Comparing Ontario Covid-19 Lockdowns in Reducing Electricity Demand

Earlier this year IESO released their 2020 stats and noted Ontario’s electricity demand fell 2.1% (down 2.9 terawatt hours [TWh]) from 2019 or about what 325,000 average households would consume in a year.

In 2020 the first full lockdowns in Ontario started in late March and basically stayed in place until late June/early July when some relief was allowed.  The current year’s lockdown looks very similar!  So, did the 2021 lockdowns result in further consumption reductions compared to the same quarter in 2020?

As it turns out consumption in the current April, May, June quarter saw a jump of 1.4 TWh compared to the same three months of 2020. That 1.4 TWh increase (up 4.7%) represents what 625.000 average Ontario households would consume in three months.  Ontario’s ratepayers consumed 29.724 TWh in the three months of 2020 and in 2021 consumption jumped to 31.130 TWh.

The GA (global adjustment) for 2021 totaled $2.687 billion and adding the average of the HOEP (hourly Ontario energy price) of $15.50/MWh for the three months brings the total cost to Ontario’s ratepayers and taxpayers (taxpayers are now picking up a large portion of the electricity costs) to $3.169,5 billion! The latter total indicates an average cost of approximately 10.2 cents/kWh (kilowatt hour) with the math simply being: $3.169,5 billion divided by consumption of 31.130 TWh.

The GA for 2020 was considerably higher as the Ford government capped the GA at $115/MWh (megawatt hour) due to the concern it would spike, so it totaled $3.825,7 billion and coupled with the average HOEP (average $8.10/MWh for the three months) brought the total cost to $4.066,4 billion.  That means the cost per kWh in 2020 for the same three months looks to be about 13.7 cents/kWh.

So, one should wonder, why the drop in average costs if consumption increased 4.7%?  

Well as it turns out our net exports (exports minus imports) declined 2.9 TWh so in 2021 that decline saved Ontarians about $425 million for those three months as we didn’t have to eat the GA of $115/MWh and the average HOEP (the sale price) was higher (up $7.40/MWh) so in 2021 we got a little more for each MWh we sold.  Additionally, curtailed wind declined by 183K MWh* saving us another $22 million.  I suspect we also didn’t spill as much hydro or steam-off nuclear which would also have reduced 2021 costs but that information is not disclosed as yet.  Less solar generation in 2021 may also have played a role at reducing costs.

It becomes obvious Ontario’s grid; supplied principally with nuclear and hydro supplemented by gas generation would produce lower costs. For all of 2020 nuclear and hydro supplied 94.3% of Ontario demand and cheap and reliable gas easily supplied the balance.  The intermittent and unreliable supply of wind and solar at the exorbitant contracted 20-year rates does nothing to reduce emissions while burdening ratepayers and taxpayers with much higher costs. 

The three-month comparison highlights the mess created by the previous Liberal Government(s) under the leadership of the McGuinty/Wynne terms as Premiers of the Province and their enactment of the Green Energy Act coupled with those contracts signed with wind and solar generators during their time in power.

*Thanks to Scott Luft for tracking industrial wind generation and curtailment monthly.

Author: parkergallantenergyperspectivesblog

Retired international banker.

8 thoughts on “Comparing Ontario Covid-19 Lockdowns in Reducing Electricity Demand”

  1. Parker,

    The OEB conducted a consultation on the impact of COVID-19 on Ontario electricity distributors under the docket EB-2020-0133. You may be interested in reading the OEB final report of the consultation and the submissions.

    https://www.rds.oeb.ca/CMWebDrawer/Record?q=casenumber:EB-2020-0133&sortBy=recRegisteredOn-&pageSize=400#form1

    The position of my client, Energy Probe, is that ratepayers should not be required to compensate electricity distributors for any incremental costs or lost revenues due to COVID-19.

    Tom Ladanyi
    Consultant representing Energy Probe

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  2. Is it possible that curtailment could be incrementally continued until large scale renewables are ‘mothballed’?

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      1. Many of the wind generators in Ontario were sold by the original owners to the Canada Pension Plan. So you and I are the indirect owners whether we like it or not. It is unlikely that the government of Ontario would cancel any contracts with CPP owned wind generators.

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  3. Tom Ladanyi, have you read this article?
    https://stopthesethings.com/2017/03/08/james-delingpole-dumps-on-the-great-wind-power-fraud/

    “More and more, renewables are being recognised as an environmental disaster, as a charter for troughers and rent-seekers, as a human health hazard, and as a serious threat to economic stability.”

    “As you know I’m planning to put my money where my mouth is in an investment fund – Cool Futures – which plans to bet against renewables.”

    Why would Canadians be willing to watch their CPP investments continue to be held in ‘stranded assets’?

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    1. I have seen it. Wind turbines are probably producing a good return for CPP while they last. However, wind turbines only last about 20 years. Many don’t even last that long. Original owners sold many 10 year old turbines to CPP. Now CPP will be responsible for the dismantling and disposal of old turbines. Unlike the fund for nuclear liabilities that OPG has and that Ontario ratepayers have been paying into for years, there is no fund for the disposal of old wind turbine waste (or solar panel waste). If CPP pays for disposal, it will be paid for by pensioners across Canada. If Ontario eventually absorbs the cost, it will be paid for by Ontario taxpayers or electricity ratepayers. One way or another you and I will have to pay for it. Most people don’t understand that and even if they did, there is nothing they can do about it.

      Liked by 1 person

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