One spring day just cost you millions

A happy day for power importers south of the border. For you? Not so much…

April 9, 2017 was a perfect day to demonstrate the mess the current Ontario government could have expected if they had simply done a cost-benefit study of the electricity sector prior to imposing the GEA (Green Energy and Green Economy Act).

The April 9th IESO generator report and Daily Market Summary provide highlights of many of the mistakes the Liberal government has made, as does my friend Scott Luft’s “Daily Electricity Supply Estimates.”  IESO’s report fails to provide details of distributor connected (DX) generation (principally solar and wind) whereas Scott estimates those along with the curtailment of wind, solar, hydro and nuclear generation. His estimates have proven to be on the conservative side in the past.

IESO’s “Market Summary” shows Ontario Demand was only 294,600 MWh (megawatt hours) which Scott noted was the “3rd lowest Ontario Demand day in the history of the market” and that day, along with five other recent “lowest Ontario Demand” days have all occurred within the past 12 months.   How low is demand? Scott says the six low demand days were lower than any day during the massive blackout of 2003.


Demand in Ontario on April 9th of 294,600 MWh could have been easily supplied by nuclear generation (236,400 MWh including 14,800 MWh steamed-off) and hydro generation (101,900 MWh including 1,200 MWh spilled, and 2,600 MWh from DX).  Those two clean, emission-free power sources could have delivered 338,300 MWh, leaving 43,700 MWh available for sale to our neighbours.  The 338,300 MWh should have cost Ontario ratepayers $20,554,000 based on what we pay on average for nuclear and hydro generation.  That would equate to 6.1 cents per kilowatt hour (kWh) combined!

As it happened, Sunday April 9 saw 51,400 MWh of net exports (exports less imports) sent to our neighbours in Michigan, New York and elsewhere, along with an average payment of $3.08/MWh. They gladly took those free MWh along with our payment of $158,312.00.

Sunday April 9th also saw Ontario’s ratepayers pick up the bill for transmission (TX) and DX-connected wind of 25,700 MWh and another 46,300 MWh of curtailed (one of the highest curtailed days ever) wind at a total cost of $9.290 million.  If we calculate the cost for just the accepted wind generation (25,700 MWh,) the cost per MWh becomes $361/MWh or 36.1 cents/kWh.

Ontario ratepayers also picked up the bill for the 10,533 MWh of solar generation (DX and TX) and the 667 MWh of solar estimated as curtailed. Solar’s costs were $5.280 million, which means the delivered generation cost last Sunday was $501.28/MWh or 50.1 cents/kWh.

Meanwhile, those same ratepayers picked up a $4.143 million bill for gas generators who delivered 5,773 MWh (TX and DX) at a delivered cost of $717.12/MWh or 71.7 cents/kWh. Scott Luft noted the 5,773 MWh delivered to the system by the gas plants set a record low.*

The cost of unnecessary power for ONE DAY?

The total cost of the unneeded supply of power on April 9th coming from wind, solar, gas and biofuel ($368,000) plus the payment made to export ($158,312.) came to over $20 million.

What that means is, this one day of generation, Ontario’s ratepayers are obliged to pay for, was $40.8 million or 13.6 cents/kWh yet the 294,000 MWh they actually consumed was produced at a cost of $17.9 million (not including the $2.7 million loss on exporting).

Premier Wynne has admitted her government has made mistakes on the energy file. The “mistake” on that Spring day turned out to be a burden on all of Ontario’s ratepayers (rich and poor) with the extra cost of over $20 million in order for the Minister of the Environment and Climate Change and Premier Wynne to be able to claim the “cap and trade” tax is driving down emissions in the energy sector, by reducing generation from fossil fuels (gas).

They are not likely to mention that anyone using electricity from Ontario’s generators would have had to more than double — 13.8 cents/kWh instead of the 6.1 cents/kWh — so they could make that claim!

* Lower gas generation will allow Glen Murray, Minister of the Environment and Climate Change to claim the “cap and trade” tax is working.

Author: parkergallantenergyperspectivesblog

Retired international banker.

8 thoughts on “One spring day just cost you millions”

  1. The sheer irony is that the word ‘curtailment’ for the residents who are being harmed by industrial wind turbines is a very positive word. The elation one feels when the turbines are off or barely moving is indescribable relief.
    Take a look at what happened at Queen’s Park this week when MPP Lisa Thompson stood up for her constituencies in Huron County who have been reporting noise issues to the MOECC for almost two full years:
    Minister Glen Murray is seriously out of touch with reality.

    Liked by 3 people


    Wow no wind and they’re still spilling my hydro to NY and Michigan…. some people think that the export line at the bottom of the page in green is good…. basic accounting principals in the real world the equation listed numbers should be in red. .
    IMPORT plus
    (bad cause we have a robust supply of energy…)
    EXPORT (bad cause they’re giving it away and you pay premium $$)
    should all be in red….. bad…. negative…. otherwise good…
    Just saying….

    Liked by 1 person

  3. Two of the wind projects in Haldimand County were shut down for the full 24 hour period on the 9th. As my French teacher use to say, quel desastre.

    Liked by 1 person

  4. We have a new record low for demand at 10,167 set at 4:00 am Sunday, April 16, 2017. This is turning out to be the Easter weekend massacre of the Ontario power grid. We will all be waiting for Parker’s analysis of it.

    Liked by 2 people

  5. This analysis and post really says nothing of value. It is just more extreme cherry-picking of the data by Parker Gallant and Scott Luft. Nothing wrong with having days when supply is great than demand and the excess electricity is sold and days when demand is greater than supply and electricity is bought. That is how modern electricity systems work. All modern electricity systems have to have built in over-supply in order to provide for a margin of error to meet demand, particularly given how volatile electricity demand can be. Are you saying that Ontario has too much such electricity generation supply? If that is the case, then why don’t you and Scott Luft actually prove that? Given that Ontario has to buy power to meet demand from time-to-time then that is going to be very difficult to prove. The selling of excess generated supply on any particular day is a bonus. Even if Ontario gets $1 for that excess power it would be a marginal gain for the province. There is no cost even if electricity is sold below it cost to generate, as the cost is just part of the overall cost to generate electricity for the province for the entire year. That $1 is extra revenue from electricity sales helps to offset the costs for Ontario electricity ratepayers. The province is lucky to have electricity markets where it can dump its excess supply.


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