2nd Anniversary: Current Initiatives, my past and the IESO's outlook

The past 10 days saw a sudden flurry of activity in reports and announcements of new groups to examine old issues in Ontario's electricity sector:

• a new initiative on household electricity data management from the Ontario Ministry of Energy, 
• a new Independent Electricity System Operator (IESO) "stakeholder engagement plan"  initiative on the Hourly Ontario Energy Price (HOEP),  
• another new IESO stakeholder engagement plan on the Global Adjustment (GA), 
• a new release of the IESO 18-month outlook

Habitually I felt I should make some statement as these things came out.

The 'smart' announcement is not deserving of any serious examination.  The government has long been foolish in the issues around smart.  Having given little thought to raw data  issues in an un-costed rollout, they now want an app for their iPhones - approaching MaRs'ians to do that makes sense as that institution is also advertised as smart - and hangs right outside of Queen's Park's walls.

HOEP: I went to find the first blog entry where I examined the falling HOEP and found it to be written just over 2 years ago, on November 19, 2010:  The Economics Lab Blogs on Market Distortions (an extended comment on a Globe and Mail column).  The premise:

• Contract more supply as demand falls and the market rate goes down
• Contract more expensive supply and the total cost goes up - with the market rate going down resulting in the global adjustment going up.

Ontario sets record for daily wind production - pays to export it

Friday November 23rd saw a record 36,423MWh of production from the industrial wind turbines on the IESO controlled grid.
The day ended with a weighted average Hourly Ontario Energy  Price (HOEP) a negative $5.76 (estimated) - which would value the loss on exporting at ~$279 thousand.

The wind output on the 23rd was 16 times greater than the wind production 3 days earlier, on the 20th.

We didn't pay to export power on the 20th.

A tool to heal, A tool to steal: Thoughts on a Carbon Tax

Carbon taxation is in the news, for some good and bad reasons.

One bad reason is that now that the US election season has ended, policy discussion season is just starting; further evidence that elections are considered no time to discuss policy, as short-term Canadian Prime Minister Kim Campbell is accused of claiming.

A second, I think mostly bad reason, is that following months of denials that the US is increasing it's energy production, the latest outlook from the International Energy Agency acknowledges US energy self-sufficiency is a plausible outcome within a decade.  Certain groups, broadly perceived as "environmentalists," had been arguing the necessity of making drastic changes to our lifestyles because we were running out of available oil and gas.  Now that doesn't seem to be the case, it should be added impetus to strengthen attempts to curtail consumption.

One good reason a carbon tax is newsworthy is if putting additional CO2 (and other greenhouse gases) into the atmosphere is to be discouraged, there's a valid argument that we should tax putting CO2 into the atmosphere to discourage it.  

The Exhibition Turbine: An Icon for Ontario's Mazza Race

The Toronto Exhibition grounds are the appropriate site of a wind turbine that is frequently described as iconic.

What does this icon represent?

A review of the performance of Toronto's wind turbine indicates the financial numbers don't justify any respect being paid to the project. The turbine has a 600kW capacity - often reported as 750kW because of the capacity of parts of the turbine, but it seems it's actually 600kW due to the capacity of other parts of the turbine.  The initial costs were $1.8 million, the turbine became operational in January 2004, and the co-op owners reportedly received a dividend payment in January 2005 (4% of share value).

The only one they have ever received, and recent press reports indicate even it is forgotten.

The Globe and Mail reported that the turbine performed poorly in 2006, 2007 and 2008; The Toronto Star reported production of 780MWh in 2008, 1064MWh in 2009 and 927MWh in 2010.

In March 2011 the turbine broke down, and it would not come back until parts costing $200,000 were found and installed at the start of May. The output in 2011 probably dropped below the 1000MWh estimate, which makes it likely that since 2005 the 1000MWh level was achieved only in 2009.

Electricity Data and Narrative

Comment on the role of data in a society driven by narrative.

A recent post at Tom Adams Energy gave an Ontariocentric call for data reporting in a Canadian jurisdiction along the lines of the the United States' Energy Information Administration (EIA).  Mr. Adams may have been unaware that Dr. Michal C. Moore of the The School of Public Policy at the University of Calgary authored a paper earlier this year with an overview of a national structure that might fill the role of the national EIA structure in the US.  Dr. Moore's paper saw a central data organization, namely Statistics Canada, collecting the data that would be manipulated/interpretted by an independent organization.

The issue I have with the paper is it assumed Statistics Canada excelled at collecting data.  That may be true, but I found reason to be skeptical..   The uproar over the change to the long-form census, which somehow entered the mainstream, reflected, in my opinion, the often conflicting goals of maintaining the same processes, and standards, in data collection to ensure data integrity between census years, and the desire to collect the best data possible - which is now frequently in databases throughout the government to be collected through the data mining of critical systems, and not intermittent surveying outside of those systems.  As an example, most federal funding for provincial programming is not based on census figures, but the ongoing population estimates (and census counts are adjusted based on the population estimates).

ON latest stats; Reinforced lessons on policy errors

The beginning of the month can be a busy time querying the stats for regular reporting, and to evaluate the messages contained therein.  Recently there's also broad coverage on Ontario's electricity sector in the mainstream media that touches on many subjects I've written on previously.   The most recent figures reinforce some old messages related to the news of the day.

Increased Wind and Increased Coal

While the final days of the month led to coal having it's first decline in 8 weeks, it ended the month with an increase to 240 GWh, from 105 GWh the previous October, which was enough to move coal-fired generation in 2012 up on 2011 on a comparable year-to-date basis.

The jump in coal use did not surprise me as it accompanied a growth in wind generation of 50% from October 2011.  Gas-fired generation, meanwhile, fell 36% from October 2011.
Combined, this indicates emissions can fall through better supply management in allowing the most appropriate generation to be utilized; given Ontario's high baseload mix (hydro output was up 4%, nuclear 5%), and increased intermittent supply from renewables, there are situations when that probably is coal.
As renewable capacity increases, so too do the situations when the flexibility provided by the peaking depth of coal is desirable (see At the end of the IESO18-month outlook).

High Winds Make Wind Cheaper than Natural Gas Generation