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.

I graph the curtailment estimates along with the output of industrial wind turbines in part due to my work that predicts much of the wind production will either bump other firm contracted generation, or be dumped on export markets.  Over the past 52 weeks the total curtailment is ~1.55 million MWh (1.55 TWh), with the curtailments heaviest in the fall, and also common in the spring.  The two weeks with the largest curtailment include Christmas' week, and the second highest wind production month in Ontario's history.

This graph indicates we are hitting the peak season for curtailments.

It's also a peak season for wind.

Adding wind output to these figures I compute how much wind was producing while these curtailments occurred (up to 100% of the curtailment), and I give that figure as a percentage of all wind generation for the week.  For 1.55TWh of apparently necessary curtailment, wind could have been curtailed, instead of NUG, hydro or nuclear generation, for as much as 1.2TWh.  

Overall, wind produced 4.6TWh, so this 26.4% of all wind production didn't supply Ontario, but dispatched other supply Ontario was also committed to purchasing, or clean hydroelectric generation Ontario owns.  The figure I posted for 2012, in September 2011, was 28.2%.  So these figures support the work I've previously done.

Estimates from September 2011
That work estimated capacity costs for the natural gas generation required to accompany intermittent renewables too.  I'm further off there because I estimated the values using a $7900/MWmonth valuation, but the Minstry of Energy has since communicated the average value is $13,187/MWmonth.  In addition to the capacity costs being 67% higher than anticipated 1 year ago, the time-frame for adding renewables to a total of 10700MW is now earlier.  The "other" costs I argue are part of the wind experiment, if not altered by sober thought (for a first time), will exceed $1.5 billion within half a decade.

These costs must be understood.  Saunders hydroelectric output is sold at a regulated rate of ~$35/MWh; Bruce B nuclear at ~$52/MWh and the NUG's at ~$110-120/MWh.   The average cost of the curtailed supply is ~$57/MWh, but the cost of the curtailment is not that $57, it's the $135 paid for wind instead.  At 1.2TWh of wind supplied during curtailment, that cost is ~$160 million over the past 52 weeks before accounting for the production that was dumped on export markets well below cost.

One ray of hope has been the inaction on the feed-in tariff program, and the lack of clarification of wind producers rights in terms of payment when the system can't accept their output.  I asked in June"Will Mr. Bentley commit Ontario ratepayers to spending ~$1 billion a year for dispatched off, or dumped, FIT contracted energy?"

So far he has not.  

While the government has not announced a way forward which shows consideration for ratepayers, under Minister Bentley a cabal of special interests no longer seem to be typing out government policy.

I can be thankful for that.


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