IESO Creates and Promotes Hybrid Electricity Generation-What could go wrong?

Who knew?

IESO recently claimed by simply combining very old technology mankind would create hybrid electricity generation! 

The foregoing was stated recently by IESO in their September report “Enabling Foundational Hybrid Facility Models in the IESO-Administered Markets ”.  One example cited by IESO in the 46 page report, says combining batteries (invented in 1800 by Italian physicist Alessandro Volta) with electricity generated by wind turbines (created by Professor James Blyth in 1887) is “hybrid” generation.  The following from the report states: “Expiring wind and solar contracts along with declining technology costs for battery storage is expected to drive hybrid facility development over the next decade.”

It appears to be similar to mating horses and donkeys to create mules.  Considering how long batteries and wind generated electricity have been around perhaps IESO should name this new “hybrid” they claim now exists in Ontario?  The words “double-dealing” and or “chicanery” added to wind/battery or solar/battery would be a good descriptive for these hybrids!   

The foregoing implies IWT (industrial wind turbines) and solar with FIT (feed in tariff) contacts brought to us in Ontario by the McGuinty/Wynne governments will be renewed as long as battery storage is added by the owners. One should wonder if the Ontario Minister of Energy, Todd Smith has been played by Mark Carney, Vice Chair of Brookfield? A Brookfield subsidiary recently proposed a $300 million 161 MW (megawatts) battery storage unit that will reputedly contain four hours (644 MWh) of dispatchable energy and those batteries will be charged in the middle of the night and dispatched during the day when demand is high.  The benefit to Brookfield will translate to selling the power when the HOEP (hourly Ontario energy prices) market price is high while downloading it when prices are low. 

What looks to be somewhat confusing about this “hybrid” issue is the Energy Minister’s letter of August 23, 2022 wherein he states:  “I am pleased to see that through the first Medium-Term RFP (MT1 RFP) our government’s approach of competitive procurements has secured supply at a cost about 30 per cent lower than previous contracts.” It one believes he was referencing IWT contracts which are paid $135/MWh that would reduce the price for grid accepted wind to $94.50/MWh without including what we are also paying for “curtailed” generation of $120/MWh! 

Interestingly enough it appears the “30 per cent lower” quote from the Ministry letter is related to comments in the 46 page September 2022 report from IESO titled:  “Enabling Foundational Hybrid Facility Models in the IESO-Administered Markets”! The IESO report has the following two sentences: “Post-market renewal, there will be a locational marginal price (LMP) for the storage injecting resource and another LMP for the storage withdrawing resource. The LMP values may be different for the two (2) resources (e.g., $20/MW for the storage withdrawing resource and $21/MW for the storage injecting resource).”

The question becomes; had IESO negotiated the additional payment(s) with the IWT owners and made the Minister aware of the agreement reached before he penned his letter as it infers; due to the date of his letter proceeding the IESO report by one month?

Despite the foregoing question it seems interesting that the two additional payments added to the 30% reduction would bring the total cost of wind generation to $135.50 ($94.50+$20.00+21.00=$135.50).  The other question is whether the IWT owners can pick and choose when to sell their stored energy and if they will be allowed to choose hours when the HOEP market price is higher than the guaranteed price?

Another very recent announcement from Capital Power in Windsor suggests Ontario’s natural gas fired plants are keen to get in on the “battery” storage action as the September 21, 2022 article in the CBC suggests.  Capital Power is proposing to add a 40 MW battery storage unit particularly as IESO has forecast “demand in southwestern Ontario as a whole is expected to double over five years to about 2,000 megawatts”.  The article highlights a report from Power Advisory which amusingly recommends the City of Windsor ironically investigate “importing power from Michigan” whom the EIA (US Energy Information System) note in 2021 got their largest share (32%) of electricity from coal generation.

One of the principal reasons for the IESO projected demand increase is; “the announcement of the $4.9-billion Stellantis-LG Energy Solution electric vehicle battery plant, a massive facility slated to open in 2024.” The press releases from the Provincial and the Federal Governments don’t disclose how much taxpayers will be providing as the Federal Press Release notes: “Details of this agreement are subject to commercial confidentiality and cannot be disclosed at this time”.  Needless to say we taxpayers should expect government grants will be several hundred million of our tax dollars! Both press releases tout the wonders of converting from manufacturing ICE to EV automobiles in line with PM Trudeau and his minions seeking to achieve his target of “100% zero-emission vehicle (ZEV) sales by 2035”. The only announcement about grants was from the City of Windsor who have committed $68 million with the help of a $45 million loan from Infrastructure Ontario an Ontario taxpayer owned entity.

As IESO and the Federal, Provincial and Municipal governments here in Canada continue the push for batteries to be manufactured in Ontario and to also provide electricity it is interesting to note California has similar targets as those proposed by our various government bodies. Very recently PG&E (Pacific Gas & Electric) experienced yet another major battery fire at a large battery storage unit (182.5 MW) and that plant has now been shut down indefinitely!  

From the above summary of ongoing events here in Ontario and elsewhere it seems, in the minds of our bureaucrats and politicians charged with running our energy system (whose objectives should be reliable power), their view is:

“everything old is new again”!

Witness Wind Cash Gobblers on September 22nd

What Ontario ratepayers expect in the Spring and Fall seasons started on the very first fall day (September 22, 2022) in the current year.  

The 4,900 MW (about) capacity of grid connected IWT (industrial wind turbines) spread throughout the province could have generated 74,442 MWh (63.3% of their capacity) if the approximately 8,800 MWh of curtailed wind is included with the IESO accepted generation.

As it turned out IESO accepted 65,642 MWh and were busy finding a home for those MWh with our neighbours in Michigan, New York and Quebec who eagerly snapped up 61,757 MWh at the average bargain basement HOEP (hourly Ontario energy price) market price of $8.56MWh (0.86 cents/kWh).

The foregoing happened as we ratepayers/taxpayers are obliged to pay $135/MWh (13.5 cents/kWh) for the grid accepted IWT generation and $120/MWh (12.0 cents/kWh) for its curtailed generation given their “first-to-the-grid rights!  What the above translates to is a total cost of $9,891,000 will be paid to the IWT owners. IESO had to sell off that unneeded generation to avoid overloading the grid and cause blackouts. IESO sold the bulk of it to our neighbours who paid about $529,000 which translates to a net cost to us Ontarians of $9,362,000 for power we didn’t need.   

While it’s not unusual to see those IWT operate at levels of 40/60 % of their capacity it tends to always be during the spring and fall when Ontario’s peak demand is low. Yesterday was no exception as peak Ontario demand occurred at Hour 20 and was only 15,584 MW whereas on those warm summer days peak Ontario demand frequently hovers around the 20,000MW+ mark but wind generation is frequently missing or completely absent.

Those peak demand summer days is when the IWT take a holiday proving all they do is add to the costs of our energy supply with their intermittency and unreliability!

Pretty sure most Ontarians will be happy when those contracts given by the McGuinty/Wynne led government(s) finally expire and those IWT are shut down.  Migrating birds and bats and households in rural communities affected by the high decibel noise and the infrasound affecting their health will, no doubt, be delighted!

To paraphrase the Dire Straits song; IWT owners get “money for nothing, but it sure ain’t free”!

Generating Less Electricity Benefits Ontario Ratepayers

The OEB (Ontario Energy Board) on September 12, 2022 finally posted “Ontario’s System-Wide Electricity Supply Mix: 2021 Data” and it was the latest posting ever from them in the last seven years!  The OEB takes the TX (transmission connected) generation, ie; IESO data* they provide (usually within two weeks of the prior year-end) and add the DX (distribution connected) generation provided by the local distribution companies in the province. We assume it is a slower process to obtain the latter info from the 58 distribution companies but 8 ½ months seems longer than needed!

The foregoing combined data from the OEB report indicates generation from TX and DX generators fell from 154.7 TWh (terawatt hours) in 2020 to 150 TWh in 2021 or 3%.  The 4.7 TW drop equals the annual consumption of about 525,000 Ontario households!

As one would suspect some generation sources fell while some increased but not enough to offset the drop.  The biggest drop was from our nuclear plants which generated 4.8 TW less and our hydro plants also fell generating 2.8 TW less. Combined the 7.6 TW is about what 850,000 average Ontario households (16% of all Ontario households) would consume in a year.  The only generation source to significantly increase generation was Ontario’s grid connected natural gas plants who supplied 12.2 TW an increase of 2.5 TW from 2020 (up 25.7%) and about what 290,000 average households annually consume. The only other categories to show increases were wind; up 100 GW (gigawatts) or about what 10,000 households consume annually and “Non-Contracted” which increased by 500 GW or what 50,000 households would consume annually.  The OEB states the latter “represents a variety of fuel types that the IESO is unable to categorize”! We should suspect those “Non-Contracted” sources are mainly small gas plants operated by manufacturers and sub-contracted to supply generation when the local grid is potentially short of demand!  

The only bright star shining out from the report is related to Ontario’s “net exports” (exports minus imports) which declined by 6.6 TW and had the positive effect of pushing up the market price ie: HOEP (hourly Ontario energy price) from an average of 1.39 cents/kWh in 2020 to 2.85 cents/kWh in 2021. While that doesn’t sound like much it did decrease our costs by $118 million on our Net Exports in 2020 of 8.5 TWh. The increase in the HOEP would also decrease the taxpayer liability amount for those intermittent and unreliable non-hydro “renewable energy contract costs” (wind and solar) as referenced by IESO* and slightly reduce the GA (Global Adjustment) component!

We shouldn’t believe what has finally shown a positive year over year result to continue however, due to the push by the Minister of Energy, Todd Smith’s August 23, 2022 “directive” to IESO containing the following instructions:  “to evaluate a moratorium on the procurement of new natural gas-fired generating stations in Ontario and to develop an achievable pathway to phase out natural gas generation and achieve zero emissions in the electricity system”.

Get prepared for the future which like many European countries will include orders to turn off your air conditioners in the summer and reduce your thermostat in the winter to avoid blackouts. Oh, and don’t charge your EV (electric vehicles) until we tell you, you can!

Energy reliability is no longer a target our politicians promote! The word “reliability” is being replaced by the word “transition” and the OEB is front and center in executing the change with their just released “Energy Transition” post containing a poll we must all take!

*Note on IESO data release: As of January 1, 2021, Global Adjustment costs for all electricity consumers are being reduced because approximately 85 per cent of non-hydro renewable energy contract costs are being shifted from the rate base to the tax base. Savings will vary, depending on consumers’ electricity consumption, ICI participation, and location.

Perhaps Voters Should Demand IQ Tests for Anyone Running for Public Office

Numerous events recently have caused yours truly, and hopefully many more, to wonder; are we are being led by elected politicians, federally, provincially and municipally with IQs (intelligent quotients) that would easily qualify them for a place in the “Dumb & Dumber” cast of the movie of the same name!  Those politicians take it upon themselves to direct bureaucrats; responsible for managing public services (entities paid with our tax dollars), to do what they are told. The bureaucrats do as they are told as they are well paid with lots of perks so they don’t “pushback” no matter the stupidity of the directives!

Let’s have a look at a few issues related to mankind’s need for “energy” firmly under control of politicians. Energy, until recently, has caused the world to become a better place; reducing poverty, climate related deaths, increasing lifespans, and damage from weather anomalies i.e.; not “climate change”!

Ottawa is a Great Example of Municipal Idiocy

With municipal elections just around the corner, Ottawa’s Mayoralty Candidates are having “eco-debates”!  The candidates include Bob Chiarelli a former mayor of Ottawa and when he was Ontario Minister of Energy is famous for suggesting the $1 billion cost associated with moving the planned Oakville gas plant was the cost of a Tim Horton’s coffee. It should come as no surprise the debates relate to the city councils approved; “Energy Evolution”, an 86 page document forecast to cost $57.4 billion and will reputedly transition Ottawa to a “net-zero” city by 2050. With a population of about 1.1 million that represents a cost per resident of about $52K or more than $200K for a family of four. An earlier article about Ottawa’s plan to get to “net-zero by 2050” strongly suggests it was written by Pollution Probe a group dedicated to convincing us all to abandon our use of fossil fuels to achieve the COP-26 targets. As if to exacerbate the push to spend those billions of dollars the City of Ottawa contracted Innovative Research Group to conduct a survey* that seems destined to produce favourable results for the Ottawa politicians due to the skewing of the questions. Perhaps Pollution Probe also had a hand in generating those survey questions?  It would be great if those municipal politicians running for mayor or council took the time to look at what has happened in the UK or Germany where energy prices have skyrocketed due to their push to “green” the electricity sector. This winter they plan to control the temperature households set to heat their homes! It seems apparent research isn’t something those seeking reelection or election to the City of Ottawa have bothered to do!

Province of Ontario Demonstrates Provincial Idiocy

From all appearances it seems almost conclusive the Premier Ford led government is simply carrying on with what Ontario experienced under the McGuinty/Wynne led government which brought us an almost tripling of the cost of electricity in the province.  While Ford did cancel the GEA (Green Energy Act), it is obvious they are still committed to eliminating fossil fuels completely which affects reliability and will surely drive-up generation costs. 

Beyond the announcement OPG would be adding a 300MW SMR (small modular reactor) which may be in service in 2028 at the Darlington site we have seen nothing from the current Ontario government aimed at ensuring we have a reliable supply of electricity in the future!  With the approximately 3,000 MW of the Pickering Nuclear plant scheduled to close by 2025 the Ford government (via his Minister of Energy, Todd Smith) is pushing the Pathways to Decarbonization (P2D)” which fearfully, doesn’t seem to project reliability. The latter is concerning, as via a recent directive Minister Smith “asked IESO to evaluate a moratorium on the procurement of new natural gas-fired generating stations in Ontario and to develop an achievable pathway to phase out natural gas generation and achieve zero emissions in the electricity system.”  From all appearances the directive has led to the upcoming (September 19, 2022), Ontario Energy Conference “Navigating to Net Zero” classified as “Ontario’s Energy Transition”!  According to the page describing the conference a key issue is; “Energy customers are demanding clean energy solutions with some urgency” but doesn’t disclose who those “energy customers” are. My (personal) guess would be they are not small/medium sized businesses or households suffering from inflation but may include eco-warrior charities like Environmental Defence, David Suzuki Foundation, etc. etc.  In reality, it appears to be simply Ontario’s politicians complying with the wishes of Prime Minister Trudeau and his Minister of the Environment and Climate Change, Steven Guilbeault; famous for his actions when he was an eco-warrior climbing on the roof of former Alberta Premier, Ralph Klein’s home and scaring his wife as well as his criminal action of climbing the CN Tower!

It is worth noting that IESO had previously been asked by Minister Smith to evaluate the phaseout of natural gas and their report indicated the cost to eliminate it by 2030 would be $27 billion and raise electricity prices by 60%.  Interestingly on the page with the link to the foregoing report IESO note; “Did you know that natural gas provides just 7% of Ontario’s electricity needs, but on the hottest summer days can provide up to 30%?”  This was a clear message from IESO that without natural gas, Ontario would have to increase its generation considerably to ensure reliability and prevent blackouts.

A clear message about vulnerability totally ignored by Minister Smith and the Ford Government!

Only a Few of Many Examples of Federal Idiocy

Looking back to August 19, 2021 and viewing a video of Trudeau announcing one of his handouts before the upcoming election is an interesting exercise! At the press conference in BC he promised to provide funding “to support the training of 1,000 new community-based firefighters and the purchasing of new equipment to continue to fight the impacts of climate change across the country”. A question presented to him asked about inflation and the Bank of Canada possibly loosening inflation controls and his response was: “You’ll forgive me if I don’t think about monetary policy”!  We should also suspect his Minister of Finance and Deputy PM, Chrystia Freeland, is of a like mind so, spending our tax dollars on the “net-zero” pledge requires no thoughts about the consequences on Canada’s future despite the federal deficit having reached $314 billion in the year that had just ended on March 31, 2021.

German Chancellor Olaf Scholz recently visited Canada with the presumed hope Canada might be able to supply some natural gas via LNG shipments but all he got was a promise that maybe, sometime in the future, we might be able to supply Germany with “green hydrogen” generated by IWT (industrial wind turbines) out of Newfoundland. An article out of Germany however about the latter titled“Will rescue come from Canada?”casts serious doubt on that possibility as the following from the article notes (from the Google translation):  “So does this prove the feasibility of LH2 imports from Canada? The technical possibility may be given. However, the profitability is more than questionable. If you look at the whole supply chain: wind energy – electricity – electrolysis – liquefaction – ship transport – distribution – storage – generation in fuel cells – feeding into the grid – then you have to be very skeptical. It would be maddeningly expensive. Maybe then the LH 2 tax will be introduced in Germany and the kilowatt hour will ultimately cost one euro.” This was the best PM Trudeau could offer as the Liberals have stifled the generation of fossil fuels and the pipeline that would have brought them to export terminals.

The Trudeau led government during their reign in Canada have continued their efforts to achieve “net-zero” crippling our natural resource sector, advocating for EV to replace ICE vehicles by subsidizing their purchase and increasing the carbon tax on gasoline and diesel fuels. He and his minions such as Steven Guilbeault, Minister of the Environment and Climate Change and Jonathan Wilkinson, Minister of Natural Resources, despite having some of the largest reserves of natural gas in the world, have refused to allow the building of the infrastructure needed to export our oil and gas resources!

TheBuild(ing) Back Better” advocacy pushed by the WEF (World Economic Forum) has become the recent version of the former communist “Five Year Plans” by the Liberal Government and enshrined in past budgets of the Trudeau government. It appears they haven’t realized Russia abandoned those Five Year Plans many years ago!  Canadians are now experiencing the results of those plans with inflation climbing, record Federal Debt, taxes rising and investment fleeing the country despite Canada’s abundance of resources.  It sure appears “Building Back Better”, by eliminating Canada’s exploitation of our natural resources is cripplingly us and harming those citizen’s who are not members of the elite’s of the Canadian Liberal Party.    

We should all find it fascinating a couple of months ago PM Trudeau was in Nova Scotia for a staged presence once again handing out $255 million of our tax dollars with $125 million destined for wind projects and $130 million for battery storage.  While making the announcement he was standing in a farmer’s field and in the background were several wind turbines that were totally dormant. We should doubt Trudeau actually noticed how those IWT demonstrated their intermittency and unreliability!  

The foregoing event occurred shortly after Trudeau displayed his new haircut patterned after Jim Carrey when Carrey stared in the movie series, Dumb & Dumber.  Now isn’t that ironic in how his new haircut and those dormant wind turbines enunciate how incredibly incompetent our current crop of elected leaders appear!

The time has come for politicians to take off the blinkers and do basic research before accepting what the eco-warriors incorrectly see as the end of the world unless we achieve “net-zero” emissions.

*Full disclosure:  I completed the survey twice using my e-mail address without pushback so eco-warriors from Pollution Probe or others may well have completed it dozens of times.

Vestas Wind System Awarded Top ESG Score by Corporate Knights

A recent and very long article in The Oregonian titled “How an airborne blade exposed broader problems at PGE’s flagship wind farm” went into considerable detail on the effects of a turbine blade that was spinning and suddenly was launched in the middle of the night plowing a four-foot furrow in the wheat stubble where it landed.  The foregoing led to a full shutdown of the 217 wind turbines in the Biglow Canyon by PGE (Portland General Electric) and lots of responses from locals pointing out many other issues associated with those IWT (industrial wind turbines). The article elaborates on six major reported issues which included oil spills, metal debris appearances, etc. etc. and also states, how over the years, those turbines (manufactured by Vestas and Siemens) underperformed in respect to generation they originally promised. The article reports on more unfavourable information about the Vestas turbines versus the Siemens ones but both are criticized. It is somewhat surprising the article does not even mention how those IWT also kills birds and bats or how their associated noises (both high decibel and infrasound) affects humans and animals in a negative way.

Vestas is a company with their head office in Denmark and is touted as the world’s largest supplier of IWT.  It may seem oxymoronic to many that Denmark has the highest household electricity prices in the EU currently at “0.3448 euro per kWh”!  The prior fact illustrates what many around the world have experienced due to the favourtism, tax dollars and tax benefits accorded companies awarded contracts to erect IWT to save us from “climate change”! The end result of those IWT installations is much higher electricity prices and unreliability due to the intermittent nature of wind versus dependable energy generation from nuclear and fossil fuels!

Interestingly, Vestas was favourably recognized by Corporate Knights of Toronto* in their January 2022 ESG (environmental, social and governance) assessment of 6,914 companies with more than US$1 billion in annual revenues.  Corporate Knights ranked Vestas Wind Systems as the world’s most sustainable corporation, granting them as the only company, to achieve an A+ rank! Needless to say Vestas tout that ranking in their 74 page  2021 Sustainability Report stating they were “The most sustainable company in the world”. One should wonder about the qualifications of Corporate Knights staff and their ability to examine those 6,914 companies as it relates to ESG accounting standards.  Those ESG accounting standards have been widely criticized as being far too vague as noted in a recent article by Bloomberg.

So, one should wonder did the “top of the heap” award by Corporate Knights spotlighting Vestas ranking higher than the other 6,913 companies provide a benefit to Vestas’s shareholders? The quick answer is no!

If one looks at the Vestas share price on January 3, 2021 it was US$17.23/share but by September 9, 2022 it was US$8.17/share having dropped by 52%.  Looking at the share price on the Corporate Knights release date of the “World’s 100 most sustainable corporation” on January 19, 2022, the Vestas share price was US$9.21 but as noted it fell to US$8.17/share by September 9th down by 11.3%. 

It seems obvious those involved in investing our funds through assets management companies or private pension plans** are not convinced renewable energy is a sound investment.  A recent article notes fossil fuel companies have out performed renewable energy companies by a factor of ten in the current year. Renewable energy companies beat the S & P by an average of 4.3% whereas fossil fuel stocks have outperformed the S & P by an average of 43%.

From all appearances it should be apparent the population who view the possibilities of renewable energy providing the world with all the energy we need are in short supply no matter what Corporate Knights or politicians tell us minions!

*Corporate Knights describe themselves as “The Voice for Clean Capitalism” but seem quite happy to take tax dollars from the Federal Government for their “magazine” as well as obtaining contracts from them to report on “decarbonization trends in Canadian industry sectors”.

**Public pension plans have jumped on board to support renewable energy and have suffered the consequences as pointed out in a recent article about Caisse de Depot and OMERS who took a pounding on just one of their investments.

Was Hour 16 on September 8th a Future Blackout Signal?

Pleased to confirm if your lights flickered at Hour 16 yesterday it had nothing to do with a power outage in Ontario.  At that hour the market price or HOEP (hourly Ontario energy price) was $180.67/MWh and the grid was in a shortfall position from Ontario electricity generators.  As a result, we were importing power from NY, Manitoba and even Michigan at that hour. 

Ontario is almost constantly in a surplus position and either exporting power or curtailing those IWT (industrial wind turbines) or spilling hydro but not yesterday!  In all we were net importers for six (6) continuous hours starting at Hour 16 and Quebec also were called on for imports during those hours.

Ontario’s peak demand came at Hour 17 (hour ending at 5 PM) and was 19,731 MW but didn’t qualify for one of the top 10 demand hours in the current year.  At hour 16 those approximately 4,900 MW of grid connected IWT managed to generate only 254 MWh and for Hour 17 they only managed to produce 235 MWh meaning they generated less than 5% of their rated capacity.

For the full 24 hours IWT generated 5,287 MWh, operating at an average of 4.5% of their rated capacity while our natural gas plants generated 72,505 MWh over the same period. What that suggests if those natural gas plants were non-existent, we would have needed another 67,000 MW of wind capacity to avoid blackouts and produce the 72,505 MWh the gas plants provided.  An additional 67,000 MW of IWT capacity is almost double Ontario’s current total grid connected capacity of 38,079 MW IESO reported we had at the end of 2021.

One should wonder, is the foregoing what Minister of Energy, Todd Smith has in mind with his recent directive to IESO wherein he states: “I asked IESO to evaluate a moratorium on the procurement of new natural gas-fired generating stations in Ontario and to develop an achievable pathway to phase out natural gas generation and achieve zero emissions in the electricity system. I asked IESO to report back to me with its analysis and results by November 2022.”

It should be recognized with the forthcoming closure of the Pickering Nuclear Plants in 2025 and their hourly generation of 3,000 MWh (72,000 MWh per day) it’s not clear what he anticipates will provide that replacement power.  If its IWT we may need another 67K of those IWT to perhaps provide reliability to prevent blackouts or we will all be forced to reduce our electricity consumption to much lower levels. 

We should also be concerned about the future of our manufacturing and business sectors who will be impacted by the lack of reliable energy! 

From all appearances it seems our politicians lack planning skills so we should expect in the near future “blackouts” may well be a common occurrence.

Wow, was Hour 20 a Look at the Future cost of electricity?

The market price, referenced as the HOEP (hourly Ontario energy price), at Hour 20 on August 29th reached $571.93/MWh or 57.2 cents/kWh and that doesn’t include the GA (global adjustment) which would push the price to over 60 cents/kWh. 

One should wonder have Ontario’s politicians bought into PM Trudeau’s commitments at COP 26 and are seeking to emulate what the UK and EU countries are experiencing with their push to reach “net-zero” emissions. As just one example energy price forecasts suggest in the UK they could top £7,000 per household from April 1st, 2023 or about $10.5K in Canadian dollars.  

It’s not entirely clear why the HOEP price reached the level it did at Hour 20 as it was a windy day in Ontario with storms in many areas meaning less sun generation but an exceptional day for the IWT (industrial wind turbines) owners. 

Those IWT generated 64,130 MWh over the full day which meant they were operating at 54.5% of their capacity and well above their annual average generation of about 30%. What the IWT were generating in the middle of the night was unneeded power (17,484 MWh or 59.5% of capacity) and the HOEP for the first six hours averaged a piddly $14.20/MWh. The bulk of the surplus was purchased by Michigan and New York meaning Ontarians were picking up the difference between what we paid for those six hours of IWT generation and what we sold it for.  It cost Ontarians $2,360,000 @ $135/MWh and we sold it for $248K @ $14.20/MWh meaning we lost $2.1 million in just six hours.

So, what happened at Hour 20 is a bit of a mystery as the peak Ontario demand hour occurred at Hour 17 reaching 21,871 MW and is now ranked as the third highest peak hour for the year.  IESO were wrong in their wind forecast for Hour 20 overestimating by almost 20% as they suggested IWT would generate 2,453 MW but they fell short with only 1,993 MW actually generated so that may have caused some upward push to the HOEP. At the same hour however, natural gas generation ramped up from 4,055 MW in Hour 19 to 4,711 MW in Hour 20 so easily covered the drop in IWT generation.  It may have been the variability of IWT generation over the hour as their generation bounces up and down based on wind speed and gusts causing the HOEP to reach higher levels in the 5 minute intervals of demand and trading volumes.

While the spike in the HOEP may have been an anomaly the concern should be what the upcoming future will be! The major concern should be due to the very recent IESO directive from Todd Smith, Minister of Energy wherein he “asked IESO to evaluate a moratorium on the procurement of new natural gas-fired generating stations in Ontario and to develop an achievable pathway to phase out natural gas generation and achieve zero emissions in the electricity system.

With the planned shutdown of the Pickering Nuclear Plants by 2025 and their almost 3,000 MW of capacity coupled with the current 8,500 MW capacity of our natural gas plants we should all wonder how Ontario will avoid blackouts or restrictions on electricity use in the near future? 

At the same time, we should also anticipate electricity rates will skyrocket in a similar fashion to what we are witnessing in the UK and the EU countries and drive out our businesses while creating “energy poverty” for all but an elite group of Ontarians.    

One should ask, is that the game plan for the Ford led Provincial Government?

IWT with “First-To-The-Grid” Rights Demonstrate the Best They Can Do is Wimp Out

August 23, 2022 once more demonstrated IWT (industrial wind turbines) inability to produce power when it is actually needed. The day produced a peak demand hour close to being in the top 10 hours so far in the current year reaching 21,075 MW at Hour 17.  We should surmise many of the Class A electricity customers fired up their gas generators to take advantage of their status and achieve the rate reductions that come with reducing their power draw as the Class A status allows.

At hour 17 the market price of power or HOEP (hourly Ontario energy price) saw IESO buying and selling power at $159.41/MWh via the intertie markets.  They were selling to Michigan and New York states while buying power from Quebec to ensure reliability over the grid. The exchanges at that hour resulted in a negative flow of 61 MW meaning we imported slightly more power than we exported.

The IWT at hour 17 generated 465 MWh which was just shy of their peak for the day of 519 MWh at hour 16 and represented 2.2% of demand but their capacity is over 15% of Ontario’s total grid connected capacity. At the hour when those IWT were demonstrating their unreliability our natural gas plants produced 4.926 MWh or 23.4% of demand with nuclear and hydro producing almost all of the balance.

The only positive thing about the failure of those IWT to produce power when it’s needed during peak periods is that we generally sell our surplus power for higher prices unlike the Spring and Fall when demand is low but generation from IWT is much higher than summer months. During those months IWT are frequently producing so much surplus power we curtail them and pay $120/MWh for those happenings.  At the same time the HOEP is at low prices so what is actually accepted on the grid is sold to Michigan and NY for pennies of their actual cost.  Both of the foregoing events simply drive-up costs to Ontario’s Class B ratepayers which are the small and medium sized businesses and residential ratepayers. In the meantime, large public entities such as universities and hospitals (many of whom are also Class A ratepayers) dependent on tax dollars are unaffected as they fire up their gas generators so it’s simply another cost to ratepayers and taxpayers.

The foregoing IWT failure is almost a daily event during summer days and highlights the fact once the Pickering nuclear plant is shut down (2025) our natural gas plants will be called on to continually generate power. Without any additional reliable power added to the grid in anticipation of that closure, Ontario’s energy security is at risk.

The question on our minds should be; when will the Ford led government do something that ensures Ontario’s businesses and households will have secure electricity sources that are capable of generating power 24 hours a day and 365 days a year and pass regulations to curtail our subsidies to IWT?

Natural Gas Rises to the Occasion on August 17, 2022

Well, August 17th has come and gone and to the best of my knowledge Ontarians didn’t experience any blackouts in our electricity grid.

The day itself was a nice warm (not hot) summer day and while Ontario’s electricity demand wasn’t amongst the top 10 for the year it did peak at Hour 17 (hour ending at 5 PM) reaching 19,856 MW. Those IWT (industrial wind turbines) at that hour managed to only generate 350 MWh (1.8% of demand) just short of their peak generation for the day.

For the full 24 hours IESO data disclosed the existing IWT generated 4,673 MWh which was about 3.98% of their capacity and at their lowest point (Hour 11) they managed to generate only 42 MWh or 0.86% of their capacity.  Their average generation per hour was 194 MWh so would not have been missed during any of the 24 hours.

While those IWT were pretty well useless at providing sufficient reliable generation over the day, we should be thankful we had natural gas plants available.  Ontario’s natural gas plants were there for us at the peak hour providing 4,164 MWh (21 % of demand) and over the full day generated 65,820 MWh for an average of 2,743 MWh per hour.   At hour 3 they generated 658 MWh and at hour 18 they produced 4,331 MWh demonstrating their flexibility to respond to actual demand. Without the gas plants being at the ready Ontario would have been blanketed with “blackouts” so one wonders why the push by the eco-warriors to shut them down?

In the event those eco-warriors are convinced IWT could supply what those gas plants did yesterday one should doubt they have bothered to calculate how many more of those IWT we would require when they generate electricity at only 3.98% of their capacity.

Presently we have close to 2,300 wind turbines connected to Ontario’s grid so in order to simply replace our natural gas plants we would require approximately fourteen (14) times the number to meet yesterday’s electricity generation needs.  The result would mean the need would be for almost 32,000 more turbines rated at 2 MW each. Those turbines would be spread throughout the province eating up rural farmland, killing birds and bats, affecting aquifers and creating health problems for people and animals. Their approximate 64,000 MW capacity would be almost double what our current grid connected generation of nuclear, hydro, gas, wind, solar and biomass is!  That strongly suggests electricity costs would skyrocket harming businesses both big and small and drive many Ontario ratepayers into energy poverty.

It seems apparent eco-warriors like the OCAA (Ontario Clean Air Alliance) and others have absolutely no concept of the harm existing IWT cause and how much more they would cause should they convince politicians to replace our reliable and dependable natural gas plants with them!

Batteries + Industrial Wind Turbines or How to Increase Ratepayer Bills

The global push on coupling “battery storage” with wind generation to achieve “zero-emissions” appears to be a ruse to increase revenue for IWT owners while upping electricity bills for ratepayers. 

Evidence of the foregoing was obvious when Brookfield Renewable, via their subsidiary, Evolugen, disclosed they are trying to get Ontario’s Ministry of Energy to allow them to build the 161 MW Timberwolf Battery Storage System next to their existing 189 MW Prince Wind Farm.

The following will hopefully explain how Brookfield are doubling down to raise revenues at the expense of us ratepayers! Reviewing IESO (Independent Electricity System of Ontario) data for August 22nd provides a brief overview on how the above will be accomplished.

IESO data on generation for the first seven (7) hours of August 16, 2022 disclosed Ontario’s IWT generated 6,961 MWh which would have earned IWT owners $939,735 at the contracted price of $135/MWh.

If one examines the market price (HOEP) over those same hours the average price IESO sold surplus power into the market was $30.44/MWh suggesting the 6,971 MWh costing ratepayers $939,735 may have generated $211,893 from their sale; a net-cost to ratepayers of $727,842 for surplus generation.

If the battery storage owners purchased the above 6,971 MWh at the market price over those seven hours ($211,893) and sold it back over the next 10 hours as Ontario’s demand climbed and the HOEP price averaged $116.93/MWh they could have generated $783,314.  Had the latter occurred those 6,961 MWh in the seven hours would cost ratepayers of $1,511,156 ($939,735-$211,893+$783,314) ie; $216.77/MWh or 21.7 cents/kWh.

It is worth pointing out over the balance of the day (the 17 hours remaining) those IWT generated a total of 6,699 MWh or an average of only 8% of their capacity (another $904,365 cost) but in the first seven hours (when they were unneeded) they operated at 20.3% of their capacity!

IWT perform poorly in the warm summer months but normally generate at a much higher level in the Spring and Fall when demand is much lower so the opportunity to double-down on generating a greater return by battery storage during those seasons would surely drive-up costs for ratepayers. 

The other issue associated with the costs rising is our natural gas plants would be confined to less generation.  Many of those natural gas plant contracts guarantee them their capital costs at the rate of $10K per month per MW of capacity and when operating; they charge for the price of gas used and a small additional cost per kWh.  That $10K per MW of capacity will continue but ratepayers will forego the cheap cost of what they would normally produce offsetting the failure of wind and solar to power up for high demand. Those gas plants would however still be needed as battery storage at this stage; is only available for a maximum of four (4) hours whereas gas plants can ramp up and down at any time.

We ratepayers should hope the politicians and bureaucrats responsible for managing the electricity system in the province recognize the real reason for the Bloomfields of the world pushing battery storage to augment their revenue from their wind and solar farms.

Further enrich the rich while harming the poor and middle class!