Monday, December 30, 2013

Building Blackouts

Ice is the alleged culprit that forced many of Toronto's buildings into darkness over the past week; water the alleged culprit for the blackouts this summer.  Both ice and water served as triggers, but the systemic weakness that allowed for extended outages was created over many years, by fashionable politics cancelling intelligent policy, and the acquiescence of a deliberately weak regulator in allowing poor government initiatives to take precedence over providing value to consumers.
You never want a serious crisis to go to waste...
Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with.
  - Rahm Emanuel
There's no shortage of lobbyists looking to take advantage of this crisis, but perhaps the best outcome would be to find the body/bodies most responsible for the fragility of the current system, and address the deficiencies there.

Toronto Hydro seems an obvious target, and I assume their staunchest critics will evaluate their performance/responsibility - as they should.
I submit the problems go far beyond the local distributor, and that the regulator bears an enormous responsibility for taking away from the Christmas of many Torontonians.

Toronto Hydro, which took far longer than it's first 72 hour estimate at getting many households powered again, has been seeking rate increases from the Ontario Energy Board (OEB) for years:
Toronto Hydro will be asking the Ontario Energy Board to reconsider a request to increase hydro rates, which was turned down earlier this month...
Toronto Hydro wanted to present its case for raising monthly hydro rates by an average of $5 a household to pay for infrastructure improvements totalling $1.5-billion over the next three years.
...upgrades are necessary to bring Toronto's grid up to modern standards.
 -Jan 2012

Thursday, December 19, 2013

Electricity Sector Lessons from a cold week in Ontario

I've just run the numbers to update my weekly reporting page for the week starting Wednesday, December 11th (to match the IESO's weekly reporting).
It was a cold week which lead to demand being up over the comparable week in 2012 by 13.4% - which is the highest growth in years.
Weekly Ontario demand of 3,162,967 megawatt-hours is the highest demand this year.

Here's some lessons reinforced this week:

1. Wind has little capacity value
even in winter.  Wind had a very productive week, but on two of the seven days, including the highest winter peak, it was producing at under 10% of capacity.

2.  Ontario burns fossil fuels to generate electricity for export.

Monday, December 16, 2013

November's Record electricity Rates: the Global Adjustment/Ontario Roulette story

Sources inform us Ontario's common ratepayers will pay more for November's electricity than they have paid in any month previously.
That may be true for some but it's probably not true for all.

The Toronto Star's John Spears courageously tackles the "murky fee" that is the global adjustment (GA), but that charge is primarily the difference between the cost of supply, almost all of which is contracted, and the share of those costs recovered by sales at the Hourly Ontario Energy Price (HOEP).  The primary reason for record rates are the contracts - not the GA; the "actual" GA for November is higher than it's ever been largely because the weighted HOEP average for the month is the 2nd lowest it's ever been.

The Independent Electricity System Operator (IESO) reported November's final "global adjustment" figures at a record $847 million dollars, resulting in a record "actual rate" of $78.55 (class B).  Combined with a weighted average Hourly Ontario Energy Price (HOEP) of $16.08 (the 2nd lowest ever), the wholesale market commodity charge will be reported as a record $94.63.

My estimated composition of November costs (view as webpage)
My estimate of the global adjustment did indicate a record, but not as high an amount as the IESO now reports as "actual."  That's not surprising as there are a lot of murky areas in estimating the total value of the electricity sector supply, and the total demand to allocate it to. [1]

A quick overview of the estimates in the table:

  1. Estimated generation, market value and contract cost 
  2. Estimated embedded generation (contracted, but not directly on the IESO grid)
  3. Estimated curtailment levels 
  4. Estimated Global adjustment as difference between supply costs and supply value at HOEP
  5. Balance the estimate to much higher ($72 million) actual global adjustment reported by the IESO
  6. Reduce demand by estimated line loss
  7. Remove exports from total consumption and market value (valued at HOEP)
  8. Estimate cost to class B customers of lower Class A charges

Sunday, December 15, 2013

Big Thunder is a Big Mistake, and it's not the only one

There were a number of items that caught my attention on the industrial wind turbine front this week, including two articles in the province's largest newspapers (by circulation):
  • Ontario is tilting at the wrong windmills is a strong editorial from the Globe and Mail; "...cost is climbing, as expensive wind and solar power is brought into the system, as demanded by Ontario’s Green Energy Plan..."
  • Ontario tilts against wind turbines as costs spiral, by the Star's Martin Regg Cohn, showed signs of intellectual, if not emotional, life; "While the NIMBYists beat their breasts, the bean counters took their eyes off the turbines. Politics trumped economics."
The item that inspired me to write is the 18-month outlook released by the system operator (IESO) on Friday.  I've written on the final paragraphs of previous IESO outlooks; this one ends:
In the first 30 days after wind became dispatchable, about 1% of the wind energy that could have been generated was curtailed due to global SBG concerns while 6% of total wind energy available was curtailed due to local SBG concerns. The majority of local SBG concerns were in the northeast and northwest where transmission constraints are more frequent. Wind dispatch in these areas prevented water spillage which was a primary alternative solution to mitigate
There are only two wind generators on the northeast and northwest regions: Prince Farm is just outside of Sault Ste. Marie (which is in the northeast zone), and Greenwich is north of Lake Superior, in the northwest zone.

With a trip to my database to pull my estimates on Curtailment of electricity supply in Ontario, I found that between wind becoming dispatchable and home heating season kicking in, there was one site far more likely to be curtailed than all others - and it's the northwestern Greenwich site.

Over the period noted in the graph the estimate is that 35% of Greenwich's potential generation was curtailed.

Wednesday, December 11, 2013

The troubling in Auditor's Report on OPG

The Auditor General of Ontario released an annual report and, as a result, it's open season on publicly owned Ontario Power Generation.  Much of the criticism is misplaced, and what criticism is well-placed is illogically morphing into recreating the worst decisions made about Ontario's electricity sector in the 1990's.

As I write this I'm hearing CBC Metro Morning's Matt Galloway repeatedly cite OPG as being responsible for increasing rates. It's a ridiculous implication. In 2013, the total cost of all electricity generation in Ontario will be $1-1.25 billion over what was paid in 2012.  Very little of that increase could be attributed to OPG.

Some of the report's implied criticisms are not only applicable to OPG.
The number of OPG staff on the Sunshine List has grown steadily since the organization was
created in 1999, albeit at a slower pace after the 2010 pay freeze legislation. Over the last 10 years, Ontario Power Generation Human Resources the number has doubled, from 3,980 employees in 2003 to 7,960 in 2012, representing about 62% of the employees on OPG’s payroll; the corresponding increases in total salaries and taxable benefits paid to those on the list were $513 million for 2003 and $1.11 billion for 2012.
Big numbers to be sure, but in percentage terms far beneath the growth in the numbers at the Office of the Auditor General of Ontario, which has more than tripled both the number of people it has on the Sunshine list and their total salaries and benefits - and those people just get your blood to boil, whereas OPG's people get your kettle to boil.

Wednesday, December 4, 2013

Premier Deception on Oakville Gas Plant Cancellation Costs

I don't write much on the gas plant relocations - my intention having written my thoughts was to move on.

This post isn't about the gas plant issue; it's about a politician communicating only to mislead - which I increasingly think is the purpose of most of Premier Wynne's "conversations."

I read a tweet yesterday from the incurious Globe and Mail Queen's Park Reporter, Adrian Morrow, which reported Ontario's Premier as saying "There is no way to know those costs."

One implication being there were actual costs to know, and a second being they weren't knowable.
Both are mostly false.

Monday, December 2, 2013

2013 LTEP Plan: First Impressions


The theme of lower than expected rate increases comes up, and the press repeats claims recent rate increases have been below expectations.

That doesn't appear to be true.
"Since the 2010 LTEP, electricity prices have not increased as much as they were forecast to at that time."
This was true at the start of the LTEP 2013 process, but it looks false to me now after growth in the commodity rate soared since last winter.

The 2010 LTEP stated:
Over the next five years... residential electricity prices are expected to rise by about 7.9 per cent annually (or 46 per cent over five years). 
In October 2010 the year-to-date commodity charge (weighted) was 64.55/MWh, and total market charges were $85.22.
In October 2013 the figures were $85.228/MWh (up 33%) and $107.28 (up 26%).
In November 2010 the average rate for regulated price plans was ~6.9 cents/kWh; 3 years later it's up 29% to 8.9 cents/kWh

Rates are up in line with LTEP 2010's projections.
Reporting on LTEP 2013 notes "Ontario homeowners face a 33 per cent hike in electricity rates over the next three years..." and the same reports say that's less than expected in LTEP 2010 - with its 7.9% a year.

It looks to me that the rate hikes are proceeding as expected.

The 2013 "Long Term Energy Plan" (LTEP) seems to be, at first glance, a pretty tame, and possibly irrelevant, document.
Perhaps I have a strange perspective, but before I started reading I jotted down a couple of things I'd look for:

Energy literacy as a primer for an energy plan

Last week, in the lead-up to the release of a "Long-Term Energy Plan" (LTEP), the government of Ontario posted a new page to the Ministry of Energy's website: emPOWER Me.   
The page is mainly short video clips, and most are harmless enough.

A look at some of the issues "emPOWER Me" misleads people about (as a prelude to a look at the new LTEP)

The Value of Conservation is a fine sounding, but very misleading video."

Saturday, November 16, 2013

Curtailment of electricity supply in Ontario

I've just developed some queries to estimate the curtailment of wind supply on the Ontario grid, and thought a quick, primarily "stats", post might interest some of my readers.

This also provides an opportunity to review methods that the Independent Electricity System Operator (IESO) uses to reduce supply, and the limitations of estimating those curtailment actions.
  1. Non-Utility Generator (NUG) curtailment (discussed here)
  2. Hydroelectric output being redirected directly in Quebec's high-voltage direct current (HVDC) grid (discussed here)
  3. Nuclear curtailment maneuvering condenser steam discharge valves (CSDV) to reduce output at all Bruce Power's 8 reactors (Bruce A's units gained this capability since I discussed the curtailment method here)
  4. Wind curtailment, which became possible on September 11th, 2013, as a result of the IESO's renewable integration initiative.
Generators Output and Capability Report

Wednesday, November 13, 2013

A record week for Ontario wind

Each week I update my estimates/shadow reporting of the Independent Electricity System Operator (IESO) data reports; the IESO reports weeks as running from Wednesday to Tuesday.
I reference the first Wednesday of the year as marking week 1; today we begin week 46.

Weekly supply mix chart (from data site)
Week 45 was pretty interesting.
It set at least one record - the highest reporting output from the industrial wind turbines on the IESO grid.

The week also contained the hour of highest IWT output, which is currently hour 11 of the 11th day of the 11th month [1].

Coupled with high nuclear production levels, this plentiful supply resulted in an average Hourly Ontario Energy Price (HOEP) of $10.23/MWh; that is the second lowest weekly average since the market began (record low is week 14 of 2009, at the depth of the recession and the height of the freshet).

A twitter exchange has motivated me to write a quick entry on the cost of Ontario's changed supply mix at this time of year (all of impacts being predicted by the data analysis behind an earlier blog post).

In Ontario, high supply and low prices end up being very expensive for consumers.

Sunday, November 3, 2013

There's never been a worse time for this Conservation thing

To every thing there is a season, and a time to every purpose under the heaven:
A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted   - Ecclesiastes ,3 King James Version [1]
A time to conserve - a time to consume.

As the clock struck midnight with the arrival of November, my hourly rate for electricity went up 7.5%[2], while the rate for export customers was around 1/10th of the residential rate in Ontario, and over 20% of Ontario's generation was being gifted away at those low, low prices.
“There’s never a wrong time to do the right thing ...” - Dalton McGuinty
The current Premier would appear to be trying to take a page out of her predecessor's book of wisdom (a page with 10 words), as her administration seems to have turned the entire public service to promoting "conservation" regardless of the circumstance (abundance).  In a simpleton's world of good and bad, conservation is portrayed as the very best regardless.

Conservation may be, but the conservation the government's agencies are spending their time, and our money, promoting won't conserve energy this winter.

In a recent Twitter Campaign on "phantom power" Ontario's Ministry of Energy found these messages important to communicate:
  • Count em' up: how many non-essential appliances do you have plugged in?
  • Plug into a power bar with an integrated timer or auto-shutoff. Here’s a coupon...
  • Gaming consoles draw #phantompower. Plug them into a power bar and switching it off when you’re not playing
  • Unplug that hairdryer or electric toothbrush to save...
  • Chargers for cellphones, laptops and other personal devices draw #phantompower. Unplug them when you’re not charging. 
  • Unplug small kitchen appliances when not in use. Otherwise they draw...
Regardless of the moral righteousness of conservation programming in general, I got the feeling Ministry wasn't really aware of how phantom power wastes "energy".

Monday, October 21, 2013

A contest for Ontario's Smart Grid Makes the Province look stupid

October 1st;
In partnership with MaRS Discovery District, the Energy Apps for Ontario Challenge is offering $50,000 to support the best new apps that use electricity data collected by smart meters. link
Harmless sounding, but if you are an Ontarian capable of being embarrassed, here's a short review of the history that should embarrass you.
government graphic: spending on "smart" to help you decide on solar panels


Premier Dalton McGuinty makes smart metering a priority (2004):
Right now, most customers don't get a break on their bill if they use energy during off-peak hours when demand is lower. In particular, those off-peak hours range from about 10 o'clock in the evening until 7 o'clock in the morning. The reason they're not getting a break is because old-fashioned energy meters only record how much energy is being used and not when it is being used. Smart meters, together with more flexible pricing, would allow Ontarians to save money if they run appliances in off-peak hours. That's why we are directing the Ontario Energy Board to develop a plan to install smart electricity meters in 800,000 Ontario homes by 2007 and in each and every Ontario home by 2010. 
Lot's of spending ensues.

Today most electricity consumers have a smart meter, and most are now on "time-of-use" pricing.
Prior to the last election, off-peak hours were moved back to 7 pm, so as to exclude the highest demand hours of the day.

Thursday, October 17, 2013

Sun-burned: Winter Electricity Rate Hike likely a record

Today the Ontario Energy Board (OEB) announced regulated price plan rates for November 1 2014 - April 30, 2014: my initial review shows the rate hike is over 12%  from the same period a year earlier, which is a record hike for winter rates since the OEB started setting rates, and probably also exceeds historical price spikes in the early 1990's, and the 1970's.

The OEB posts a number of documents in announcing the rates; Navigant Consulting has been providing a canned report for years, so I was just briefly leafing through it and found a new table displayed this time around - I've marked it up as Ontarians, and many others, have exhibited a lot of difficulty spotting the obvious.

Solar is expected to be 11% of the total - and that's in the least productive months for solar output!

I have noted solar is likely now exceeded the cost of hydro (I regularly update supply cost estimates here), and Navigant is now showing it too.

On another poorly played note ....

Tuesday, October 8, 2013

Backgrounder for Auditor General's report on Oakville Gas plant

Today the new Auditor General of Ontario will deliver, to the legislature, a report on the cost of cancelling/moving the Oakville Generating Station (I'll refer to it as the OGS, although now it is to be located hundreds of kilometers from Oakville).
The report will tell us more about the capabilities of the new Auditor, and the mainstream media, than it will about the gas plant.

It's been almost exactly a year since analyst Bruce Sharp provided the public with reasonable estimates of the full cost of the bumbling on the OGS (directly here, and second hand in the Star).  Former head of the Ontario Power Authority Jan Carr took a different route to arrive at essentially the same figure.
There have been higher estimates: Terence Corcoran found a way to put the ''one billion dollars' tag on the debacle, and documents released due to the legislature, and posted at Tom Adams' site, indicate the Ontario Power Authority (OPA) was authorized to go as high as $1.2 billion to make the problem go away.

Tuesday, October 1, 2013

Wholesale rates up double digits again in September; Regulated prices likely to increase sharply for November

Enough data exists to estimate the Commodity Charge for electricity in Ontario's wholesale market will be up about 16% in September 2013 (from September 2012), which will bring the year-to-date increase to the same 16%.
2013's September will have a weighted average Hourly Ontario Energy Price of about ~$22.24/MWh (down 15% from 2012's), and the 2nd estimate for the global adjustment (GA) is $63.08 (up 32% from 2012's $47.62); combined the rate is $85.32, which is ~40 cents above the YTD average, both of which are 16% increases over 2012.

A month ago I was noting the quality of global adjustment estimates, including a first estimate for September of over $87/MWh (sensationally misreported in The Toronto Star days later).  The second estimate is 28% lower than the first - and the HOEP plus the 2nd estimate GA combined is also lower than the 1st estimate of the GA.

Emphasizing how scary the global adjustment charges look, the far better than initially feared total dollar estimate for the month is $666 million (actually $666.7, presumably rounded from $666,666,666.66)

Monday, September 16, 2013

Submitted comment on long term energy planning.

The government of Ontario is doing a planning exercise regarding Ontario's energy sector - as they do.

The big changes since the last time they went through the process is more useless supply is now contracted, the planning agency responsible for producting a long-term plan (the Ontario Power Authority) has been scapegoated at gas plant hearings and targetted for termination (by all 3 parties in the legislature).
The current Minister of Energy responds indignantly to truth with lies, and the Premier's mouthed 7-months of platitudes about conversing seems far more likely to produce a record of hypocrisy than anything else; the implementation of pre-existing bad policy is occurring much quicker under cover of her "conversation" routine.

Most of the submission is copied from my submission on the supply mix directive in January 2011, although there are some updated sections and the submission ends with a quickly written outline of 3 themes I'd meant to get to at some point:
  1. Market design
  2. Carrbon taxation
  3. Promotion of trade/capitalizing on a low-emission electricity sector.
In keeping with Ontario's policy of technical excellence, submission are text only; my submission is posted here in the font choice provided.

Saturday, September 14, 2013

Ontario's Minister of Energy and 6 gazillion whatevers

Two days after I posted an array of estimates in Ways to estimate Ontario's losses on electricity exports, a Canadian Press article included a very different figure as coming from Ontario's Minister of Energy:
Chiarelli says Ontario is making a net profit of up to $6 billion a year on importing and exporting electricity
I was a little angered dishonesty might be the strategy to respond to fact, but recognized the possibility the minister may have been misquoted.

The next day a slightly different story was told by Bob Chiarelli on the CBC radio program "As It Happens" (3rd segment of 3rd clip here) as he claims, emphatically that the:
"province since 2006 has made between 5 and 6 billion dollars net profit on the sale of it's electricity"
Obviously I disagree, and the reader may not be interested in a prolonged "I said/liar said" exchange,  so I'll only briefly reiterate claims government entities have made on the issue:
Based on our analysis of net exports and pricing data from the IESO, we estimated that from 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario
-Auditor General of Ontario annual report 

Friday, September 13, 2013

NENGO's target nuclear at expense of the environment

Greenpeace Canada and the Pembina Institute have put their names on; Renewable is Doable: Affordable and flexible options for Ontario's long-term energy plan (LTEP).  The document is primarily about criticizing nuclear generation in Ontario, and presenting, "good reasons for Ontario’s next LTEP to keep the province’s options open and not lock into nuclear."

Renewable is Doable basically presents 2 arguments: we don't need new nuclear, and it would be better to build a "cost-effective, low-carbon energy mix" instead of the new, not needed, nuclear units.

The argument questioning the need for nuclear isn't surprising to me, as 30 months ago I wrote in a submission on an aspect of another LTEP:

Wednesday, September 11, 2013

Value messages from data on an Extreme day for Ontario's grid

Warm humid weather moved into the southern Ontario yesterday and sent demand upwards.

The temperatures were very moderate in the earliest hours of the day, so demand was low - so low the pricing was negative for 4 hours and that meant nuclear units at Bruce reduced their output.   It took a while after the IESO banned negatively priced exports but there now seems to be, effectively, a minimum price just below $0/MWh (thus each of the 4 hours was ~$-4.50/MWh).
A unique feature of the day is not only did it experience some essentially minimum pricing levels, it also saw maximum pricing levels (for the 5 minute MCP - IESO report)

By the end of the day the average rate (HOEP) was the second highest daily price of the year, and the 7th highest of the past 5 years (not to worry - at $87.52 it's just about what you've been billed lately)

More unique than the pricing movement was the demand variance between the 12,458MW minimum in hour 3, and the 22,682 maximum in hour 20.  The 10,224MW difference is the most severe in over 3 years and the 9th highest since the market opened (including 2 days for the blackout of 2003).

I pulled some figures for the day as I was posting a report for the IESO week (Sept. 4-10).

Monday, September 9, 2013

Ways to estimate Ontario's losses on electricity exports

I've been crunching numbers related to Ontario's electricity exports again - again in a collaboration with the hopes of having another translate my bombardment of figures into a message that will be broadly communicated.

In working collaboratively, I/we work with a massive amount of data to extract a presentation supporting the point we wish to communicate.

In this data geeky post, I'm going to look at statements on exports over the years, and indicate 4 different methods of estimating the cost to Ontario ratepayers of exporting electricity at very low pricing.

The numbers vary widely between estimates.
The problem exposed by the various estimates does not: increasing exports are now contributing to much higher rates in Ontairo.

Sunday, September 8, 2013

Taking the temperature to Ontario's Electricity metrics

A quick post on some data views I found interesting after linking my personal hydro one data to Ontario's system operator (IESO) data for Ontario's electricity sector.  My data has the average daily temperature (in Penetanguishene), so this post will look at the impact of temperature on the electricity sector.

Most will recognize that heating, and cooling, are drivers of electricity consumption.  In Ontario, heat more than cold drives electricity demand - thus Ontario is a summer peaking jurisdiction for electricity.

But not for energy: natural gas consumption in Ontario is far more variant, increasing roughly 300% in the coldest periods.

Getting the expected demand pattern, let's move to price.

Tuesday, September 3, 2013

Efficiency in the eye: IESO's latest 18-month outlook

Ontario's Electricity System Operator (IESO) announce it's latest 18-month outlook with a news release humbly titled, IESO Improvements Help Transition to More Sustainable Supply Mix: 18-Month Outlook:
"The IESO is constantly looking for ways to improve the efficient operation of the province's electricity market, while promoting continued reliable supply," said Bruce Campbell, President and Chief Executive Officer of the IESO. 

A quick look at "efficiency" from the numbers within the forecast itself.

Sunday, September 1, 2013

Ontario Electricity Rate set to rise 30% in August

The total commodity charge for electricity is now estimated to be up 30% from August 2012 to August 2013.

The weighted average market rate (the HOEP) will be around $23.55/MWh and the freshly released 2nd stimate of the global adjustment rate is $68.99/MWh; the combined "Class B" commodity charge of $92.54 is 30% higher than 2012's $71.09.

August's 30% follows 3 months with inflation over 20% (as Parker Gallant and I noted here), so it does not come as a surprise to me, but it appears to come as a huge surprise to the market operator (the IESO).

Friday, August 23, 2013

The Capacity Trap: Ontario's Electricity Costs Soar as Emissions Drop

Ontario's market has inflation of over 20% each of the past 3 months.  The price drivers are now well known: adding supply to an already oversupplied market; exporting more electricity at rates well below the prices paid to suppliers, and capacity payments to natural gas and coal-fired generators. Nonetheless, when driving down into the data, I am astonished by the punishing reality of Ontario's electricity design: the cleaner our supply, the higher the price.

If limiting greenhouse gas emissions is the goal, the system is increasingly designed to fail.

Ontario fell into paying capacity payments over time.  The key moments were a 2004/05 decision to offer "net revenue requirement contracts" to natural gas-fired generators - primarily to encourage market entrants to displace coal-fired generators.  The enormous Lennox Generating station became less utilized and uneconomical - but the system operator felt it was necessary to the system and it started to receive contingency support payments soon after.  In 2008/09 demand dropped with the recession, and the coal-fired generators (also felt necessary by system operators) also began receiving contingency support payments.

Graphic from Behind the Switch .... | The Pembina Institute
Other types of contracted supply exist: non-utility generators have managed to have secret contracts for 2 decades, but it's generally understood most have must-run contracts to take all supply at a fixed price, which is also true of contracts for variable renewable energy sources (vRES - wind and solar), private hydro supply, and private nuclear (Bruce Power).  The largest public hydro, and nuclear, generators have rates set by the regulator.

Traditionally, all numbers related to producing electricity are thrown into a calculation and out pops a levelized unit cost.  The graphic displays some estimated ranges for these costs (they aren't reflective of costs in Ontario for legacy hydro and existing wind contracts)

Looking at the data from May-July 2013, and the same months in 2012, reveals the magic impact of capacity payments as replacing high cost generation with low-cost generation drives up Ontario's electricity rates.

Wednesday, August 14, 2013

Putting lights on the blackout of August 2003

Some thoughts, and data, on the blackout of 2003, influenced by the perspective of my recent work on long-term energy planning issues.

August 14, 2003 had the 3rd highest daily peak of the summer of 2003 - peaks were higher in the winter back in 2003 and 2004 - unlike today.  Many of the articles written a decade after the blackout pretend it was primarily an Ontario event largely driven by a supply shortage, despite widespread acknowledgement it was a cascading failure starting in Ohio.

It's important, for future planning, to address some of the issues being raised, generally by lobbyists, about that blackout.

We were importing at the time of the blackout - importing about 2130MW.

Is that a bad thing?

Monday, August 12, 2013

Wynne should right Duguid's wrong NUG directive

Premier Kathleen Wynne's first 6 months in office was characterized by an acceleration in the activities she feigns concern over so well - more wind turbine projects than ever before are being approved and another suburban seat has been bought (this one with a subway - they'd already cancelled the possibility of the wind turbines off the bluffs to protect their Scarborough seats prior to the last election).
Meanwhile, the cancelled/relocated gas plant scandals continue.

The government response has been to force the energy bureaucracy into a summer of assigned 'conversation' with the small subset of Ontarians deigning to converse with it.

The Premier would find more conversational partners, if she cares to find them, by actually doing something to halt an expensive, backroom-born, opaque, emission generating, electricity ratepayer-punishing, decision from the McGuinty era.

Here's one:
To support the objective of clean and efficient electricity generation and to help ensure electricity system adequacy, the Ministry of Energy (the “Ministry”) has determined that it is advisable to pursue the initiative of seeking new contracts (the “New Contracts“) for the non-utility generators ...    -Nov. 23, 2010 Directive to OPA from Mister of Energy Brad Duguid
  • Brad Duguid (pronounced "do good") was the minister that announced the Samsung deal.
  • Brad Duguid was the minister in office for every industrial wind turbine contract ever offered under the feed-in tariff (FIT) program
  • Brad Duguid was also the minister when a moratorium on offshore wind was announced
  • Brad Duguid was the minister when the Oakville Generating Station was cancelled
  • Brad Duguid was the Minister when the Liberal campaign promised to cancel the Mississauga gas plant 
Duguid was a central figure in many of the poor decisions that have the current government in constant crisis control mode, but the worst directive of his stint as Minister of Energy may be the direction to extend the NUG's.

Tuesday, August 6, 2013

LTEP Tools: Calculating deception

Ontario's government is currently presenting an appearance of consulting on another iteration of a long-term energy plan (LTEP).

Ontario's Ministry of Energy now has a web page with a graphical tool for designing a portion of Ontario's 2025 Energy Mix: Power Play: Make Your Electricity Mix.

Ministry of Energy Power Play tool
It's understandable the Ministry would not wish to get stuck in debates over numbers, so a simple, entirely graphical, presentation is prudent in avoiding complicating contributions to a legitimate conversation.

The Power Play tool caught my interest as I have been designing an energy mix calculator to assist me - and anybody who cares to download it - on a separate site.
Neither 2003 nor 2005's supply mix met reserve requirements

In order to meet NERC requirements for comparison purposes,

natural gas generation was added in the "+" models
A dishonesty in the Ministry of Energy's tool is the choice of meeting demand requirements with supply that cannot meet demand requirements. Specifically wind and solar generation (or vRES, for variable renewable energy sources).

The reason vRES cannot independently fulfill needed generation is contained in Table 4.1 of each forecast from the Independent Electricity System Operator (IESO), where each type of energy supply has a "Forecast Capability at [seasonal] Peak."

The IESO forecasts peak demand and that peak demand forecast is reported to the North American Electric Reliability Corporation which has a "Reference Margin Level" of 20.2% for the IESO's region (page 21).

There is a number a supply mix needs to hit that is not for total generation (such as the 155TWh imagined in the Ministry's Power Play tool), or for total generating capacity, but is instead the figure for the "capability at peak" - a figure sometimes referred to as a sources capacity value.

Thursday, August 1, 2013

15% Up: First look at July's electricity figures.

It's by-election day in Ontario.

It's also the first day of August - meaning I've been running July's numbers for Ontario's electricity sector (preliminary monthly report and supply cost estimates) .

Demand down ~5.5% from July 2012, and price up ~14.5%, based on the IESO's low second estimate of the global adjustment rate (low meaning the millions divided by the demand in Ontario is higher than the rate projected).
The 14.5% is essentially the year-to-date increase over the first 7 months of 2012.  Most Ontarians will not yet realize the increase, but they'll become suddenly aware when new regulated pricing plans are set for November.
Inexplicable price hikes peaking in June
followed by inexplicable drop in July

Here's a striking monthly change:  If you value the Ontario portion of the market as the hourly demand at the Hourly Ontario Energy Price plus the overall total for the global adjustment, you'll find, based on the IESO's estimate of a $593.7 million, that July's total Ontario market value rose $10.2 million from June, while the total electricity demand rose 1.7 million MWh.

That makes the incremental cost of the additional supply required in July less that 7/10ths of a single cent/kWh.

Wednesday, July 24, 2013

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.

Wednesday, July 17, 2013

Nothing is NOT better than Junk Generation

Junk generation is a term I picked up from Tom Adams, but I'll attempt to define it: generation that exists to meet a proponent's need for revenue, not a consumer's need for power.

Like, for instance, industrial wind turbines in Ontario.

The past two days were the hottest of the year, with demand averaging 28% more than it has thus far into 2013.
Coal and natural gas collectively produced twice what they usually do
Nuclear 16% above its average
Hydro is right on it's average (being strongest during the sprint freshet)

Wind produced at 12.6% of it's average generation level


Premier Wynne returns to work poorly

Yesterday Ontario Liberal Party leader, and therefore Ontario's Premier, returned from vacation to her role as Liberal leader.

Wynne, Justin T. and Ben Levin (since conficted of child porn charges)-source
During the week she was away there were a couple of incidents one might have expected the Premier to be around to address: 
  • a transformer station failed causing prolonged power supply problems in a transmission system that had been referred to, years ago, as, "the weakest of any major financial centre in North America and probably the weakest such centre in the OECD"
  • Benjamin Levin, the deputy minister that served in the Ministry of Education while Kathleen Wynne was the minister, a man who recently served on the transition team as she became Premier, and shared a stage with her at Toronto's recent Pride festivities, was charged with child porn offences
In her return to the public stage, the unofficial scribe of the Liberal Party of Ontario tells us:

Monday, July 15, 2013

The Real High Price of Low-Value Electricity

The costs of generating electricity from various technologies is always a contentious subject, but particularly so in Ontario, where 2009's Green Energy Act entrenched a feed-in tariff (FIT) regime specifically to grow the presence of variable Renewable Energy Sources (vRES) in Ontario's high-baseload electricity system. With the new nuclear build for Darlington also prominent in a supply picture being redrawn with a new long-term energy plan, it's an important time to define the value proposition, for the public, for Ontario's generation options.

A value proposition is not solely about costs, but it's important to address the cost factors more thoroughly than the standard levelized unit costs that historically have formed the basis to compare different supply options.
2011 IPSP Stakeholder Consultation Supply Presentation, Slide 39 [1] 

The Ontario Power Authority (OPA), tasked with preparing an Integrated Power System Plant (IPSP) in 2011 presented the levelized cost estimates, from the U.S. Energy Information Administration (EIA), for a variety of new generation sources.

The 2011 EIA document provides a guide to establishing costs only if the columns containing the assumptions/parameters aren't ignored in jumping to the final column containing the levelized cost.

Firm price contracts for each unit of output, whether they are referenced as feed-in tariffs or strike prices, are easy to misinterpret as representing a levelized unit cost to a consumer, but they do not. A recent report from the Organization for Economic Co-Operation and Development and the Nuclear Energy Agency (OECD/NEA) [2] attempted to quantify "grid-level systems costs" for a variety of generation technologies in a number of countries:
The results show that system costs for the dispatchable technologies are relatively modest and usually below USD 3 per MWh. They are considerably higher for variable technologies and can reach up to USD 40 per MWh for onshore wind, up to USD 45 per MWh for offshore wind and up to USD 80 per MWh for solar, with the high costs for adequacy and grid connection weighing heaviest.
In Ontario, such costs have been reported at over $60/MWh for industrial wind turbines. [3]

Sunday, July 14, 2013

Conversation as cover: electricity siting consultation in Ontario

The Premier has directed the Ontario Power Authority (OPA) and the Independent Electricity System Operator (IESO) to "invite Ontarians to join the conversation and share their views about Ontario’s regional energy planning and siting processes."

This strikes me as pretending the distasteful electricity sector scandals have something to do with inadequate conversation between government professionals and whoever wishes to speak at them.

As much of Toronto suffered blackouts due to inclement weather last week (combined with a known lack of redundancy), the Minister of Energy issued a statement including:
Provincial energy agencies will conduct a review to determine how our energy infrastructure performed and how personnel responded. This process ensures that best practices are in place to learn from every outage, and to minimize future system issues. It's an opportunity to determine causes, learn what worked and ensure we can deliver the best service for families and businesses.
Perhaps some honest background would have been a helpful conversation starter.

Thursday, July 4, 2013

CTV reports on one symptom of Ontario's surplus generation

CTV's Paul Bliss reported on the cost of curtailing generation at Bruce Power's nuclear units.  The report had some information not available elsewhere.

Exclusive: Ontario spending millions to halt surplus electricity production | CTV Toronto News:
Bruce Power has turned five units off at different times this year to cut supply for a total down time of 40 days. Since the plant is paid about $1 million per day, it cost Ontario $40 million for reactors to idle.
Bruce also conducted steam diversions from turbines to cut power production 84 times this year, which is the equivalent of approximately 22 unit days offline. For that, the plant was paid $22 million to vent steam into the air instead of operating turbines.
In total, $62 million was paid to the Bruce plant this year to suppress electricity production.
The full article, and more comprehensive video report, are at CTV Toronto News

I think some context on the figures is important, both for understanding the role of the curtailments in the rapidly escalating prices Ontarians are, or soon will be, experiencing, and to understand while they'll be experiencing escalating escalations.

Tuesday, July 2, 2013

Ontario's Electricity System Halfway into 2013: 2011 rewritten

A couple of years ago, today, I posted a half-year review titled Ontario's Electricity System Halfway into 2011 ... here it is for 2013 with some crossouts, updated graphics, and some new commentary(bold italics)
I have not included the factor new to this year, which is the surge in high cost generation not reported by the system operator (IESO) or the system planner (OPA).  That will be left for another post, except to note generation, and demand figures for the first half of 2013 I estimate to be underreported by ~1.1TWh, roughly double the unreported amounts for 2011 which were double the amounts for 2009.
Other than that, the trends apparent 2 years ago continue, and the excessive rate hikes of the past couple of months are due to the government's consistent disinterest in competently managing supply.

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 exceeding 10%. But the same headlines should have been written one year years ago. Instead, Ontario's residents continue to be subjected to errant implications an insatiable appetite for ever more electricity is driving the price hikes.

Monday, July 1, 2013

Ontario's Jeopardy: The highest level of the civil service

"Over the past six or seven years, Ontario has beefed up its electricity exports and made $5-$6 billion selling excess electricity, says IESO President and CEO Bruce Campbell. "

Hell no.

Calculations from IESO HOEP and Import/export .csv files
There are lots of ways to estimate profits and losses on exports, but over "the past six of seven years" Ontario doesn't even have $5-$6 billion in revenues from exports. $4-$5 billion is a revenue range for all exports since 2006 began, but most imports (particularly in the most recent years) occur while we are exporting even more, so at the most rudimentary level one might say the net revenue from export/import activities has been $2-$2.5 billion in the past 6 or 7 years.[1]

Newly crowned President and CEO Campbell is forgetting costs as, previously, Premier McGuinty, Minsiter Duguid, Minister Bentley and Minister Ciarelli have done.

One has to wonder if the ability to forget things is a quality that acquires position in Ontario's ruling culture.

What would this cost me?

Friday, June 28, 2013

Ontario's Electricity System Plan: Designed Uncompetitiveness

In a recent Google search I accidentally stumbled upon the original news release from the ministry on signing the Greenfield South project, which is the now famous Mississauaga project to be relocated hundreds of kilometers from Mississauga, in the Sarnia-Lambton area.  The 2005 release, combined with information provided in a presentation by the Ontario Power Authority's Amir Shalaby last year, can be used to communicate why Ontario's planned supply mix cannot produce electricity at costs competitive with most other jurisdictions.

Here's how the 2005 press release described the capacity payment mechanism of Ontario's natural gas contracts:
The contract winners are assured that they will have sufficient ongoing revenue to meet their fixed project costs, such as capital and financing, if they operate efficiently according to the pre-agreed standards. When market revenues exceed these fixed-cost requirements, the contracts stipulate that 95 per cent of the surplus will flow back to ratepayers. The proponents that submitted proposals under this RFP each bid a "Net Revenue Requirement" (NRR), which includes all fixed project costs. The weighted average NRR that was bid by the six selected proponents is about $7,900 per megawatt-month. This is the average amount required on a per-megawatt basis to cover the monthly fixed costs of these projects.
The actual cost of power from the five generation facilities will vary with the price of natural gas, which fluctuates from season to season and year to year. However, using historical market data from the last two years as an example, the average price of power from the five generation projects would have been less than 7.8 cents per kilowatt-hour.
This provides much of the information to needed to calculate the levelized unit energy cost (LUEC): 
(capacity * capacity factor * hours * Heat Rate * Gas Cost/MMBtu) + NRR / (capacity * capacity factor * hours)
Bringing the figures up-to-date, the last average NRR provided for natural gas generators was $13,187/MWmonth, but gas prices have fallen considerably: at $5/MMBtu (higher than it's been for some time now), and the 45% capacity factor noted in 2005's price release, the LUEC today would be roughly the same as the 7.8 cents/kWh projected in 2005.

Wednesday, June 26, 2013

Ontario's Class A Con: A problem of Machiavellian Governance

The government of Premier Wynne has recently backtracked on the McGuinty government's big green deal, launched a consultation on "siting large energy infrastructure" and is preparing to invite input on the next long-term energy plan.
The Ontario Energy Board (OEB MSP) recently released the latest report from it's Market Surveillance Panel, and that provides some fresh data, and analysis, through which I can review how the appearance of 'consultation' was manipulated in the past to the detriment of the average Ontario electricity consumer.

The Class A Global Adjustment

In 2009 Ontario's economy, particularly its manufacturing sector, was indisputably in trouble.  While the government prayed to the wrong deities, and had their prayers answered with the the Green Energy and Green Economy Act, Ontario's largest users of electricity sought to avoid the coming cost increases, and many of the charges they already incurred, by lobbying privately with government insiders.
The rumour was that it was the provincial Environment Minister who took up the cause and rammed through a change to the global adjustment mechanism that rewarded large users of electricity, now known as "Class A" customers, for being large users of electricity.

The changes occurred out of the light of disclosure and under the green cloak of the environmental registry.

This is not meant to slight the accomplishment of the Class A mechanism in reducing costs for Ontario's largest consumers of electricity.  Piecing together bits of information from the OEB MSP reports U.S. EIA and Ontario's IESO, it seems the program was very successful at transferring costs from Class A to other consumers.

Unfortunately, the accomplishment came at a rather steep cost if one is to place the level of faith in "conversation" espoused by Premier Wynne.

Conversation itself.

Sunday, June 16, 2013

May's Record electricity price only a hint of pain to come

When the IESO posts the monthly report for May 2013, it should show a record high commodity price of $92.97/MWh - comprised of an HOEP of $25.38/MWh and a Class B global adjustment charge of $67.59/MWh (also a record).

This is just a hint of the enormous increases Ontarians will be seeing though 2016.  Communicating those increases is something a number of people, including myself, have been attempting for some time; hopefully some of the graphics I've built will bring some urgency to the reader about what is occurring in Ontario; not simply in terms of energy pricing, but in the declining quality of public institutions, the data they provide, and the mainstream media dominated by forces disinterested in looking for the implications of the breakdowns in public governance demonstrated by events such as the gas plant scandals.

Thursday, June 13, 2013

The Final Day of Dalton McGuinty, MPP

The end of this session marks an opportune time for me to bring to a close my service to the people of Ottawa South as their member of provincial parliament.
I leave politics with my idealism intact and a deep sense of gratitude for the opportunity to have served in public life
"Idealism?" wrote Martin Regg Cohn, provincial politics writer for the Toronto Star.

"This is the point at which we could be saying generous things about Dalton McGuinty" began the column from the Globe and Mail's Ontario politics columnist Adam Radwanski.

Well maybe ... if it's warranted by his performance measured against his promised performance.

Dalton McGuinty came to power in 2003.  He'd lost his first election leading the Liberal party (as most first-time leaders do) to an incumbent Premier, but in 2003 Mike Harris had retired and Ernie Eves had been hurt by, amongst other issues, electricity costs.   

During the provincial election of 1971, when I was a teenager, over 73% of eligible voters went to the polls.
Voter turnout hit historic in 2007, and 2011
Lessons From Ontario's Record Low Election Turnout
By the 1999 election, the turnout among eligible voters was little over 50%.
When barely half our population takes the time to exercise their most basic democratic right, when turnout among young people and new Canadians hardly hits one-third, real change is needed.
People have lost faith in their politicians and their institutions of government.
Disturbing as it is, it is not hard to understand why.
For decades we have watched our democratic institutions erode. And for the last eight years we have seen these trends accelerate dramatically under the Harris-Eves government.

Sunday, June 9, 2013

The diminishing value, and increasing costs, of wind and solar generation in Ontario

This post is a follow-up to my previous post.
I've formatted some data to emphasize the full impact of the now defunct FIT program will not be felt for several years - and the price impacts, should the contracted projects be constructed, are likely to be increasingly more severe throughout that period.

"Value of wind production continues to drop"
The more wind, and the more solar, capacity that is added to the electricity system, the more expensive the entire system will become, unless the price of wind and solar is declining quickly enough to offset the diminishing value of a unit of output as capacity increases.

The Market Value of Variable Renewables, by Lion Hirth, writing for Vattenfall [1], inspired me to look at the data in Ontario with the idea of demonstrating that as wind output increased, the relative value of a unit of wind decreased.

Saturday, June 8, 2013

Wind Feed-in Tariffs in Ontario: An Info-Obit

Ontario's Ministry of Energy recently announced that, " the province will develop a competitive procurement process for renewable projects over 500 kilowatts (kW). The new process will replace the existing large project stream of the Feed-In Tariff (FIT) program."

I believe the announcement does end a FIT policy I've written extensively on, particularly in a pair of posts in November 2011 (here and here), and recently in a post concluding, of the FIT program.
It is a failure; a high cost, low value, artificial creature that deserves to be killed.
I say to the government, "well done"
but ...
The scenario that lead to the FIT policy, where professional planning was replaced with amatuerish whimsy, should not be allowed to repeat itself.
There is reason to believe that is exaclty what is happening.

Saturday, June 1, 2013

Ontario Electricity Rate Increases 38% since December

Ontario''s Independent Electricity System Operator (IESO) posted the estimate for the May 2013 Global Adjustment (GA), and it is $66.36/MWh. Coupled with my estimate of the Hourly Ontario Energy Price (HOEP) of $25.22, the monthly wholesale commodity rate in Ontario in May is estimated to be $91.58.

In December 2012, the HOEP was similar, at $25.51, but the GA was $40.64 - for a total of $66.15.

If you are a "class B" customer exposed to the market rate, the increase in your rate is therefore 38% in the past 5 months. Regulated price plans (including residential ones) will reflect the same costs, but not in the same months.

The last time prices approached this height, a government''s panicked rate freeze failed to prevent it''s electoral defeat. May''s commodity charge is the highest since Ontario''s market opened, and in reality it is much higher. While the HOEP exceeded $80/MWh early in 2003, it wasn''t meaningful for customers as there was a price freeze at $43/MWh introduced (with retroactive payments) after prices peaked in September 2002 at $83.14.

The IESO will eventually report May''s Ontario demand average just over 14,000MW per hour in May 2013, which is lower than they''ve reported for any month except May 2009. Don''t panic that the low total indicates we''ve returned to the depths of the recession; the IESO''s reporting is increasingly less indicative of actual supply, and actual demand, in the province.

Saturday, May 25, 2013

At the end of the week ... and the IESO 18-Month Outlook

A review of some events from the past week unrelated to drugs and elites and former TV celebs on public teats.

Early in the week, Tom Adams' site entered it's 5th year.  His observations have, unfortunately, never been more necessary.  Hopefully Adams is receptive to a cry of "4 more years!"

Politically, NDP "Leader" Andrea Horwath announced she would continue to support the Ontario Liberal government.  All rookie leaders in Ontario tend to have dissappointing first election campaigns, but Horwath has, in my view, distinguished herself in increasingly demonstrating she feels an incompetent Liberal government superior to one she would lead.
After 4 years of pain since the foolish Smitherman/McGuinty policies were introduced to Ontario's electricity sector in the form of the Green Energy Act, we look set for two more years of pain, unless the NDP is able to dispose of it's "leader."

Speaking of disposal ... the Independent Electricity System Operator (IESO) released it's latest 18-Month Outlook on Friday.  I've previously written on the relevance of the concluding paragraphs of IESO outlooks, and this one concludes:
Forecasting for embedded variable resources will be developed by Q3 2013. Additionally, RII [Renewable Integration Initiative] will facilitate the dispatching of variable generation, with implementation set for September 2013. 
Variable generation dispatch will allow for greater flexibility and help alleviate surplus baseload generation concerns.
Uh huh

Alleviating the IESO's "concerns" isn't related to controlling costs, or stopping the growth of the SBG problem.

Wednesday, May 22, 2013

Spin Doctors: Air Quality in Ontario Report

The Ministry of the Environment's backgrounder for it's "2011 Air Quality in Ontario Report" caught my attention with statements such as, "air quality has improved significantly over the past 10 years."

This we knew already, but what about over the past year?

Figure 4.8 of Air Quality in Ontario: Report for 2011
I checked to see how 2011 compared to 2010.  I did not spot any accomplishments there, which is notable because Ontario's coal-fired generation of electricity reportedly dropped from 12.6TWh in 2010 to 4.3TWh in 2011.

The Ministry explains, "Emissions of NOx, CO and SO2 continue to decrease due in part to Ontario's air quality initiatives such as the phase-out of coal-fired generating stations."

The Ministry's backgrounder did not reconcile how the coal-fired generation drop in 2011 wasn't matched by declines in SO2 or NO2 in 2011, but it did provide a convenient excuse if air quality wasn't improving:

Transboundary emissions, mainly from the U.S., account for approximately half of Ontario's smog.