Wow, May 7th came and went and no blackouts throughout the province were in evidence. We should all be thankful that as is generally the case in the Spring and Fall, electricity demand in Ontario is in the lower demand level for the year ranging from only 12,000 MW in the night reaching a high in the 16,000 MW range at our peak hour.
The summer highs reaching 22,000 MW are a month or so away, so it is a bit worrisome that at the present time 60.5% (7,950 MW) of Ontario’s nuclear capacity is out for refurbishment or VBO (vacuum building outage) reasons! Nevertheless we once again survived the day! We survived the day as both hydro and natural gas generation stepped up to ensure the lights stayed on even though peak demand at hour 20 reached 15,695 MW.
Over the day the existing nuclear capacity of 5,194 MW produced 124,297 MWh and ran at 99.7% of their rated capacity. The strange happening however, was, Ontario’s hydro power for 22 of the 24 hours actually generated more power then nuclear produced and for the full day generated more then nuclear at 132,335 MWh. That hydro generation surely helped to keep the lights on and our businesses operating. To top off what hydro generation provided, our national gas plants, which the OCAA (Ontario Clean Air Alliance), a member of the “Church of the Climate Cult” want shut down; generated 79,438 MWh to ensure we had the required power needed throughout the day ramping up and down as demand fluctuated!
What is amazing about how the day unfolded is that IESO were still busy selling off our surplus generation to Michigan and Quebec with a small amount to New York via our intertie connections. In total our net-exports were 39,107 MWh and at hour 16 with the net sale of 1814 MW the HOEP (hourly price), IESO were paid, was $454.37/MW or 45.4 cents/kWh and it presumably included the 654 MW of IWT (industrial wind turbines) generation it produced at that hour!
Excluding the foregoing hour the average sale price for the day was $32.82/MWh but including it raises the net sale price to $50.39/MWh! What was somewhat unusual is that while Quebec was the principal buyer of the surplus generation throughout much of the day, during hours 17 to 21, Ontario actually were net importers of 1,133 MW from them but perhaps IESO were just ensuring we needed that power to avoid a blackout during those usual higher demand hours!
The foregoing 39,107 MWh (net-exports) sold probably was, principally, a result of those IWT generating 27,540 MWh while operating at 23.4% of their capacity throughout the day. Those IWT have the benefit of “first-to-the-grid” contract rights ($135/MWh) so IESO accepted all of their generation as their sale price exceeded the $15/MWh they could have saved from having them curtail their power.
Conclusion
It seems obvious IESO has logically picked the best time to allow the nuclear plants to conduct their VBO, pinning their hopes on no unusual weather that would drive demand higher than it has been for the past several days.
Let’s all “cross our fingers” in support of their plan but don’t count on either wind or solar generation to step up in the event we get any unusual weather!
As noted in a recent article the Ontario Minister of Energy, Todd Smith announced the possibility of a discount for charging your EV (electric vehicle) but he better hold off for quite a while.
Yesterday, May 5th was a clear demonstration why he should hold off as 59.4% of Ontario’s nuclear capacity is either down for full refurbishment or VBO (vacuum building outage). What that means is Ontario’s current grid connected capacity is without 7,810 MW of that reliable nuclear power that when grid connected, operates 24 hours daily.
Should Ontarians suddenly endorse EV in a big way and need to charge them on a regular basis it could bring about a demand that the grid will be unable to handle, and we may then experience rolling blackouts. We ratepayers should be thankful most Ontarians have not been sold on the reputed wonders of EV to reduce our CO 2 emissions!
Yesterday, Ontario’s hydro capacity (7,375 MW) which, unlike nuclear can ramp up and down, actually generated more power than nuclear for 8 hours of the day. As frequently occurs during our spring and fall days demand was quite low and only reached 15,185 MW at hour 20 (hour ending at 8 PM) and for most of the day was well under 14K MW and as low as 11,158 MW during our nighttime!
Thankfully Ontario has 8,711 MW of natural gas capacity which like hydro also can ramp up or down as needed so it generated power during the higher demand hours!
We also have 4,936 MW of IWT capacity, and 436 MW of solar capacity connected to our grid, but it cannot be ramped up when needed if there is no wind blowing or the sun isn’t shining but we are obliged to accept all of IWT’s generation when the wind is blowing!
As a result of the low demand yesterday but, fortunately a low wind day, those IWT only generated 28,146 MWh or 23.9% of their capacity however it wasn’t needed! Despite the foregoing the “first-to-the-grid” rights of their contracts required IESO to either accept them or have them curtailed. Curtailing wind only saves us ratepayers $15/MWh so IESO will sell off the surplus power to our neighbours should the average market price exceed that $15/MW which it did yesterday averaging $24.73/MWh!
While IESO actually reported net-exports totaled 37,104 MW we should assume all of that IWT generation wasn’t needed but it cost us $135/MWh, so Ontario ratepayers picked up the cost which was $4.8 million but IESO only earned $800 thousand from its sale meaning the remaining $4 million became a cost to us Ontario ratepayers and taxpayers.
Conclusion
Let’s keep our fingers crossed that those nuclear plants will return before the high demand days arrive on our hot summer days and well before EV adoption increases!
It was a press release from the Ontario Minister of Energy, Todd Smith asking (nay, telling) the Ontario Energy Board “to explore options for an Electric Vehicle Charger Discount Electricity Rate as the province continues to support the adoption of electric vehicles (EV).”
Needless to say the press release goes on and on to glorify EV reminding one of old expressions such as putting “lipstick on a pig” believing it will change our beliefs and the lipstick will change our view of the pig from “ugly to pretty”!
A couple of examples follow from the press release:
1.”A new electricity rate would support electric vehicle adoption across the province by reducing the electricity costs for charging infrastructure where demand is only beginning to emerge, making them more economical.”
Presumably what the foregoing implies is that cheaper fuel costs (charging your EV) will entice more Ontarians to purchase an EV! On the other side of the road if you own or purchase an ICE vehicle you will be hammered by added costs which now include that “carbon tax” which will continue to add to those fuel costs as it increases year over year!
What is missing in the advent to “cheaper fuel costs”; implied by conversion to an EV, here in Ontariowe are many facts and costs associated with the electricity sector including:
a) increasing your home service from a 100-amp to 200 amp service, b) the electricity service on your street may require an upgrade, c) the local transformer station may also require an upgrade should EV ownership increase substantially d) lots more generation will be needed to satisfy demand. All of the foregoing will add to the costs of electricity which will impact all households and businesses either by increased electricity rates or even more than the current $7.3 billion will need to be absorbed by taxpayers.
2.“With $43 billion in new electric vehicle and EV battery manufacturing investments in Ontario’s auto sector over the last several years, our government is working to improve access to public charging infrastructure to support drivers who are making the transition to electric vehicles.”
If one follows the news and has read the November 17, 2023 press release from the PBO (Parliament Budget Office) it is interesting to note it estimated “government support” for just the battery manufacturing sector amounts to $43.6 billion which is remarkably close to what the Ontario government claims is being invested in Ontario’s auto sector.
The PBO goes on to state “We estimate the total cost of government support for EV battery manufacturing by Northvolt, Volkswagen and Stellantis-LGES to be $43.6 billion over 2022-23 to 2032-33, which is $5.8 billion higher than the $37.7 billion in announced costs,” adds Mr. Giroux. The $5.8 billion in non-announced costs represents foregone corporate income tax revenues for the federal, Ontario and Quebec governments combined.
Of the $43.6 billion in total cost, PBO estimates that $26.9 billion (62 per cent) in costs will be incurred by the federal government and $16.7 billion (38 per cent) will fall on the provincial governments of Ontario and Quebec.”
What the PBO report notes is that not only are we Canadian and Ontario taxpayers providing huge subsidies for those investments but at the same time we are granting them tax free status.
The PBO press release goes on to specify “Of the $43.6 billion in total cost, PBO estimates that $26.9 billion (62 per cent) in costs will be incurred by the federal government and $16.7 billion (38 per cent) will fall on the provincial governments of Ontario and Quebec.“ The PBO goes on stating; “We estimate a break-even timeline of 15 years for the $13.2 billion production subsidy announced for Volkswagen, and 23 years for the $15.0 billion in production subsidies announced for Stellantis-LGES—consistent with our previous estimate of 20 years based on their combined production schedules”.
The foregoing suggests our current Federal and Provincial governments contain politicians we elected to see into the future!
Based on the incredible commitments being made here in Ontario and the obvious push to capture EV manufacturing we Ontarians should wonder what is the uptake of BEV and Hybrids (including plugins) when compared to ICE and Diesel sales?
Are We Buying What Politicians Are Selling?
A quick review of StatsCan vehicle registrations in Ontario* for the 2023 fourth quarter disclosed there were 171,157 vehicle registrations in the province in total. The registrations break down as follows:
Conclusion
It sure appears Ontarians are not sold on the purchase of BEV whereas gasoline hybrids are much more popular but even those didn’t achieve a 10% market share. The BEV market share has not bloomed suggesting the $43 billion of taxpayer dollars handed to the auto companies are not inspiring people to purchase them.
It is looking more and more like our politicians; with blinkered foresight, don’t have an appreciation of taxpayers hard earned dollars! The time has come for them to realize they are not Nostradamus and simply manage the present system and stop gambling with our taxes!
*Ontario doesn’t offer rebates but the Federal Government grants $5,000 for the purchase of a new BEV
Those who receive media output from the OEB (Ontario Energy Board) will have recently received an e-mail notice titled “End of Winter Disconnection Ban”! It informs the reader how to avoid the disconnect by outlining the various programmes that now exist to obtain taxpayer dollars to cover the costs as well as what your local distributor can or cannot do!
We should all assume this happening is merely the “chicken coming home to roost” due to how our energy costs have been climbing steadily due to Federal, Provincial and Municipal governments having gone overboard in an effort to achieve “net-zero” to hinder or stop, what was once called “global warming” but has morphed into “climate change”!
The not-so-subtle warning from the OEB served as an enticement to go back in time to see how things once were It led to IESO’s (Independent Electricity System Operator) website where they have listed TOU (time of use) rates from 2006 through to the most recent price change effective November 1, 2023! Here are the screenshots of the November 1, 2023, and 2006 price ranges. The middle screenshot from May 1, 2018, was when the Ford led Ontario Conservative Party took over from the McGuinty/Wynne Ontario Liberal Party and in the runup to that election they promised to reduce electricity prices!
“Improved supply conditions and lower total demand in 2006 contributed to the lowest annual average weighted price since the market opened in 2002. The average price for 2006 was 4.87 cents per kilowatt hour, down 30 per cent from the previous year.“ IESO went on to note: “Ontario set a new all-time record for electricity demand of 27,005 MW on August 1, 2006. However, despite this record peak, total annual demand for electricity declined to 151 TWh, compared to 157 TWh in 2005.“
It is worth noting that daily peak demand has maintained the record since 2006 and annual demand has not reached 151 TWh since then. Perhaps the climb in the costs of electricity had something to do with that as Ontario’s population back in 2006 was lower as were the number of households which have increased from around 4.6 million to almost 5 million in 2020. We should suspect both households and the population of Ontario are undoubtedly higher today.
Time of Use (TOU) Prices Ahead of Inflation
Should one do the math on inflation rates from 2006 to 2023 we discover they increased in Ontario by 44.1% and 16.9% from 2018 which turns out to be well below the increase in TOU rates for both the McGuinty/Wynne Liberals and the Ford Conservative led governments!
Since 2006 to 2023 Off-peak rates are up by 159%, Mid-peak by 72% and On-peak by 88% so all are well above the 44.1% inflation increase we experienced in those 17 years!
From 2018 to 2023 Off-peak rates are up by 33.8%, Mid-peak by 29.8% and On-peak by 45.4% which again is well above the 16.9% overall increase in inflation rates in the past 5 years!
Should one examine which of the three TOU rates jumped the most since 2006 it is obvious the biggest increase by far was in the “off-peak” rates which co-incidentally is responsible for 60/70% of household demand. Off-peak rates apply over weekends including holidays and also apply from 7 PM in the evening to 7AM in the morning during workdays and as noted during the 2006 to 2023 timeframe those rates increased the most and usually represent over 60% of usage during a normal month.
Conclusion
It is obvious from the above information with the actual facts coming from the OEB and IESO that Ontario’s electricity rates have outstripped inflation by a significant margin since 2006 due to both the Liberal and Conservative led Provincial governments. Both the Liberals and the Conservative governing parties have chosen to allow those rates to continue climbing adding to inflation while layering on rebates for taxpayers to absorb (Ontario’s recent budget allocates $7.3 billion) and adding other programs to help those suffering from “energy poverty”!
While the Ford led government cancelled the GEGEA (Green Energy and Green Economy Act) passed by the McGuinty Government in 2009, the cancellation did absolutely nothing to reduce the cost of electricity to ratepayers who are also taxpayers. Premier Ford and his Minister of Energy continue to push the net-zero concept, presumably in support of the Federal led government, which will continue to increase the costs of what is a basic necessity. With IESO seeking increased generation and storage capacity coupled with nuclear plant refurbishments to meet those “net-zero” targets and achieve full “electrification” it is hard to visualize how they will be able to slow the increasing costs of the electricity sector down.
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.
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!
Parker Gallant Energy Perspectives 