Easter Weekend and Wind Generators Gorged on Ontario’s Chocolates

Since the McGuinty led, Ontario Liberal government, passed the Green Energy Act in 2009 handing out lucrative above market contracts, Ontario ratepayers have been saddled with increasing costs. Industrial wind generators tend to produce more energy in the middle of the night and during the Spring and Fall when demand is at its lowest levels.  Easter weekend was atypical!

Average demand during a mid-January or mid-July weekend typically has a daily average of just under 400,000 MWh but in the Spring and Fall Ontario’s weekend demand is normally 100,000 MWh less and the past Easter weekend was no exception.  According to IESO’s Daily Market Summaries for April 10th, 11th and 12th the average daily Ontario demand was 293,400 MWh. If one does the math the hourly average demand over the three days was 12,225 MWh, easily supplied by nuclear which averaged over 10,000 MW over the 72 hours and hydro at an average of less than 4,000 MW.  In one hour when wind generation dropped and demand increased hydro ramped up to over 4,800 MW so together nuclear and hydro could have easily supplied all of our needs even when Ontario demand peaked at 14,174 MW.

Unfortunately, those “must take” contracts granted to wind and solar generators meant IESO were obliged to either accept their generation or pay to curtail what they might generate.  Over those three days, lESO accepted approximately 125,000 MWh of wind generation to the grid and curtailed 84,400 MWh.  The cost of the grid accepted and curtailed wind power works out to a cost of $213.44/MWh or about $26.9 million for unneeded power.

Saying the electricity wind generated was unneeded is not a misnomer, as over those three days we exported 250,000 MWh which was double grid accepted wind.  To make the obvious more obvious IESO sold exports at an average price of $2.71/MWh so if we assume all of the wind generated electricity was exported it would have generated $339 thousand while costing $26.9 million.  Even paying the idling costs (about $10K per month per MW) on the 9,500 MW capacity of gas plants (to back up wind and solar generation) only cost us about $9 million for the three days. The other exported power of 125,000 MWh over those three days cost us the GA (Global Adjustment).  Based on IESO’s first estimate for April the forecast of the GA at $137.07/MWh would mean the additional 125,000 MWh exported; cost ratepayers/taxpayers another $17.1 million.  I am confident we were spilling hydro and paying for it too but IESO don’t disclose that information (transparency is frequently not in their vocabulary).

Summing up  

Adding the costs of wind generation of $26.9 million to the costs of the other exported generation of $17.1 million and deducting the revenue from the sale of the exports of  $600K would see Ontario ratepayers/taxpayers paying $43.4 million over the three days for NOTHING!  Something is inherently wrong with the management of our electricity system despite all of those well-paid public servants operating it.  Thank god it was a cloudy weekend or solar costs would have added to the burden.

Spurious Claims 

While researching the above I was made aware of a letter sent to our esteemed (sarcasm intended) Prime Minister signed by over 250 people  principally associated with universities.  The letter was posted on the website of the National Observer and focused on telling the PM to not execute a “bail-out” for the oil and gas sector.  The following paragraph with its obvious connection to what Ontario has experienced as a result of the Provincial Liberals passing the GEA, displays either their inability to see the obvious or, their complete lack of common sense!  To wit:

 “It inot acceptable to give privileged access to big business associations while excluding representatives from trade unions, universities, municipalities, Indigenous communities and non-profit organizations that work on behalf of the public interest.

Public investment in oil and gas at this time is a highly speculative proposition, and particularly unwise given the urgent need for strategic investments in economic recovery.”

Taxpayers annually hand out hundreds of billions to all of those groups they suggest are “excluded” and the money they receive is generated by the private sector including those in the oil and gas businesses and their supply stream.

Had those professors and reputed experts bothered to examine big business associations such as CanWEA or CanSIA to determine how much they extract from Canadian ratepayers/taxpayers in after-tax dollars they might have been shocked. The Easter weekend in Ontario demonstrates what “privileged access” really looks like!

Looking ahead

Perhaps the time has arrived for Premier Ford to use the Province’s declaration of the “State of Emergency” to reduce payments to wind and solar generators as part of the pandemic exercise.  Unlike so many other companies in Ontario the operators of wind and solar generation have not stepped forward to assist in the fight against Covid-19 and the economic cost to the country. They just want our money.

Time to take away wind and solar generators “privileged access”!

Author: parkergallantenergyperspectivesblog

Retired international banker.

5 thoughts on “Easter Weekend and Wind Generators Gorged on Ontario’s Chocolates”

  1. With so much of the public’s attention diverted by the effects of the pandemic, it may be difficult to gain the attention of readers in Ontario for significant and frankly shocking reports like this one. There may come a time when the consequences of the pandemic take a turn that the wind and solar industry and university professors will not welcome. Consider, for both the federal and Ontario governments, the fiscal impacts of spending almost $200 billion to partially offset the effects of shutting the economy down for months plus the loss in corporate tax, personal tax, and HST revenues due to the shut-downs. Governments will be left with immense debts and carrying costs that will force unprecedented increases in taxes and decreases in expenditures. Will the privileged access for wind and solar survive the winnowing that must come?

    Liked by 1 person

    1. With the emergency measures Ford has put in place, it includes reduced hydro rates … I hope Parker will do a write up on those costs and how far down the road they will be pushed.

      We are at the point with this plandemic that a 120% tax bracket won’t cover the interest payments on our debt, never mind principal.

      Like

  2. And how will the massive debt and carrying costs be paid for if not through taxes/royalties and employment income tax generated from “traditional” resource and energy projects? I don’t foresee a lot of government revenue through money losing wind & solar. Maybe they will find a way to tax all the hot air being expelled by the renewable energy advocates? Better yet, how about taxing or redirecting contributions from foreign ENGO’s that are actively sabotaging Canada’s resource and energy sectors?

    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 )

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

%d bloggers like this: