Suspicious about how those IWT (industrial wind turbines) were generating unneeded power for the past couple of days, a review of IESO data for May 19th and May 20th disclosed the awful truth!
Ontario households and businesses took a nasty hit as those IWT were producing nothing but unneeded power for the last couple of days as is their habit in the Spring and Fall. On May 19th IESO accepted 31,052 MWh and curtailed 1,200 MW from the IWT generators and then on May 20th IESO accepted 42,542 MWh and curtailed 6,681 MW.
As is quite frequent during this time of the year the demand for power in Ontario wasn’t needed so IESO were busy getting rid of it selling it off for pennies of its cost to Michigan, New York and Quebec with net exports (exports minus imports) on May 19th of 55,382 MWh and 56,382 MWh on May 20th. As one can easily understand those net-exports on both days were well in excess of what those IWT delivered meaning they were not needed as peak demand on the 19th reached only 14,413 MW at hour 18 and 15,561 MW on May 20th at hour 20.
The parties buying and selling the excess energy surely had a field day as the average HOEP (hourly Ontario energy price) or market price averaged only $10.96 (about one cent per kWh) on May 19th and even less on May 20th as the HOEP averaged $5.92/MWh (less than one cent per kWh).
The net result was IWT generation (accepted and curtailed) on May 19th cost $4,336,020 and May 20th IWT generation (accepted and curtailed) cost $6,544,820. Collectively the two days brought those IWT owners’ gross revenue of $10,880,540 due to their “first-to-the-grid” rights under their contracts with IESO.
Over the two days the HOEP sale price of that unneeded IWT generation earned a miniscule $591,515 (5.4% of their cost) putting the net cost of that power (our neighbours happily snapped up) to $10,289,315.
The weight of the McGuinty/Wynne GEA (Green Energy Act) pushed by Gerald Butts continues to hammer Ontarians with costs providing no value except to the owners of those IWT and our neighbours!
Those who voted for the Ford led government surely hoped their gaining a majority in the Provincial Parliament would somehow result in a different outcome. Electricity costs of energy are essential to the daily needs of households and businesses but for some reason their rising costs are not dealt with.
Just another problem brought to us by the “climate change” fanatics our politicians seem unwilling to challenge as we watch our costs rise and energy poverty increase!
Well once again Ontario ratepayer’s and taxpayer’s generosity was in full swing as those IWT (industrial wind turbines) were in full motion throughout the day. IESO forecast they would generate 60,760 MWh or about 52% of their capacity (enough to supply over 2 million average Ontario households) but accepted 51,130 MWh meaning about 9,630 MWh were curtailed.
The cost of the foregoing at $135/MWh for what was accepted was $6,902,550 plus another $1,155,600 for the curtailed power at $120/MWh bringing the total cost to $8,058,150 for the IWT output. The big problem with yesterday’s IWT output was; we didn’t need it as demand throughout the day was less than what our baseload (nuclear and most hydro) provided and peak demand only reached 14,757 MW at Hour 21.
What the foregoing resulted in was seeing all that surplus generation exported while driving down the market price (HOEP) which averaged only $3.40/MWh over the day. As a result, IESO data disclosed our net exports (exports minus imports) to Michigan, New York and Quebec were 57,732 MWh. Going further, the IWT accepted generation of 51,130 MWh represented 88.6% of what we gave away. If we included the IWT curtailed generation those IWT could have generated 105% of what we sold off for pennies of their guaranteed “first-to-the-grid” costs.
The results from having those IWT generate their intermittent and unreliable power is costs to Ontarians for just yesterday’s unneeded generation was just shy of $7.9 million.
The above clearly shows how layering unreliable and intermittent generation like wind and solar drives up the costs of our energy consumption.
Despite the obvious there clearly is no intention IESO will reduce those costs as a Press Release from them yesterday illustrates they are going to add yet another layer. They announced the “largest energy storage procurement ever in Canada“ and the bulk of it will be battery storage allowing the IWT owners to double down on the revenue grab from us ratepayers. Those battery storage systems will allow them to buy their intermittent wind generation (we are obliged to purchase) for the cheap market price and sell it back into the grid at higher prices when the wind isn’t blowing or the sun isn’t shining.
We should all wonder; when will commonsense ever return or is this meant to drive more of us into “energy poverty” to save the world from “global warming”!
PS: The overnight temperature in most of Southern Ontario in mid-May was around zero (0) degrees Celsius which suggests we may have solved the UNIPCC crisis!
Mother’s Day which was March 14th this year, has come and gone, much like we grandfathers, grandmothers, sons and daughters here in Ontario have just had over $4 million taken from our pockets to pay for the intermittent supply of IWT (industrial wind turbines). The money is gone because we didn’t need any IWT generation but because of their “first-to-the-grid” rights embedded in their contracts we were obliged to pay the IWT owners.
The day was atypical for the spring with demand reaching a lowly 5-minute peak of 14,627 MW during Hour 21 (hour ending at 9 PM) versus those much higher demand hours in the summer and winter months.
Needless to say IESO were busy trying to get rid of our surplus power by selling it off to Michigan, New York and Quebec as nuclear plus our baseload hydro were more than enough to supply us for the full 24 hours. As it turned out net-exports (exports minus imports) were 65,498 MWh (about what 2.2 million households consume daily) and the market price, ie: HOEP (hourly Ontario Energy Price) averaged only $3.88/MWH or 0.04 cents/kWh! What that means is we earned a grand total of only $$254K from their sale but our costs for their generation was up around the $7 million mark.
Naturally a big part of the above costs were the IWT generated power as IESO forecast they would generate 33,627 MWh but they only accepted 23,822 into the grid so the other 9,805 MWh were curtailed. As most Ontarians know we pay $135/MWh for grid accepted IWT generation and another $120/MWh for what is curtailed so the total amount we taxpayers/ratepayers paid to the IWT owners was approximately $4.4 million or about 63% of the $7 million cost of all the exported surplus power.
It is worth noting grid accepted IWT generation only represented around 36% of the total net-exported MWh we sold but their generation and curtailed power surely played a significant role in driving down the market price as the buyers would recognize we had to sell it off or give it away for nothing.
As if to reinforce the latter the HOEP for 12 of the 24 hours yesterday reported by IESO was 0.00/MWh!
Once again, the events surrounding the intermittent and unreliable nature of those IWT clearly demonstrated their uselessness unless it is to reduce emissions from coal plants* located elsewhere!
*A recent Scott Luft post demonstrates how we Ontarians are helping Michigan reduce their emissions from those nasty coal plants but they are not giving us any carbon credits we could sell off to recoup some of the IWT costs!
Well May 10th clearly demonstrated the volatile nature of IWT yesterday bouncing from producing a low 24 MWh at Hour 9 when they were forecast to produce 25 MWh to a forecast generation of 1,316 MWh at Hour 24 but at that hour IESO only accepted 881 MWh meaning they curtailed about 435 MWh. Those IWT presented themselves in a backward motion as at Hour 9 Ontario’s demand is usually on the rise and at Hour 24 demand is heading down. At Hour 9 it reached 14,077 MW and at Hour 12 it fell to only 12,507 MW which nuclear and hydro easily provided and perhaps why IESO curtailed some of that wind generation we ratepayers are obligated to pay for.
As is frequent during our Spring and Fall seasons demand is almost always low whereas peaks during our summers are often in the 22,000 MW range and in the winter in the 20,000 MW area. Those latter seasonal peaks are generally when the wind isn’t around!
So yesterday, wind was very wimpy and those IWT could have delivered only 12,100 MWh (IESO curtailed about 890 MWh) so would have operated at 10.3% of their capacity which is well below their yearly average of 29/30%. Due to their “first-to-the-grid rights they will be fully paid for what IESO accepted and curtailed even though it wasn’t needed.
Because it was a well below average day for IWT output, it won’t cost Ontario’s ratepayers and taxpayers too much (about $1.6/1.8 million), even though it was probably all exported or caused our cheaper power supply to be sold to our neighbours in Michigan, New York and Quebec.
What the foregoing demonstrates is we ratepayers/taxpayers should be thankful for those too infrequent Spring and Fall days when the wind isn’t blowing.
As recently noted, Spring weather in Ontario is often windy and powers those IWT (industrial wind turbines) in the province generating unneeded excess power which we practically give away to our neighbours or curtail! Either of the foregoing events adds significant costs to Ontario’s ratepayers and taxpayers so it was kind of a pleasant surprise to see some early summer doldrums yesterday.
The result of the lack of wind yesterday was clearly demonstrated as those 4,900 MW of IWT capacity only generated 4,180 MWh over the full 24 hours meaning they operated at an average of about 3.5% of their capacity. At Hour 9 (hour ending at 9 AM they collectively delivered 4 MWh (0.8% of capacity) or 0.02% of demand (15,698 MW) to the grid! Generation of only 4 MWh during Hour 9 probably meant they actually consumed more power than they delivered.
The following screenshot for the day was for the first 21 hours and IWT generation is the thin green line at the top which is often barely visible on those hot summer days when peak demand is frequently north of 21,000 MW.
At peak hour yesterday which was Hour 20; they managed to deliver 185 MWh of the peak demand of 16,303 MW or a miserly 1.1% of our consumption.
It is worth noting at Hour 9 Ontario’s natural gas plants generated 2,116 MWh and at Peak Hour they added 2,531 MWh to the grid ensuring (in both cases) Ontarians would NOT experience a blackout!
The failure of those IWT yesterday clearly demonstrates the unreliability of IWT so perhaps we should abandon the use of the IWT designation and future references should be UWT (unreliable wind turbines)!
Well, once again a review of IESO data for April 20th indicates we taxpayers/ratepayers were negatively impacted!
The wind was blowing pretty good on this Spring Day so IESO forecast those IWT (industrial wind turbines) would generate 63,303 MW (54% of their capacity). Ultimately IESO only accepted 56,339 MW meaning they curtailed about 7,000 MW of the anticipated output. This happened as we were obliged to pay $135/MWh for the grid accepted generation and $120/MWh for what was curtailed. The cost to us ratepayers for the IWT generation and curtailed output came to over $8.4 million.
While IESO were obliged to either accept or curtail the IWT generation they were busy exporting our unneeded and surplus power once again to our neighbours in Michigan, New York and Quebec. In total the “net exports” (exports minus imports) reported by IESO were 62,116 MW which easily exceeded the 56,339 MW the IWT provided to the grid.
Based on the foregoing we can, rightly assume, the IWT generation IESO accepted; was not needed so we Ontario ratepayers received absolutely no benefit and instead were obliged to pay the costs of that intermittent and unreliably generation.
We can therefore conclude no IWT generation was needed at any hour of the day particularly even, when noting the “peak Hour” which only reached 15,821 MW at Hour 20 (hour ending at 8 PM). If we then look at the average hourly rate, we note it was a very low $6.36/MWh. At peak hour it was even less reaching only $4.50/MWh or 0.045 cents/kWh meaning what we paid $135/MWh got us only $4.50/MWh for a loss per MWh of $130.50. Sure doesn’t make one believe we have a handle on the contracts delivered to those IWT owners!
We should be pretty sure our neighbours appreciated the gift we once again handed them which, if one does the math, it came to a net cost of approximately $8,076,000 after we were paid that miserly $6.36/MWh for the 56,339 MW of the IWT generation.
As a matter of interest just the grid accepted IWT generation we gave away is about what 1.8 million households consume daily!
When, if ever, will our Minister of Energy, Todd Smith, fix this rip-off of us taxpayers/ratepayers should be the question on our minds?
Well, the wind wasn’t blowing quite as much as April 11th but what was actually consumed by Ontario’s ratepayers April 14th set a new record cost; to the best of my knowledge, per MWh!
On April 13th the 4,900 MW of grid connected capacity in Ontario of those IWT (industrial wind turbines) were forecast by IESO to generate 62,063 MW (52.8% of capacity) but only 53,317 MWh or 45.3% of its capacity was accepted meaning about 8,746 MW were curtailed.
The math on the above meant total costs to Ontarians (ratepayers and taxpayers) for IWT generation was $6,722,325 for grid accepted generation at $135/MWh plus $1,049,520 at $120/MWh for curtailed generation so it totaled $7,771,845.
Just like two days earlier we didn’t need what those IWT generated as demand, while somewhat higher, throughout the day, peaked at 16,488 MW at Hour 19 (hour ending at 7 PM) and was only slightly over 16,000 MW for three hours (hour 18 to hour 20) of the whole day.
As it was on April 11th, IESO were busy selling the surplus power off with most of it going to Michigan, New York, and Quebec. The average market price or HOEP (hourly Ontario export price) over the 24 hours was only $10.74/MWh and net exports (exports minus imports) were 93.4% (49,795 MW) of the grid accepted IWT generation. Total net exports (exports minus imports) were 53,317 MW resulting in us ratepayers only receiving $534,798 (49,795 MW X $10.74 = $534,798) for the exported IWT generation.
As previously noted, we should assume most of the surplus we sold to our neighbours was either all IWT generated power or caused by it meaning Ontarians consumption of IWT generation was only 3,522 MW of the IESO accepted 53,317 MW generated by them.
Taking the foregoing logic to the next step we can easily calculate the cost of the 3,522 MW of IWT generation we consumed! The math is simple; The total cost of IWT generation (grid accepted and curtailed) of $7,771,845 minus the $534,798 generated from their sale to our neighbours divided by the 3,522 MW we consumed in Ontario i.e., $7,237,047/3,522 MW = $2,054.81/MWh.*
Wow, the $2,054.81/MWh it cost us on April 13, 2023, for IWT generation is rather mind-boggling and who knows, it may well have happened in the past but unless you examine IESO data on a daily basis one would never know, although the $6.5 billion taxpayers absorb annually to keep rates at current levels may be why we don’t notice.
In the process of putting together this information a quick glance at generation today on April 14th disclosed IWT generation had dropped to the point where they generated 84 MW for Hour 17 and Hour 18 clearly disclosing why IWT are labelled intermittent and unreliable. The 84 MW could well be less than they are actually consuming to keep that light blinking on and off at the top of their towers!
We clearly don’t need them for grid connected generation and it is so disappointing our politicians won’t accept that obvious fact and rescind their “first-to-the-grid” rights!
The above headline sounds “kind of” over the top but as it turns out its factual!
The wind was blowing strong throughout the day on April 11th and the 4,900 MW of grid connected capacity of those IWT (industrial wind turbines) were generating lots! IESO forecast they would generate 82,184 MWh (69.9% of capacity) but they only accepted 77,315 MWh (65.7% of capacity) suggesting 4,869 MW were curtailed.
The quick math on the above means the total costs to Ontarians (ratepayers and taxpayers) was $10,437,525 for accepted generation ($135/MWh) plus $584,280 for curtailed generation ($120/MWh) so totaled $11,021,805.
The big problem with the accepted IWT generation yesterday was we didn’t need most of it as demand was low throughout the day and only reached 15,624 at its peak at Hour 20 (hour ending at 8 PM). As it turned out IESO were busy selling the surplus power off with most of it going to Michigan, New York, and Quebec. If one, then examines the average market price or HOEP (hourly Ontario export price) over the 24 hours we discover it averaged a lowly $4.70/MWh. Over the day net exports (exports minus imports) were 59,726 MWh or 77.3% of the grid accepted IWT generation meaning we received only $280,712 (59,726 MW X $4.70 = $280,712) for that surplus generation.
Should we, logically, assume the surplus we sold to our neighbours was either all IWT generation or caused by it; we Ontarians only consumed or needed 17,589 MW of the 77,315 MW IESO accepted of IWT generated power over the day.
Taking the foregoing logic to the next step we can easily calculate the cost of those 17,589 MW of IWT generation we consumed! The math is simple: the total cost of IWT generation (grid accepted and curtailed) of $11,021,805 minus the $280,712 generated from their sale to our neighbours divided by the 17,589 MW we consumed in Ontario: i.e. $10,741,093/17,589 MW = $610.67/MWh.
Wow, the $610.67/MWh it cost us on April 11, 2023, for IWT generation, is not uncommon and what we frequently experience during the Spring and Fall seasons when our electricity demand is low.
Peak levels often are well over 20,000 MW per hour during hot summer days or cold winter ones when IWT generation is frequently absent!
The time has come for the Provincial government under Doug Ford to recognize the mess the McGuinty/Wynne government created and finally do something about it. We ratepayers and taxpayers should not be shouldering the burden of this intermittent and unreliable power!
Fix the mess and get rid of electricity costing us $610.67/MWh and recognize Ontario’s electricity sector is over 90% emissions free!
Over the past few days those of us living in southeastern Ontario couldn’t help but notice the ups and downs of the wind with both windy ones followed by almost a mid-summer doldrum! As a result of that experience it was worth a look at some IESO data and that is displayed below in a screenshot of April 4th to 9th taken on April 9th.
The green on the chart shows the IWT (industrial wind turbines) grid connected generation over that timeframe and if you spot red and yellow, they respectively represent biomass and solar generation. The dark blue is natural gas generation responding to either IWT absence or its high output during demand for each of the many hours in the screenshot. The light blue is hydro output, and the orange is nuclear with a large portion of hydro and all of nuclear considered “baseload” power!
Should one examine the IESO data for April 5, 2023, they forecast grid connected IWT would generate 79,740 MW (67.8% of capacity) and reported 76,932 MW (65.4% of capacity) were accepted suggesting just under 3,000 MW were curtailed. Peak demand on that day occurred at Hour 20 (hour ending at 8 PM) and reached 16,573 MW and those IWT were humming delivering 3,626 MW or 21.9% of peak demand.
In contrast to IWT generation on April 5thon April 8th those IWT were almost absent generating only 7,685 MW over the full 24 hours. That represented only 6.5% of their capacity and only 10% of what they delivered three days before! At the peak hour which again was Hour 20, IESO reported they delivered 96 MW or 0.62% of that hour’s peak demand which was only 15,513 MW. Peak hour generation on April 8th came from nuclear, hydro and natural gas (1,366 MW) so, without the latter Ontario may well have experienced a blackout. Alternatively, IESO may have shouted out: “don’t charge your EV” (electric vehicles) as the grid operator in California (CISO) does when their IWT are not spinning or the sky is cloud covered!
Now try to imagine one of Ontario’s hot summer days when the wind isn’t blowing, and peak demand is over 21,000 MW as it was on nine of the ten highest peak hours last summer! Don’t charge your EV or turn on your air conditioner will be the message should the Minister of Energy order the closure of Ontario’s natural gas plants!
The recent two days clearly demonstrate the Yo-Yo characteristics of IWT as an unreliable supply of electricity due to their intermittent nature.
Back in April 2018, Vic Fedeli, who, at that time, was Interim Leader of the Ontario PC Party wrote a 130 page document titled: “Focus on Finance, A Look Into Ontario’s Finances”. Needless to say his review had much to say about the mess of the electricity sector from the privatization of Hydro One to the Fair Hydro Plan. Naturally it dwelled on how the Liberal governing party had driven up electricity prices backing it up with reports from both the Ontario Auditor General as well as the FAO (Financial Accountability Office).
At that time Ontarians will remember both residential and business rates had climbed extensively during the Liberal reign with residential rates having jumped over 100% (74% from just generation costs) and companies such as Maple Leaf Foods; whom he quotes in the report with a Sr. VP stating: “our electricity price increased by 18% in 2016 … I think anyone would agree that 18% is a large increase.” He added, “If we had operated in Manitoba instead of Ontario it would have been a 65% saving on our electricity bill.“
MPP Fedeli also had a lot to say about the “Fair Hydro Plan” introduced by the Wynne led government noting: “there are four major components: refinance the Global Adjustment (GA), adding an additional accumulated debt of about $28 billion; enhance consumer rebates, at a cost of $905 million, plus the $1 billion required from the tax base to pay for the 8% HST rebate; lower the Industrial Conservation Initiative threshold, with the cost to the ratepayers yet to be calculated; and find efficiencies in the market, to save at least $200 million per year, starting in 2021. As outlined earlier, the government has co-opted OPG into their scheme, so these liabilities don’t show up on the province’s books. This is inappropriate and risky for OPG.“
Needless to say MPP Fedeli not only criticized the actions of the OLP (Ontario Liberal Party) on the energy sector but all other aspects including those with fiscal implications! Following are a few key examples contained in his Focus on Finance report with current updates.
Debt to GDP
Then: MPP Fedeli Report: “Ontario’s debt-to-GDP is up by half a percent, from 37.1% to 37.6% this year.”
It appears the Debt-to-GDP ratio has increased to 41.4% since the Ford Government came to power.
Net Debt
Then: MPP Fedeli Report: “In 2016-17, Ontario’s net debt reached $302 billion, or approximately $21,500 per Ontarian.“
Now: From the 2023 Budget: Net Debt Interim 2022–23 $395,785 (hundreds of million or $396 billion). So the current Net Debt is approximately $94 Billion higher then 2016-17 which represents an increase of 31% in those six years or about $27,200 per Ontarian; an increase of 26.5%!
Budget Spending
Then: MPP Fedeli Report: “Since 2003, the current government has doubled spending from $71 billion to $141 billion.“
Now: From the 2023 Budget: 2023 Budget Total Expense Outlook $202,572 (hundreds of million or $203 billion) an increase of $62 billion or 44%!
Energy Critic
MPP Fedeli when first elected to Ontario’s parliament was named as the energy critic and frequently plied yours truly with questions and sought information/perspectives related to the electricity sector which I was happy to provide. The Focus on Finance report contained a reference and material related to an article I had written in late March 2017 titled: “Found! Where the Wynne government spent $36 billion!“ posted on my blog.
Fedeli started off the section with the details from my article with the following: “What did $50 billion get us? Recall the Premier stated the government spent $50 billion on the cost of the rebuild. But her own Energy Minister issued a news release claiming Ontario had “invested more than $35 billion” in new and refurbished generation. So, between them, their talking points differed. My retired banker friend and frequent National Post energy columnist Parker Gallant beat me to the punch and has created a comprehensive list. His findings are here:“!
He went on to highlight my findings stating: “This is indeed shy of the $50 billion the Premier says was spent, but the number lines up with the Energy Minister’s claim. Nonetheless, this proves that the bulk of the money did not go towards “the cost of the rebuild.” It went to intermittent and unreliable wind and solar projects (like the AG said it did), which are unable to deliver generation when the wind isn’t blowing and the sun’s not shining. The second largest category created no generation, nor improved transmission, nor reduced blackouts or brownouts.“ My estimates came to over $36 billion and included several spending categories most of which simply increased our electricity costs and as he noted most of the costs went to “deliver generation when the wind isn’t blowing and the sun’s not shining”.
While I appreciated MPP Fedeli referencing me as his “retired banker friend” at the time I would note since the Ford led OPC Party gained a majority he and others including our local MPP Todd Smith, Minister of Energy no longer call me for input and will not respond to my calls or e-mails much like those who were in the McGuinty or Wynne led governments when they were in power!
As noted above, in respect to some of the macro details MPP Fedeli noted in his 2018 report one of the issues not mentioned is any reference to either the costs of provincial employment or the number of provincial employees appearing on the notorious “Sunshine List”!
Sunshine List:
2018: A search disclosed back in 2018 before the Ford led government won the election there were 151,400 employees who made the list collectively earning $19.3 billion or an average of $127.5K per employee.
2022: The list for 2022 was recently released and it disclosed there were now 266.900 provincial employees who made the Sunshine List and their collective costs to us taxpayers was $$33.3 billion which works out to $124.5K per employee.
Conclusion:
It appears we can give the Ford government some credit (minor) for having reduced the provincial employee’s annual average earnings but the impact on increasing the number of employees earning over $100K per year increased by over 76%. Adding that 76% to the number of employees earning over $100K in just four years obviously has had a negative affect on Ontario taxpayers.
Reflecting on the above simply confirms the Ford led government has done an incredibly bad job at managing Ontario’s economy even considering the Covid 19 costs over the two years!
Further, Ontario has nothing to show of any beneficial change made in managing the electricity portfolio! Taxpayers now have to absorb in excess of $6.5 billion annually associated with the ongoing costs of the $36 billion identified in 2018 as being wasted by the former Liberal government.
Parker Gallant Energy Perspectives 