Parker Gallant eats crow on gas power generation (really!)

An eye-opening tour of the Lennox plant in Eastern Ontario leads to starting calculations, too

Lennox power station in Bath–fast, efficient, low cost …what the heck did we need wind power for? [Photo: OPG]
Back in late May and just before the Ontario provincial election, I wrote a “what if” post titled; “If I were Ontario’s new Minister of Energy ” which was suggested how I would undertake to reduce the costs of electricity.

So far, a few of my recommendations have actually happened.

I won’t linger over the enacted or missed ones but I will focus instead on my suggestion that we close the “Lennox oil/gas plant in Napanee/Bath with a capacity of 2,200 MW that is never used.”

I received an invitation to tour the Lennox plant and I accepted! The tour was led by John Hefford, VP Regional Operations-Eastern Region, who has responsibility for not only Lennox but for all the hydro generating facilities located in the eastern part of Ontario, which (including Lennox), totals about 4,800 MW — that’s about 30% of OPG’s total capacity.

Driving toward the Lennox plant one can’t help but notice, in the distance, the industrial wind turbines (IWTs) recently built on Amherst Island (“owl capital” of North America).  That project is considered one of the most divisive wind power projects ever awarded a contract by IESO under the McGuinty/Wynne  governments.

The tour combined with a takeaway “Overview” of Lennox was truly enlightening.  The most noteworthy bits of information picked up were related to the ability of each of the four 525-MW turbines to ramp up quickly from their minimum load point of only 28 MW or 5%.  To put that into perspective, the other gas plants operating in Ontario are mainly CCGTs (Combined Cycle Gas Turbines) and they have to idle at minimum loads that are six to 14 times higher.

The ramping load point at Lennox logically translates to much lower emissions than the units added to Ontario’s grid(s) backing up industrial wind turbines (IWT) and solar under the FIT (feed-in-tariff) program.

The other significant difference between the CCGTs and single-cycle Combustion Turbines (CTs) is in respect to idling costs: for Lennox the cost is about $4,200 MW per month versus CCGT generators with costs of $10,000 MW per month to $20,000 MW per month, and CTs which average about $10,000 MW.

Another impressive piece of information picked up on the tour is the ability of the units to operate on either natural gas or residual oil (or both). That means, if a fuel cost spikes due to high demand (e.g., gas in the “Polar Vortex” winter of 2014) Lennox can switch to the other fuel. Lennox was also recently called on when a Pickering nuclear unit was shut down due to the 2018 Lake Ontario algae situation.

IESO forecasted shortfall                                                                                                         It appears likely Lennox will be called on to provide the capacity during the shortfall that  the IESO projects during the upcoming nuclear refurbishment years. From a ratepayer perspective, it makes sense.

Carbon tax calculations

Completing the tour and driving home led me to the questions of how much Ontario’s ratepayers might have saved if Lennox had been deemed the back-up for wind and solar power generation or had been used to generate electricity instead of handing out high priced 20-year contracts under the FIT program.  The first question would take an inordinate amount of research, so I opted for the latter!

A report (IESO prepared?) titled the Ontario Energy Report has a chart showing emissions generated by the electricity sector and the report for year-end 2017 indicated emissions in Ontario were 14 mt* in 2009 and 3 mt in 2017, for a decline of 11 mt in 9 years. The decline was touted by the Wynne government as attributable to renewable energy in the form of wind and solar.

Looking only at the wind power generation and its associated cost in those nine years provides an indication of just how much Ontario’s ratepayers have paid on a per ton basis to achieve that 11 mt drop! According to the IESO, from 2009 to 2017, wind turbines generated 53.1 TWh (terawatt hours) and since we commenced paying for curtailed power (paid for but not used), ratepayers picked up those costs for about 6.9 TWh.

So, the approximate costs of the grid-accepted wind power generation was about $7.2 billion, and for the curtailed generation was another $800 million. That brings the overall costs of the 11 mt reduction to about $8 billion!

The cost of that reduction of 11 mt looking at IWT (generation and curtailed) only and without solar, works out to $655/ton!

Ontario’s ratepayers have obviously done their bit to reduce emissions and will continue to pay more until the wind turbines and those 20-year FIT contracts finally expire.

We don’t need a carbon tax.

PARKER GALLANT

P.S. The second in this two-part series about Lennox will follow shortly, covering off how much we might have saved without wind power

*mt denotes “megaton” equal to one million tons.

Advertisements

Author: parkergallantenergyperspectivesblog

Retired international banker.

6 thoughts on “Parker Gallant eats crow on gas power generation (really!)”

  1. “Ontario’s ratepayers have obviously done their bit to reduce emissions and will continue to pay more until the wind turbines and those 20-year FIT contracts finally expire.”
    Why not push for all wind turbine contracts to be cancelled?

    This was posted last week in the public domain:

    Professor Ian Lee of the Sprott School of Business told journalist Rob Snow on Radio CFRA today that, contrary to rumours that investors would lose confidence in Ontario if contracts for existing wind power projects ended, nonsense—investors would have renewed confidence in Ontario now that the reckless mismanagement of the McGuinty-Wynne governments is over. #FordNation #windenergy #CancelNationRise https://sprott.carleton.ca/profile/ian-lee/
    sprott.carleton.ca
    Ian Lee
    I am an Associate Professor at Carleton University in the Sprott School where I started in 1988, teaching the 4th year and (later) the MBA Strategic Management capstone course, as well as related courses such as International Business Strategy, from then to now.

    I thanked Ian Lee for weighing in at such a critical moment in this new government’s decision making process because his assessment is very significant.
    In response he sent me this:
    “Thanks
    I will continue to advocate the legislative cancellation of exploitative wind and solar panel contracts by a bill in the legislative assembly.
    as they were morally unconscionable.”

    Like

  2. Solid work and analysis. The Lennox GS is actually in Greater Napanee, not Bath to which it is slightly closer. Lennox sits about 40 miles north of Niagara Mohawk’s Nine Mile Island Nuclear plant, across Lake Ontario.

    The author doesn’t mention that the billion-dollar boondoggle Napanee Generating Station, which runs on gas alone and which was originally to be sited in Oakville, is nearing completion a baseball throw east of Lennox. These are the two closest situated thermal power plants in North America.

    Gallant and Lee are patriots.

    Like

  3. running with what Dan Cummings said:

    It bugs me no end that that a useless CCGT is being built right next door to a perfectly good 2,000 MW rankine cycle plant that was paid for decades ago. They relocated “Oakville” because they realized it would sound semi-credible if they claimed it was “not needed” in Oakville — so why the heck would it suddenly be needed in Napanee, literally next door to a 2,000 MW plant that just about never gets used.

    Anybody who pooh-poohs Ontario Hydro’s ability to build stuff should visit Lennox — it is pretty impressive. All the more impressive when you consider that the company that built it was also busy building a first-of-a-kind nuclear fleet just down the road (Pickering) and on Lake Huron (Bruce).

    Excellent article, Parker.

    P.S. The IESO classifies Lennox as “gas” — but apparently it mostly runs on Bunker C (when it does run)

    Like

  4. Proud to see someone acknowledge the efforts that so many have made to keep the Ontario grid reliable.
    It was a sad day for all Ontario hydro rstepayers when the Liberal government forced through the Green Energy Act.
    Stan Thayer

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s