The following is a copy of the e-mail I sent to Ontario Minister of Energy, Todd Smith October 4, 2022, seeking information related to the captioned press release. If, and when I receive a response, I will post it!
Your recent press release starts with:
“The Ontario government is increasing funding for the province’s energy-efficiency programs by $342 million, bringing the total investment to more than $1 billion over the current four-year electricity conservation framework.“
I have read this over several times and fail to find anything other than the following that suggests rates will decline:
“This funding will support a new voluntary Residential Demand Response Program with an incentive for homes with an existing central air conditioning or heat pump unit and smart thermostat to help lower energy use at peak times and lower bills.“
So turning up our air conditioners and turning down our electric furnaces (etc.) along with walking around in the dark will reputedly deliver these savings ($650 million) according to the following in your press release!
“By 2025, this expansion of energy-efficiency programs will help deliver enough annual electricity savings to power approximately 130,000 homes every year and reduce costs for consumers by over $650 million“
The release also says:
“Our government’s success in driving electrification of industry and transportation and strong economic growth is increasing electricity demand“
So demand will supposedly increase with the foregoing “electrification of industry and transportation” but by using less we Households “reputedly” will see a reduction in costs!
Am I missing something or will this annual “$650 million” of “reduced costs” be allocated to taxpayers or has your ministry suddenly discovered some cheap source of electricity generation via new technology or some “net-zero” imports from our neighbours for a cheap price?
As my local MPP and a taxpayer I sure would appreciate a little clarification!
A concerned resident of your constituency”
Response from Ontario Ministry of Energy:
|“Dodsworth, Michael (ENERGY) <Michael.Dodsworth@ontario.ca>|
|to me, Todd|
Good morning Parker,
Minister Smith forwarded me your message which I am pleased to respond to on his behalf.
Energy efficiency programming is a fast and cost effective measure that can save families money and reduce demand for electricity from the grid. These programs, which include supports for energy efficiency retrofits, Distributed Energy Resources and the Residential Demand Response Program you referenced, all will mean reductions in demand for electricity.
These programs are a complement to the government’s comprehensive plan for addressing increased demand for power due to economic growth and electrification, including ongoing capacity resource procurements, rather than an alternative.
By reducing demand and in particular peak demand, we can offset the need for some new electricity generation resources. This will mean a cost reduction for ratepayers and a net system benefit of ~$300 million (the cost reduction of $650 million less the increased investment of $342 million).
I hope this addresses your question satisfactorily.
My response to the Ministry:
Thank you for your response but I fail to see how it will, as you state: “mean a cost reduction for ratepayers and a net system benefit of ~$300 million”!
Let’s examine your response bit by bit!
“Energy efficiency (1.) programming is a fast and cost effective measure that can save families money and reduce demand for electricity from the grid. These programs, which include supports for energy efficiency retrofits, (1.) Distributed Energy Resources (2.) and the Residential Demand Response Program (3.) you referenced, all will mean reductions in demand for electricity.”
1.Your claim on how “energy efficiency” will save families money ignores the fact “supports” for the programs are provided by taxpayer funds. I would guess ratepayers without the ability to provide the additional funds from those taxpayers will be unable to afford their portion of the costs. I would point out most ratepayers are also taxpayers so those unable to come up with the additional funds will be unable to invest in those “energy efficiency retrofits”
2.Distributed Energy Resources are those such as: “rooftop” or “ground mounted” solar, “wind turbines” “battery storage”, “small hydro” etc. and are contracted at rates well in excess of those of the likes of OPG, Bruce Power, etc. as they exist outside the purview of the OEB!
3.From my personal observation point this is the only one not supported by other ratepayers or taxpayers however the “installed cost” of a “smart meter” is a higher cost than an analog meter and the costs of those are spread throughout all ratepayers. It is also a fact smart meters have a shorter lifespan than an analog meter meaning they must be replaced sooner adding to the costs of this endeavour.
“These programs are a complement to the government’s comprehensive plan for addressing increased demand for power due to economic growth and electrification( 4.), including ongoing capacity resource procurements, rather than an alternative.”
4.While you and Minister Smith reference “electrification” and the OCP’s full support of the concept it appears the cost of that objective and the new capacity required by Ontario to meet that target have not had any serious focus. To look at just one study; NREL, a national laboratory of the US Department of Energy, in their study stated “Widespread electrification increases 2050 U.S. electricity consumption by 20% and 38% in the medium and high adoption scenarios, respectively and relative to the reference.” For Ontario let’s focus on the “medium” scenario! At the end of 2021 IESO reported total grid connected capacity in Ontario was 38,079 MW. If we assume Pickering Nuclear gets approval to extend its life that reflects the need to add 7,600 MW of NEW capacity (20% of 2021 capacity) or 10,600 MW (28%) should Pickering renewal not receive the green light! Please note the study states “consumption” which means both wind and solar plus storage would need to be at least triple that capacity level!
“By reducing demand and in particular peak demand (5.), we can offset the need for some new electricity generation resources. This will mean a cost reduction (5.) for ratepayers and a net system benefit of ~$300 million (the cost reduction of $650 million less the increased investment of $342 million).”
5.Should we assume a cost study has not been done based on the claim there will be a “cost reduction for ratepayers” or is this a false claim? Many of us ratepayers lived through the McGuinty/Wynne days and constantly were fed similar stories from them related to the GEA. Under pressure from the largest manufacturing companies in the province they reacted to the false message and came up with the ICI (Industrial Conservation Initiative) which allowed those companies to benefit from significant cost reductions by reducing demand during just five (5) annual “peak demand” periods which still exists today. The incentive was so great those companies invested heavily in a variety of gas generators to take advantage of the incentive. It should come as no surprise, due to this push by Ontario and many other jurisdictions around the world opining for “net-zero” that manufacturers of those generators have benefited greatly as a quote from a recent article suggests: “The global gas generator sets market is expected to grow from $7.82 billion in 2021 to $8.3 billion in 2022 at a compound annual growth rate (CAGR) of 6.48%. The gas generator sets market is expected to grow to $11.15 billion in 2026 at a compound annual growth rate (CAGR) of 7.57%.” It is equally important that you and Minister Smith should be aware that many stand alone administered “public sector” corporations such as colleges, universities, etc. are now ICI beneficiaries which equates to an indirect and hidden form of taxation.
In summary, I and my blog followers, would love to see some proof the recent moves by the Ministry of Energy (reputedly endorsed by IESO) will achieve that “net system benefit of $300 million” you allude to in your response!
Looking forward to your response,
Parker Gallant Energy Perspectives