regarding Ontario Electricity Generation and Costs, 2007 - 2015

This week I was handed some data indicating, by supply type, electricity generation and costs in Ontario. The data was a hard copy response of the IESO to a freedom of information request. There's nothing in the data that will surprise readers of my work, but perhaps it's time for a refresher, as today I read one flip comment by a mainstream journalist, joking they'd like to see "Ontario families can no longer afford skyrocketing nuke costs," and an opinion piece on the public broadcaster's site which included:

...as data from the [International] Electricity System Operator clearly shows (sic), it’s nuclear and gas plants that are responsible for the lion’s share of increases. 

"Clearly."
It is time for a refresher.

Some background on the data I'll share. The 2015 Annual Report from the office of The Auditor General of Ontario included a chapter on "Electricity Power System Planning." The entire chapter contained a wealth of information and continues to be cited frequently, but for those chasing hard numbers one particular star of the work was a figure revealing the quantity, and cost, of generation from various sources, inclusive of not only the larger generators frequently reported by the IESO (the "I" is not for international, but it is the electricity system operator), but also the seldom reported distributed generation - which is where most solar exists.

The freedom-of-information requests handed to me included this request:

Breakdown of Generation Cost by Energy Sources for the years 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2015. The Breakdown for 2014, which was included in the Annual Report of the Auditor General of Ontario, is attached as reference.

The data table that follows responds fully with the request - I have only reformatted it:

Ontario government acting like small manufacturers' bad boyfriend

We are tripling the size of the cut we're making to people's hydro bills from 8% to an average of 25%. - Ontario Premier Kathleen Wynne

On March 2nd the Premier of Ontario announced "Fair Hydro Plan" actions "cutting electricity bills by 25 per cent." The announced actions cut no actual costs. To the contrary, interest expenses are expected to climb to $1.4 billion annually, perhaps totaling $25 billion in the fullness of time. Perhaps $40 billion.

My two previous posts have looked at rate components from a residential bill perspective, and an overall system supply cost perspective. I hope I have communicated that rates have risen substantially due to one small set of recently contracted supply, while nuclear and hydro provided the bulk of supply but little of the cost increases - and that not all consumer groups shared the burden of the rate increases. In this post I'll review the politics of recent electricity pricing policy decisions.

"We feel that a lot of manufacturers are the middle child that are completely left out...They saw almost nothing in the recent announcements." 

Jocelyn Bamford - Coalition of Concerned Manufacturers

It's been over 6 weeks since the government announced it's so-called "Fair Hydro Plan", and while some details will remain sketchy until enabling legislation/regulation is introduced, the overall intent is clear. Ontario governments reacting to increases in electricity prices with rash programs to calm the populace are nothing new, but the current government's targeting of rate reductions is.

Graphic originally from Ontario’s perceived electricity cost inflation

Significant previous actions include the rate freeze introduced in the early 1990's by the NDP government headed by Bob Rae, and a rate freeze introduced a decade later by the Progressive Conservative (PC) government headed by Ernie Eves. An article from November 2002 puts into perspective the long duration of the rate freeze:

Don't believe happy presentations of Ontario's renewables pain

In January Ontario's government is introducing a new price support program to help poorer households with electricity costs. The planning for the program reveals an expectation that 1 in 10 Ontario households can not longer bear rising electricity rates.

I am inspired to write by two events of November 30th:

1. Ontario's electricity system mandarins released an astronomical estimate indicating November rates will be 20% higher than ever before.
2. CBC's flagship news program broadcast a poorly researched segment, "Canada's clean energy race."

Examining the Samsung numbers for high-priced November might provide a simple explanation of what the global adjustment is, but some background is necessary to judge the value Samsung has delivered.

Chris Brown's CBC report included segments interviewing Tim Smitheman, once a public servant, now an employee of Korea's Samsung further aiding that company in siphoning money out of Ontario. Brown celebrated Samsung, but any investigation would have revealed he could not have picked a better subject to display the failure of Ontario's green energy foibles.

A brief history lesson is necessary to communicate how poorly Samsung has performed for Ontario. In 2008-09, Minister of Energy George Smitherman and his boss Dalton McGuinty wanted to make a big splash to kick off the glorious renewables future German politicians and David Suzuki had convinced them was imminent. In January 2010 the government inked a deal with a Korean Consortium that included Korea's electricity experts, KEPCO (since departed the Consortium), and Samsung. The deal, "would see the consortium receive preferential treatment from the province, in the form of priority access to the energy grid and higher-than-market rates for the renewable energy it creates as part of Ontario’s new feed-in-tariff (FIT) program." 

“It’s now a race to see which clean technologies will dominate, and wind and solar are off to a strong start” - Chris Brown, CBC, November 30, 2015

The Samsung deal has been a disaster. Hopes that expertise in LCD displays would lead to breakthroughs in solar panel manufacturing tech Samsung would base in Toronto disappeared, as did hopes expertise in shipbuilding would translate to breakthroughs in wind turbine design to be based in Ontario.
All those things were sub-contracted out.

Green Is The Old White

News last week that The European Parliament cancelled their delegation to the UN's Rio+20 summit on sustainable development.  The reason being that the brutish Brazilians didn't know how to host a conference properly:

“The Brazilian government should have taken action to avoid hotels abusing their position. That's also part of the responsibility of hosting such a large conference,” said Dutch Liberal MEP Gerben-Jan Gerbrandy, who was to lead the delegation.

The first Earth Summit, hosted in Rio de Janeiro in 1992 - with Maurice Strong as Conference Secretary General, is remembered for creating a couple of notable things, including; the United Nations Framework Convention on Climate Change, the Convention on Biological Diversity, and the fabled Agenda 21.
It is not remembered for the cost of hotels.

Ontario Electricity Act Being Re-Written - and Other Thoughts for Santa

I stumbled across something yesterday that jolted me away from Christmas planning.  I've not posted much this month as I've been suffering from writer's block in attempting to write Santa my list.  I don't wish  for stuff anymore - I generally mix up the old gift holiday with my murky religious philosophy. It's a season where a muddled mind is unavoidable - so I usually hope for wisdom.
For others
What attribute should I wish for this year?

I was thinking about this when I saw the CBC's Mike Crawley tweet:

At 4pm on Fri before Xmas, McGuinty govt announces proposed changes to how it reports on hydro debt retirement http://bit.ly/uzexC3 #sl

Response to Comments on Power Dumping

It was an honour to work with Parker Gallant on “Ontario's Power Trip: Power dumping.”  I wanted to follow-up on some of the comments now attached to the article.  I don't do this necessarily as a response to the commentators, but some of the arguments recur frequently in government and ENGO releases, so I have worked on some responses.

Ontario’s Power Trip: Power dumping

The article,by Parker Gallant and myself, first appeared in the Financial Post

During the spring months in Ontario, the winds blow a lot. For companies in the wind-power business, that’s good news. For the province’s electricity consumers, though, it’s another financial disaster that, on an annual basis, drains up to $400-million out of consumers’ pockets. But that money doesn’t directly fund green electricity for Ontarians who pay for it. Instead, the bulk of wind power is essentially surplus power that is exported to the United States and out of province at rock-bottom prices. Ontarians are paying $135 for units of power that are dumped on the export market at prices as low as $20. Sometimes, Ontario has to pay other jurisdictions to take the surplus off its hands.

This past May, Ontario’s wind producers generated 284,000 megawatt hours (MWh) of electricity. For each MWh, the producers collected $135, for a total of $38-million. That money is paid out of the churning slush fund that is now the Ontario electric power system. The system, through its byzantine structures, sold that same power into the electricity market at market prices. The average market price for electricity in May was about $25 a MWh. Wind power, however, rarely gets even the average price.

Because wind often blows when power is not needed, and the Ontario government has mandated wind, the Ontario power system is stuck with surplus power that has to be unloaded, at whatever the market will bear, which is usually below average market prices.

Pembina is an Oilfield

An article in the Toronto Star, Don't blame green power: Energy bills rising anyway, alerted me to the latest marketing pitch from the Pembina Institute. Behind the Swithch, Pricing Ontario Electricity Options is the latest propaganda release. It claims to consider 2 scenarios: in one Ontario's Green Energy Act (rumoured to have been penned by a cabal including Pembina) continues to gut Ontario, and an allegedly worse one where the the legislation is dismantled and somehow a greater reliance on fossil fuels is the outcome. They then make some bad assumptions which serve to deceive Ontario about the impacts, on pricing, the scenarios are expected to have.

Huff – Po - The Liberals’ Ho – whistle whistle whistle...

Google led me to a Huffpost Canada stupidity the other day, “Wind Power:  A Quiet Solution to Climate Change”

Following the title comes; “We asked a tough question today: Is the fear and anxiety being spread about the sound of wind power justified?”

A horse’s ass has reason to hope the cart goes before the horse, but it really doesn’t.  The correct first question should address the title;  “Is wind power a solution to climate change? 

It isn’t. 

Price of Ontario's Electricity Policies Hits New High In April

The Global Adjustment rate for April is $43.89/MWh, which is the highest it has ever been. The reality of the mess we are in is being hidden by the mainstream press deflecting the blame from the government, such as Metro Martin's, “a small proportion of the recent hikes can be attributed to subsidies, for the simple reason that few renewable energy projects are up and running yet.” At The Globe and Mail, Adam Radwanski toned down the not-due-to government policy theme so trendy in the media hub of Toronto; “Mr. Hudak stands to capitalize on pocketbook angst over rising energy prices for which green projects have (to an exaggerated extent) been blamed.”

Exaggerated eh?

The Mainstream Press Addresses Electricity Records Noted Here - 7 days ealier.

On January 3^rd I posted to this blog that there were a number of statistical records to end 2010 and begin 2011. Today some of the mainstream press did to: Don Butler, at the Ottawa Citizen, and the Toronto Star's John Spears. Choose Bulter's – or read this to counter the Star's Silly Spin

Friday, January 7^th John Spears dutifully reported on the IESO press release summarizing 2010's generation totals. He parroted the increase in coal and gas, as well as the official government spin.