The recent two days in Ontario brought Spring showers and lots of IWT (industrial wind turbine) generation as the wind was blowing throughout the province. Based on IESO data it also resulted in them apparently curtailing some of its unneeded generation.
On April 22nd IESO forecast those IWT would generate 46,220 MW (39% of capacity) but curtailed 4,464 MW. Then on April 23rd IESO forecast they would generate 91,540 MW (77.8% of capacity) but again curtailed 10,288 MW. Those “first-to-the-grid” contacts resulted in the owners of the IWT receiving $135/MWh for accepted generation and $120/MWh for what was curtailed!
Over the same two days IESO data disclosed Ontario’s net-exports to our neighbours in Quebec, Michigan and New York were 90,293 MW or 73.4% of what they accepted into the grid from IWT generation strongly suggesting it wasn’t needed. IESO sold that power at an average price of $16.83/MWh on the 22nd and $18.83/MWh on the 24th so we ratepayers wound up paying $512.21/MWh or 51.2 cents/kWh for the 32,735 MW that was apparently required in Ontario to keep the grid supplied with what was in demand. The total costs of the IWT generation coupled with the curtailment costs were $18,378,020 and we were paid $1,611,881 for the 90,293 MW they sold over the intertie lines resulting in the foregoing cost of $512.21/MWh for the 32,735 MW used in the Ontario grid and a net cost to ratepayers and taxpayers of $16,767,139!
The owners of the IWT were surely rubbing their hands in glee while Ontario taxpayers were forced to pick up $7.3 billion in costs associated with “Cost-Relief Programs” caused by the intermittent and unreliable supply of electricity from principally those IWT and to a lesser degree solar generation sources!
California
In California a recent article noted “In 2024, residential PV (Photovoltaic) will shift nearly $4 billion onto others’ bills, more than double the 2020 amount.“
What the foregoing statement implies is the plentiful solar panels sitting on residential roofs in California contribute much less towards the “fixed costs” which are detailed as: “vegetation management, grid hardening, distribution line undergrounding, EV charging stations, subsidies for low income customers, energy efficiency programs, and the poles and wires that we all rely on whether we are taking electricity off the grid or putting it onto the grid from our rooftop PV systems.“ The effect is a layering of those costs onto all the other ratepayers without rooftop solar.
To put the foregoing into perspective the article goes on to state: “In 2014, the homes served by these three IOUs (Investor-owned utilities) got less than 2% of their electricity off their roofs. Today they get about 20%. As fewer kWhs are sold from the grid, retail rates must rise even more in order to recover the fixed costs of the system.“ The story goes on to note California’s electricity rates are more than double the national average in the U.S.
The following chart from the article shows the steep climb in rooftop solar in the state:
Another article related to California basically aligns with Ontario’s IWT issues due to lower demand during the Spring noting: “Solar energy waste is most prevalent in the spring when there is less need for heating and cooling. Use is high in the morning and evening but drastically reduces during the day. Therefore, the National Renewable Energy Laboratory found that with a high demand of solar power on an electricity grid, the netload of renewable energy takes on a “U” shape. However, even when demand is low, solar panels continue to absorb energy that goes to waste. In 2022, the state wasted 2.4 million megawatt-hours of electricity, and 95% of that was solar. Throwing away free power raises electricity prices.“
Conclusion
The foregoing actually presents proof that politicians in both California and Ontario who pushed the renewable energy agenda have been responsible for driving up what we all consider a basic necessity of life. They failed to see the future implications of the transition to “renewable energy” in an effort to reputedly save the world from “climate change”!
The time has come for politicians to appreciate their inability to predict the future and stick to managing our bureaucracies in a way that will ensure “energy security” without inflation driven concepts sold to them by the eco-warriors!
Should one scroll down to page 366 in the recently released Federal Budget under the highlighted “Total tax revenues” it announces as one source for the 2024-2025 year, they anticipate collecting $14.9 billion!They clearly state where that revenue is generated from and destined for in the future: “Pollution pricing proceeds to be returned to Canadians“!
It represents only 3.3% of the forecasted tax revenues yet it is still significant in that it is approximately $530.00 for each and every taxpayer but only about 50% of what they are granting to VW and Stellantis to manufacture EV!
So we 28 million taxpayers should wonder: Where are those recycled tax dollars coming from?
The Federal Carbon Charge
As it turns out it will be us taxpayers (residential and industrial) who are providing those “Pollution pricing proceeds” that supposedly will be returned to us, or will they?
Examining the Federal Government’s documents on the “Circular Economy” as it appears to apply, is summed up by them as follows:
“The federal carbon pollution pricing system has two parts: a regulatory charge on fossil fuels such as gasoline and natural gas, known as the fuel charge, and a performance‑based system for industries, known as the Output-Based Pricing System (OBPS). The federal system can apply in whole or in part in a jurisdiction.
Canada also designed its system to be revenue neutral: where the federal system is applied, all direct proceeds from the federal fuel charge and federal OBPS are returned to the province or territory where they were collected.“
Examining the Federal Carbon Charge (FCC) for Natural Gas
The government has decreed they are leveling a charge on natural gas, so it is worthwhile to note that according to the CGA (Canadian Gas Association) what Canada’s GHG emissions are from natural gas. The CGA states: “In 2020 the transmission, distribution and storage of natural gas produced around 10 Mt CO2eq emissions (Canada’s total GHG emissions were 672 Mt CO2eq) ie: 1.4% of emissions came from natural gas! We should wonder how those emissions if eliminated would be even noticeable as Canada’s total emissions on a global scale are only 1.5%.
The CGA also provide individual statistics and note in “2021the average residential natural gas customer used 2,385 cubic metres1 of natural gas. Annual residential gas use varies across Canada from 1,900 to 3,100 cubic metres per year, depending on the climate in the region.”
The FCC as of April 1st, 2024, increased to 15.3 cents per cubic metre so if the average consumption remains the same in the current year the natural gas bill to heat your household will include $364 of those FCC costs!
The CGA report the total number of households who heat their homes with natural gas in Canada was over 6.8 million in the 2021-2022 season. What the CGA basically state is; all households with natural gas to heat their homes annually consume 16,218 million cubic metres of that fossil fuel source. The Federal government on the other hand suggest natural gas can be replaced with either expensive heat pumps using electricity from a fossil free grid at less cost or fuel your electric furnace from those same electricity grids!
If one does the simple math by multiplying 15.3 cents per cubic metre of natural gas consumed by those 6.8 million households the revenue from that charge represents $2.47 billion or 16.6% of the $14.9 billion they estimate as tax revenue associated with the “Pollution pricing proceeds to be returned to Canadians”!
Industrial Gas Costs
The Federal Fuel Charge Rates also apply to natural gas used for industrial purposes and if combined with hydrogen it is considered “non-marketable natural gas”! The FCC has been set at an even higher rate of 20.6 cents per cubic metre for it, in the 2024-2025 year but no consumption disclosures are available for the latter.
Looking at the StatsCAN data from June 2023 it notes; “In December 2022, natural gas deliveries to industrial consumers in Canada totalled about 8.3 billion cubic metres, with over 70% going to Alberta. The industrial sector in Alberta—the single largest consumer of natural gas in the country—received a record 5.8 billion cubic metres in December, the majority of which was used as fuel by the energy producing sector.“
As neither StatsCan nor the CER disclose what the total “non-marketable natural gas” was we will use the above noted 15.3cents per cubic metre to calculate the foregoing. It suggests those 8.3 billion cubic metres would have generated revenue of $127 million for the month of December 2022 and perhaps as much as $1.5 billion for the full year 2024-2025 at those rates if those volumes are constant! The $1.5 billion would represent 10.1% of the forecasted $14.9 billion to the “Pollution pricing proceeds to be returned to Canadians”. Now try to imagine how that $1.5 billion in FCC costs would impact what those “industries” (including farmers, etc.) are producing by driving up their costs.
The foregoing suggests the combined FCC (Federal Carbon Costs) associated with Canada’s generation and consumption of natural gas would collectively represent about 26.7% or $3.975 billion of the $14.9 billion contained in the budget. This works out to around $141.00 per taxpayer so we should assume the shortfall in the budget projections will all come from the FCC applied to the use of other fossil fuels such as gasoline, diesel, propane, etc. fuels!
The price per metric ton of emissions from the natural gas sector for 2024-2025 looks to average around $39.75 per ton but its impact will drive up the price of everything associated with it and have only a very minor (immeasurable) impact on reducing Canada’s emissions!
Maybe PM Trudeau and NDP Leader Singh should get busy and plant some of those two billion trees he promised Greta Thunberg to absorb those GHG and save us Canadian households from this cost-of-living increase and avoid the “circular economy” designed by the WEF!
The 3.8 million households in Ontario using natural gas as a home heating source have all, presumably, recently received their March 2024 bills from Enbridge and examining them demonstrates how it is becoming harder for those living on low or fixed incomes to heat their homes.
As of April 1st those households, suffering from rising costs, are obliged to pay even more to heat their homes! When they get their next bill, it will be higher if they consume the same amount of gas, but it will have nothing to do with an increase in the cost of the natural gas itself.
Layering Taxes
Reviewing the bill we received, disclosed the cost of the gas was 12.3695 cents/m3 while the carbon tax levied was 12.9 cents/m3! To top things off the HST (harmonized sales tax) added another 7.2 cents/m3!
On a combined basis the carbon tax plus the HST was 20.1 cents/m3! The foregoing suggests trying to stay warm in our cold winters should not be tolerated and therefore our Federal and Provincial governments seem intent on classifying it as a “sin tax”!
Looking at specific details of the bill discloses the “carbon tax” referenced as “The Federal Carbon Charge” (FCC) is mixed in with the natural gas costs, delivery costs, transportation costs, etc. The HST which is 13% in Ontario is levied below the line after all the other above costs including the “carbon tax”, aka the FCC! The “below the line” HST therefore applies to the Federal “carbon tax” meaning it is a “tax on a tax”!
The foregoing made me curious about the “sin tax” and a quick calculation discerned my bill would have been over 32% lower without those two taxes.
The carbon tax increased to 15.3 cents/m3 as of April 1, 2024, adding 18.6% to the natural gas “carbon tax” and then applying the HST brings the total costs of our duplicate bill with those “sin taxes” to over 36% of the total costs of the bill!
More Costs on the Way
Four years from April 1st, 2024, the carbon tax will have doubled meaning; when combined with the HST in Ontario, taxes will have reached 72% of the bill to heat natural gas fired homes in the province should all other costs on the bill remain where they are today.
Conclusion: Increased Energy Poverty on the Horizon
Back in 2019 it was estimated 1,138.000 Ontario households were experiencing energy poverty based on a 2016 census but there were no specifics as to whether that was due to high costs of electricity or natural gas as well as other heating sources such as furnace oil or propane. The 2019 study defined energy poverty as follows: “Energy poverty is qualitatively defined as the experience of households and communities that struggle with meeting their home energy needs. Home energy needs typically include electricity and home heating fuels.“ The study went on to state “energy poverty” kicked in when spending reached 6% of after-tax income. The 2016 census indicated at that time there were 5,169,000 households in the province which means about 22% of them were experiencing “energy poverty”!
Statistics for 2021 indicate total households in Ontario had grown to 5,491,000 so we should expect those living in “energy poverty” have increased; due to both the number of households and the increased costs of energy which now includes the “carbon tax” along with the HST being applied on the latter.
With the “carbon tax” continuing its climb and the “transition” of the electricity sector gaining traction it is obvious we will undoubtedly see the 22% experiencing “energy poverty” in 2016 climb to levels well over that in the next four years.
Conclusion:
They told us the “Energy Transition” was happening! They just didn’t tell us they meant its purpose was to transition us into poverty!
PS: The application of the FCC is occurring in most provincial jurisdictions meaning “energy poverty” increases will be nationwide!
April 14th and 15th arrived and as frequently happens in the spring, Ontario’s peak demand was low reaching only 15,757 MW on the 14th and 15,971 MW on the 15th with both occurring at hour 20 (hour ending at 8PM).
While those IWT (industrial wind turbines) were generating energy it wasn’t particularly high; nevertheless, due to low demand, it wasn’t needed but due to their contracts giving them “first to the grid” rights, all of what they generated was accepted. On the 14th they generated 35,168 MW (29.9% of capacity) and on the 15th they produced only 17,690 MW (15% of capacity) but absolutely none of it appeared to be needed based on what IESO were selling off to our neighbours in Michigan, New York and Quebec.
At this particular time a large portion of our nuclear plants are down for refurbishment (about 5,700 MW) with several more of them still in operation scheduled for future refurbishment. In addition to the foregoing a Ministry of Energy press release dated April 16th announced a “plan to refurbish its hydroelectric stations in the Niagara region, including the Sir Adam Beck Complex at Niagara Falls.“ The $1 billion refurbishment will commence in 2025 and is expected to be completed in 15 years and add 50 MW of capacity.
While all those refurbishment projects are happening; IESO’s Pathways to Decarbonization forecasts by 2050, we will have both an incredible amount of nuclear as well as 15,000 MW of hydrogen generation (currently an unproven source of low cost power) as one can see in the following chart. One should also note no natural gas plants will be in existence at that time! The chart also anticipates lots more IWT capacity will be added to the grid! We ratepayers must presume the “Demand Response” capacity will keep the “grid stable” while industrial companies will be severely impacted having to shut down on numerous occasions to contain blackouts!
As and when 2050 arrives we should also anticipate (laughingly) IESO’s plan is those IWT will have reached the stage where they will generate power only when needed unlike the recent two days which demonstrated their intermittent and unreliable nature.
The total generation for both of the two April days was unneeded as IESO were busy exporting the surplus power to our neighbours at an average HOEP price of $19.17/MWh on the 14th and $27.41/MWh on the 15th while they were paid $135/MWh! The net intertie exports (exports minus imports) on the 14th (39,836 MWh) and the 15th (51,925 MWh) both exceeded what those IWT generated meaning it was surplus to Ontario’s demand.
The net result of the foregoing was a cost to us ratepayers and taxpayers of over $6 million for those two days. We should expect that cost will surely rise should the Province of Ontario continue to believe we must “decarbonize” to save the planet from “climate change” resulting in an unreliable grid and further creation of “energy poverty” as all those EV and heat pumps gobble up whatever remaining dependable power is available in the future!
Why isn’t the Ford led provincial government fighting back on the inane push of the Federal led, Trudeau government to continue on the “net-zero” target and recognize what we are attempting in Ontario will not change the climate in any way!
Wow, the pushback on the “net-zero” initiative seems to be gaining speed and failures of investments made to move in that direction are becoming more frequent! These are a few to catch my eye in the recent period! Before highlighting the failures, I would invite you to view the following chart from “A joint report from Northwood University’s McNair Center for the Advancement of Free Enterprise and Entrepreneurship and the Mackinac Center for Public Policy” and how it grades US Energy Production! Please note it gives a “failing grade” to wind and solar as well as geothermal which is the reputed answer to replacing our furnaces with heat pumps! The full report can be found here: MCPP-NWU_Energy_Report_Card.pdf (mackinac.org)
Biomass Industry
Hmm, could it be one of those presumed “clean” energy classifications is getting pushback and causing the industry’s biggest companies to declare bankruptcy? One such classification is biomass which saw conversion of our coal plants to biomass during the McGuinty/Wynne era. These days biomass has angered some of the eco-warrior crowd as noted in a very recent article co-written by an eco-warrior from the UK and one from BC. The article is critical of biomass pellets provided by a company in B.C. to Drax who are a UK electricity generator with what is probably the largest biomass generation in the world. The amusing thing about this is the fact the biomass used by Drax comes from Canada but because it is used in the UK it is considered emissions free as it is from another country even through the article accuses Drax of being the largest emitter of CO 2 in the UK!
While BC is presumably benefiting from the jobs created through the production of biomass pellets the authors are upset because some of those pellets could come from old-growth forests!
While that is upsetting the eco-warriors another major incident hit the news as Enviva Inc. of Maryland, the world’s largest manufacturer of biomass pellets has declared bankruptcy and the eco-warriors are concerned President Biden may bail them out using “renewable energy credits”. Now, that would be ironic as presumably many of the EU countries Enviva provide with biomass for their generating units would be treating the local electricity generators as providing emissions free power! Could be some “double counting” going on now an in the future!
While those international biomass events are proceeding, here at home, back in February 2023, our Federal Minister of Natural Resources, Jonathan Wilkinson was handing out $35 million tax dollars to the 400 people living at Whitesand First Nation so they can build a 6.5 MW biomass energy plant and use “locally-sourced wood waste” for its generation.
The Trudeau led Government Picking Winners
A recent article about Taiga Motors of Quebec noted they suspended production while laying off 70 workers that had been manufacturing electric snowmobiles and electric watercraft. Their year-end statements noted their net loss for 2023 was $72.5 million versus a loss of $59,5 million in 2022 and their net deficit stands at $812,477! The foregoing occurred despite the fact the Quebec government gave them a $30 million loan while the Trudeau led government provided grants of almost $10.4 million. It is worth noting Taiga’s stock price back in April 2021 was $12.52 per share and now sits at 20 cents per share!
Trudeau’s Defence Policy and Spending
There have been many recent articles noting Canada’s spending on defence being well off the mark in respect to annual spending of 2% of our budget as agreed to in the North Atlantic Treaty Alliance (NATO) but a recent article suggests we have stepped up somewhat but, not in a meaningful way, as Canada will still fall well short of the target. Perhaps the reason why we are falling behind is because Trudeau is doing some spending behind doors as an announcement from Ameresco’s Canadian subsidiary suggests. They have been awarded a contract for efficiency upgrades and emissions reductions at the Canadian Forces Base in Edmonton! The contract is for $45.3 million and is apparently aimed at cutting “energy costs” by $2 million per year! Strangely enough the contract was awarded to the subsidiary of a U.S. company but it’s not clear if it was due to a competitive bidding process. The strange part of this award is that the company will be supplied with a $100 million loan by the Trudeau created CIF (Canada Infrastructure Bank)! One would think a big US company like Ameresco with revenues of U.S. $1.374 billion and net profit of 62.5 million would have access to credit from our many big financial institutions but perhaps the CIF are offering them a much lower interest rate or is there more to this than meets the eye? Will we ever know the real reason?
Trudeau is being Laughed at From Afar
Australia’s Sky news has a “Your Weekly Dose of Climate Insanity” which is a relatively short segment and a recent one highlighted “laughable Justin Trudeau on Climate Change” which is well worth the six and a half minutes of the episode. It interviews a logging truck operator who appears to be in British Columbia about the concept of electrification of his truck and he nails it. The knowledgeable individuals in the three members of the video dispel the whole “electrification” concept and the session finishes with a recent Trudeau video announcing his $8.4 million handout for the “global south” to better understand how “climate change” interacts with democratic decline! The three then have a laugh and analyze where we are heading! Well worth the time to watch!
West Virginia Fights Back
West Virginia is a major mining and manufacturing state producing coal, natural gas and petroleum and using those products to manufacture adhesives, plastics, pharmaceuticals and industrial chemicals many of which use the foregoing mined materials.
As a result of their involvement in those “fossil fuel” sectors their basic economy is being greatly affected by the Biden Administrations push to achieve the “net-zero” target in response to the eco-warriors influence on politicians. In an effort to prevent the obvious potential collapse of their economy West Virginia have in the recent past (2022), listed the restricted institutions who have; “publicly stated they will refuse, terminate or limit doing business with coal, oil or natural gas companies without a reasonable business purpose”.
There are nine financial services companies on the state’s list since 2022 including BlackRock Inc., Goldman Sachs Group Inc., JPMorgan, Chase & Co., Morgan Stanley and Wells Fargo & Co. Those institutions are restricted from any financial dealings with the state. They recently added four more financial institutions to the boycott list “based on a review of each institution’s environmental, social and governance policies and public statements“ ie; ESG, which are Citigroup Inc., Toronto-Dominion Bank, Northern Trust Corp., and HSBC Holdings PLC. The state’s treasurer Riley Moore said, “We cannot allow institutions that seek to destroy our state’s critical energy industries and the economic activity they generate to also profit from handling the very taxpayer dollars they seek to diminish,” Moore, a Republican, said in the statement.“
Perhaps what West Virginia is doing might inspire a few of Canada’s Provincial Premier’s to embark on a similar boycott! A boycott such as the foregoing might incentivize our financial institutions to pressure the Trudeau Liberal Party to toss their “net-zero”, “decarbonization” and “full electrification” aspirations down the drain to prevent Canada’s further falling economic status that will result in the country becoming Canezuela!
Conclusion
As noted from the above it sure appears the “bloom is slowly falling off the rose” and politicians cannot be trusted as they appear to favour Orwell’s 1984 to be the destination, they are taking us to.
The current group of politicians (Trudeau and his minions) currently in charge of ruining (oops, should be “running”) Canada, fail miserably at every turn believing renewable energy such as wind and solar is how we eliminate CO 2, a plant food, while also thinking they can pick winning industries with our tax dollars that fail at every turn.
Peak Demand on April 6th was low reaching only 15,491 MW at Hour 20 (ending at 8 PM) and it was the same day Bruce Nuclear’s G-1 re-entered service bringing its baseload power of over 800 MW back in service. The combination of its re-entry and low peak demand didn’t stop the wind from blowing or the sun shining so we Ontario ratepayers were burdened with the cost of both as they cranked out unneeded generation.
Those grid connected IWT (industrial wind turbines) produced 38,801 MWh which was 33% of their capacity and the grid connected solar panels generated 3,351 MWh or 31.2% of their rated capacity. Based on IESO intertie data (exports minus imports) we Ontario ratepayers didn’t need any of their generation but with those “first-to-the-grid” contracted rights we were obligated to accept them.
IESO reported net exports over the 24 hours of the day amounted to 44,563 MW which was 2,427 MW more than the combination of wind and solar generation demonstrating we didn’t need it! Additionally, it also appears IESO were also instructing OPG to spill hydro as is commonplace in the Spring as for several hours’ hydro was generating less than 4000 MW!
So we should wonder, how much did that cost us ratepayers?
Not including the spilled hydro costs, IESO average HOEP suggests the average price we received over the 24 hours for the intertie sales was a low (when compared to the $135/MWh we pay for IWT generation and the $440/MWh paid for solar) 25.06/MWh so sale of the IWT and solar generation, if all exported, earned a miserly $1,055,928 versus their total cost of $6,705,535 leaving us with the daily tab of $5,649,507 for absolutely NOTHING!
Once again, thanks to those ludicrous contracts signed under the then ruling Ontario Liberal Party headed by McGuinty and Wynne, we have been forced to pay up for power that went to Quebec, New York and Michigan.
Conclusion
Absolutely no benefit for Ontarians but our intertie neighbours, hopefully appreciate our generosity!
Those IWT in the recent two days, demonstrated their innate ability to generate excess power when it’s unneeded and then to reverse course and be absent when it is needed.
On April 2nd they were humming all day generating 93,012 MWh which was 79.1% of their capacity and IESO were busy selling much of it off to our neighbours in Michigan, Quebec and New York at an average price of $29.27/MWh. In total IESO’s intertie data (net-exports) showed 55,013 MW weren’t required to keep the lights on In Ontario which was 59.1% of IWT generation on that day so we ratepayers and taxpayers in Ontario were forced to eat those costs of excess generation.
On April 3rd those IWT were still humming but most of the humming was in the early morning from 1AM to 7AM when they generated 24,894 MWh or 72.6% of their capacity while IESO sold off (net exports) of 15,184 MWh or 61% of the IWT generation at $29.87/MWh.
Later that day when demand was higher IWT generation fell off and for some reason IESO were busy importing power to keep our lights on! From hour 14 through to and including hour 22 IESO data notes we were net importers of 8,940 MW from Quebec and New York at an average cost of $86.89/MWh and almost three times what we sold off the excess power for earlier in the day. Over those same hours IWT generated 9,834 MWh which was only 22.2% of their capacity.
It’s unclear why IESO went through the import process as both our hydro and natural gas plants show their generation fell over the same period based on IESO data?
Fun Facts
The foregoing reminded yours truly of a fun fact related to the push to achieve that “net-zero” emissions target with IESO telling us in their 2024 Annual Report “full electrification will require the grid to increase “two per cent a year over the coming decades, from 154 TWh in 2025 to 245 TWh by 2050.“ IESO’s Annual Report also includes projections of generation from those IWT for the winter and the summer (30%+ for winter but only 15% for summer) but don’t mention their habit of much higher generation during the Spring and Fall when Ontario’s daily “peak demand” is much lower.
The 154 TWh forecast for 2025 also caught my eye due to a recent examination of IESO’s “Historical Demand” which has data for both the top 20 peak demand hours historically as well as Total Annual Ontario Energy Demand! In reviewing that historical information it became clear Ontario back in 2005 had an annual demand exceeding the 2025 projection and it was 157 TWh! Back then Ontario’s population was approximately 12.6 million versus our 2023 population of 15.6 million. What that means is back in 2005 our annual consumption per individual was 12.5 MWh whereas in 2023 when consumption was 137.1 TWh it drops to 8.8 MWh per individual! That represents a drop of 3.7 MWh per person or 29.6%!
Conclusion
We should rightly assume our drop in average consumption from 2005 had zero effect on the price we pay per kWh. We should suspect the cost per kWh will continue to increase as Ontario adds more renewables such as wind, solar and biomass and expensive storage such as batteries to try and offset the intermittent and unreliable nature of wind and solar. There is also the aspect of other expensive generation sources still in the early development stage that are reputedly “emissions free” power such as “green hydrogen” not to mention the tens of billions they plan to spend on grid expansion!
Yes, sit back and watch your electricity costs rise to the point where it will be “lights out” or starve!
One year after the OPC Party was elected in Ontario Premier Doug Ford told us Ontarians all the promises he made were kept and he did that by issuing a press release telling us all they had done in their first year in office. Looking back, many of those promises they purportedly “kept” were broken and never achieved.
One example really stands out as he said: “we have a reasonable and responsible plan to balance our budget, while protecting core services like healthcare and education.“ Here we are five years later, and the recent budget they just rolled out has our deficits rising and a forecast that the budget will finally be in surplus for the 2026-27 year! We should all wonder; what did he mean by saying they had a “reasonable and responsible plan” if we don’t see it balance unless the party needs to be elected three times before the “balance” appears! Promise Made, Promise Broken! One of the facts in the press release stated: “The government is implementing a plan to achieve a balanced budget by 2023–24.“ Woops, they missed that one by a country mile or two!
What About Electricity Costs?
In the leadup to the 2018 election Ford made lots of promises as to how he would fix the electricity sector and the following screenshot of an e-mail exchange dialogue from Ford with a voter describes his plans as does the “back and forth” of another dialogue with a different voter! Take your pick on what he promised but didn’t deliver!
Ford’s response to a voter
This sentence from the above Ford response to the voter got my attention: “Doug Ford and the Ontario PCs will scrap the Green Energy Act, which saw Ontarians overpay $9.2 billion for contracts that were awarded to Liberal donors.”
Ford’s dialogue and response to another voter
Loved this from Ford’s response: “I’m dead against these turbines” Everyone is for alternative energy so forth and so on, but this is just a big scam.”
Actual Results from another voter
As a matter of curiosity I went back and looked at my March 2018 electricity bill and it was 15.8 cents/kWh all-in after receiving the 8% rebate the Wynne led Government was doling out! I then looked at my March 2024 electricity bill and calculated the all-in rate was 17.8 cents/kWh which is a 12.6% increase since the Ford led government gained power and that was after the 17% rebate they now hand out!
Interestingly the billed cost of the “electricity” portion only; back in March 2018, represented 52.1% of my bill before the rebate whereas the “electricity” portion in the current bill before the rebate represents 47.9% of my bill suggesting actual electricity costs have not risen as much as the “delivery, regulatory charges and taxes” have during that time frame. Using Cold Air’s annual data on generation and total costs one can then calculate about what the total costs were in 2018 versus 2023. So it was the case for all ratepayers in the province the total billed costs would have been approximately $26.6 billion coupled with the other charges on the bill in 2018 and $31.1 billion in 2023 for a growth of $4.5 billion or 16.9% which is in line with inflation over that time frame.
Many will remember before the 2018 election that Premier Wynne had allocated $2.5 billion of electricity costs to taxpayers but the Ford led Government has tripled that as the latest budget forecast of electricity costs assigned to taxpayers allocates spending of over $7.5 billion to help ratepayers pay their bills!
Promises Made, Promises Kept: Na, I think you missed those promised to the two voters!
From the press release referenced in the opening paragraph above the comments about the ”hydro mess” had the following message:
“Cleaned up the hydro mess by overseeing the renewal of Hydro One, including the departure of the previous CEO and Board of Directors, and installing a new Board backed up by real accountability and transparency measures; cancelling and winding down more than 750 unnecessary and expensive renewable energy contracts to save ratepayers $790 million; and repealing the Green Energy Act to stop approvals for wasteful energy projects that would add unnecessary costs to electricity bills, as part of the government’s commitment to lower hydro bills by 12 per cent.“
Conclusion:
The reason the Ontario Liberals then led by Kathleen Wynne became the “minivan” party was all related to the mess made of the “electricity” portfolio by them.
We should wonder if that will happen to the Ford led Ontario PC party? As voters, our problem is no one, so far, from any of the other parties has dared to suggest they will fix the “hydro mess”! It simply appears that the mess will continue as an increasing burden on us taxpayers and ratepayers and to reuse a Ford message from above: “this is just a big scam” as is this one: “Doug Ford and the Ontario PCs will scrap the Green Energy Act, which saw Ontarians overpay $9.2 billion for contracts that were awarded to Liberal donors.”
Now a large portion ($7.5 billion) of that $9.2 billion “scam” has been passed on to taxpayers!
Surely Doug Ford must realize ratepayers in Ontario are also taxpayers and that promise to “lower hydro bills by 12 per cent” has instead increased bills by almost 17%!
Having a look at IESO data in the Spring often brings distressing news and it’s always about the wind blowing and raising electricity costs while those IWT kill the birds and bats, harm aquifers and create that damn infrasound.
Well along came March 26th, 27th and 28th and those spring breezes arrived and Ontario’s 4,900 MW of IWT (industrial wind turbines) were spinning and respectively generated 96,911 MWh on the 26th, (82% of capacity) 65,896 MWh on the 27th (56% of capacity) and finally 43,714 MWh on the 28th (37.2% pf capacity).
It’s worth noting, in the past, IESO’s “Annual Planning Outlook” would forecast those IWT would generate 29/31% of their capacity annually but they would be specific when looking at the summer and winter (Ontario’s two peak demand periods) and would only rate IWT at 15% for the summer and 30% for the winter! IESO’s recently released Annual Planning Outlook no longer does the foregoing and instead it forecasts they will generate .8 GW (gigawatts) in the summer and 1.5 GW in the winter which equates to 16% in the summer and 30% in the winter.
Over the three Spring days noted above, those IWT generated 58.4% of their capacity producing 206,296 MWh without any apparent curtailment!
The question then becomes did we need all that generation or were we exporting it to our neighbours at low prices? As it turns out Peak demand is low most of the time in the Spring and Fall seasons and the above three days were no exception with the highest peak reaching only 17,457 MW at Hour 19 on March 27th so yes, we were exporting a lot of that power to Quebec, Michigan and New York! As it turns out net export sales totaled 100,814 MWh or 48.9% of what they generated!
Over the three days the wholesale HOEP price averaged over $30/MWh coming in respectively at $30.27, $35.35, and $31.01 so IESO recouped a total of $3,145,380 for all of those net-exports.
Now if we agree, excess IWT generation represented ALL of the net-exports or caused other baseload generation (nuclear and hydro) to be exported we can rightly discern their unreliable and intermittent nature should be allocated to what the remaining 105,482 MWh of their generation actually cost us Ontario ratepayers/taxpayers. The 206,296 MWh those IWT generated received $135/MWh which cost us a total of $27,850,000* and granting them all of the revenue from the sale of the 100,815 MWh over those three days at the above sale prices means we earned $3,145.000*. If we then deduct the latter from the full cost of the IWT generation, it means for the 105,482 MWh we Ontarians consumed it cost us $234.20/MWh or 23.4 cents/kWh!
The foregoing is what we Ontario ratepayers have become accustomed to as a result of the GEA (Green Energy Act) and the contracts signed under it. The Ford led Government cancelled the GEA when they gained power but there is something disturbing about their buy-in to “Electrification” as it has seemingly got to the point where IESO suggest we need vast amounts of power to achieve the “political” goals.
One example of those future goals and needs from the “Annual Planning Outlook” is the following sentence referencing our needs from 2029 to 2034: “These needs are expected to be met by new or repowered, non-emitting energy-producing resources (that include but are not exclusive to wind and solar) acquired through future long-term RFPs, as well as the reacquisition of existing facilities through medium-term procurements in accordance with the Resource Adequacy Framework.”
Conclusion
From all appearances the Ford led Ontario Government seems intent on satisfying the wishes of PM Justin Trudeau and his “climate czar” Steven Guilbeault, to drive us all into energy poverty instead of pushing back!
Ontario’s IESO recently released their “2023 Year in Review“ and it confirms some suspicions, including less generation from IWT (industrial wind turbines) and solar despite their contracted “first-to-the-grid” rights.
The biggest surprise is the review revealed a year over year slight drop in Ontario demand from 137.57 TWh in 2022 to 137.1TWh in 2023. The drop happened despite the ongoing efforts to decarbonize our generation with demand reputedly increasing as IESO stated in their recently released; “Annual Planning Outlook” claiming we will see “steady demand growth year over year, with total demand increasing 60 per cent over the next twenty five years.“ Strangely enough, while demand declined by .47 GW (gigawatts) year over year it was reported by Statista that Ontario’s population grew 3% from 16.1 million to 16.6 million in 2023 yet electricity demand fell! Hmm, what do IESO attribute this to?
Well as we have come to expect during these times, IESO blamed it on the weather, stating: “Weather had a significant impact on 2023 demand, as the winter and summer months were milder than normal“and they also blamed it on “economic activity, which was diminished slightly owing to inflationary pressures.“
On the “weather” issue they said nothing about how an El Niño year affects the weather resulting in how “trade winds weaken and the Pacific Ocean tends to release more heat into the atmosphere.“ Despite the foregoing IESO in its recently released “Annual Planning Outlook” prattle on and on about “climate change” and “decarbonization” going as far as to state: “Climate science has demonstrated that the global climate is changing due, in part, to an accumulation of GHG emissions in the atmosphere.“ It seems obvious IESO Staff need to review the recent released Climate the Movie (The Cold Truth) in which prominent scientists debunk the claims of the Church of the Climate Change Cult!
On the “economic activity” issue we should suspect due to many small and medium businesses shuttered (120,000 across Canada) due to the Covid lockdowns that a good percentage of them were Ontario based so that presumably, represented the decline in “economic activity” resulting in diminishing electricity demand in 2023.
Let’s look at a few issues coming out of this “Review”
Peak demand in 2023 reached 23,713 MW on September 5, 2023, and the review gives it a lot of attention but compared to past peaks it pales as the highest summer demand peak hour was back on August 1, 2006, when it reached 27,005 MW. Had they bothered to review their history of the top 20 peak hours they would have noted the September 5, 2023 peak was over 1,600 MW short of number 20 on the “peak” list back on August 12, 2002!
The “Review” also has nuclear capacity showing as 13,144 MW but at no time during the year was it at that level as many of the units were, and still are, shut down for refurbishment. As of today the “grid connected” nuclear capacity is (as of hour 18) shown as 6,561 MW or slightly less than 50% of what IESO claim in their “Review”!
Looking at imports and exports it is interesting to note the former dropped from 7.9 TWh in 2022 to 4.1 TWh in 2023 and interestingly IESO blame it those Quebec wildfires (14 of them were caused by an arsonist now in jail but that’s not mentioned) stating it was one reason Quebec was unable to export hydro. The second reason was apparently “because of hot, dry weather contributing to lower hydroelectric output“. Ontario’s exports were also down by 1 TWh, but no reason is given by IESO.
In respect to the latter perhaps the reason for lower exports was related to those IWT (industrial wind turbines) whose generation fell by 1.6 TW from 2022 as did the grid connected solar which fell by .5 TWh. Ah yes, the vagaries of wind and solar! Despite those drops by wind from 13.8 TWh in 2022 to 12.2 TWh in 2023 and solar, IESO reported exported generation in 2023 was 16 TWh (enough to power 1.8 million average Ontario households) and we sold it for pennies as the average HOEP (the wholesale price) was a miserly 2.99 cents/kWh!
Should one do the math on the foregoing and simply deduct the imports of 4.1 TWh from the exports of 16 TWh it comes to 11.9 TWh or almost exactly what those IWT generated (12.2 TWh) in their unreliable and intermittent way! If we go further and suggest all of those exports were either IWT generation or caused baseload generation to be exported, the cost associated was approximately $1,251 million! The latter is a simple calculation: the 11.9 TWh of net exports caused IESO to manage the grid and they sold it to our neighbours at an average price of $29.9 million/TWh so it would have generated revenue of about $356 million (11.9 TWh X $29.9 million). The cost of that, if it was all IWT generation or caused other generation (baseload) to be exported at $135/MWh, would have been approximately $1,607 million (11.9 TWh X $135/MWh). If one deducts the $356 million earned from the export sale it indicates, we Ontario ratepayers/taxpayers were forced to absorb the above noted $1,251 million in costs representing about $260.00 per Ontario household!
Natural gas plants stepped up
While those IWT and solar panels generated less power in 2023, Ontario’s natural gas plants with their ability to ramp up or down came through when needed and their generation increased from 15.2 TWh in 2022 to 19.1 TWh in 2023 while hydro generation fell slightly by .6 TWh.
Ontario’s Minister of Energy, Todd Smith’s on a Podcast
Interestingly enough, Ontario Energy Minister, Todd Smith was on a podcast February 27, 2024 discussing the Federal CER (Clean Electricity Regulations) created by the Federal Minister of the Environment and Climate Change, Steven Guilbeault and had this to say:
“So when it comes to generating electricity, for the time being, natural gas is going to play a vital role as the insurance policy to keep the lights on. However, as more storage is added to our system and potentially long duration storage, which has the potential ability to dispatch electricity for 10 to 12 hours at a time will be less reliant on our natural gas fleet over time.
For home heating here in Ontario, there’s well over 70% of our homes that rely on natural gas for heat right now. We have several pilot projects that are underway in municipalities across the province to move to a hybrid electric heat pump, which is being well received in certain communities. But if we were to move, let’s say to all electricity for home heating, we would have to build several more Bruce Powers to make sure that we have the electricity that we need. And our system operator told us that in our pathways to decarbonization report that I asked them to produce for us on what it would take to get to net zero by 2050, and they said it would take 18 gigawatts of nuclear alone, but hundreds of billions of dollars in new transmission and new generation of other types as well.“
When asked further about the “transition” demanded by the CER Minister Smith had this to say: “Yeah. So I mean, there are other ways to reduce emissions and this is not the way to do it. By ensuring we have that reliable,affordable system, we’ll be able to reduce emissions where the actual emissions are in our transportation, in our electric arc furnaces, in our home heating potentially.“
In the podcast he goes on to brag about the new EV plants as well as expanding our transmission lines to accommodate increased electricity demand required throughout the province to accommodate the CER but says nothing about the relative costs.
We Ontarians should find it disappointing the province is acting in such a meek and mild way in fighting the CER as the “net-zero” transition will drive up costs tremendously as we are refurbishing nuclear plants, adding short term storage while pushing heat pumps for heating and building new transmission lines at huge costs despite our electricity system currently being 90% emissions free.
Conclusion
It is truly disappointing IESO have seemingly abandoned what was formerly their unbiased disclosure of “facts” and seem to now be endorsing the “climate change” cult and abiding by the dictum of the Federal Government via its Clean Electricity Regulations (CER), released in August 2023! The CER “outline steps to mandate the decarbonization of electricity systems across the country. The IESO has released its formal response to the draft CER, which provides comments aimed at supporting an orderly transformation of the electricity system.“
IESO obviously take their direction from Minister of Energy, Todd Smith, who fails to recognize his positioning in response to the CER is simply an endorsement of it. The minor changes made to the CER will do nothing to change the IESO forecast in its “Pathways to Decarbonization Report” stating it would cost “hundreds of billions of dollars in new transmission and new generation of other types as well.“NB
Refurbish our nuclear plants but ditch the rest!
NB: What the Pathways to Decarbonization Report said: “In terms of both transmission and supply, the Pathways scenario would need $375 billion to $425 billion in new infrastructure investment, and result in an annual total system cost of approximately $60 billion by 2050.“
Parker Gallant Energy Perspectives 