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.
Ontario’s IESO (Independent Electricity System Operator) who manage our electricity grid and our needs for energy on a hourly basis released their 2022 Year in Review report and it seems to have attracted net-zero attention from the MSM. In this era of catastrophic references to “global warming”, “net-zero” and “climate change” one would assume some of the media might have examined the results but they didn’t.
What was interesting was the fact that those IWT (industrial wind turbines) generated 13.8 TWh (terawatt hours) or 9.4% of total demand in 2022 versus 12 TWh and 8.4% of demand in 2021. While their capacity increased slightly by 100 MW (megawatts) from 4,783 MW to 4,873 MW year over year that was due to one project that took an inordinately long time to be commissioned so it was surprising to see generation increased by 1.8 TWh (1,800,000 MWh). In retrospect it may simply have been due to much larger curtailment in 2021 then what occurred in 2022 but IESO do not disclose that information.
Despite the foregoing it is worthwhile to have a serious look at the costs of IWT generation known for its bad habit of generating power when its unneeded meaning it is frequently sold off to our neighbours for pennies or as noted above it is curtailed and we pick up those costs.
In Ontario the bulk of IWT generation was contracted during the days of the McGuinty/Wynne led Ontario Liberal governing party via feed-in-tariff contracts for 20 year terms rewarding the owners with prices that were $135/MWh and also granting them first to the grid rights. At a latter point they were given curtailment rights (needed to manage the grid by IESO) which paid them $120/MWh.
While many of those contracts are due to expire over the next several years we should be concerned they will either be renewed or the turbines will be refurbished.
It is worth pondering the 2022 IESO data just to get an idea of how the contracted costs have affected our electricity bills. The IWT grid connected generation in 2022 received $1.863 billion for the 13.8 TWh IESO accepted versus the $1.620 billion they received in 2021 for the 12 TWh IESO accepted.
Now, as noted above IWT intermittent and unreliable nature strongly suggests they cause us to sell off our power to our neighbors in Michigan, New York and Quebec for pennies of their original cost. Logically those costs should be added to the costs of the IWT generation actually consumed in Ontario.
Reviewing IESO data discloses we exported 17.5 TWh in 2022 at an HOEP (hourly Ontario electricity price) market price with an annual average of $47.80/MWh. If we then assume 30% (5.25 TWh) of those exports were either actual IWT generation or caused by it, the costs of what we actually consumed in Ontario jumps by just over $450 million (exports cost of the 5.25 TWh of $709 million less the approximately $250 million earned from their sale at $47.8 million/TWh). That increases the total costs of wind generated and consumed by Ontario ratepayers to around $1.612 billion or $188.53/MWH [18.9 cents/kWh]). If the foregoing was an annual occurrence those 20-year contracts for the current IWT capacity would amount to $32.2 billion ($1.612 billion X 20 years).
So based on the above let’s look at the capital costs of those IWT per MW of capacity and how long it would take to recover those capital costs. Current capital costs per MW of IWT capacity are about CDN $1.7 million/MW so the total capital costs of their current capacity is around $8.3 billion. At the income level of the last year ($1.863 billion+) those capital costs would be recovered in approximately 4.5 years meaning they would be a great gravy train for the remaining 15.5 years. That means we ratepayers are simply padding the pockets of the IWT owners at great costs* to us from that point on.
Conclusion:
Quite the Gravy Train for the IWT owners as the above demonstrates.
*The above estimated costs don’t include additional costs associated with curtailed wind generation nor does it include the cost of spilled hydro we ratepayers must pay for too.
Ontarians should be thankful Sunday March 12, 2023, was both a weekend day and also kind of an early spring day which contributed to a relatively low electricity demand day. Ontario’s peak demand came at Hour 19 (hour ending at 7 PM) and was only 17,614 MW. While the below screenshot of IESO data shows (at the top) the output of all electricity sources at 8 PM the coloured graph ends at Hour 20 and it shows the peak hour occurred at Hour 19 and at that hour all those IWT (industrial wind turbines) generated was a miserly 244MW or 5% of their capacity and 1.4% of peak demand.
Now squint at the coloured graph above and focus on the green, yellow and red lines at the top which are respectively IWT, solar and biomass generation to recognize why they can’t ever hope to replace flexible natural gas (dark blue), hydro (light blue) or nuclear generation (orange).
Over the full 24 hours of the day total wind generated was 7,215 MW which represented 6.13% of their capacity and at their low point at Hour 15 they only managed to generate 163 MW (3.3% of their capacity). At Hour 1 (ending at 1 AM) they hit their high for the day generating 484 MW (9.9% of their capacity).
Ontario’s natural gas plants stepped up to meet our needs yesterday generating 43,653 MW or six (6) times what those IWT generated. What the foregoing makes obvious is that Ontario would need another 29,400 MW of IWT capacity to replace what our gas plants generated in addition to the 4,900 MW of existing grid connected capacity. Adding that capacity to the grid would also increase the need to upgrade the transmission system and both of those additions would drive up the cost of energy further.
As yet another addition to the foregoing Ontario would need a minimum of approximately 7,500 MW of BESS (battery energy storage systems) with the capabilities to deliver stored power to replace what those gas plants generated. That 7,500 MW of battery storage would need to store their power in the days before the wind disappeared and it wouldn’t happen if the wind wasn’t blowing.
Blackouts would be the alternative to the above.
Now try to imagine how much more IWT generation coupled with BESS units we would need on a hot summer day when demand peaks at over 22,000 MW!
Just two days ago, on March 1, 2021 at Hour 22 (hour ending at 10 PM) Bruce Nuclear’s Unit G-3 with a capacity of 784 MW was shut down for major component replacements (MCR) and will not return to service until sometime in 2026. Daily that unit has been supplying enough generation for 12% (627,000) of Ontario households with (18,800 MWh) their electricity needs. The refurbishment of that unit brought down Ontario’s nuclear baseload to just under 8,000 MW so coupled with all of Ontario’s run of river hydro it is insufficient to meet our peak needs and we can’t count on Quebec to always be there to cover our shortfalls. The Society of United Professionals pointed out why we can’t count on Quebec to help us out in a February 2021 report in which they stated: “importing firm baseload power from Quebec is not as simple as signing a contract and flipping a switch. As a result of bottlenecks in Ontario’s transmission system, pressures on Quebec’s power supply and Ontario’s ongoing reliance on Quebec for summer peak power, there are multiple reasons that imports are not the simple solution they may seem.“
Likewise, even though Ontario has grid connected IWT (industrial wind turbines) with a reported connected capacity of about 4,900 MW (6 times the G-3 unit) their average annual generation is only in the 29/30% range. Further because of their intermittency they cannot be counted on to generate power when it is actually needed. March 2nd is a perfect example as over the full day they only generated 11.6% (13,619 MW) of their capacity with a peak at Hour 18 of 957 MW (19.5% of capacity) and a low of 275 MW (5.6% of capacity) at Hour 1.
Fortunately, yesterday was a relatively speaking; a mild winter day in Ontario and Quebec and peak demand came at hour 20 when it reached its high for the day at 18,579 MW and those IWT contributed only 2.6% (486 MW) of demand at that hour. Because it was a somewhat mild winter day Hydro Quebec was able to supply around 38,000 MWh while we were busy selling about 24,000 MWh to Michigan. Had it been a cold winter day Quebec would have needed the power they supplied Ontario via our intertie connections. As it turned out we were a net importer of power for twenty-two hours and a net exporter for only two hours of the day which is a big turnaround from when our nuclear baseload was higher in the 10,000 MW range only a month or so ago.
What really stepped up to the plate for Ontario yesterday was our natural gas generation thanks to its flexibility and over the 24 hours it supplied us with 68,552 MWh or about what 2.3 million average Ontario households (45% of Ontario households) consume daily. At our peak hour it provided 3,957 MWh or 21.3% of demand and over eight times what those IWT generated. It should also be noted the abilities of natural gas generation to be so flexible presumably resulted in the HOEP (hourly Ontario energy price) remaining relatively stable throughout the day in the $30/MWh range.
The good news is Bruce Nuclear’s Unit 6, the first unit to be refurbished under the MCR project, is scheduled to return to service later in 2023 and its life cycle will be extended to the early 2060s! Perhaps by then politicians will have abandoned the concept of wind and solar being a reliable supply of electricity and the eco-warriors will have returned to their caves!
The past couple of days in Ontario have demonstrated the ups and downs of energy demand both from those of us in Ontario and our neighbours tied to us via the intertie grids.
February 2, 2023
Starting with February 2, 2023, examining IESO data, clearly demonstrates the ups and downs of demand for electricity coupled with the market price variation (HOEP) of overproduction of IWT (industrial wind turbines). The wind was blowing hard all through the day but with baseload nuclear and hydro providing most of the demand what wasn’t needed was most of the power being generated by IWT. IESO forecast IWT would generate 94,503 MW over the full day (80.3% of capacity) but it wasn’t needed. Recorded output was 72,115 MW (61.3% of capacity) meaning IESO instructed IWT owners to curtail almost 22,400 MW. As most Ontario ratepayers know the IWT contracts provides them with “first-to-the-grid” rights and also pays for curtailed power at the rate of $120/MWh and $135/MWh for the accepted power. For the full 24 hours on the day the price allocated for accepted and curtailed IWT generation amounted to over $12.4 million in costs to Ontario’s ratepayers/taxpayers and about $172/MWh in costs for the accepted power.
Coupled with the foregoing; as demand was low for most of the day, the market price (HOEP) averaged $3.12/MWh so IESO were busy disposing of unneeded power for pennies of its costs. Even at the daily peak hour (Hour 19) the HOEP was only $5.18/MWh. For the full day exported power was 41,911 MW representing 58.1% of the generation IESO accepted from IWT. If one assumes the unneeded power from IWT represented all of the exported power or caused it, the cost added to the 30,200 MW of IWT generation consumed by Ontario ratepayers is another $7.1 million bringing the cost of the 30,200 MWh, added to the grid, to $11.2 million or $370/MWh (.37cents/kWh).
The happenings on February 2nd once again demonstrate how we Ontarians continue to provide cheap power to our neighbours. We do that by absorbing the costs of those intermittent and unreliable IWT sprinkled throughout the province allowing our neighbours to buy our surplus energy for pennies on the dollar while we eat the costs.
February 3, 2023
February 3, 2023, turned out to be a “Top 10” Ontario peak demand day reaching 21,388 MW and 24,821 MW for the “market peak” at Hour 19! The result was the HOEP for the full day averaged about $41.70/MWh. While that represents a large jump from the prior day those IWT were still costing us a lot more then the aforementioned HOEP average.
To put the foregoing in context, IESO data in the first 5 hours forecast IWT generation would be 18,795 MW but they only accepted 13,838 MW meaning about 5,150 MW were curtailed and the HOEP over those 5 hours was a piddly 0.62 cents/MWh. If one, then calculates the HOEP for the remaining 19 hours in the day it becomes $56.60/MWh so, much higher than the first 5 hours! Continuing to look at those 5 hours it becomes apparent we Ontarians absorbed the costs of almost $2.5 million to generate those 13,715 MW. Hopefully our neighbours in NY, Michigan and Quebec appreciate our generosity for those MW which was very close to the IESO accepted IWT generation.
Looking at the full day, IWT were forecast by IESO to generate 69,174 MW but their output was 62,940 MW meaning we paid for around 6,200 MW of curtailed generation but as noted in the preceding paragraph only about 1,000 MW more were curtailed in the following nineteen hours. Over the day IESO were busy selling off approximately 87,000 MW to our neighbours in Michigan, NY and Quebec with the latter taking well over a third of them. The last point should be no surprise as Quebec is a winter peaking province and on February 2nd Hydro Quebec asked their customers to reduce their electricity consumption due to the anticipated cold starting late Thursday night.
The other interesting happening related to generation on February 3rd was how much gas generation there was over the day. Ontario’s natural gas plants produced 88,172 MW which coincidently was only slightly higher than our total exports. It is worth pointing out when a MWh of natural gas is generated ratepayers are only paying the raw costs of the natural gas plus a small markup as the capital costs and the approved ROA (return on assets) have been included in the price of electricity since those plants were originally commissioned. In other words once a gas plant is operating it generates power that is very much cheaper compared to both wind and solar.
Quebec Support
About 60% of households in Quebec heat with electric furnaces or electric baseboards so are dependent on electricity to stay warm during cold winter days. For that reason we should suspect Ontario’s natural gas plants may have played a key role in ensuring those Quebecers were able to avoid a blackout on the recent very cold days we have just experienced.
The other thing Ontario’s natural gas plants may well be doing is allowing Quebec EV owners to recharge their EV batteries. Approximately 10% of all new cars registered in Quebec* are EV possibly due to the large $8,000. grant the province provides to purchase them. Interestingly, while Hydro Quebec tells households to turn down their heat and avoid using certain appliances during peak hours, they say nothing about when you should or shouldn’t charge your EV.
The generosity of Ontarians is astounding due to the treatment of IWT and the contracts in place providing those “first-to-the-grid” rights. On top of that, if we are subsidizing the sales of our IWT surplus power to other markets where it may be used to charge EV it just doesn’t seem quite right!
Maybe the Ford Government should ask Quebec to provide Ontario with carbon credits to offset the “emissions” of our natural gas plants that keep their people warm in the winter!
*A September 22, 2022 New York Times article stated the following about EV in Quebec: “Quebec has 150,000 electric vehicles on the road, compared with 113,000 in New York State, an indication of how ubiquitous charging can encourage ownership.“
Those IWT (industrial wind turbines) along with solar panels once again demonstrated their inability to provide Ontarians with reliable power when it’s actually needed!
Peak hour on January 18th came at Hour 18 (hour ending at 6 PM) when Ontario’s peak demand reached 19,250 MW and those 4,900 MW of grid connected IWT managed to only generate 218 MWh or 1.1% of peak demand and 4.4% of their capacity. At that hour the sun wasn’t shining so no solar generation occurred. Our natural gas plants however, filled in the gap providing 4,038 MWh or 21% of peak demand while the balance came from our nuclear and hydro generation sources.
If one travels back in the day and notes what IWT were doing, they once again demonstrated their nasty trait of generating unneeded power. From Hour 1 to Hour 13, IESO forecast they would generate 29,859 MW (46.8% of their capacity) but accepted only 25,040 MW meaning just over 4,900 MW were presumably curtailed. Due to the “first-to-the-grid” rights and the generous contracts granted the owners of those IWT we taxpayers and ratepayers paid for both the accepted and curtailed power.
Over those same 13 hours our net exports (exports minus imports) were 19,827 MW (79.2% of accepted IWT generation) and the intertie price only averaged $17.47/MWh or 1.7 cents/kWh over those hours. As IESO were selling the surplus power off we were paying $135/MW for the IWT accepted power and $120/MW for what was curtailed. The foregoing suggests it cost us (ratepayers/taxpayers) about $3.5 million for that unneeded IWT generation over those 13 hours.
While natural gas stepped up when needed in Ontario, we should also understand it’s importance by simply seeing what most of Europe is experiencing without natural gas. Many households are suffering from the lack of reliable electricity generation due to their various government’s endorsement of wind and solar while exiting fossil fuel generation except for a little bit of natural gas. That push coupled with Russia’s curtailment of natural gas sales into Europe has driven up their costs of power and is even creating energy poverty for many “middle class” households! In some instances rationing of electricity is happening as charging EV and running your heat pumps could cause the electricity grid to collapse.
We Ontarians should take a moment to thank Alberta for providing us with natural gas which in addition to helping keep the lights on and power our businesses also provides heat for over 60% of all our households in the province.
Ontario’s Minister of Energy, Todd Smith should think seriously about December 20th and contemplate; if we were without natural gas generation, how would the province have avoided blackouts? What would we need to have in place to provide the 124,792 MWh (what 4.1 million average Ontario households consume daily) our gas plants supplied on that December day?
More wind, more solar? If he picked those two intermittent and unreliable sources, we would need a multiple of at least five times current capacity. Even then, if they only generated five times the 232 MWh, they did at Hour 3, we would have experienced a blackout in the middle of the night during a low demand hour. Natural gas generators at that hour produced 4,003 MWh (26.8% of demand).
Throughout the day grid connected wind generated about 21,000 MWh and solar 547 MWh. At peak demand, Hour 18 ending at 6 PM, wind generation neared its peak for the day generating 1,341 MWh (6.8% of demand) whereas our gas plants generated 6,033 MWh or 30.4% of peak demand. Because demand was relatively high and wind failed to generate less than an average of 900 MW per hour the market price (HOEP) averaged $82.88/MWh over the day so the 39,000 MW we sold to our neighbours in NY, Michigan and Quebec generated a reasonable price compared to days when the wind is blowing hard and the sun is shining.
If Smith said hydro, it would be sensible, however Ontario has pretty well exhausted its hydro sources near population centers so that’s not an option. We would need to open up the northern reaches of the province and spend billions of tax dollars to build roads, transmission systems and the hydro plants themselves to get the power to where its needed. Not feasible for well over a decade!
Nuclear would be a good and logical source, however the only possible new nuclear we might get in the next 10 years is a 300 MW capacity SMR (small modular reactor) now in the planning stage by OPG.
What’s left then for him to contemplate is either hydrogen or storage. The former is still in early test stages and unlikely to be scaled up for a decade or more. Despite the foregoing the push for it by many European countries is on as they view it as the solution to achieving “net-zero”. The big concern about hydrogen is associated with possible leaks as a recent article noted: “Scientists have warned that hydrogen could be a significant “indirect” contributor to the greenhouse effect when it leaks through infrastructure and interacts with methane in the atmosphere.“
One should wonder does Minister Smith have a belief “storage” is the option and if so, how much will be needed? In the near term he seems to have somewhat recognized the fallibility of our electricity system as his Ministerial Directive of October 6, 2022 directs IESO to secure a minimum of 1,500 MW of storage generation and a maximum of 1,500 MW of natural gas generation. On the former he had already directed IESO to negotiate a 250 MW battery storage contract with Oneida on August 27, 2022 despite the need for a cost/benefit study as noted in a earlier article.
Minister Smith had also asked IESO to prepare a plan to allow Ontario’s electricity system to be fully “decarbonized” by 2050 and in their response titled: “The Pathways to Decarbonization” they included 2,507 MW of storage capacity in 2035.
The full costs of that capacity will be in excess of $2.4 billion based on a recent well researched article suggesting battery costs are a minimum of US$700K (CA$950K) per MW of capacity. Battery storage capacity results in about only 80% of it as being available when it’s needed on the grid, but, it can deliver the rated capacity for three hours. That means 2,507 MW of battery storage at a capital cost of $2.4 billion could deliver approximately 6,000 MWh before having to reload.
Now, if we consider the generation provided by Ontario’s natural gas plants on December 20, 2022, one notes we would need twenty-one times more battery storage to generate the almost 125,000 MWh they delivered. The capital cost would be astronomical and amount to about $50 billion. Repaid over the 10-year lifespan of the batteries (including a profit margin of 10%), it would result in adding $5.5 billion of annual costs to ratepayer bills.
What the IESO chart suggests is natural gas capacity coupled with; “New Capacity Online by 2035” in the form of; Demand Response, Solar, Wind and new Nuclear, we will not need additional storage. Let’s hope their forecast is accurate despite the “Disclosure” on Page 2 stating:
“The information, statements and conclusions in this report are subject to risks, uncertainties and other factors that could cause actual results or circumstances to differ materially from the report’s findings. The IESO provides no guarantee, representation, or warranty, express or implied, with respect to any statement or information in this report and disclaims any liability in connection with it.”
The 2035 scenario depicted by IESO also contained the following suggesting they had some faith in part of their report: “New large hydroelectric and nuclear facilities were not selected due to lead times that extended beyond the horizon of this scenario. As firm imports from Québec would require resource development in that province, they proved to be costly and were also not selected. Finally, with 2,500 MW of battery energy-storage systems included in the base supply mix, the value of additional storage diminished, hindering its selection.“
Hmm, kind of makes one wonder if the “Pathways” report is delivering what Minister Smith has in mind?
An article written by Allison Jones of the Canadian Press and dated December 26, 2022 reputedly confirmed Minister Smith’s directive to IESO to obtain the additional 1,500 MW of natural gas generation along with the “2,500 megawatts of clean technology such as energy storage”. The article went on to claim, “Smith said in an interview that it’s the largest active procurement for energy storage in North America.“ Another quote in the article came from Katherine Sparkes, IESO’s director of innovation who apparently said:
“As we look to the future and think about gas phase-out and electrification, one of the great challenges facing all energy systems in North America and around the world is: How do you address the increasing amounts of variable, renewable energy? resources and just make better use of your grid resources,” she said.
“Hybrids, storage-generator pairings, give you the ability to deal with the variability of renewable energy, meaning storing electricity when the sun isn’t shining or the wind not blowing, and then using it when you need it.”
We ratepayers should all be troubled if the foregoing is a quote from IESO’s director of innovation! In that position she should know if the sun isn’t shining, or the wind isn’t blowing there is no energy that can be stored!
On the other hand, if it’s a misquote by the author of the article, its what we have come to expect from the MSM reporters who seem to frequently fail to do any fact checking. The latter is evident in other parts of the article where obtuse comments are made and accepted with one of them suggesting their company will “make power plants obsolete” using EV and another suggesting “the provincial and federal governments need to fund and install bidirectional chargers in order to fully take advantage of electric vehicles.” No indication was in the article as to what sources of energy would be used to power up those EV batteries nor does the author question those making the statements.
It is readily apparent the author of the article failed to either question those interviewed or to seek other views that might challenge their claims. Unfortunately, investigative journalism is no longer within the purview of those associated with the mainstream media.
Conclusion
Natural gas is a fossil fuel that benefits mankind in many ways and the cold December day we Ontario residents recently experienced clearly demonstrated how it is needed until something better comes along. It is self-evident the “something better” is clearly not battery storage.
Let’s turn up the heat on our Ministry of Energy and the many reporters in the media who message us with the propaganda perpetrated by those who want us to freeze in the dark!
Recently invited to be a guest on Zoomer Radio, I agreed, and was informed I would be joined by Bryan Purcell, VP of Policy and Programs at The Atmospheric Fund. TAF is a “not-for-profit” company with almost $100 million of “restricted funds” that have been provided by the City of Toronto, the Province of Ontario and the Government of Canada and appears to have 30 employees. They use the revenue generated from the funds ($7.1 million in their 2020 and $1.2 million in 2021 financial reports) and other revenue (minimal) to provide grants described as: “has the potential to generate large-scale carbon reduction in the GTHA“ (Greater Toronto Hamilton Area).
The planned discussion/debate was to be in respect to a Toronto Star article posted November 30, 2022 titled “Ontario’s new gas plants will cause your hydro rates to rise, report says” and presumably for Zoomer’s audience to hear competing views on the content in the article from yours truly.
Shortly before the program was to start the Auditor General of Ontario released her annual report so I, and presumably Bryan Purcell, were informed the discussion was cancelled as the host wanted to cover the AG report due to it’s significance in detailing how the AG viewed Premier Ford’s led financial management over the prior year.
The TorStar article was written by Marco Chown Oved*who identified himself as a “Climate Change Reporter” in the article heading! On his LinkedIn profile, he identifies himself as an “Investigative Reporter at Toronto Star”! The TAF representative, Bryan Purcell, also scheduled to be on the radio program, is quoted in the article and on his LinkedIn profile states he is a: “Environmental Professional focused on Climate Change mitigation“ but his qualifications suggest he is stretching the truth.
Below we will examine some of the claims made in the article based on the report prepared by Power Advisory, which we assume TAF paid for with our tax dollars! The report’s author from Power Advisory was Travis Lusney, whose LinkedIn profile discloses he was the Senior Business Analyst at the OPA (Ontario Power Authority). In that former position he states he; “Managed analysis and implementation of procurement policy. Focused on the Feed-In Tariff Program with emphasis on pricing, connections and stakeholder engagement.“ Hmm, one should wonder if Mr. Lusney, was at least partially responsible for the cost of electricity in Ontario jumping by over 100% due to the FIT contracts to wind and solar proponents which paid them as much as 82 cents/kWh for rooftop solar. Perhaps we should take his recent report to TAF with the proverbial “grain of salt”, or should we simply shrug it off based on the “investigative journalism” claims of Marco Chown Oved, the Toronto Star reporter?
Claims from the article:
“Rather than relying on natural-gas-fired generation to meet growing electricity demand, Ontario’s cheapest and most reliable options require new wind and solar,”
It is unbelievable the “investigative journalist” didn’t bother to do a little research work on the foregoing claim as he would quickly discover wind and solar are not the “cheapest and most reliable”. Had the author simply bothered to look at the February 2022 report of the FAO (Finance Accountability Office of Ontario) he would have discovered they have driven up the cost of electricity to the point where taxpayers are forced to absorb a cost of “$38.6 billion (32.7 per cent) to move most of the cost of 33,000 renewable energy contracts with wind, solar and bioenergy generators from all electricity ratepayers to the Province.“ Had he also bothered to just examine a few days of IESO data he may also have discerned wind and solar’s bad habits of generating power when it’s unneeded and failing to deliver power during “peak hours” on cold winter days and hot summer ones. Recent examples of unneeded power generation occurred December 2nd and 3rd when IWT (industrial wind turbines) operated at 76% of their rated capacity whereas on December 7th and 8th they operated at a miserly 8.5% of their rated capacity. In the first instance the IESO were forced to sell off that power for pennies of it’s cost and in the latter case natural gas and hydro ramped up to prevent blackouts such as those that occur in California and elsewhere around the world where wind and solar are a large part of electricity grids.
People, governments and businesses are switching en masse to electricity as a power source for cars, heating and heavy industry in an effort to lower carbon emissions and avoid the worst effects of climate change.
Once again, the Toronto Star’s “investigative reporter” obviously did not do any research, or he would have discovered the “en masse” switch is not happening to any great extent without government grants, and they obviously must be higher or people won’t switch. In the case of EV penetration a very recent article from mid November pointed out EV sales in Canada were low during the first 6 months of 2022 stating: “Based on average new vehicle registrations, the EV total would have to grow from 55,600 to about 480,000 over six months to hit that 60 per cent target.” The 60 per cent target is for 2030 and the 2035 target is 100 per cent. The Federal government also hand out grants for heat pump conversions as well as interest-free loans of $40K but once again reviewing government statistics the conversion rate is not happening. A StatCan report notes heat pumps as a primary heat source have only grown from 3% in 2013 to 5% in 2019 and forced air furnaces have only declined by 1% from 53% in 2013 to 52% in 2019. Funnily enough, electric baseboard heaters over the same time frame fell from 28% to 26%. The actual data easily demonstrates the “en masse” switch the author suggests is a fallacy!
“The report says Ontario needs to start making significant investments in its grid, especially considering the lengthy timelines required to build the transmission, generation and storage required to simultaneously meet demand and reduce emissions.”
Hydro One just received approval from the OEB (Ontario Energy Board) for a rate increase for planned capital spending on their transmission system. The spending appears to represent about $7.5 billion over the next five years. Spending of that amounts suggests the investment is “significant” and a little research by the article’s author would have disclosed that! No investigative integrity is apparent!
“It’s very clear that if we’re going to go to net-zero, renewables are going to be part of the mix,” said Travis Lusney, the report’s author and director of power systems at Power Advisory. “How far you go is dependent on a lot of factors, even outside of the electricity sector.”
Well, it is apparent Lusney has a love affair with renewables as his prior role at the OPA (Ontario Power Authority), created by the McGuinty Government handed him the power to construct the mess of the electricity sector in Ontario that (as noted above) the FAO stated in his February 2022 report will cost taxpayers $38.6 billion.
“The report finds that a 97 per cent non-emitting grid can be achieved by building new transmission lines, solar and wind generation as well as energy storage facilities. This would allow the grid to reduce its dependence on natural gas to a few peak demand days in mid summer.”
It is worth noting the report fails to mention Ontario’s electricity grid is already over 92% “non-emitting” and fails to include a cost/benefit analysis to achieve the additional 5% emissions reduction it seeks. The report in the three scenario’s recommends adding as much as 12,700 MW of wind capacity, 5,500 MW of solar capacity and 3,900 MW of storage capacity. The report goes on to suggest those wind turbines, solar panels and the storage capacity be spread throughout the province. The report then forecasts due to the spreading it would require as much as an $8.4 billion spend on the transmission system in order to get the power to where its needed. In summary the Power Advisory report recommends spending billions of dollars to achieve a 5% reduction in emissions in Ontario’s electricity system. As outlined above it is very unlikely those new facilities coupled with the additional wind, solar and storage capacity and their associated costs would reduce electricity prices! Instead those costs would drive up prices much as they did in the past with a much smaller capacity addition of renewables. Nevertheless, we should be pretty sure Power Advisory would love the foregoing to happen and Travis Lusney would surely rise in the ranks of his employer, Boston Advisory, who would stand to benefit from the money stream generated by assisting applicants seeking contracts from IESO.
“In each scenario, hydro prices will be lower than they would be if the province goes through with its plan to build new gas plants, the report concludes, mostly because gas is expected to get more expensive, a rise that will be exacerbated by the increase in carbon tax. Meanwhile, prices for wind and solar, which are already cheaper than natural gas, are expected to fall.”
First off, one should wonder how each scenario will cause “hydro prices” to be lower but perhaps they were actually suggesting “electricity prices” will be lower? Past and current experience in Ontario due to wind and solar generation have actually caused “hydro spills” meaning OPG are paid to simply spill water over dams without running them through the turbines. Ratepayers, however pick up the costs of those spills and for the past several years their costs have been substantial. The spills by OPG are almost always caused by unneeded wind generation as their contracts give them “first-to-the-grid” rights . On the statement, “prices for wind and solar” are expected to fall” is also far from the truth. As one example an article last month about Vestas, the world’s largest wind turbine manufacturer, stated: “Vestas has raised prices more than 30% in the past year to help stem losses.“ It should also be recognized gas prices would fall if our abundant supplies in Saskatchewan and Alberta had more pipelines available but the Federal government has done everything in its power to prevent that from happening.
As the foregoing once again suggests; the Toronto Star, their reporters, and other MSM companies simply accept what they are told or read and fail to do any research to determine if they are providing facts or fiction. In this case it seems obvious it is the latter and reporter Marco Chown Oved should immediately rewrite his LinkedIn memes as it doesn’t suggest he is a “investigative reporter”!
* Marco Chown Oved’s LinkedIn biography brags about how the CAJ (Canadian Association of Journalists) were so enthralled with an article he wrote about “climate change” they blessed him for writing it. Perhaps they will do so again for this diatribe of BS as the MSM seems to have abandoned publishing the truth and the CAJ has endorsed their abandonment! This is what Marco Chown Oved has on his LinkedIn site: ”Awarded the inaugural Environmental and Climate Change Award from the CAJ for my feature on heat waves in Montreal, a part of the Toronto Star’s Undeniable series on climate change.”
A recent rate application before the OEB (Ontario Energy Board) brought back memories of when Bob Chiarelli was Ontario’s Minister of Energy and when queried about the costs of cancellation of the planned Oakville TransCanada gas plant stated: “It’s less than a cup of Tim Hortons coffee a year“!
What brought the foregoing to mind was an OEB application from Wataynikaneyap Power LP for transmission rate increases that (it appears) would apply to all of Ontario’s ratepayers not just those 16 First Nations and their 14,000 residents that will eventually be connected to the power grid.
The announcement made in March 2018 with great fanfare by Ontario Premier Kathleen Wynne and Federal Minister of Indigenous Services, Jane Philpott, concerned a $1.6 billion dollar Federal Government grant to build an 1,800-kilometre transmission line(s) to connect those 16 communities. The application submitted to the OEB seeks .20 cents monthly from all Ontario’s residential ratepayers which equates to $2.40 annually so is very close to the cost of an extra-large “timmies”. Over the 40-year estimated life of the transmission lines the total amount paid by all residential households would be approximately $400 million for this application which is a lot of “timmies” coffee. We should suspect the cost will increase as the transmission lines reach further to connect with the 14 other First Nations. Oh, and an unknown portion of the .20 cents will go to Hydro One.
The OEB also recently ruled on a significant application from Hydro One related to both their transmission and distribution connected customers. The OEB labeled it as; “the largest and most complicated rate case to come before the OEB.“ The reasoning behind the foregoing comment was because it was “a combined proposed revenue requirement of approximately $20 billion and a proposed investment plan of about $13 billion over the 2023-2027 rate period“ The result of their review and ruling is; all ratepayers will see an increase in rates associated with transmission costs and those who are Hydro One distribution customers will be slapped with an additional rate increase.
The bill impacts noted by the OEB stated “on the transmission portion of the application, it is estimated that for a typical Hydro One residential customer with a monthly consumption of 750 kWh, the total bill impact averaged over the 2023-2027 period will be an increase of $0.69 per month“. Once again that doesn’t sound like much and will amount to only $8.28 annually but with 4.2 million households it totals around $35 million for the year and over five years becomes $175 million without factoring in the costs to businesses and other large consumers.
The rate increase for Hydro One’s distribution customers approved was; “ for a typical residential distribution customer of Hydro One with a monthly consumption of 750 kWh, the total bill impact averaged over the 2023-2027 period will be an increase of $2.43 per month or 1.5%.“ For a residential customer consuming 750 kWh monthly the annual cost comes to $29.16 but will be more for businesses, farmers and other larger consumers. For the approximately 1.4 million Hydro one residential customers alone the costs will be north of $41 million annually and for businesses will be much higher than the $29.16 for the “average” residential customer.
As is obvious from the OEB announcements electricity rates are going up but, those increases are not because Ontario has added new generation it’s simply to help build new transmission lines to First Nations, upgrade existing ones and their associated infrastructure for the planned “full electrification” of the electricity sector. One should wonder is it meant to ensure you will be able to charge your EV during our cold winter days.
Hydro One customers may well be forced to reduce their “timmies” intake over the upcoming years!
Yesterday October 22, 2022, those IWT (industrial wind turbines) demonstrated their intermittent and unreliable traits. As is often the case in the Spring and Fall those IWT were humming but those seasons are when Ontario’s demand is at it’s lowest and yesterday was no exception as peak demand occurring at Hour 18, was only 15,242 MW.
Wind at Hour 18 generated 3,037 MW or almost 20% of peak demand and for the full day generated about 79,100 MW with their (potential) peak generation at Hour 6 when they were forecast to generate 4,079 MWh. It appears at that hour, about 400 MW were curtailed. In addition to what was accepted by IESO into the grid IWT also curtailed around 3,700 MW over the full day. If one does the math (79,100 MWh grid accepted + 3,700 MWh curtailed = 82,800 MWh) and multiplying the accepted MW X $135 and curtailed MW X $120 you see the full cost of IWT for the day was around $11,124,000 or an average of $140.63MWh (14.1 cents/kWh).
If one goes further and looks at net exports (exports minus imports), we note 40,619 MWh went to our neighbours in Michigan, NY, Quebec. It is reasonable to assume those MWh sold were caused by the excess and unneeded IWT generation and what they were sold for, considering their costs, as noted in the preceding paragraph was somewhat shocking. The average HOEP (hourly Ontario energy price) market price over the 24 hours was $13.26/MWh (1.3 cent/kWh) meaning the loss (based on the average price paid for the IWT generation less the revenue earned from their sale) represented a one-day cost to ratepayers of close to $5.2 million.
What makes the loss rather staggering is the fact that 3,000 MW of our baseload capacity (Pickering Nuclear) is down and going through a VBO (vacuum building outage) to ensure the integrity of the equipment and infrastructure. Had Pickering been in service all the IWT generation would have been surplus to our needs and most of it would have been curtailed or sold for a few pennies! That would have represented a one-day cost of over $10 million for NOTHING!
With the above facts in mind, we Ontario ratepayers should all try to imagine how, or if, that surplus IWT generation could have been stored for our future needs during those upcoming cold winter days when peak demand is in the 20,000 MW range and those IWT are not spinning. We would need a mess of batteries and they are only capable of storing power for about four hours of demand!
Without Pickering Nuclear, Ontarians could be facing blackouts when of if they fail to receive approval for an extension or, natural gas generation is shut down by 2030 as proposed by 34 municipalities who have signed on to the OCAA push endorsing the “gas power phase out”.
In respect to the latter perhaps consideration should allow those 34 municipalities to be delinked on the grids sending natural gas generation to them effective December 31, 2029. If their municipal leaders have any common sense a promise to do that might trigger them to do some research to learn a little more about Ontario’s electricity generation sources and raise some real concerns.
In the interim perhaps we simply rephrase what Albertan’s rejuvenated when the last Trudeau was PM from, “Let the eastern bastards freeze in the dark” to: “Let the 34 municipalities phasing out natural gas freeze in the dark.”
Parker Gallant Energy Perspectives 