Another Weekend Proves Wind and Solar Drive up Electricity Costs

A post a month ago focused on the $50 million excess cost of renewable energy (wind and solar) on the Victoria Day weekend. Now with summer finally arriving and warmer temperatures, it is perhaps worth comparing the past weekend to that one by examining the performance of wind and solar and its costs.

The inevitable happens in Ontario as demand for electricity during Ontario’s mild spring and fall seasons drops from both winter and summer demand.  As noted in the earlier article average Ontario demand over the three days of the Victoria weekend was only 294,668 MWh whereas over the past weekend (including Friday June 19th) average demand was 401,336 MWh an increase of 36.2%. Demand obviously increases as warmer weather arrives and air conditioners are turned on.  This has been augmented by government and other employees working from home due to the lock-down associated with Covid-19.

The Victoria Day weekend saw wind delivering almost 133,000 MWh (plus 59,100 MWh curtailed) and solar 36,000 MWh causing net exports to soar to 264,000 MWh principally due to their excess generation.

This past weekend net exports were 84,500 MWh as wind produced only 29,500 MWh (9.1% of capacity) and solar 58,200 MWh (31% of capacity).  Increased demand coupled with the drop in wind and solar (combined) generation not only caused our net exports to fall but also resulted in the HOEP (market price) increasing from $1.16/MWh to $17.34/MWh.   What the latter means; we recovered $1.5 million more of our costs despite exporting much less (179,500 MWh less) this past weekend demonstrating wind’s habit of generating power when it’s not needed.

Ontario’s peak demand hour during this recent weekend appears to have occurred June 20th at hour 18 when it reached 19,997 MWh.  During that hour wind generated 226 MWh and solar 124 MWh or 1.7% of demand demonstrating their inability to deliver power when needed.  Needless to say; nuclear, hydro and gas delivered what we needed!

So, the inevitable question is; did increased consumption drive up our average costs as one would expect?  One would assume it would because the average price paid for solar is $448/MWh so the 58,200 MWh delivered cost Ontario ratepayers approximately $26 million and the 29,500 MWh of wind ($135/MWh) added $4 million. That brings the two generation source’s costs to $30 million over the three days and allowing for the recovery of the $1.5 million for their sale means a net cost of $28.5* million or $21.5 million less than the Victoria Day weekend. The foregoing occurred even though consumption was up 36%. Despite the reduction in costs for the recent weekend it still amounts to $9.5 million per day and extrapolated over a year would amount to $3.5 billion which coincidentally is close to what wind and solar’s costs were in 2019 as outlined in a recent post.

The conclusion:

Using more power costs less, when wind and solar generation falls!  That implies wind and solar** should be completely eliminated due to their intermittent and unreliable generation.

*The 87,700 MWh delivered by wind and solar collectively cost ratepayers 324.97/MWh or 32.5cents/kWh.

** They may work for off-grid locations subject to storage availability.

Author: parkergallantenergyperspectivesblog

Retired international banker.

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