LTEP Backgrounder: The Con in Conservation

Ontario's government is currently presenting an appearance of consulting on another iteration of a long-term energy plan (LTEP).   Immediately after announcing they wanted input, they announced Ontario's New Energy Vision Puts Conservation First.

This post looks at the presentation of conservation in the first content pages of a document presented as authoritative "in support of the 2013's LTEP Consultation."

One of the resources the Ministry of Energy notes for the LTEP process is an Ontario Power Authority "Technical Presentation": Status, Outlook and Options for Electricity Service In Support of the 2013 LTEP Consultation

It's an interesting but flawed document.

In terms of costing out an electricity supply mix, slides 2 and 3 of the document present a generation capacity comparison between 2003 and 2013, and a comparable comparison of the energy produced in 2003 and the OPA's anticipated production in 2013.

Diving into the numbers one fascinating fact emerges - one which it's hard to imagine is a coincidence. Tallying up the generation and accounting for net exports (Exports - Imports), it turns out that the two years, a decade apart, are equal.

If you think about this presentation from the OPA, that seems to indicate that all Ontario demand reductions since 2003 are due to the OPA run conservation programs.

Uh huh.

If you think about it a little longer, it also means that all conservation savings have been exported.

Hmmmm.

Since 2008 exports have averaged around $30/MWh (3 cents/kWh).

The OPA produced a 2011 Conservation Results Report which boasted:

"From 2006 to 2011, conservation programs have seen an investment of $2.0 billion and have saved customers $4.0 billion in avoided costs. Overall, 2011 conservation programs in Ontario influenced 717 million kWh of verified and sustainable annual energy savings yielding a program cost to consumers of 3 cents per kWh. The most cost effective year to date"

There's a couple of issues here:

• 717 million kWh is 0.7TWh, which is less than 1/10th of the conservation production indicated for 2013 in the "technical presentation" for the LTEP. 
• Natural gas contracts guarantee a "net revenue requirement" (NRR), which means the incremental cost of generation is essentially the cost of the fuel to produce it. With gas prices at low levels, the conservation, if it displaced anything, would usually displace production with an incremental cost similar to that claimed for the conservation programs.

The non-technical term for the conservation claims on these slides is "bullshit".

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The LTEP is too broad a topic for me to map out a column - or a chapter.

So I've began a site with the intent of working through issues separately.  If all goes well it will be the web equivalent of sausage making.  The site is here (the bulk of this post came from initial work on this page)

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Addendum

3.1 The Directive

The Directive’s Conservation goals are to reduce demand by 1,350 MW by 2010 and an additional 3,600 MW by 2025. The Directive states:

The plan should define programs and actions which aim to reduce projected peak demand by 1,350 MW by 2010, and by an additional 3,600 MW by 2025. The reductions of 1,350 MW and 3,600 MW are to be in addition to the 1,350 MW reduction set by the government as a target for achievement by 2007. The plan should assume Conservation includes continued use by the Government of vehicles such as energy efficiency standards under the Energy Efficiency Act and the Building Code, and should include load reductions from initiatives such as : geothermal heating and cooling; solar heating; fuel switching; small scale (10 MW or less) customer-based electricity generation, including small scale natural gas-fired co-generation and tri-generation, and including generation encouraged by the recently finalized net metering regulation. 

Directive Priority
Conservation takes priority over supply resources in that the IPSP first applies all economic and feasible Conservation to meeting resource requirements before applying supply resources. Economic Conservation is defined as Conservation that is more cost effective than supply resources as determined by applying a Total Resource Cost (“TRC”) Test.
Feasible Conservation is Conservation that can be used for resource planning. In other words, the Conservation contribution can make as predictable and reliable a contribution to meeting resource requirements as the alternative supply resource.
The OPA will seek to develop and identify Conservation opportunities that exceed the Directive’s 2010 and 2025 Conservation goals. However, determining whether and how this can be done requires a realistic understanding of the feasibility of achieving Conservation beyond the goals. Such an understanding can only occur as Ontario gains more experience in Conservation and in associated evaluation, measurement and verification (“EM&V”) results. In addition, the OPA will monitor future policy changes such as codes and standards, price, carbon taxes and land use that underpin the potential estimate to establish the feasibility of exceeding the goal.
The IPSP has sufficient flexibility to develop a number of options on both the Conservation and the supply side. If experience from the 2008 to 2010 Conservation programs demonstrates that there is feasible Conservation to exceed the Directive goal, that Conservation will be compared to alternative supply resources before any commitment is made.

Sound like 2013's Ontario's New Energy Vision Puts Conservation First.?

It is from the 2008 Integrated Power System Plan that was abandoned due to the Green Energy Act.