Found! Where the Wynne government spent $36 billion!

Not all of it useful.

March 26, 2017

Ontario Energy Minister Thibeault claimed the government spent $35 billion on the electricity sector while Premier Wynne says it was $50 billion. But neither of them provided an accounting as to exactly what the money was spent on, and what the value was for ratepayers.   They both claim the system was “broken” when the Liberals took over governing, and the money spent fixed the system.

If Minister Thibeault’s $35 billion is factual it would represent spending $8,000 per residential ratepayer; if Premier Wynne’s $50 billion is true it means $11,000 per ratepayer. Bear that in mind as you travel through my computations.

The spending via directives from the Energy Minister’s office were, and continue to be, frequent (well over 100 to the OPA [merged with IESO], OPG, OEB and Hydro One); the directives often had no connection to fixing anything, or generating electricity.

Here’s a look by category. Some of these are estimates but the estimates come from reasonable and reliable sources. 

Billions Spent to December 31, 2016

Category: Frills and shiny baubles *

1.Spending on “smart meters”!                                      $2 B

(Ontario’s Auditor General in her report of December 2014 basically said we have wasted the money spent!)

2.The “smart grid” aimed to work with smart meters!  $1.2 B

(We are all billed for the costs of developing the “smart grid” but the benefits accrue to only a few select individuals and companies.)

3. “Closing the coal plants” requiring OPG to write off the     $ .6 B

(This meant the OPG had to write off the remaining value of those plants including their scrubbers for removing emissions!)

4.“Conservation” spending, $3-4 million/year       $2.5 B

5. Moving the gas plants                  $1.1 B

TOTAL spending for frills and shiny baubles: $7.4B

Category: The unreliable and intermittent**    

The IESO’s 18 Month Outlook covering April 2017 to September 2018 provides approximations of grid and distribution connected wind and solar which are:

Wind generation as at March 31, 2017 will be approximately 4,650 MW and at a capitalcost of $2.2 million per MW had a cost of                                                                             $10.2 B

Solar generation as at March 31, 2017 will be approximately 2,389 MW and at a capital cost of $2.6 million per MW had a cost of                                                                             $ 5.2 B

Transmission spending by Hydro One to connect wind and solar to the grid and for embedded connection expenditures is estimated to have had a cost of                                  $5.0 B

TOTAL spending for unreliable and intermittent $20.4B 

Category: Photo-op generation***

1.“Big Becky” which went $600 million over budget in an effort to squeeze 150 MWs of capacity from Niagara Falls at a cost of   $ 1.5 billion

2.“Mattagami” originally a $1.6 billion dollar project to increase the rated capacity by 438 MW (NB) it went over budget by $1 billion reaching a cost of    $ 2.6 billion

TOTAL spending for Photo-Op generation $4.1B

Note: In 2010, before both of the above were completed, OPG produced 30.6 TWh (terawatt hours) of hydro generation; so, despite adding the above 588 MW of capacity, hydro generation in 2016 fell to 29.5 TWh.  A quick look at the generation from the Mattagami units on March 21st indicates they generated power at about 8% of rated capacity, while all other hydro was operating at an average of about 50% of rated capacity.

Category: Value for money

It appears that some of the claimed investments in generation did actually provide some value. The Bruce Nuclear refurbishment (NBB) of two units came at a cost of $4.8 billion but according to Ben Chin, former VP of the OPA, the cost to ratepayers was limited to   …        $ 3.4B

Note: Bruce Nuclear over the four (4) years (2013 to 2016) have annually generated an average of 10 TWh above their 2012 generation, prior to the refurbishment, at a cost of about 6.6 cents per kWh.

TOTAL spending for Value for money: $3.4B

TOTAL estimate for all spending to the end of 2016:                                                            $36.7 B                                                   

This estimate comes reasonably close to the $35 billion Energy Minister, Glenn Thibeault claimed was spent in his September 13, 2016 press release.

Category: What’s still to come?

The IESO Outlook referenced above indicates we have contracted for additional generation which will be added to the grid in the next 18 months (April 2017 to September 2018) including:

Another 500 MW of wind capacity with an estimated capital cost of                                   $ 1.1 billion

Another 100 MW of solar capacity with an estimated capital cost of                                    $   .3 billion

Another 1,300 MW of gas (assumption is single cycle @ $.75 million/MW) at a cost of $0.9B  

TOTAL for What’s still to come? $2.3B

 Even if one includes the money still to be spent, the total investments (most of them wasted) is shy of the $50 billion Premier Wynne claims has been spent, by $11 B.

We still need to see Minister Thibeault’s accounting, and Premier Wynne’s too, to allow the taxpayers and ratepayers of the province to determine whether all of the spending has provided the value for our tax dollars claimed by the Premier and Energy Minister.



*Money spent that created no generation nor improved transmission nor reduced blackouts or brownouts.

**Refers to the intermittent and unreliable nature of wind and solar, which are unable to deliver generation when the wind isn’t blowing and the sun’s not shining.

***Money spent on large hydro infrastructure projects that produce little power but presented great photo-op situations for Ontario Liberal Energy Ministers and even Premiers.




Author: parkergallantenergyperspectivesblog

Retired international banker.

21 thoughts on “Found! Where the Wynne government spent $36 billion!”

  1. I think your header should be 36 Billion Parker. If that’s corrected I have a few people I want to send this to.


  2. Also at the bottom in notes you refer to Wynne estimate as 50 million instead of 50 billion

    From: Bill Doerfling
    Sent: March 26, 2017 11:02 AM
    To: ‘Parker Gallant Energy Perspectives’
    Subject: RE: [New post] Found! Where the Wynne government spent $36 million!

    I think your header should be 36 Billion Parker. If that’s corrected I have a few people I want to send this to.


  3. This is precisely why we need competent people, who know how to prepare and read complex ledgers, managing the energy portfolio.
    We also need people who are well aware of the complexities of climate change and the steadily forthcoming scientific evidence that mitigation efforts, especially industrial scale wind power stations covering rural Ontario, are a waste of tax payers’ money.


  4. Great post, Parker. The only point I don’t understand is how the capital cost of Bruce Nuclear refurbishment could be $4.8 billion and only $3.4 billion be charged to ratepayers. Who paid the remaining $1.4 billion?


  5. Incompetence rises to the top in our present government. Keep it up and we will all be using candles eventually.


  6. Under the 18 month outlook, I don’t see that figure for solar in terms of installed capacity (2,389MW), I see 280MW instead, which is in-line with what’s on the IESO website.


    1. I think I see where my confusion lies, you are including “embedded” solar, which is different from grid-connected solar, of which there is expected to be an increase from 280MW to 380MW. Embedded solar is expected to eclipse 2,200MW over the cited period.

      I wonder if we should be looking at these two resources separately? As I believe they are contracted differently.


      1. Yes, I was looking at the grid-connected side of it and completely ignored the embedded local generation aspect of it initially, my mistake. I do however think it is worth mentioning the difference between the two, as grid connected is figured into the entire works like any other medium, whilst embedded simply drives down grid demand by satisfying it locally.

        I also think they are contracted differently, as one participates actively in the IESO administered market (grid-connected) and the other doesn’t. Both are of course rate subsidized but my impression is that the small stuff has higher rate subsidies than the larger contract facilities that are more likely be IESO registered.


  7. Most of them (big and small) are contracted under the OPA which merged with IESO Jan 1st/15. You are right that the smaller stuff generally got higher rates than the larger contracted developments. If you go to this link you will see what was the first revision to the pricing schedule and note rooftop solar originally got 80.2 cents per kWh.


    1. Exactly. Just to include a bit more information, if we look at the difference between embedded and grid-connected:

      27,947 solar contracts totalling 2,211.4MW.
      72 wind contracts totalling 611MW.

      14 solar contracts totalling 478MW.
      52 wind contracts totalling 5,444.3MW.

      There are 24,622 Embedded MicroFIT contracts totalling 216.8MW
      There are 3,386 Embedded FIT contracts totalling 1,908.9MW

      There are 42 Grid-connected FIT contracts totalling 2,705.7MW.

      And then of course we can be further depressed by the contract type, with the majority of major modes either being bi-lateral negotiated or Competitive offer, but 27,950 of the solar contracts are all Standard Offer, as are 98 of the 124 wind contracts :/

      And to quote the IESO: “Contracted capacity under the FIT Program has grown from 13 MW in March 2010 to 4,615 MW in the current reporting period. ”

      Now of course the contract rates early on in the program were incredibly generous, however even with the present reduced rates for 2017, we still see the smaller facilities getting higher rates (these are for solar):
      <6kW = $0.31/kWh
      10kW = $0.223/kWh
      >100kW = $0.207/kWh

      Which are, despite lower than earlier on in the program, massively more than market rate.

      Which is why I think it is important we recognize the difference between the grid-connected and the embedded solar installs, as the embedded isn’t represented in the IESO distribution graph, which often puts it out of sight for those looking at the distribution mix, but the costs are still reflected in the Global Adjustment fees we all pay, and all of the MicroFIT and small scale FIT contracts are paid even more per kWh than the obscene rates paid to the grid-connected facilities.

      Liked by 1 person

      1. Which is why I think it is important we recognize the difference between the grid-connected and the embedded solar installs, as the embedded isn’t represented in the IESO distribution graph, which often puts it out of sight for those looking at the distribution mix, but the costs are still reflected in the Global Adjustment fees we all pay

        Absolutely correct on all counts! Now the fact that embedded generation isn’t reflected in the IESO numbers begs the question: where did you manage to get the numbers you show here?


  8. Attention all turdbine leaseholders in Ontario…. Stop Threatening local businesses and their hard working employees with boycotts to said businesses….. it is absolutely disgusting and embarrassing that you are threatening to boycott local businesses because of your mistake…. YOUR money that YOU spend in those businesses belongs to the hydro ratepayers of the province…… if you wish to threaten those businesses you need to go home and sell 50 acres of land that YOU AND YOUR FAMILIES HAVE EARNED…. then bring that money in and spend it or threaten businesses with….. you leaseholders forget that we know that it is our money you are trying to threaten us with….


  9. I don’t suppose there’s any chance that the Auditor General of Ontario will be delving into the energy morass any time soon? Is an audit at the discretion of the government? What could trigger an audit?


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