity is necessary for a low-carbon world has been repeatedly emphasized this year, including in reports on reducing greenhouse gas (GHG) emissions in California, and even more recently in a report, “Scottish Energy 2020?”, put out by the Institution of Mechanical Engineers.  That report noted, “Electricity is actually projected to be the smallest component of Scotland’s energy demand (heat and transport energy being greater)...”  

That sent me to the figures at the back of Part 3 of Canada’s latest (2009) National Inventory Report, to calculate per capita emissions for 3 categories with large residential components.   The resulting graphic shows per capita emissions in Ontario and Quebec (‘Electricity and Heat’ is almost entirely electricity in both provinces, as the ‘heat’ referred to here is primarily the H in CHP - which is essentially absent in these provinces).  I’ve shown emissions from light vehicles, including light trucks.   Most are aware of Quebec’s hydroelectric capacity, but I’m not sure many understand the implications of heating with electricity.  In Ontario, 2011 is likely to see more emissions from heating than from all electricity generation (and both will be dwarfed by the use of light vehicles).

More Wind Records For Ontario - Emissions Rise

Sunday November 13th saw record electricity production from Ontario's wind turbines.   No coal-fired generation was replaced, and emissions from electricity generation in Ontario increased over the comparable day from the previous year.


The initial IESO data shows 32,401MWh of generation this past Sunday, which would be a record. (endnote 1).
Hour 9 has 1426MW recorded, which is the highest hourly figure recorded.

Reviewing Ontario's Feed-In Tariff: Part 1

The Ontario government's announcement of a review of the Feed-In Tariff (FiT) program raised alarms among observer's of Ontario's electricity system.  The review has been put in the hands of a senior bureaucrat from outside of the electricity planning process, de-emphasizing knowledge of Ontario's electricity system..  The government developed a survey and wrote; "All Ontarians are invited to participate in the review of the FIT Program and can provide feedback by answering an online survey or making a written submission at 2yearFITreview@ontario.ca."    The government claims their review will "examine program rules and pricing to ensure the program remains successful and sustainable."  
Remains 'successful and sustainable'?
That is a disconcerting description, but the distortion seems even more bizarre in the official government survey.  Surely in order to comment on revisions to the plan, we should review the first two years to evaluate the accomplishments of the program thus far.  This is especially true as the first accomplishment was to halt comprehensive long-term planning of Ontario's electricity system

Hydro One 3rd Quarter Report Hints at High Costs Of Politicized Electricity System

Hydro One's Press Release on 3^rd Quarter results includes a number of sentences that leave me scratching my head and wondering how much spending is necessary to keep the lights on, and how much should be attributed to the politically motivated connection of unreliable, heavily subsidized, generation.

Curiosity  seems to be in short supply these days, as the country's most read papers continue to print that bills can't have been going up due to renewables as most contracted capacity is not yet online.  They missed years of escalating delivery charges for Ontario's residential consumers.  I had previously looked at escalating capital costs (including the chart shown here, taken from an earlier article on our smart grid).  2010's capital expenditures finally leveled off, at 2009's level, but with the smart meter spending essentially completed, the recent Hydro One results don't indicate capital expenditures will be reduced.

October Stats: Preliminary Ontario Electricity Figures

A quick overview of some statistics, for October 2011, along with some views of the data not included in the IESO monthly reporting.   I offer these only as my own calculations based on freely available data from the IESO site.   

Mistakes may be my own - some minor variances are expected as the IESO daily figures currently available lack the full detail of the weekly data updates which will not be posted for some days yet.

The HOEP rate for October will end up down around $29.38/MWh, but the 2nd revision of the Global Adjustment, pushes the wholesale rate up to $74.97.  YTD, Ontario demand is almost identical to the first 10 months of 2010, the HOEP is down over 16%, while the GA has climbed over 51%.  Neither markets, nor demands, are causing the rate inflation.

Ontario’s Electricity Policies Bite Into Municipal Budgets

I read an article in the newspaper the other day that began; “The skyrocketing cost of lighting city streets is the result of Ontario Energy Board (OEB) rate changes, city councillors were told Monday.”  The previous week the same council had heard of $130,000 associated with annual electricity bills for the new local twin-rink.  I hadn’t dwelled on it until I read it out loud to a visiting relative; “Street lighting costs are budgeted to increase to $645,500 next year, an increase of 41% since 2009.”  Then the nickel dropped – duh!  I’d written, a week earlier, “OEB Hikes Electricity Rate … 41% in the Past 2 years.”  

Winter 'Years' starting Nov. 1 (ie. 2011 is Nov. 1, 2010, to April 30, 2011)

The two figures shouldn't match.  My understanding was that the Municipalities, Universities, Schools and Hospitals, known as the MUSH sector, were no longer offered regulated rate plans.  They are to pay the actual rates (Hourly Ontario Energy Price -HOEP), with the global adjustment (GA) mechanism applied to ensure recovery of all generation costs (plus a couple of  other things).  The story I read claimed the that, "the number of connections, not the amount of power used, has the greatest impact on cost..."  Regardless of the reason for streetlight costs escalating at the same rate as residential off-peak rates,  some investigating shows rampant contracting of supply, facilitated by the global adjustment mechanism, is destroying the attempt to differentiate off-peak rates in both the regulated consumer market, and the wholesale market.

OEB Hikes Electricity Rate ... 41% In The Past 2 years.

Today the Ontario Energy Board (OEB) announced new electricity regulated price plan (RPP) rates for the coming winter. In the winter of 2009-2010, the Off-Peak Time-Of-Use Rate was 4.4 cents/kWh. It will be 6.2 cents/kWh for the winter of 2011-12, which is an increase of 41% over the past 2 years; the single-year increase is 21.6%.  In only 4 years the off-peak price, in winter, has doubled through consecutive annual, increases of 33%, 10%, 15.9%, and 21.6% (figures are here).

Is the OEB regulating electricity pricing or selling gas furnaces?

Wind Production Records In Ontario Accomplish Nothing

Saturday October 15th saw record electricity production from Ontario's wind turbines.   No coal-fired generation was replaced, and emissions for electricity generation in Ontario were not reduced.

Value, LUEC Limitations, And FiT Failure

The comparative value of  of each generation source in Ontario’s electricity system is measurable.  I’ve written on this before, and recently read a couple of encouraging articles noting the shortcomings of the LUEC (levelized unit energy cost), or LCOE (levelized Cost Of Electricity) tools in evaluating electricity generating technologies.[i]   Presenting some of the data I’ve collected, in a slightly different way, will emphasize the need for a value analysis that also considers the supply mix, and demand characteristics..  The analysis indicates Ontario’s recent electricity planning foibles will not provide a low-emissions, sustainable, electricity supply.

Lessons From Ontario's Record Low Election Turnout

One of Ontario’s 3 main political parties had a lower percentage of eligible voters opt for their party than had been the case since 1943.

That party won.

Reported preliminary figures show Dalton McGuinty's Liberals won 53 of Ontario's 107 seats by collecting 37.62% of the 49.2% of possible electors that bothered to vote.  That's the lowest share of electors who chose the Liberal party since WW II. The first lesson for the Progressive Conservatives is that the Liberals weren't relevant in their loss.

Ontario’s Liberals Less Popular in 2011 Election Win than in 1995 loss to the Harris PCs

Ontario’s election saw the Liberals returned to power, but reduced in stature to minority status.  They won 53 seats, and a majority required 54.  I wrote a blog entry, prior to the official start of the campaign, that noted; “Events of the past 2 weeks have made it much more likely that the new government could be the same as the old one.”   I didn’t have the courage to predict that – in fact I said a PC minority was the most likely scenario.  But I did, in hindsight, provide the roadmap for a train-wreck; a map that the Hudak campaign followed. 

Mussolini was a teacher

“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes stronger than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group,”                                                                  

Franklin D. Roosevelt 

I saw that quote, a long time ago, on sites opposing the imposition of Industrial Wind Turbines on unwelcoming communities; an action seen as deliberately facilitated by Ontario’s Green Energy and Green Economy Act (GEGEA).  I explored the quote, and FDR, and soon realized the quote not only wasn’t a great definition of fascism, but FDR was considered a fascist, an opponent of fascists, a facilitator of fascist …   Opinions of FDR appear to communicate more about the opiner than FDR.  Strangely, or not, the speech the quote kicks off deals with corporatism, and the distribution of income – both might be more relevant (and almost totally ignored) issues today, and both are only tangentially connected to the European Fascism generally associated with the term.   

Germany's Will to Power

“If someone declares publicly that nuclear power would be needed in the baseload because of fluctuating energy from wind or sun in the grid, he has either not understood how an electricity grid or a nuclear power plant operates, or he consciously lies to the public. Nuclear energy and renewable energies cannot be combined.”—Siegmar Gabriel, then-Federal Environment Minister of Germany

This quote was included in the anti-nuclear “World Nuclear Industry Status Report 2010-2011”, and it introduced two points: the first being that “overcapacity kills efficiency incentives,” and the second being that ‘renewables need flexible complementary capacity.’  The implication here is that because renewables need “flexible” capacity, and too much capacity isn’t desirable, inflexible nuclear baseload is undesirable.    If one buys into this premise, and if the question arises, “which is better,” a nuclear supporter is born.

That question doesn’t seem to come up very often.

September Stats: Preliminary Ontario Electricity Figures

A quick overview of some stats, for September 2011, along with some views of the data not included in the IESO monthly reporting.   I offer these only as my own calculations based on freely available data from the IESO site.

Mistakes in the data may be my own ... but it's unlikely.

Beyond Oxford: Capacity Markets and $263/MWh IWT Output

This is the fifth, and final, post in a series inspired by a UKStudy that concluded a “truism” for natural gas in the coming decades is ‘want wind, need gas.’”

My previous post noted that the need for variable generation capacity, presumably primarily natural gas-fired, does not decrease as wind capacity increases over the next decade, although the annual generation from ‘peaking’ type sources may drop from about 20TWh annually, to 17TWh annually.[i]   The decline for gas producers may be more than offset by the removal of coal-fired generation.  In Ontario, it is frequently noted the costs of the feed-in tariff programs for renewable (FIT and microFIT) have not yet impacted bills.  I’ll demonstrate that isn’t entirely true.  I’ll explore market mechanisms required in a system that includes intermittent generation that is provided with priority purchase status; and the alternate, non-competitive, mechanisms Ontario has substituted for market mechanisms.  That will provide the basis to calculate a figure to add to the accounting for the cost of Ontario’s wind strategy.

The Cost of Wind Generation: Bumping Hydro and Duplicating Capacity

This is the fourth post in a series inspired by a UKStudy that concluded a “truism” for natural gas in the coming decades is ‘want wind, need gas.’”

My previous post contained the promise of more data modeling work, allowing for an estimate of the true cost of Ontario's Electricity policy, particularly the cost of increased industrial wind turbine (IWT) capacity in an existing low-emission, but low flexibility, supply mix..  The modelling is competed and the next cost, for hydro capacity that cannot be matched to Ontario's demand with the planned wind capacity installed, is almost $3 billion.

Industrial Wind, SBG, $3.3 billion ... and more

This is the third post in a series inspired by a UKStudy that concluded a “truism” for natural gas in the coming decades is ‘want wind, need gas.’”

 One of my goals is to determine the need for peaking capacity if more Industrial Wind Turbines (IWT’s) are added, but another is to provide a better accounting of the costs of the Ontario government’s grand experiment, inserting wind into a supply mix already dominated by a large contingent of baseload nuclear and non-reservoir hydroelectric generation.  My first post in the series showed the planned IWT capacity is essentially planned as excess capacity, and illustrated wind’s variant output, especially it's lowest output period, of summer, coinciding with the peak supply/demand requirement.  The second post developed the concept of ‘baseload’ supply in Ontario, based on summary estimates of daily output.  My definition of baseload included supply we were contractually obligated to take (or to pay not to take).  Today I’ll start putting price tags on the choices our government has been making for us.

Ontario’s Bizarre Industrial Wind Strategy

This is the second post in a series inspired by a UKStudy that concluded a “truism” for natural gas in the coming decades is ‘want wind, need gas.’”

This post continues the analysis, of Ontario electricity sector data, that is loosely guided by Chapter 6 of a recent study from the Oxford Institute for Energy Studies.   Previously I demonstrated what typical wind production will look like in the coming years.  Now we’ll look at the overall supply picture in an Ontario context.  

Ontario’s electricity system is characterized by a very large nuclear component, and a significant hydro component that generally lacks reservoirs.  As demand has dropped in recent years (it peaked in 2005), intermittent sources have come into the generation mix on a ‘must take’ basis.  I’ll address the current mix this has left us, and the issues already apparent in Ontario due to that mix, before forecasting some figures for future years.

Excessive Wind Power Generation in Ontario

This post became the first in a series inspired by a UKStudy that concluded a “truism” for natural gas in the coming decades is ‘want wind, need gas.’”

I received an e-mail today from a concerned reader wondering at the lack of new posts.
I wish I'd been simply doing other things, but I have been doing the back-end data collection to further my arguments regarding Ontario's electricity system challenges/follies.

I noted a study that came out in the UK recently; “The Impact of Import Dependency and Wind Generation on UK Gas Demand and Security of Supply to 2025,” from The Oxford Institute for Energy Studies.

Chapter 6 of that study, "Wind Intermittency," was not only informative, it included a number of helpful graphs that I felt I would be capable of assembling, with Ontario data, to communicate a similar message in the context of Ontario.

2 Words Missing From the Ontario Liberals’ Platform

“Forward. Together. The Ontario Liberal Plan 2011-2035” does not contain an electricity policy.  The platform, perhaps named as an homage to US President Nixon’s “Forward Together” slogan, has some very notable gaps where we’d expect some substance to be, the most notable of these being nuclear policy.  The word ‘nuclear’ does not appear once in the 60 page document.  I’m no Bob Woodward, but I’ll attempt the role in investigating why electricity policy went missing in the Liberal platform.

Liberal Education for the English Speaking Whirled

The Liberal Party has some terrific ads out for the election. Seriously.

The Leadership/Education ad sounds great, and Premier McGuinty appears confident and assertive.

But the message is deceitful.

Nothing is more important to Ontario's Economic Future Than Education Kindergarten.

August Electricity Stats, and Thoughts On the Election

I've been discombobulated this week, after driving my son off to begin university last weekend.  I did run my normal routines capturing summary figures for Ontario's electricity system in August, and I did watch energy specialists from Ontario's major parties, and the Greens, on The Agenda with Steve Paikin.  It was an ugly display for somebody with my positions on the electricity system.

My discombobulated might be far more coherent than people find in other places, so ... here's my look at August's stats using the Agenda discussion to indicate points of interest.

Coal’s Replacement in Ontario

Ontario had a record low pricing day, where we paid to dispose of generation, and the coverage in the press[i] meandered to quoting Minister of Energy Duguid;

“It’s a distinguishing issue for the Ontario Liberal party and its premier, who have stood up and taken the decisions needed to be taken to get out of dirty coal … You can’t do it without wind and solar being part of the energy mix.”

That’s a remarkable amount of incorrect information to fit into so few words. In July 2002, an all party committee recommended, “the Ontario government shall mandate the closure of all remaining coal or oil-fired generating stations by 2015.”  The current Premier distinguished himself, in 2003’s campaign, by promising to get rid of coal by 2007. Perhaps he is distinguishing himself now by claiming it could only be done by lying about everybody else while hand-picking recipients for rich wind and solar contracts. Wind, and solar, have not been significant factors in the reduction of coal-fired generation, in Ontario, over the past few years.

Accounting And Ontario's Electricity System: A Farce

People are trying to make sense of the record low electricity price Ontario achieved this Sunday.  I wrote about it Monday morning, but most are getting their information from other sources, including the Toronto Star– and these source don’t seem to working with any foundation in accounting.  I have some experience with ‘retail math’ – which is probably about a grade 7 level of math. I combined unease with my qualifications, my interest in technology and theories of education, and my occasional feeling I should take a more active interest in my children’s schooling, and brushed-up on my accounting with some lessons at the Khan Academy (which I learned of in a recent column by Margaret Wente). 

Sunday Sees Record Low Pricing in Ontario’s Electricity Market

The official daily report from the system operator shows August 28^th’s  an average HOEP at $-22.58 (weighted average of $-17.53/MWh).  This is the lowest average price throughout a single day on record – breaking a record set only January 1^st.  

Duncan's Grow-Op Is Stealing Hydro

Public generation is increasingly being demoted to servicing private interests in Ontario. In April 2004, minister Dwight Duncan delivered a speech, to the Empire Club, titled “Choosing what Works for A Change.” In hindsight, the obvious question should have been, “Works for who?”

Government Machine Rewrites History To Protect McGuinty on Debt Retirement Charge

The OEFC's 2011Annual report for the next OEFC fiscal year, ended March 31^st, 2011, was being posted to their website as I was posting my article, Retire the Debt Retirement Charge .

Remarkably the 2010 report wasn't posted until October 2010 – who knew the next would follow 10, and not 12, months later.

Retire the Debt Retirement Charge

Ontario's Debt Retirement Charge (DRC) has become an election issue. The PC party made the removal of the DRC, which they introduced while forming the government¹, a part of their election platform . The pledge is contained in the “Getting Home Energy Bills Under Control” section of their Changebook platform. The elimination of the DRC should help do that in the long run, but probably not in the short term.  

Time for Hudak to Step Up, Or …

In early October, Ontario will vote in the next provincial government.  Events of the past 2 weeks have made it much more likely that the new government could be the same as the old one.

A 400% Rise in the Global Adjustment, and Other Disturbing Trends

The Global Adjustment provides both adequate energy supply and green energy for Ontario. It accounts for differences between the market price and the rates paid to regulated and contracted generators and for conservation and demand management programs.

The IESO provided a second, lowered, estimate for July's Global Adjustment (GA), of $30.75/MWh or $390.3 million. In July 2010, the figures were $7.50/MWh and $98.8 million.

Exporting Electricity: Smarter Guys In the Room

Diving into statistics doesn't always provide the expected result.  It would probably be best to leave it at that and move on, but ... I think I owe it to some traders to update a previous column ... and it never hurts to try and find something interesting.

Coal is Not Being Replaced By Wind

Wind is not going to replace coal in Ontario.  There are many claims wind generation is yet to replace any fossil fuel generating station in any jurisdiction, but Ontario may be particularly poorly suited for the introduction of industrial wind generation into our supply mix.  Electricity pricing looks to be an important issue destined to occupy much of the discourse in Ontario’s election this fall.  People generally don’t believe the government, but they also don’t believe bills could be rising so quickly, so much new capacity being announced, and yet some forecasts show shortages again by the end of the decade.  All are true, and the key driver of pricing increases in Ontario is a reckless disregard for operational efficiency that is driven by wind proponents.  That could lead to future shortages.

Response to Comments on Power Dumping

It was an honour to work with Parker Gallant on “Ontario's Power Trip: Power dumping.”  I wanted to follow-up on some of the comments now attached to the article.  I don't do this necessarily as a response to the commentators, but some of the arguments recur frequently in government and ENGO releases, so I have worked on some responses.

Ontario’s Power Trip: Power dumping

The article,by Parker Gallant and myself, first appeared in the Financial Post

During the spring months in Ontario, the winds blow a lot. For companies in the wind-power business, that’s good news. For the province’s electricity consumers, though, it’s another financial disaster that, on an annual basis, drains up to $400-million out of consumers’ pockets. But that money doesn’t directly fund green electricity for Ontarians who pay for it. Instead, the bulk of wind power is essentially surplus power that is exported to the United States and out of province at rock-bottom prices. Ontarians are paying $135 for units of power that are dumped on the export market at prices as low as $20. Sometimes, Ontario has to pay other jurisdictions to take the surplus off its hands.

This past May, Ontario’s wind producers generated 284,000 megawatt hours (MWh) of electricity. For each MWh, the producers collected $135, for a total of $38-million. That money is paid out of the churning slush fund that is now the Ontario electric power system. The system, through its byzantine structures, sold that same power into the electricity market at market prices. The average market price for electricity in May was about $25 a MWh. Wind power, however, rarely gets even the average price.

Because wind often blows when power is not needed, and the Ontario government has mandated wind, the Ontario power system is stuck with surplus power that has to be unloaded, at whatever the market will bear, which is usually below average market prices.

The Fog Around Emissions From Electricity Generation

I've been mulling over tackling this topic since the ENGO's launched a campaign, to support the Green Energy Act and related FIT lotteries, built around implications of increasingly large heath costs due to the use of coal plants - despite a 90% reduction in the use of those coal plants. Recently there's been a great deal of news related to the points I thought were pertinent, the primary one being that if pollutants from electricity generation are decreasing, and respiratory problems are increasing, you should probably look at other urban issues,

Pembina is an Oilfield

An article in the Toronto Star, Don't blame green power: Energy bills rising anyway, alerted me to the latest marketing pitch from the Pembina Institute. Behind the Swithch, Pricing Ontario Electricity Options is the latest propaganda release. It claims to consider 2 scenarios: in one Ontario's Green Energy Act (rumoured to have been penned by a cabal including Pembina) continues to gut Ontario, and an allegedly worse one where the the legislation is dismantled and somehow a greater reliance on fossil fuels is the outcome. They then make some bad assumptions which serve to deceive Ontario about the impacts, on pricing, the scenarios are expected to have.

Ontario's Electricity System Halfway into 2011

Ontario's electricity sector experienced more of the same during the first half of the year - which continues to betray the ongoing mistakes of the government and the Ontario Power Authority (OPA).

The headline figures for the first half the year, when June's numbers are finalized in a couple of weeks, should be anemic demand growth accompanied by inflation in pricing of almost 10%. But the same headlines should have been written one year ago. Instead, Ontario's residents continue to be subjected to errant implications an insatiable appetite for ever more electricity is driving the price hikes.

Huff – Po - The Liberals’ Ho – whistle whistle whistle...

Google led me to a Huffpost Canada stupidity the other day, “Wind Power:  A Quiet Solution to Climate Change”

Following the title comes; “We asked a tough question today: Is the fear and anxiety being spread about the sound of wind power justified?”

A horse’s ass has reason to hope the cart goes before the horse, but it really doesn’t.  The correct first question should address the title;  “Is wind power a solution to climate change? 

It isn’t. 

May 2011 Ontario Electricity Rate Soars

The Independent Electricity System Operator (IESO) has released the Monthly Market Report for May 2011, and it confirms the message of rapid price inflation for Ontario's business sector.

The Commodity Charge for the businesses/industries subject to the wholesale rate soared to $75.94/MWh, driven primarily by a Global Adjustment charge of $50.05/MWh. That is a 17% increase over May 2010's $64.73.

The total rate of $98.90, including delivery and all other charges, was only 14% higher than one year earlier. That's as close as businesses can expect to get to good news as a glutenous Ontario Power Authority continues to contract additional, and extraordinarily expensive, supply - despite the oversupply we so clearly have.

May 2011 Ontario consumption dropped 5% from the same period in 2010.

All I Want for Global Wind Day Is A Moratorium

June 15^th is apparently Global Wind Day.

I put some thought, and study, into what to wish for, and not just for myself. From the first entry of this blog I've been examining Ontario electricity system issues, particularly supply and demand metrics.

The IESO site now shows the May global adjustment finalized at an enormous $50.05/MWh, while the average HOEP rate averaged $25.89/MWh. The combined rate, $75.94/MWh, is 17% higher than the rate for May 2010. Nothing I did not know on June 1^st, when I wrote about it, and estimated how much the various generation sources contributed to this escalation in rates that accompanies demand drops.

Parkinson's Law and the Innumerate Mr. Miller

Elements of Parkinson's Law:

• Work Expands so as to fill the time available for its completion
• An official wants to multiply subordinates, not rivals
• Officials make work for each other.

Gord Miller was in the press yesterday, a lot, following the release of Managing a Complex Energy System: Annual Energy conservation Progress Report -2010 (Volume One), with most of the attention going to his description of the Ontario Clean Energy Benefit (OCEB) as “a perverse incentive that undermines conservation efforts.” Mr. Miller's report continued “One estimate of its effect is to increase overall electricity consumption by more than one per cent. This would negate about one-third of the savings that conservation programs are expected to provide between 2011 and 2014.” I'll return to Mr. Miller's interesting use of statistics shortly, but first ...

Searching For Value in Ontario's Electricity System

I'm constantly amazed how difficult it is to underestimate the value of generation from industrial wind turbines.

I have queried hourly generation data by source 'fuels' to demonstrate the 'value' of the various sources. I was inspired to do so while writing my previous post, which calculated average hourly rates of imports/exports for different jurisdictions. Quebec was much more expensive power to import, but that was because we imported from Quebec at more expensive times. I concluded that was because Quebec could run off cheap imports at night to run as little water through the hydro turbines as possible, and run their hydro turbines during more expensive daytime periods for . Using the same process, with another data set, wind is demonstratively the least valuable source in Ontario.

A Valuable Lesson From Ontario-Quebec Electricity Trade

During the first 10 days of June the data shows Ontario has been a net exporter of electricity to Quebec, of approximately 27,565 MWh. Combine the hourly intertie data with hourly price data, and you get a net payment to Quebec of about $3,685,811, which works out to paying Quebec about $134/MWh - just using the net figures. Out of context it isn't a meaningful statistic, but put in context it communicates a lot about value in electricity generation sources. (updated June 12 - see end note 2)

Net Exports Divided by Net Revenue ($/MWh):

	Quebec	Not Quebec	Total
April	$6.11	$27.22	$22.12
May	$10.85	$25.20	$21.89
June	-$133.71	$32.47	$19.88

Smile, And Say "Goebbels" - A note from the government

This release, Electricity Exports Help Keep Ontario's Supply Strong,  is remarkably dishonest


"This revenue helps Ontario:

• Keep costs down for families"

No, this revenue set against the costs of producing the power does not keep costs down for families.  This figure is meaningless by itself, and put together with the purchasing costs adds, by my calculations, $50 million to the costs of Ontario's consumers in the month of May only.  Net Exports (exports less imports) of over 1,300,000 MWh sold for only $3,100,000.

Mayday, Mayday! Global Adjustment Still Soaring to Monthly Records

The operator of Ontario's electricity system, the IESO has posted it's 2^nd estimate of the global adjustment for May 2011, and the estimated rate of $49.94/MWh is a record high, as is the $496.1 million dollars. I've been on the themes driving the increased pricing in Ontario for some time, and May serves as the starkest reminder of the remarkable callousness of Ontario's electricity policy in disregarding Ontario's residents, and it's businesses.

Jobs Lost, And Ontario's Cheap Electricity Exports

Ontario has been providing Quebec with cheap electricity following the loss of large industrial customers in Ontario to the cheaper electricity of Quebec.

Wind Jerks

Are you familiar with the term “Jerk”?

I came across the word a number of times in a fantastic series of comments attached to a very interesting article, CO2 avoidance cost with wind energy in Australia and carbon price implications, so I looked it up on wikipedia:

“In physics, jerk, also known as jolt (especially in British English), surge and lurch, is the rate of change of acceleration; that is, the derivative of acceleration with respect to time, the second derivative of velocity, or the third derivative of position.”

Let's look at some jerks in Ontario's electricity system.

How the IESO is Managing Surplus Supply

The Independent Electricity System Operator (IESO) has been dealing with many hours where Ontario's baseload supply exceeds Ontario's demand - a situation now referred to as surplus baseload generation (SBG). In recent weeks, SBG is a condition that has existed up to 70% of all hours. Today, a media news release from the IESO included, "Exports have played a significant role in managing Surplus Baseload Generation (SBG) conditions in the past and the IESO will continue to utilize exports and other available options to address the SBG that is expected over the 18-month period," said Bruce Campbell, Vice President of Resource Integration.”

Exports have played a role. So has supply curtailment.

Aldyen Donnelly Article On Regressive, and Progressive, Taxation

Aldyen Donnelly: The indispensable report | Energy Probe
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"The data clearly shows that energy consumption taxes (carbon-weighted or otherwise) are highly regressive–though not as regressive as value added consumption taxes. Though still imperfect, vehicle taxes appear much more equitable. And vehicle taxes that are pro-rated to vehicle weight and emission ratings (as opposed to kilometers of use) are almost progressive–shifting some of that load that would otherwise build up on middle income families (as in the actual 2008/09 UK data) to the higher income families."

10 for 10: Ontario's Surplus Baseload Generation

The latest SBG report shows there are only 10 hours during the next 10 days when Ontario is capable of not producing too much supply for Ontario's market.

Over the first 130 days of the year, Ontario's net exports grew 50% from last year, while the market price (HOEP) dropped 8%.  The variance between the price Ontarians pay, and exports, is the global adjustment.

In 2011 this means export customers have paid approximately $143.8 million dollars less than Ontarians would have paid for the same amount of electricity (3,745,460MWh of net exports at $38.39/MWh).