Monday, August 26, 2019

Henvey Inlet provides opportunity for RIckford to address declining performance in Ontario's electricity sector

It's shaping up to be the worst year in some time for Ontario's electricity sector.

The useful structures planned during the previous government are falling apart during the implementation stage, and the current Minister of Energy, et cetera, has appeared - well, infrequently. It's still early in the sophomore year for the Honourable Greg Rickford, but he's shaping up to be the worst energy minister since Brad Duguid.

Duguid could have saved Ontarians billions if he'd stuck to his druthers and implemented the solar rate cut the Ontario Power Authority decided on in 2010, but he didn't. He succumbed to lobbying from an industry not to reduce rates, and eventually, as those high-priced contracts entered service, Ontario became a global laughingstock for contracting solar capacity at an average price well above $400/megawatt-hour (MWh).

A feed-in tariff (FIT) contract for the 300 MW Henvey Inlet wind project was announced eight-and-a-half years ago on February 24, 2011. From the standard FIT contract during February 2011 (version 1.4):

2.5 Milestone Date for Commercial Operation
The Supplier acknowledges that time is of the essence to the OPA with respect to attaining Commercial Operation of the Contract Facility by the Milestone Date for Commercial Operation set out in Exhibit A. The Parties agree that Commercial Operation shall be achieved in a timely manner and by the Milestone Date for Commercial Operation.
The date for commercial operation was generally 3 years from the contract date. Later it was extended to 4 years for many contracts.
Henvey Inlet, at some point, received extra special consideration and it's date for commercial operation was extended to February 25, 2018 (according to IESO contract list). Today being August 26, 2019, is more than 1 and half years from the date for commercial operation.

Section (9.1), "Events of Default by the Supplier", includes:
(j) The Commercial Operation Date has not occurred on or before the date which is 18 months after the Milestone Date for Commercial Operation, or otherwise as may be set out in Exhibit A.

Thursday, August 15, 2019

In defense of Ohio's bailout of nuclear, and other, generating stations

July ended with Ohio passing an energy bill :
to facilitate and continue the development, production, and use of electricity from nuclear, coal, and renewable energy resources in this state, to modify the existing mandates for renewable energy and energy efficiency savings...
I noticed American pundits hating it.
The bill prevents Ohio's only nuclear generating stations from closing, as previously announced, so I thought it worth my time to investigate it. Unfortunately it's one more subject that demonstrated the shallowness of most energy commentary.

Ohio just passed the worst energy bill of the 21st century announced David Roberts at Vox. Self-described "energy Ronin," Jesse Jenkins responded to the claim the legislation, saving 2 nuclear plants in Ohio, was better than "passing nothing and letting them close," with a flat: "No. Not really." It's a claim that should be revisited in the not too distant future - when Ohio can be compared to Pennsylvania, where no bill was passed to save two nuclear facilities soon to exit operations. I'll plant the seed for that future comparison with some background on what did happen in Ohio - and very briefly at the approach that failed to sway lawmakers in Pennsylvania.

Roberts' article has these bullet points on the Ohio legislative action:
  • Bail out two nuclear plants
  • Bail out two coal plants
  • Gut renewable energy standards
  • Gut energy efficiency standards


If I skimmed the legislation correctly nuclear (and some other generators) will receive up to $9/MWh in credits for their output - with the amount being reduced if the market price is above $46/MWh and disappearing at $55USD/MWh (currently equates to about $73 CAD/MWh).
A fact-based commentary on that price might note most pricing is now set by natural gas so the $9USD/MWh stipend equates to a $22/tCO2e implied cost of emissions (tonne of CO2 equivalent emissions) - which is a little under $30 Canadian dollars per tCO2e.

It's a sad commentary on the state of American commentary that those who claim to support positions on reducing emissions fail to mention implied emissions' costs in their comments.

Regardless, that's the nuclear bailout: it can be perceived as compensating trivial-emission generation for the unpriced negative externality of currently cheap and abundant natural gas-fueled generation. Previous actions by New York and Illinois legislators have tied their funding of threatened nuclear plants directly to a social cost of carbon.

So why the coal bail-out?