Who gets the carbon credits for recycling wind turbine blades and other burning questions?

As a climate change “realist” this past week has been what I would term, over the top. It seemed there is total confusion about what we should do and what we should avoid to push for net-zero emissions and move to the “circular economy”.  Some examples:

Industrial Wind Turbines are not yet part of the Circular Economy          

Cement giant LafargeHolcim and GE’s renewables wind turbine unit are teaming up and the purpose is “to explore the recycling of wind turbine blades.” The main objective of the partnership is to focus on “circular economy solutions”.  The same article notes one of the largest companies producing IWTs, Vestas, in early 2020 said it was aiming to produce a “zero-waste turbine” by 2040.  If one gives some thought to the Lafarge/GE team you conclude recycling fiberglass, etc. blades should result in the handing out of “carbon credits”! Both of those team members would presumably want them as they both are facing rising costs associated with “democratic” governments punishing them with a carbon-tax due to their emissions. The proponents of renewable energy from wind turbines must now be wringing their hands in confusion as they had pushed the concept that energy produced from them was emissions free but refused to admit their manufacturing generated emissions and that the blades were not recyclable.  It should also be noted that cement if it was a country would reputedly “rank fourth in the world as a climate polluter.”  IWT, based on many research papers could, “warm the surface temperature of the continental U.S. by 0.24 degrees Celsius, with the largest changes occurring at night when surface temperatures increased by up to 1.5 degrees.”  So, will those carbon credits be shared or will they both be rewarded with the carbon tax we consumers are paying now and in the future?

Swiss CO2 law defeated at the ballot box means no carbon tax for the Swiss  

The Swiss held a vote on a CO2 law, based on the “polluter pays” principle,”. It targeted “road vehicles, air traffic, industrial emissions, and the renovation of buildings. Those who cut their CO2 emissions would have benefited from exemptions.” Presumably those who didn’t “cut emissions” would pay an emission tax. Switzerland’s government now has a problem as they have committed to the EU they would cut their emissions. 

It was interesting to note “Urban cantons including Basel, Zurich and Geneva voted in favour of the bill.  But 21 of the 26 Swiss cantons struck it down.”  One should suspect had Canadians voted on the recent move by the Trudeau led government to impose the increase to $170/tonne on emissions the outcome may well have turned out similar. Most large urban community voters seem to fail to realize the outcome will drive the cost of living up as the “carbon tax” climbs whereas the rural communities have a much better understanding of basic economics!

Interestingly the nay side “argued that Switzerland will not make a critical difference to global climate efforts since the real game-changers are China and the United States when it comes to reducing CO2 emissions” which many sane Canadian voters also understand.

So, the question is; when will Canadian voters be given the opportunity to vote yay or nay to the carbon tax?

Meteorologist Says Snow in June In Line With Historical Snowfall on Avalon                                          

The forgoing story about snow in Avalon, Newfoundland June 10, 2021 caught my eye due to having recently watched a video with Natural Resources Minister, Seamus O’Regan doing the introductory speech in a video at the launch of the Ottawa Climate Action Fund (OCAF).  As an aside, OCAF is proposing to spend $57.4 billion tax dollars to make the City of Ottawa achieve “net-zero” emissions by 2050. In the opening welcome from O’Regan he opined about last winter stating, “average temperatures of 10 degrees higher than normal in the height of winter” in parts of Labrador suggesting it was caused by climate change. What he failed to say was average winter temperatures in Newfoundland and Labrador can swing widely by as much as 30 degrees so 10 degrees hardly seems unusual. Nevertheless If you’re pushing the “net-zero” theory to justify handing out tax dollars to groups like OCAF you may only want to present information that is one-sided.

The question someone in the media should ask O’Regan is; do you think snow in June is caused by “climate change”?

Centre Block renovation to take until at least 2030 to complete, cost up to $5Billion                     

Another article that caught my eye was once again all about Ottawa and referenced how the renovation associated with the Peace Tower and Centre Block was not only going to cost taxpayers $5 billion but would also not be completed until 2030 or 2031.  One of the strange issues arising out of the renovation had nothing to do with the $57.4 billion the City of Ottawa wants to spend to make the city reach “net-zero” as the Peace Tower and Centre Block are owned by the Government of Canada. The article noted:

It’s being promised by PSPC (Public Services and Procurement Canada) that the renovation will result in transforming the “largest energy consumer and greenhouse gas emitter” within PSPC’s portfolio of federal buildings into a carbon-neutral facility with significant reductions to energy and water consumption.”

I’m sure PSPC has numerous properties emitting “greenhouse gas” but probably none of them are places where so many politicians are present so perhaps, as taxpayers, we were aware of where the largest “carbon emissions” emanate from; when parliament actually sits. 

Putting aside the fact that our parliamentarians spew “greenhouse gas” one wonders why PSPC didn’t look for alternatives to spending all those tax dollars?  Was the only choice to spend $5 billion to make it “carbon-neutral” or perhaps they should have considered buying some of those California “Global Emission Offset Credit’s” priced at US $20.32/tonne for June 2021? $5 billion would buy a lot of those “offset credits”!

PwC to add 100,000 jobs in US$12 billion strategic revamp

An article in the Financial Post last week stated “PricewaterhouseCoopers LLP is investing US$12 billion across its global business in an overhaul targeting better audits, digitization of services and greener operations.” The article went on to note: “The professional-services provider will hire 100,000 employees and develop the skills of existing staff over the next five years as it seeks to respond to the post-pandemic operating environment” and went on to state; “The firm’s spending will also focus on responding to environmental, social and governance (ESG) trends across its operations.” ESG was a creation of the World Economic Forum (WEF) which was founded by the German economist Charles Schwab.  ESG is fully supported by the big four audit firms as it will allow them to increase their audit bills and some of those funds will presumably result in hiring more staff with those (whatever they are) ESG audit skills. It will also allow the big investment firms like Bloombergs, Brookfield, etc. to make lots of money trading those carbon credits that many firms will be required to purchase due to regulations and “Acts” imposed by government bodies at all levels.

My question is related to the foregoing imposition of ESG!  ESG imposition seems destined to make the very rich even richer and those in the middle and poorer classes poorer and is that it’s objective?

A bird stands in the way of India’s green goals  

India has so far escaped the need to impose carbon taxes but they do seem concerned about “climate change” so have been handing out contracts for more coal generation as well as wind and solar generation. This article indicates they have received push-back from the Wildlife Institute of India on the latter contracts and they were successful pushing for buried transmission lines in order to save an endangered bird known as the “great Indian bustard”.  The Supreme Court ruling supported the Institute but now the developers are crying because burying the transmission lines will reputedly increase costs to them by $4 billion.

The question I would have for the Canadian judicial system is why in most cases when similar objections were raised by opponents of wind and solar generation in Ontario and elsewhere did the rulings handed out favour the developers and ignore wildlife proponents?

IESO and OEB join forces to support innovative projects to help meet province’s growing energy needs

The IESO (independent Electric System Operator) and the OEB (Ontario Energy Board) recently issued a Press Release announcing they have formed a new partnership. The partnership “would test the capabilities of Distributed Energy Resources (DERs) in providing services at both the local and provincial levels.” The DER resources they want to test are identified as: Some examples include rooftop solar panels, battery storage units and demand response devices, such as smart thermostats, that help reduce or shift consumers’ electricity usage.”  While industrial wind turbines are missing from the examples one should assume they are part of the mix as approximately 600 MW (megawatts) of their capacity are already part of the DER!  Ontario’s ratepayers have already experienced those “innovative projects” (sarcasm intended) which caused electricity rates to jump over 100% creating energy poverty while driving energy dependent businesses out of the province. IESO will also subsidize those “innovative projects” via their Grid Innovation Fund (GIF) while the OEB will provide “temporary relief” from regulatory guidelines.

My question is; why is the Minister of Energy allowing this to happen when the outcome has already been clearly demonstrated?

Conclusion  

From all appearances it appears confusion reigns supreme throughout the world when itcomes to the question of “climate change”, and the myriad ways governments and their regulators are dealing with it.  It is time realism is deemed important in respect to the global movement to effectively increase energy poverty and for governments to respect scientific opinion that has been tossed aside by the super-rich out to increase their wealth while harming the rest of mankind!

The time has arrived for governments to answer our “climate realism” questions!

Ottawa spending billions to get to net zero

Marc Patrone, host of the weekday show from 9 AM to 11 AM had me on as a guest this morning (June 17, 2021) to talk about the City of Ottawa’s “Energy Evolution”. While we discussed the foregoing briefly we also touched on several other energy related subjects such as the Line 5 pipeline and what the Ford Government has done in respect to the electricity sector in Ontario and the wind projects.

You can listen to the podcast starting at 1:17.37 here:

If you are a subscriber to NEWSTALKCANADA you can listen here:

https://newstalkcanada.com/?page_id=2527

The OEB and IESO are Coming After us Ratepayers Again

It appears the almost 200 employees at the OEB and the over 700 employees at IESO who collectively must survive on an average annual salary, plus benefits, of only $150K are concerned as the Covid-19 pandemic has affected people in the province.

If for some reason you felt their concerns were related to all the people who have been laid off or will lose their jobs or businesses because of the pandemic you would be sadly mistaken!

The concern, as expressed by the OEB is with OPG and electricity transmitters, ie: Hydro One!  Their recent letter of April 29, 2020 instructs those two parties to:  establish “Deferral Accounts to Record Impacts Arising from the COVID-19 Emergency”.  The letter notes; “electricity and natural gas distributors* may incur incremental costs as a result of the ongoing COVID-19 pandemic.”  As a result, the “OEB ordered the establishment of a deferral account with sub-accounts for electricity and natural gas distributors to use to track any incremental costs and lost revenues related to the COVID-19 pandemic effective March 24, 2020.”

NB: deferral accounts are set up to recoup lost revenue!

The IESO held a webinar April 23, 2020 titled: “An overview of COVID-19 impacts on electricity system operations” to also deal with the issues.

IESO disclosed some interesting pieces of information in their webinar such as:  “IESO and stakeholders have been limiting staff on-site, deferring non-essential work, and focusing on core operations” and “A third control room was built and successfully deployed in 10 days, which can be used to further maintain physical separation of control room operators”.

The latter disclosure is a big wow, as many of us have been after IESO to provide up-to-date disclosure information on issues such as: curtailed wind, spilled hydro, embedded generation etc. etc. for years without success but show them a “pandemic” and they can apparently accomplish a new “control room” in 10 days!  A simple search on the IESO website of “transparency” generates 2,290 hits but for some reason they have difficulty generating the foregoing information for those of us with a curious mind!

IESO’s webinar does provide some interesting information and the following stands out not so much for its truthfulness as much as for what IESO ignores.  First, what they posted: “High surplus baseload generation (SBG) conditions are often observed in the spring when demand is low and there are large amounts of energy from hydroelectric resources caused by higher water levels”.  The foregoing comes as no surprise however, what is surprising is, they make no mention of either wind or solar’s penchant to produce much higher generation during the Spring!  Why focus on what we all know and avoid what we would like to know?

Needless to say, the webinar info discloses (with the exception of residential consumption increasing by 4%) all segments: small commercial, industrial, etc. are showing decreased consumption in the double digit category meaning surplus baseload generation is being exported (at very cheap prices) or (non-disclosed) we are curtailing wind or spilling hydro and it will appear in our future bills and we must pay for it.

Add the above to the OEB and IESO efforts to ensure OPG and Hydro One employees (as well as themselves) can maintain their lifestyles and watch those OEB “deferral accounts” bound upwards.

Ratepayers should prepare themselves for future rate increases to ensure all those overworked and underpaid “public service” employees in the electricity sector receive their entitlements!

*While the word “distributors” is used we are unsure if that applies to all of the almost 70 LDC (local distribution companies) in the province.

Ontario electricity ratepayers paid up big-time to reduce emissions

The “Ontario Energy Quarterly” is a report containing a myriad of information related to the Ontario electricity sector and seems to be a collective production of the Province, the OEB and IESO.  It includes a chart tracking Ontario’s electricity sector emissions from 2010.  The report always appears six or seven months after the actual reporting date.  Their recent report indicates as of the end of the 2nd Quarter of 2019 Ontario’s emissions had fallen from 20 megatonnes (MT) in 2010 to only 2 MT by June 30, 2019

To put the foregoing in perspective the Ontario Environment Commissioner in 2016 indicated Ontario’s emissions peaked at 208 MT in 2000 and according to the Federal Ministry of the Environment and Climate Change Ontario’s emissions in 2017 had fallen to 158.7 MT.  So, Ontario’s emissions fell 49.3 MT meaning the 18 MT drop in emissions from the electricity sector represented 36.5% of it. At the end of the 2019 2nd Quarter, emissions from the electricity sector represented only 1.25% of total Ontario emissions in 2017 versus 11.5% in 2010 when total Ontario emissions were 174.1 MT.

The above was achieved without a “carbon tax” but it’s been an expensive proposition for ratepayers.

Costs of reducing 18 MT of emissions in the Ontario electricity sector

Many reports and articles related to reduction of emissions in Ontario’s electricity sector suggest wind and solar generation was responsible for eliminating coal generation in Ontario.  Those purveying the claims avoid the facts and fail to mention costs. The decade beginning in 2010 was the advent of above market contracts signed under the GEA for wind and solar that began to appear on our landscape.  Those contracts drove electricity costs up generating unreliable intermittent generation necessitating back-up from gas plants* including the TransCanada Oakville gas plant move which cost $1 billion.

Looking at generation for the past decade (2010-2019) from wind and solar is a relatively simple task as Scott Luft using IESO data, posted generation by source and estimated costs in charts (complete with text) starting with 2008.  He also charts our exports and its revenue over the same time period.

Wind: Let’s start with industrial wind turbine generation which in the ten-year period (2010-2019) resulted in accepted wind of 83.3 TWh and 10.5 TWh of curtailed wind.  The combined cost of the generation and curtailment was $12.760 billion representing an average cost per kWh of 15.32 cents.

Solar: Over the decade solar panels generated 21,9 TWh with most generation delivered to local distribution companies.  The costs of those 21.9 TWh was $10.504 billion or 48 cents/kWh.

Spilling water: As if to make matters worse, as Ontarians reduced their demand for electricity dropping it from 139 TWh in 2010 to 135.1 TWh in 2019 the generation coming from wind and solar created numerous situations causing SBG (surplus baseload generation) and IESO instructed OPG and other hydro generators to spill water rather than generate clean hydro power.  Once again Scott Luft has summarized available data and estimated the cost of the SBG for just OPG over the past five years. The cost was almost $500 million and was billed to ratepayers.

If one accepts the premise, wind and solar are responsible for the 18 MT reduction, then one must accept the emission reduction represented a cost to Ontario ratepayers of $23.764 billion including the $500 million from hydro spillage. That translates to an emission reduction cost of $1,320/tonne, well above the current carbon tax of $20/tonne and the one proposed by the Ecofiscal Commission of $210/tonne.

Exports: Over the past 10 years, IESO were busy selling our surplus power to NY, Michigan and other provinces and states.  In total, 182 TWh went south, east and west to our neighbours for the market price (HOEP).  Funds lost from those sales (net of transmission costs recovered) were the GA (Global Adjustment) costs of almost $12.5 billion or 6.8 cents/kWh.

It is worth noting; exports of 182 TWh were 173% of the 105.2 TWh of accepted wind and solar generation so, exporting less could have saved us that loss of $12.5 billion.

The foregoing clearly demonstrates the 83.3 TWh wind generated plus the 21.9 TWh solar generated power over the past 10 years wasn’t needed to reduce emissions in Ontario’s electricity sector!  We needed less intermittent unreliable generation as our nuclear and hydro generation (supported by less gas plant capacity) could have supplied our needs and we could still have exported 76.8 TWh.

Ontario Premier Doug Ford should demand the federal government recognize the above “facts” and reimburse the province’s ratepayers by either issuing 182 million tradeable “carbon credits” or pay the province the $23.7 billion we have paid to reduce our emissions. Either one would prove beneficial and when applied to the sector would serve to reduce Ontario’s electricity rates making the province more competitive, thereby improving our economic future.

Failing the above we residential ratepayers should all be looking forward to receipt of our rebate cheque even its only 90% of the $1,320 per tonne we have paid over the past 10 years!

*Gas plants generated 160.6 TWh from 2010 to 2019 at an estimated cost of $19.726 billion or about 12.3 cents/kW.

 

Ontario’s three Classes of electricity ratepayers

The title above is intentionally misleading.

Ontario has only two classes of ratepayers which are: large industrial users referred to as, Class A and the rest as simply Class B!

Class A’s do have sub-categories related to their peak demands and in order to obtain lower rates, they must pick the “high five” hours of the year when Ontario’s demand reaches its highest level(s).  Picking those hours and reducing their demand (by firing up a diesel generator) allows them to achieve significant savings. Reference to IESO’s report for 2019 detailing Class A consumption and the cost of the GA allocated, indicates the average cost of the GA (Global Adjustment) was 5.89 cents/kwh. That GA cost plus the average HOEP of 1.83 cents/kWh for 2019 produced an average cost of electricity for Class A ratepayers of 7.72 cents/kWh.  The substantial all-in lower cost of electricity for Class A ratepayers is due to the allocation (subsidy) of the GA costs being charged to Class B ratepayers.

The Ontario Liberal Party during its time in power piled up electricity costs by signing contracts well above market rates for intermittent and unreliable power from wind and solar which needed back-up power from gas plants.  The combination of the three sources of power drove rates up resulting in large industrial customers making the point: Ontario’s cost of electricity made them uncompetitive.  The result was the Liberals simply reallocated costs to residential and small/medium sized companies.

The all-in Class B rate (GA plus HOEP) for 2019 was 12.63 cents/kWh.

Recently, not all Class B ratepayers had to pay the foregoing average rate, as “residential ratepayers” * now receive a taxpayer subsidy, appearing on our electricity bills as the “Ontario Electricity Rebate”.   A “rebate” of 25% off of the electricity line on our bills was initially referenced as the “Fair Hydro Plan” and enacted by the Wynne led government mere months prior to the last provincial election.  The Liberal government, under Wynne, noted voters were extremely upset with electricity rates climbing by over 100% in just several years. They felt it would affect the outcome of the election without the rebate.  Despite the rebate Ontario’s Liberal Party felt the wrath of the electorate and lost party status.  The Ford government moved the rebate to taxpayers and added other allocations such as:  conservation spending ($400 million annually), low income support programs ($200 million annually), Northern Ontario tax credit ($120 million annually) etc. to the taxpayer pot.  As a result (based on the writer’s calculation) taxpayers are now picking up almost 40% of the GA allocated costs for residential ratepayers under the “Electricity Cost Relief Program” recently estimated to cost $5.5 billion.

Second class, Class B ratepayers

The small and medium sized businesses** in Ontario are still bearing the full brunt of the increased electricity costs as they get no relief.  They are treated as second class citizens of Class B which are already regarded as second class citizens by our electricity operator. A significant factor affecting them is related to Ontario’s time-of use rates with the highest costs (20.8 cents/kWh during On-Peak hours) applied to when most small/medium sized businesses are operating and consuming electricity.

A recent occurrence allowed me to review an electricity bill for a company with just under 100 employees.  Their electricity costs were 18.9 cents/kWh.  A comparable company operating in the USA would pay (average of all US states) 10.8 cents/kWh according to the US Energy Information Administration.  The net difference of 8.1 cents/kWh would have saved the company almost $200,000 annually which may have resulted in the hiring of additional staff.  Those employees would have produced additional taxes for the Provincial and Federal coffers.

Bear in mind this is only one of the hundreds of thousands of small/medium sized businesses in Ontario.  Imagine what would have happened if we had not contracted at those above market rates for the intermittent and expensive power generated by those many foreign wind and solar generators that rushed to Ontario to take our hard-earned dollars.

The time has come to treat Ontario’s largest employers with the respect they deserve by axing the Global Adjustment and the time-of-use pricing mechanism!

We should surmise those small/medium sized companies are not in favour of subsidizing large industrial complexes or those greenhouse operators producing marijuana!  Let’s level the playing field!

*Full disclosure! I calculated my average electricity line cost from my recent bill (adjusted for the “Electricity Cost Relief Program”) and it worked out to 9.11 cents/kWh

**The CFIB in a 2016 report stated Ontario had 1.4 million small/medium sized businesses.

IESO and their colourful 2019 Year-end Data

IESO, the Independent Electricity System Operator, finally released the data for 2019 related to generation, consumption and costs for electricity in Ontario within the TX (transmission connected) grid. Unless one understands how the system operates (along with basic math knowledge) you would be inclined to think—wow, we are so lucky to have such an awesome institution managing our electricity system.  A good amount of the dialogue in the report seems meant to tell the reader how well IESO managed the system during a few erratic weather days when clouds suddenly blocked the sun and the wind either dropped or increased substantially without warning.

When you dive a little deeper into the data, you realize rates climbed again for Class B customers, be they residential, or small/medium sized businesses.

Those rates climbed despite Class B ratepayers reducing their consumption* from 101.0 TWh (terawatt hours) in 2018 to 98.4 TWh in 2019 for a decrease of 2.6 TWh (about what 300,000 average households consume annually) or 2.6%.

The 98.4 TWh in 2019, cost Class B ratepayers** $12,425.6 million versus $11,616.7 million in 2018 for the 101 TWh Class B ratepayers consumed.  The $808.9 million in additional costs (up 6.9%) added 9.8% (1.13 cents/kWh) to electricity costs for Class B ratepayers bills but IESO’s rhetoric skips over that data!

As a coincidence (?) to the $808.9 million increase; IESO’s diatribe under the heading “Other 2019 Highlights” claims: “The Market Renewal Program business case confirmed a $800 million net benefits over ten years.”  A quick math calculation suggests the annual savings of the “Program” was/is $80 million annually versus the costs for the one-year jump Class B ratepayers experienced.  The 10 year savings IESO’s brags about were blown away in only one year.

So, what caused the $808.9 Million jump?                                                                                     A goodly portion of the additional costs were a result of recovering less on sales of surplus generation to our neighbours in NY, Michigan and elsewhere.  When we export our electricity, we are only able to recover the HOEP (hourly Ontario energy price) as it Is market driven!  The HOEP for 2019 was 1.83 cents/kWh versus 2.43 cents/kWh in 2018 so we recovered less despite exporting more. The 19.779 TWh (about what 2.2 million average Ontario household consume annually) we exported, cost us about $333 million more to generate than last year’s exports. Those costs were included in the Global Adjustment which increased to 10.8 cents/kWh or $108 million per TWh.  The balance of the increase ($477 million) was principally related to the OEB (Ontario Energy Board) approving substantial rate increases for Bruce Power and OPG’s nuclear generation and refurbishment.  Scott Luft has done a great job of focusing on what was behind that big jump in a recent post.

IESO should do some real planning producing results that actually reduce rates!

*IESO in the report under the heading: “Energy-Efficiency Savings” brag about their Save on Energy programs which have reputedly contributed “to overall savings of 7.4 TWh since 2015”                          

**A large portion of costs to Class B “residential” ratepayers ONLY is now paid by taxpayers via the “Electricity Cost Relief Programs” and will total $5.5 billion for the current year. Unfortunately, small and medium sized businesses in the province are paying the full costs causing many to raise their prices and/or move their businesses to other jurisdictions.

Knighthood within the Eco-royalty

The latest issue of the magazine, Corporate Knights is, as always, about clean capitalism and the latest issue does not deviate from that theme.  No matter which article you read it’s all about “climate change” and reducing emissions.  The magazine is published quarterly and distributed by the Globe and Mail and Washington Post.  Advertising dollars seem to come from those companies endorsed via their “rankings”. This issue contains a “Global 100 Progress Report” and many on that list have placed ads.

An article in this issue was written by Gideon Forman an analyst with the David Suzuki Foundation. For over 11 years Forman was Executive Director of CAPE (Canadian Association of Physicians for the Environment).  CAPE was and still is a relatively small charity with annual revenue of $386K (June 30, 2019 CRA filing) and received $107K of that from the Federal government. Nevertheless they claim many victories including phasing out coal plants, cosmetics pesticides, etc., etc. The David Suzuki Foundation on the other hand in their CRA filing for 2018 show revenue of $11.7 million and spent $1.8 million of those revenues on fundraising activities.

Forman’s article in Corporate Knights is titled “The man of wind, water and sun” and is a fawning article about Brian Iler, a lawyer who appears to reside on the Toronto Islands. Iler is an environmentalist and the article notes he “has been the creative legal mind behind a host of cutting-edge renewable energy projects, social ventures and co-ops that have challenged received wisdom.” The article goes on to note Iler was “the go-to counsel for Ontario’s cooperative sector,” and he “received a call from an engineer who wanted to erect wind turbines in Toronto. That was the start of the development of the iconic TREC wind turbine* at Exhibition Place now owned by Toronto Hydro. Finding a location for the wind turbine was difficult “until a naturalists’ group proposed Exhibition Place, but the zoning didn’t work.” A city official suggested; “Call it an amusement device” and “That’s what appeared on the building permit.”

Iler in April 2013 wrote an article about industrial wind turbines and in it he claimed “Scientists agree that the noise emitted by wind turbines ‑- the chief source of alleged health effects -‑ is basically indistinguishable from normal background sounds we experience in everyday life, whether we live in an urban or rural area.”

While Iler made the foregoing claim about wind turbines he was very upset about other noises and for several years fought against the Island Airport due to the “intolerable” noise.   An article in The Bulletin Iler penned June 6, 2018 stated: “That airport is a legacy heavy industrial use, completely out of step with the dominant recreational and residential character of our waterfront today.”  Iler was castigated in a letter from the CEO of Ports Toronto who, in his letter to Mr. Iler stated: “You are in fact the founding Chair of an organization dedicated to the airport’s closure, a position I might note that is clearly out of step with the sentiment of the vast majority of Toronto residents.”

The airport closes at 11 PM so one assumes the noise ceases at that time. Perhaps if Mr. Iler spent a few windy nights 500 metres from a 500 foot high wind turbine, he might not think of them as “an amusement device”!

Another part of the article commends Iler stating; “Iler is an expert on innovative funding models. Thanks in part to his efforts, Ontario has become a hotspot for renewable-energy-based community bonds, including SolarShare (a co-op that floats bonds to finance sun-powered arrays throughout Ontario) and ZooShare (a biogas co-operative).  Both of the foregoing have negatively impacted ratepayers and taxpayers in Ontario.

Ilier himself claims he played a major role in convincing the McGuinty led Ontario Liberal government to enact the GEA (Green Energy and Green Economy Act) in his biography (posted on his firms website).  He and other self-appointed luminaries such as Bruce Lourie, Marion Fraser, etc. were members of both OSEA and/or the GEAA (Green Energy Act Alliance) who convinced former Energy Minister and Deputy Premier, George Smitherman, to push the GEA through the provincial legislature.  Ratepayers of the Province have been paying the price of that “Act” since its enactment!

While Corporate Knights and environmentalists of the Gideon Forman ilk want to crown themselves and others such as Brian Iler; it is the ratepayers/taxpayers of Ontario who continue to suffer the consequences!

Perhaps it’s time for those who self-label themselves as knights to recognize they are charlatans.

NB: A contact of the writer disclosed the following suggesting another fact was untrue!

“The OPA called out Exhibition Place for claiming the wind turbine was the source of energy for charging their electric golf cart type vehicles. In fact, both turbine and charging stations were connected to the grid with separate accounts. As I recall, this was likely because the kWh payment for power delivered to the grid was higher than their kWh cost for the charging. Our point was that their claim about the wind turbine charging the golf carts was misleading to the public who might consider something similar.”

NBB: The Exhibition Place turbine was also created for the purpose on indoctrinating our children as this excerpt from a  August 28, 2012 indicates: “The Exhibition Place wind turbine doubles as the linchpin of a large-scale education program. In the 2008/2009 school year TREC reached more than 4,000 grade 5, 7 and 9 students.”

*The Trec Co-op Exhibition Place wind turbine is an abysmal economic failure as noted in an article penned in July 2014.

CanWEA’s “White Paper” opens doors to lower rates

Shortly after CanWEA’s President, Robert Hornung lamented about the Ontario governments cancellation of an industrial wind turbine project a post on their blog raved about a recently released whitepaper* titled “Wind Energy and the Ontario Market”. The paper was prepared specifically for the Canadian Wind Energy Association by Power Advisory LLC. The latter is the employer of Jason Chee-Aloy, former Director, Generation Procurement with the OPA (Ontario Power Authority), a McGuinty creation that has merged with IESO. One should assume Mr. Chee-Aloy played a significant role in contracting the many wind and solar projects by the OPA spread throughout the province and was probably the author of the “whitepaper”!  He presumably knows his way around the contracts he instigated.

The 45 page “paper” is sprinkled liberally with acronyms including one labelled “EAs” or environmental attributes and notes: “Within nearly all IESO contracts, the IESO retains ownership of all EAs, or similar non-emitting products, produced by generators under these contracts.  This is definitely the case for all wind generators under IESO contracts, no matter the contract type or vintage.”

While ratepayers would disagree with many recommendations in the paper the ones related to the foregoing suggesting IESO monetize those EAs has merit as noted in Recommendation # 6:

The wind energy industry should work with the IESO and other contract counterparty generators to explore monetizing associated EAs/RECs, where the revenues from the sale of EAs/RECs would be shared between these generators and the IESO.  The IESO could then credit all Ontario electricity customers with these revenues helping to lower electricity costs for them.”

No doubt, most ratepayers in the province would agree if we can monetize those EAs lets’ do it; BUT there is no need to share any revenue generated with the operators as they already receive well above market rates from those contracts that drove up electricity costs.

The monetization process would result in the issuance of “renewable energy certificates” (RECs) which could be sold by IESO in the carbon/emissions trading market and all revenues could be applied by them to reduce ratepayers’ monthly bills.

While we’re at it let’s do the same for solar, biomass, hydro and nuclear generation which are all deemed “emissions free”!

If the existing wind contracts can’t be cancelled let IESO at least be directed to generate revenue for the benefit of all ratepayers without sharing any of the revenue with the generators.

The other benefit that may well occur is the ability for the Ford led government to argue against the carbon tax imposed by the Federal Government in the upcoming Surpreme Court appeal.

This could turn into a big win for Ontario’s ratepayers and taxpayers!

*The term “white papers” originated in England as government-issued documents. One famous example is the Churchill White Paper, commissioned by Winston Churchill in 1922. Today, the term is most commonly applied to “deep dive” style publications.

Ontario ratepayers and taxpayers pay up for Hydro One’s Niagara transmission line

The 76-kilometre Niagara transmission line, meant to strengthen power ties between New York State and Ontario, with a capacity to import/export as much as 800 megawatts of electricity has finally been completed.

Recently, information submitted to the OEB (EB-2018-0275) in a rate application stated: “The Project was originally approved by the Ontario Energy Board on July 8, 2005 pursuant to EB-2004-0476 but construction was halted in 2006 until earlier this year due to a third-party land dispute.

The Niagara transmission line was finally completed August 30, 2019, or over 14 years after construction started. It’s been a long road!

The decision and order from the OEB blessed the application (they generally do for Hydro One) noting; “Niagara Reinforcement Limited Partnership’s (NRLP) interim 2020 revenue requirement request of $9,389,914 is approved.”

The approval for NRLP rather than Hydro One is a reflection of well over a decade of negotiations to satisfy the Six Nations of the Grand River and, the Mississaugas of the Credit First Nation.  Contained in a note in the 3rd Quarter financial results of Hydro One, indicates a portion of the Niagara line was sold to them in the entity now referenced as NRLP. The pertinent part of the audit note stated:  “Hydro One Networks sold to the Six Nations of the Grand River Development Corporation and, through a trust, to the Mississaugas of the Credit First Nation a 25.0% and 0.1% equity interest in NRLP partnership units, respectively, for total consideration of $12 million, representing the fair value of the equity interest acquired.”  The Mississaugas also hold an option to purchase another 20%. NRLP was created for the sole purpose of allowing that to happen.

On November 5, 2015 an article headlined “Powerline to nowhere” on CTV, noted the cost of the line to that point was $100 million plus $54.5 million in interest payments (including $5 million in interest payments for 2016).  If one adds another $10 million in interest payments for 2017 and 2018 it appears the total cost of the Niagara line was in the neighbourhood of $165 million at a minimum.  In NRLP’s submission to the OEB the actual costs of the line were claimed to be $120 million, but it’s unclear if that included any interest. Either way the cost of the line was north of $165 million yet 25% of it was sold for $12 million which seems like a pretty good deal.  Details on the Mississaugas option were not disclosed.

It should be noted Hydro One had to seek an injunction in July 2019, after repeated attempts were made to block work on the transmission project.  They stated; “Work stopped again in January when members of the Haudenosaunee Confederacy Chiefs Council (HCCC) blocked access to the construction sites and issued a “cease and desist” order.  The CBC reported; “Hydro One’s statement of claim says the defendants “have a long history of organizing blockades, causing public disruption, breaching court orders” and interfering with land development and utilities as a tactic to negotiate compensation and other benefits to members of the Confederacy.”  The article also said: “The Six Nations and Mississaugas will have 45 per cent ownership* of the project, said Hydro One, and the project will create jobs and economic benefits.”  The injunction was granted by the judge in that appeal and as noted the line was completed August 30, 2019

The estimated cost of the line (north of $165 million) mentioned above has now been passed on to Ontario ratepayers via the OEB decision.  There were lots of other costs picked up by taxpayers in Ontario** and the rest of Canada as suggested in the partial list of material contained in the Chronology of Events at Caledonia in the former Federal Indigenous and Northern Affairs Canada Ministry website suggesting the other activities associated with the happenings in Caledonia also may have cost the Canadian taxpayers as much or more than the $165 million associated with the Niagara transmission line but that is for someone else to determine.

Conclusion

Perhaps we in Ontario should be grateful for the delay in completing the transmission line as it prevented the sale of even more of our surplus power from wind and solar etc. to New York for pennies on the dollar. The delay may have accidentally saved us ratepayers hundreds of millions of dollars due to the 14 years it took to complete.

*Acquisition details related to the Mississaugas’ 20% purchase option are not available but are believed to expire quickly.

** The Ontario government agreed to pay $20 million to residents and business owners of Caledonia who suffered through the native protest at a housing development in Caledonia.

November 2019 a reflection on the cost of reducing emissions in Ontario’s electricity system

IESO finally released the November 2019 Monthly Market Report in early January and compared with November 2018 overall costs (GA + HOEP) for Class B ratepayers was down slightly from $123.69/MWh to $120.54MWh (12 cents/kWh) or 2.8%. Falling exports of 975,600 MWh (down by 151,200 MWh or 13.4%) from 2018 resulted in Ontario experiencing a drop in overall costs despite the GA being slightly higher (98 cents/MWh) in 2019*.  The drop in exports resulted in ratepayer costs of $97.1 million versus $111 million in November 2018. Ontario ratepayers are obliged to pick up the GA costs**.

Intrigued by the marginal good news for November 2019 and the arrival of 2020, nostalgia overtook my brain waves!  A decade ago, I started my quest to explore the electricity sector in Ontario. My quest coincided with a high electricity bill and the passage of the Green Energy and Green Economy Act (GEA) in 2009.  The GEA passage led to the OPA (Ontario Power Authority) receiving directives from various Energy Ministers in the McGuinty/Wynne led Liberal provincial governments telling the bureaucratic experts how to run the system.  It was meant to signal the world; Ontario was a beacon in emission reductions.1 The ministerial directives were aimed at contracting for renewable energy (principally in the form of industrial wind turbines [IWT] and solar panels) and closing two coal power plants.  Due to above market rates offered to (mainly foreign) companies and the lack of a cost/benefit analysis rates skyrocketed as projects were commissioned.  The consequence of creating the highest electricity rates in Canada and the US resulted in total defeat of the Ontario Liberal Party in 2018.

Based on the “nostalgia” it is perhaps worth going back a decade to November 2009 and compare it with the one just passed.

All-in Generation Costs for November 2009:

The IESO Monthly Market Report for November 2009 indicated the weather over the month was warmer than normal whereas in November 2019 is was colder than normal and as one might expect the latter resulted in higher Ontario demand coming in at a daily average of 375,178 MWh versus 370,578 MWh in 2009.  The extra 138,000 MWh we consumed in 2019 would translate into higher costs even if the cost of generation had remained the same. The weighed average cost (GA +HOEP) for November 2009 was $68.39 MWh so the additional 138,000 MWh Ontario ratepayers consumed should have added approximately $9.4 million.  It is worth noting back in 2009 there was only one ratepayer class so the $9.4 million would have added 84 cents for each additional MWh consumed. The average household back then was consuming 800 kWh monthly.  The total consumption of 11.117 TWh (terawatt hours) by Ontario ratepayers in November 2009 had a cost of $760.4 million.

All-in Generation Costs for November 2019:

 So, ten years later in November 2019 the 11.255 TWh consumed by Ontario ratepayers cost considerably more than the $760.4 million suggested above.  The weighted average cost for this recent November came in at $120.24 for Class B ratepayers; an increase of $51.85/MWh or 75.8% for the 8.106 TWh they consumed.  For Class A ratepayers the ten-year increase was only $3.59/MWh or 5.2% for the 3.384 TWh they consumed.  Putting the foregoing in perspective if Class B ratepayers consumed 8.106 TWh in 2009 the cost would have been $554.4 million and in 2019 it was $974.7 million or $420.3 million more for just November!   For Class A ratepayers the increase would have been a much lower amount of only $12.1 million costing them $243.6 million versus $231.4 in 2009.

As one can deduce from the foregoing the $760.4 million all-in costs for one month of electricity generation in 2009 jumped to $1.218 billion (up $457.9 million) in the decade.  The jump of $457.9 million impacted Class B ratepayers (residential and small and medium sized businesses) to a much greater extent than Class A businesses and is only representative of one month.

What caused the jump?

The increased costs drove our average rate of 6.84 cents/kWh in November 2009 to 12.02 cents/kWh (UP 75.7%) in November 2019.  That increase is about four times the inflation rate and there are several reasons for the jump in costs.

One of the major causes of the increase was the addition of industrial wind generation and solar to our grid(s) over the decade.  Their intermittent and unreliable ability to generate electricity when needed meant back-up capacity (principally gas plants including the $1 billion to move two of them) was required. To top things off the intermittency of wind generation caused the market price (HOEP) to fall and the GA to increase.  The GA is not included in the sale of surplus electricity to our neighbours so we earn less for our exports to NY, Michigan, etc. but Ontario ratepayers must absorb the difference (the GA) in the contracted value and the HOEP market price.

A rough calculation of the additional losses on our exports in November 2019 versus November 2009 indicate it represents about $68 million of added costs.  Thanks to Scott Luft’s wind generation and curtailment files I was also able to calculate IWT generation costs which increased considerably from November 2009 adding $178 million to the increase. Those two additional costs of about $246 million represent about 54% of the $457.9 million increase. The balance of increased costs can be attributed to payment for additions in; solar generation, gas plants (idling costs), biomass, and some of OPG’s expenditures on Big Becky ($1.5 billion) and the Lower Mattagami ($2.6 billion) hydro projects.

If November’s comparison becomes a measure of how the GEA harmed our electricity sector by driving our electricity rates up almost 76% in the last decade we will be looking at total additional costs of around $5.5 billion in 2019 versus 2009. The $457.9 million is but one month of comparison out of the 120 months since the start of 2009 so the final number for the decade will probably be in the tens of billions of dollars to achieve those emission reductions sought by the governing Ontario Liberals.

*The GA or Global Adjustment rate for Class B ratepayers has been higher in 10 of 11 months in 2019 compared to 2018.                                                                                                    **Exports are sold at the HOEP (hourly Ontario electricity price) price via the market to traders who buy/sell our surplus energy to Michigan, New York, Quebec and other grid connected markets.

  1. The Ontario Energy Quarterly shows our CO2 emissions fell from 20 megatonnes at the start of 2010 to 2 megatonnes at the end of the 2019 second quarter.