Spring is Just Around the Corner and Ratepayers get Hammered

Most Canadians from coast to coast look forward to Spring arrival as we get excited about warmer weather and watching mother nature show her stuff.  Those Canadians living in Ontario however can be both happy and sad about Spring arrival as it has the bad habit of generating increased costs for one of life’s necessities which is energy with an emphasis on the cost of electricity.

Two recent happenings on March 19, 2023, bring the focus on the sad part of Spring arrival.  The first is more sunshine which creates more energy from those solar panels which under the McGuinty led government received contacts at ridiculous guaranteed rates as high as 0.80/cents a kWh. Now apparently, they have embarked on more hits to our pocketbooks as the first six (6) hours of March 19th suggests they can now produce power even when the sun isn’t shining as this screenshot from IESO demonstrates!

Solar Panel Generation When the Sun isn’t Shining?

As if the foregoing wasn’t enough weird news, on the same day as solar power was generated in darkness, we note IESO data supplied more bad news.  Normally at this time of year as the snow melts and water flows Ontario benefits from more generation from our hydro facilities which are also our cheapest and cleanest source of generation. As it turns out IESO data disclosed more bad news as the first three (3) hours of March 19th (two days before spring arrives ) those IWT (industrial wind turbines) generated more electricity than our hydro plants as evidenced in the following two screenshots.

Wind Generation Beats Hydro Generation!

To accentuate the foregoing those IWT did the same thing in the last three hours of the day as the following screenshots clearly show!

IWT Generation Hours 22, 23, 24!

Hydro Generation Hours 22, 23, 24!

Over the full 24 hours IWT generated a total of 92,447 MW or approximately 78.6% of their capacity and only slightly less than hydro which generated 94,511 MW but could have easily produced more.  Ontario was busy selling off the unneeded power which we (logically) should attribute to IWT generation to our neighbours at an average price of $14.86/MWh. We exported 53,308 MW so generated revenue of around $792K while we paid $135/MWh for it, so it cost Ontarians about $6.4 million for unneeded power.  We should also suspect IESO were busy telling OPG to spill hydro (we are obliged to also pay for) as demand was low and only peaked at 17,057 MW at hour 20.

The ups and downs of those intermittent IWT and solar panels are in the bad habit of generating lots of unneeded power during the spring and fall seasons when Ontario demand is low. They are the principal reason the Province of Ontario stiff taxpayers with annual additional costs of $6.5 billion in an attempt to hide the mess our electricity system is actually in.

Just one day’s data makes it obvious both of the foregoing sources of intermittent and unreliable electricity generation should be tossed in the garbage!

Odds and Sods from Ontario and Elsewhere

Here at Home:

OPG

OPG recently announced they are buying GM Canada’s former head office building in Oshawa which GM indicated has been virtually empty since the start of the Covid-19 pandemic. OPG states the building will be refurbished before they move from 700 University Ave., Toronto late in 2024. Back on November 10, 2022, OPG released their 3rd Quarter results and they were quite favourable but not so much for ratepayers as revenue was up year over year for the nine months by $585 million (11.3%) despite generation only increasing by 2.4 TWh (4%). Net income increased by $199 million or 16% so more than double the inflation rate.

Hydro One

Hydro One recently released their year-end results and their revenue, net of purchased power (up by only 827 GWh or 2.7%), increased by $410 million (up 11.2%). Net profit was up by $91 million or 9.2% which also was 46% higher than Canada’s inflation rate of 6.3% for the year.

Despite the foregoing with OPG and Hydro One reporting results surpassing our inflation rate it is worth noting, the Ontario Energy Board’s “Vision” reputedly still is:  “To be a trusted regulator who is recognized for enabling Ontario’s growing economy and improving the quality of life for the people of this province who deserve safe, reliable and affordable energy.“

Melancthon Wind Contract Extended

For some unknown reason Ontario’s Minister of Energy issued a directive dated January 27,2022 to IESO instructing them to renew expiring contracts and IESO did; under the “Medium-Term Request for Proposals“ meaning the contract holder; TransAlta Renewables Inc were granted an extension to 2031. That particular IWT (industrial wind turbines) project hasa long and controversial history, due to hundreds of complaints of noise pollution from residents, so severe that some people abandoned their homes” and it was further stated: “Our own findings from documents received under Freedom of Information is that the Melancthon power project was number one in Ontario for noise complaints related to the turbines and a transformer.“ The foregoing happened despite the promise by the existing Minister to cancel IWT projects before his party gained power!

Joe Oliver retiring as IESO Chair

It was with acute disappointment reading recently former Federal Minister of Finance, Joe Oliver was retiring as Chair of IESO’s Board of Directors as he was only appointed in March 2019! Mr. Oliver has certainly come across as a climate change skeptic recently having penned an article for the Financial Post wherein, he stated: “To justify enormous expenditures and punishing taxes Canadians are endlessly bombarded with apocalyptic climate scaremongering whose main effect is to terrify children and convince the credulous. Even though Canada cannot make a measurable difference to the global climate, the Liberals doggedly push a net-zero agenda that will cost $2 trillion by 2050.“ He reemphasized that point in another article in the FP in early February stating “Canadians are awakening to the terrible harm the government’s destructive climate initiatives inflict on their livelihoods and freedom, without achieving anything meaningful for the environment.

Based on the very short press release from IESO should we suspect the Ford Government was not happy with what he said and perhaps asked him to retire as they are attempting to stay on the good side of PM Trudeau and his minions pushing the “Just Transition” agenda?  We taxpayers should hope not but we should be suspicious!

Prince Edward Island

Back in late 2021 the PEI government announced they would provide free heat pumps for any island household with income of $35K or less and since then they have raised the household income level to $55K but its not working! Their reasoning was because electricity and oil costs (the two main sources of heating households in the province) were very high they would pay to have the pumps installed as PEI seeks to reach “net-zero energy consumption” by 2030! In a province with only 59,000 households, thousands of them indicate they have been waiting for the installations for a long time so the province has now increased the household income to $75K. It certainly appears their provincial politicians are working hard to increase the backlog.  It’s becoming harder and harder to find any politicians in Canada or elsewhere that exhibit even a little common sense!  

Down Under to Australia

Back in early 2019 the government of NSW (New South Wales) granted approval for a 2,000 MW  proposed pumped storage facility at a then estimated cost of US$3.62 billion with commissioning expected in 2024. The approval was granted as the province sought to shut down their coal plants and move to zero emissions and the pumped storage capacity would reputedly be capable of generating 2,000 MW per hour for 175 hours. Sounds like a dream by the politicians in NSW and recent events have perhaps, highlighted their dreams have been shattered! Apparently, the initial costs have ballooned (some estimates are as high as US$9 billion) and the commissioning date in now anticipated to be December 2027 or even later. To make matters worse, recent news was the 2,400-ton boring machine has become stuck under a cave-in so has ground to a halt!  Sure looks to be yet another group of politicians and bureaucrats with a shortage of common sense! It appears to be Australia’s version of Muskrat Falls!

Oil City battery energy storage project ‘dead in the water’: mayor

The captioned article in the Sarnia Observer a week ago could be construed as an “ironic” happening as it occurred near to where oil was first discovered in North America back in 1858 when James Miller Williams was drilling for water. The location of the well at that time was called Black Creek but was subsequently changed to Oil Springs and is located about 30 kms southeast of Sarnia, Ontario.  Renewable Energy Systems Canada (they claim they are the world’s largest renewable energy company) asked for support from the local council as a requirement to seek a blessing from IESO for a proposed BESS (battery energy storage system) but the mayor and council declined to support them. Perhaps nostalgia played a role as those BESS units are seen as support for the unreliable and intermittent nature of renewable energy from wind and solar which our politicians seem to believe can replace fossil fuels.  Nice to see some politicians have basic common-sense!

Over to Germany

It is worthwhile to visit a website titled “NoTricksZone” and a recent visit to the site had a short, sad, but true story about Germany’s electricity and gas prices in a revelation by P. Gosselin. The headline read: “My Household Electricity And Gas Prices Rise 87% And 178% Respectively!The article went on stating; “my own household had made a contract in 2021 that locked the heating gas and electricity prices for 2 years, our rates had stayed reasonably low. But that contract expires on April 1st, 2023, and last week we got the long-awaited letter announcing the new prices from our gas and electric utility.“ Many are aware Germany, under Angela Merkel, went full bore on what was labelled as “Energiewende“; simply defined as, “the ongoing transition by Germany to a low carbon, environmentally sound, reliable, and affordable energy supply“.  As it turns out Energiewende has pretty well failed on all of its objectives due to their push for wind and solar, elimination of their nuclear baseload generation coupled with their shutdown of their variable coal generation plants. They have become the perfect example of what “not to do” but many countries have emulated them and are finding themselves in a similar situation with energy poverty climbing.

An article from October, 2022 stated: “One in four Germans are currently energy impoverished, up from one in six in 2018.“  Those are very dismal results and a reflection on how unconnected from society elected politicians and their bureaucrats have become in their push to achieve the “net-zero” emissions target. In the meantime China, India and many other countries have rejected the call to move in the same direction, so they are lifting many of their citizens out of energy poverty.

The above short stories hopefully highlight the apparent disregard most of our elected politicians have for all but the elites in our democratic countries but it is time to call them out. Join the fight and let them know how they are failing the majority of voters and in the process are causing energy poverty.

There is nothing “just” about the “Just Transition”!

 

 

                                                              

                                                         

                                                   

Oneida Battery Storage Contract Award Confirms our Federal and Provincial Politicians are Intent on Destroying Canada’s Economic Wellbeing in Pursuit of Net-Zero

It is apparent no one noticed from Hour 9 to Hour 11 on February 11, 2013 Ontario’s baseload power decreased by 814 MW of capacity as Bruce Power’s G-8 nuclear reactor was tripped off. It’s not clear why it was tripped, but in terms of security to avoid blackouts in the province; that baseload power would generate over 7 TWh (terawatt hours) over a full year or about what 800,000 average Ontario households consume. 

The above should be of concern to the Ontario Ministry of Energy but so far, they haven’t noticed!  The Ministry are instead excited about the recent announcement triggered by a November 24, 2022, Ministerial directive from Ontario’s Minister of Energy, Todd Smith to IESO. That directive instructed them to complete negotiations with the proponents of the Oneida Energy Storage Project, a 250 MW BESS (battery energy storage system).

Needless to say when the announcement was finally made the Ontario Conservative Party were excited and Global News reported in a February 10, 2023 article, Premier Ford stating; “It’s equivalent to taking 643,000 cars off the road,”.  The article went on to note the project “is being supported by the Canada Infrastructure Bank which has earmarked some $170 million to the initiative.“  The CIB’s press release contained slightly different information than the Ford quote claiming: “The Oneida Energy storage project is expected to reduce emissions by between 2.2 to 4.1 million tonnes, equivalent to taking up to 40,000 cars off the road.“

Hmm, the foregoing suggests someone’s math is askew as taking 643,000 cars off the road is a multiple of 16 times what the CIB said was 40,000 cars! Who should we taxpayers believe?

The CIB’s press release had numerous quotes in it from both federal and provincial government politicians  as well as the partners; Northland Power Inc., NRStor, Aecon*NB: and Six Nations of the Grand River Development Corporation (SNGRDC).  

As an example of the excitement displayed, here is what Jonathan Wilkinson, Canada’s Minister of Natural Resources had to say: “The Government of Canada is pleased to collaborate with partners to unlock the energy storage solutions needed to store clean energy while meeting increasing electricity demands,” and he went on further stating: “The Oneida Energy storage project represents a significant Indigenous-led development that will create good jobs for Canadians while reducing emissions. The Government of Canada is pleased to invest $50 million in building this project with Indigenous partners — resulting in one of the world’s largest battery storage projects.“ 

Premier Ford said: “I’m thrilled to see so many great partners come together to build this world-class project that will provide affordable, clean energy for generations to come,”.

The other quote, in my mind, that stood out, was from Mike Crawley of Northland Power Inc. as Crawley was reputedly the former Ontario President of the Liberal Party and following that served as President of the Liberal Party of Canada.

Crawley’s quote was:  “The Oneida Energy Storage Project is a milestone for Ontario’s burgeoning energy storage sector. It will make the province’s electricity grid more efficient, stable and reliable. For Northland, this project marks our first storage investment. We recognize the Government of Ontario and the Government of Canada for their continued support of energy storage initiatives. Finally, we look forward to continuing to work in partnership with NRStor and the Six Nations of the Grand River Development Corporation, without whom this project would not have been possible.”

We should suspect Crawley’s attribution to “Ontario’s burgeoning energy storage sector” is a subtle call for support (financial and regulatory) from the CIB and the Ford government to grant approval for a storage project Northland Power have been chasing for over a decade.  That project is the Marmora pumped storage project utilizing the abandoned iron mine in Marmora, Ontario. Crawley has somehow managed to entice OPG into joining Northland in their pursuit of that contract perhaps believing it will convince Ontario’s Energy Minister, he must give it his blessing.   

Mike Crawley was called out by Bob Runciman, a Conservative MPP, who sat as a member of Ontario’s parliament for 29 years and in 2004 was opposition leader.  The Hansard report indicates in Runciman’s examination of the then Minister of Energy, Dwight Duncan in 2004, he raised “conflict issues” about Crawley and his position as President of AIM PowerGen while being the Ontario President of the Liberal Party of Canada.  The issue was in respect to a $475 million contract awarded to Erie Shores Wind Farm owned by AIM PowerGen. According to the Hansard records Crawley was also President of the Canadian Wind Energy Association at the time.  Needless to say nothing came of the issue raised by MPP Runciman when he asked Duncan to “put the contract on hold” pending an investigation by the Ontario Integrity Commission. Duncan refused! Crawley still maintains influence with the Liberal Party and his influence seems to now also involve the Ontario Conservative Party.

Mr. Crawley is registered as a Lobbyist with the Federal government and in June of last year he met with Jonathan Wilkinson who stated the Government of Canada “invested $50 million” in the project. We should wonder if the $50 million investment came about as a result of Crawley’s lobbying efforts?   

Looking quickly at the Six Nations of the Grand River Development Corporation (SNGRDC) it is difficult to find complete information related to their “green energy portfolio” other than the claim; “it is capable of producing over 1000MW of clean energy through involvement in 18 solar or wind projects either directly (Equity Interests) or indirectly (Community Benefit Agreements). Their website identifies their portfolio’s capacity as 297 MW of “wind” and 145 MW of “solar”!  They recently announced they were upset the Lake Erie Connector Project had been suspended for which the CIB had planned to “invest up to $655 million or up to 40% of the project cost. ITC, a subsidiary of Fortis Inc., and private sector lenders will invest up to $1.05 billion, the balance of the project’s capital cost.“

As if the furore from the proponents along with provincial and federal politicians wasn’t enough the Federal Minister of Finance and Deputy PM, Chrystia Freeland rang out with her rants on twitter about  the project and how “it will create good jobs, help build Ontario’s 21st century electricity grid, and make electricity more affordable for Ontario families.”

As Minister of Finance she should recognize handing out $220 million of our (Federal) tax dollars for a project destined to raise the cost of electricity and create a few jobs to occasionally power homes or businesses for a few hours annually is not the panacea she hyperventilates about.

The time has come for all of Canada’s politicians to cease the madness of their “net-zero” targets and recognize how eliminating the 6% to 7% of emissions from the electricity sector will have no impact on Canada’s fossil fuel reduction but will result in the loss of well-paying jobs throughout our economy.

Time for sanity to return to our elected politicians!

*Aecon has been awarded a $141 million Engineering, Procurement and Construction (EPC) contract by Oneida LP.

NB: One of my contacts informed me John Beck CEO and President of Aecon is a big supporter of the WEF where our Finance Minister Freeland also hangs her hat! I went to the WEF website and searched his name and it popped up many times and he sits on one of their “Steering Committees. We should all wonder what in hell is going on!

Investigative Reporting by a Toronto Star Journalist is Disinformation

Recently invited to be a guest on Zoomer Radio, I agreed, and was informed I would be joined by Bryan Purcell, VP of Policy and Programs at The Atmospheric Fund. TAF is a “not-for-profit” company with almost $100 million of “restricted funds” that have been provided by the City of Toronto, the Province of Ontario and the Government of Canada and appears to have 30 employees.  They use the revenue generated from the funds ($7.1 million in their 2020 and $1.2 million in 2021 financial reports) and other revenue (minimal) to provide grants described as: “has the potential to generate large-scale carbon reduction in the GTHA“ (Greater Toronto Hamilton Area).

The planned discussion/debate was to be in respect to a Toronto Star article posted November 30, 2022 titled “Ontario’s new gas plants will cause your hydro rates to rise, report says” and presumably for Zoomer’s audience to hear competing views on the content in the article from yours truly.

Shortly before the program was to start the Auditor General of Ontario released her annual report so I, and presumably Bryan Purcell, were informed the discussion was cancelled as the host wanted to cover the AG report due to it’s significance in detailing how the AG viewed Premier Ford’s led financial management over the prior year.

The TorStar article was written by Marco Chown Oved* who identified himself as a “Climate Change Reporter” in the article heading! On his LinkedIn profile, he identifies himself as an “Investigative Reporter at Toronto Star”! The TAF representative, Bryan Purcell, also scheduled to be on the radio program, is quoted in the article and on his LinkedIn profile states he is a: “Environmental Professional focused on Climate Change mitigation“ but his qualifications suggest he is stretching the truth.

Below we will examine some of the claims made in the article based on the report prepared by Power Advisory, which we assume TAF paid for with our tax dollars!  The report’s author from Power Advisory was Travis Lusney, whose LinkedIn profile discloses he was the Senior Business Analyst at the OPA (Ontario Power Authority). In that former position he states he; “Managed analysis and implementation of procurement policy. Focused on the Feed-In Tariff Program with emphasis on pricing, connections and stakeholder engagement.“  Hmm, one should wonder if Mr. Lusney, was at least partially responsible for the cost of electricity in Ontario jumping by over 100% due to the FIT contracts to wind and solar proponents which paid them as much as 82 cents/kWh for rooftop solar. Perhaps we should take his recent report to TAF with the proverbial “grain of salt”, or should we simply shrug it off based on the “investigative journalism” claims of Marco Chown Oved, the Toronto Star reporter?

Claims from the article:

Rather than relying on natural-gas-fired generation to meet growing electricity demand, Ontario’s cheapest and most reliable options require new wind and solar,

It is unbelievable the “investigative journalist” didn’t bother to do a little research work on the foregoing claim as he would quickly discover wind and solar are not the “cheapest and most reliable”. Had the author simply bothered to look at the February 2022 report of the FAO (Finance Accountability Office of Ontario) he would have discovered they have driven up the cost of electricity to the point where taxpayers are forced to absorb a cost of “$38.6 billion (32.7 per cent) to move most of the cost of 33,000 renewable energy contracts with wind, solar and bioenergy generators from all electricity ratepayers to the Province.“  Had he also bothered to just examine a few days of IESO data he may also have discerned wind and solar’s bad habits of generating power when it’s unneeded and failing to deliver power during “peak hours” on cold winter days and hot summer ones. Recent examples of unneeded power generation occurred December 2nd and 3rd when IWT (industrial wind turbines) operated at 76% of their rated capacity whereas on December 7th and 8th they operated at a miserly 8.5% of their rated capacity. In the first instance the IESO were forced to sell off that power for pennies of it’s cost and in the latter case natural gas and hydro ramped up to prevent blackouts such as those that occur in California and elsewhere around the world where wind and solar are a large part of electricity grids.

People, governments and businesses are switching en masse to electricity as a power source for cars, heating and heavy industry in an effort to lower carbon emissions and avoid the worst effects of climate change.

Once again, the Toronto Star’s “investigative reporter” obviously did not do any research, or he would have discovered the “en masse” switch is not happening to any great extent without government grants, and they obviously must be higher or people won’t switch.  In the case of EV penetration a very recent article from mid November pointed out EV sales in Canada were low during the first 6 months of 2022 stating:  “Based on average new vehicle registrations, the EV total would have to grow from 55,600 to about 480,000 over six months to hit that 60 per cent target.” The 60 per cent target is for 2030 and the 2035 target is 100 per cent. The Federal government also hand out grants for heat pump conversions as well as interest-free loans of $40K but once again reviewing government statistics the conversion rate is not happening. A StatCan report notes heat pumps as a primary heat source have only grown from 3% in 2013 to 5% in 2019 and forced air furnaces have only declined by 1% from 53% in 2013 to 52% in 2019. Funnily enough, electric baseboard heaters over the same time frame fell from 28% to 26%. The actual data easily demonstrates the “en masse” switch the author suggests is a fallacy!

The report says Ontario needs to start making significant investments in its grid, especially considering the lengthy timelines required to build the transmission, generation and storage required to simultaneously meet demand and reduce emissions.

Hydro One just received approval from the OEB (Ontario Energy Board) for a rate increase for planned capital spending on their transmission system.  The spending appears to represent about $7.5 billion over the next five years.  Spending of that amounts suggests the investment is “significant” and a little research by the article’s author would have disclosed that!  No investigative integrity is apparent!  

“It’s very clear that if we’re going to go to net-zero, renewables are going to be part of the mix,” said Travis Lusney, the report’s author and director of power systems at Power Advisory. “How far you go is dependent on a lot of factors, even outside of the electricity sector.”

Well, it is apparent Lusney has a love affair with renewables as his prior role at the OPA (Ontario Power Authority), created by the McGuinty Government handed him the power to construct the mess of the electricity sector in Ontario that (as noted above) the FAO stated in his February 2022 report will cost taxpayers $38.6 billion.

“The report finds that a 97 per cent non-emitting grid can be achieved by building new transmission lines, solar and wind generation as well as energy storage facilities. This would allow the grid to reduce its dependence on natural gas to a few peak demand days in mid summer.”

It is worth noting the report fails to mention Ontario’s electricity grid is already over 92% “non-emitting” and fails to include a cost/benefit analysis to achieve the additional 5% emissions reduction it seeks. The report in the three scenario’s recommends adding as much as 12,700 MW of wind capacity, 5,500 MW of solar capacity and 3,900 MW of storage capacity. The report goes on to suggest those wind turbines, solar panels and the storage capacity be spread throughout the province. The report then forecasts due to the spreading it would require as much as an $8.4 billion spend on the transmission system in order to get the power to where its needed. In summary the Power Advisory report recommends  spending billions of dollars to achieve a 5% reduction in emissions in Ontario’s electricity system.  As outlined above it is very unlikely those new facilities coupled with the additional wind, solar and storage capacity and their associated costs would reduce electricity prices! Instead those costs would drive up prices much as they did in the past with a much smaller capacity addition of renewables. Nevertheless, we should be pretty sure Power Advisory would love the foregoing to happen and Travis Lusney would surely rise in the ranks of his employer, Boston Advisory, who would stand to benefit from the money stream generated by assisting applicants seeking contracts from IESO. 

“In each scenario, hydro prices will be lower than they would be if the province goes through with its plan to build new gas plants, the report concludes, mostly because gas is expected to get more expensive, a rise that will be exacerbated by the increase in carbon tax. Meanwhile, prices for wind and solar, which are already cheaper than natural gas, are expected to fall.”

First off, one should wonder how each scenario will cause “hydro prices” to be lower but perhaps they were actually suggesting “electricity prices” will be lower? Past and current experience in Ontario due to wind and solar generation have actually caused “hydro spills” meaning OPG are paid to simply spill water over dams without running them through the turbines. Ratepayers, however pick up the costs of those spills and for the past several years their costs have been substantial. The spills by OPG are almost always caused by unneeded wind generation as their contracts give them “first-to-the-grid” rights . On the statement, “prices for wind and solar” are expected to fall” is also far from the truth.  As one example an article last month about Vestas, the world’s largest wind turbine manufacturer, stated: “Vestas has raised prices more than 30% in the past year to help stem losses.“  It should also be recognized gas prices would fall if our abundant supplies in Saskatchewan and Alberta had more pipelines available but the Federal government has done everything in its power to prevent that from happening.

As the foregoing once again suggests; the Toronto Star, their reporters, and other MSM companies simply accept what they are told or read and fail to do any research to determine if they are providing facts or fiction. In this case it seems obvious it is the latter and reporter Marco Chown Oved should immediately rewrite his LinkedIn memes as it doesn’t suggest he is a “investigative reporter”!

* Marco Chown Oved’s LinkedIn biography brags about how the CAJ (Canadian Association of Journalists) were so enthralled with an article he wrote about “climate change” they blessed him for writing it. Perhaps they will do so again for this diatribe of BS as the MSM seems to have abandoned publishing the truth and the CAJ has endorsed their abandonment!  This is what Marco Chown Oved has on his LinkedIn site: ”Awarded the inaugural Environmental and Climate Change Award from the CAJ for my feature on heat waves in Montreal, a part of the Toronto Star’s Undeniable series on climate change.”

Industrial Wind Turbine Owners Love the “Gales of November”

Having looked at IESO data for November 30th, 2022 and several other days in the month, Gordon Lightfoot’s great song; “The Wreck of the Edmund Fitzgerald” came to mind as it references the “Gales of November” several times in the lyrics. A “gale” is reputedly when winds reach at least 34 knots or almost 63 kilometres/hour and we have had quite a few days this November when they reached those levels.  Yesterday was no exception as they were over 90 kilometres/hour on several occasions in many parts of the province spinning those IWT and generating unneeded power while extracting ratepayer dollars.  No doubt they probably also killed lots of birds and some bats too who were heading south during the migratory season.

To put context on the preceding paragraph about the “gales of November”; IESO data for the first 12 hours of the day forecast IWT would generate 52,228 MW or 88.8% of their rated capacity but they had them curtail about 6,700 MW which meant they operated at 77.4% of capacity.  Over those 12 hours the market price (HOEP) averaged a miserly $4.12/MWh and IESO were busy selling surplus power to Michigan, New York and Quebec.  Exports over the 12 hours were 22,366 MW or almost 50% of what those IWT delivered to the grid. As a result, the export sales returned only $92,371 of their costs which (including the curtailed power at $120/MW) was just over $3.8 million meaning Ontario ratepayers and taxpayers picked up the missing $3.7 million of the contracted costs over those 12 hours. The costs may have been more, as an example, if OPG was forced to spill water but data doesn’t allow us to determine those additional costs.

For the following 12 hours of the day the HOEP averaged $39.45/MWh and we continued to export power totaling 18,907 MW which amounted to 47.5% of IWT generation (39,755 MW or 78.2% of capacity) during those hours.  If we rightly assume the exported MW were either caused by unneeded IWT generation or were all IWT generated power we ratepayers picked up the difference on what we paid ($135/MWh) for the power and what our neighbours gave us in return.  That would represent an additional cost of $1.8 million meaning ($3.8 million for hours 1 AM to 12 PM + $1.8 Million for hours 1 PM to 12 PM) exports over the full 24 hours resulted in costs of $5.6 million without any benefit to Ontarians.

Putting aside what the cost to ratepayers was for the exported power it is important to note the IWT owners earned a total of $12,317,000 for the day including what they were paid for the curtailed power. The foregoing was a cost of $146.15/MWh to ratepayers and represented revenue to the IWT owners of about $2,514.00 per MW of capacity so a 100 MW wind farm would have generated $251,400 for just one day’s output.  Not too shabby!

Perhaps Michigan and New York didn’t have to fire up their coal plants yesterday, so our contribution helped them reduce their emissions while increasing our inflation rate and adding costs to households and businesses experiencing energy poverty.

It appears our elected politicians are unable to see how they are destroying our economy and bringing harm to all Ontarians; much like the “gales of November” destroyed the Edmund Fitzgerald and their crew!

PS: Grid connected solar only generated 78 MW over the day!

Hey, Minister of Energy Smith, Clean Energy Credits Should Benefit Ratepayers

Many Ontarians were pleased Premier Ford recognized (sort of) inflation was harming us and gave us short-term (6 months) relief from the sales tax on gasoline of 5.7 cents a litre. In the interim with high inflation driving everything up we should be pretty sure the foregone taxes were or will be fully recovered from sales taxes applied to everything else we consume. The tax relief started on July 1st and ends December 31st, 2022.  Looking at the recently released 2021-2022 Public Accounts it is obvious why he did that. Sales tax revenue from April 1, 2021, jumped from $26.6 billion to $30.4 billion by March 31, 2022, an increase of $3.8 billion (14.3%) so, presumably, sales taxes played a role in driving up inflation while increasing the government’s coffers to allow them to achieve an unplanned surplus! 

It is interesting the Ford led government chose just one of the many sources of energy we regularly use for the gesture and ignored “electricity” which is consumed daily by almost all businesses and residents in the province. Perhaps he was of the opinion the Ontario Electricity Rebate (OER) was more than we deserve as the Provincial sales taxes on our electricity bills represent only 76.5% of the OER but it only applies to residential users! If that’s the case, he ignores the fact; those who pay the costs of that rebate are present and future taxpayers who will have to pay the accumulated debt from the OER.  Kind of “in one pocket but out of the other one” tax!

Worth considering and related to the foregoing is the recent announcement by OPG stating they will be selling “clean energy credits” to Microsoft in a “firstof-its-kind deal”! 

One should wonder, will Microsoft be charged sales taxes for something intangible that will serve to improve their ESG (environmental, social and governance) disclosure scores? Those will reputedly be OPG’s “carbon-free hydro and nuclear assets”.  That seems quite strange as Ontario ratepayers (residential and businesses) already purchase the power that OPG hydro and nuclear provide in addition to: those contracted parties of unreliable and intermittent wind and solar generation also claiming to be “carbon-free”.  We ratepayers pay for the power to keep lights on and our manufacturing base, offices, restaurants, etc. etc. operating. We are also burdened to pay the power bill for our hospitals, schools, etc. via our taxes and obliged to pay sales taxes on what we consume.

What is particularly annoying, as a ratepayer; was, what the article noted about the revenue generation from those “clean energy credits”: “OPG said revenue from the credits would also help OPG in its own commitment to achieving net zero as a company by 2040. The funds received will either go toward investments in new clean generation in Ontario, back to the ratepayer or back to the taxpayer through the province.”

From all perspectives the funds generated for the province by OPG are already substantial as OPG’s December 31, 2021 financial statements indicate. OPG’s water rental costs were $415 million (paid to the province) including $26 million for spilling water during SBG (surplus baseload generation) situations plus $239 million in pseudo income taxes. Collectively that was $654 million.  What is missing from the foregoing however is the 7% sales taxes we ratepayers paid for the 77.6 TWh (terawatt hours) OPG generated and produced gross revenue of $6.877 billion. When that OPG generated power was delivered to us ratepayers we paid the sales taxes, and the province earned another $481.4 million giving the province $1.135 billion for our (taxpayers) investment in OPG.

It should be recognized the foregoing $1.135 billion doesn’t include OPG’s “Net Income Attributable to Shareholder” ie: the Province of Ontario; which was $1.325 billion. That means the “Province” claimed $2.460 billion for the 77.6 TWh OPG generated and delivered. The combined revenue added 3.2 cents/kWh to what we ratepayers consumed. The $2.460 billion is about six (6) times more than the savings of 5.7 cents a litre (approximately $400 million) we will save for the six months of a slight reduction in costs when filling our ICE vehicles with gasoline.

The return on OPG’s equity (December 31, 2021 was $15.532 billion) and the RoE (return on equity) is set by the OEB (Ontario Energy Board) at 8.4% so at $1.325 billion it is very close to the setting, however, if one adds the additional revenue the Province generated it becomes a collective RoE of 15.9% and above what most private sector power companies would hope to achieve! Unfortunately, no one sets the allowed “return on equity” for the province and there is no competition to keep rates down!

One should hope the Ford led ruling party will finally recognize their role in the gouging of ratepayers and ensure any revenues generated by the sale of those “clean energy credits” by OPG finds its way to reducing ratepayer bills rather than further spending by OPG or the province.

Pickering Nuclear Vacuum Building Outage (VBO), a Look at the Future, or a Demonstration of Ontario’s Energy Vulnerability?

Many around Ontario are probably unaware all the units at the Pickering Nuclear plant have been shut down to perform an VBO.  A VBO is usually conducted on a periodic basis for the purpose of confirming the integrity of the equipment and infrastructure of the vacuum buildings.  In the past, VBOs have been cycled with one or two units out for three to four weeks in the Spring or Fall when Ontario’s “peak demand” is generally low, but the wind is frequently blowing.  On this occasion OPG has apparently shut down all the Pickering Nuclear* units for the VBO. 

The question becomes: is it the intention to demonstrate the viability of extending their life or to show the vulnerability of the energy system without the approximately 3,000 MW capacity of Pickering or both?

Since all the units have been fully shut down (the last units were shut early on October 6th), IESO data clearly shows even though Ontario peak hourly demand on October 6th was only 16,375 MW and 16,303 MW on the 7th we were importing significant power from Quebec. We imported the power despite the fact IWT (industrial wind turbines) eventually ran well above their annual average of about 30% of capacity and natural gas peaked at Hour 11 on the 6th at 3,147 MW while wind was on an upward move and generated 925 MW.

On the 6th, Quebec supplied 22,354 MWh and on the 7th we imported 26,731 MWh from them. As a matter of interest, the latter is about what 1,000,000 average Ontario households consume daily.  It is worth pointing out Quebec is a “winter peaking” province principally due to the fact most households in the province heat with electric powered furnaces or baseboard heaters. Hydro Quebec therefore asks their customers to reduce demand during cold winter periods. For that reason, Ontario may well find its neighbour unable to supply any power during the winter so it would be expected Ontario might experience rolling blackouts without the Pickering units up and running.

The other interesting fact is; the HOEP (hourly Ontario energy price) market price over the two days has averaged over $60/MWh which will presumably affect the ICI (Industrial Conservation Initiative) ie: even picking some or all the top five peak hours over the year may not generate the same savings as in the past for those companies using a minimum of 500 KW per hour or as much or more then 5 MW per hour should the HOEP climb further.

From all appearances it seems the intention of the Pickering Nuclear shutdown for VBO purposes is clearly to signal the necessity of retaining the 3,000 MW of their capacity or subject the province to potential rolling blackouts as California has experienced.

The full “electrification” of the province as advocated by the Ford led Ontario Conservative Party may not be looking like the shining star to make the eco-warriors happy while bringing grief to the rest of us Ontarians.  The Ford led government should remember we Ontario voters went through a similar experience under the Ontario Liberal Party and turned them into the “minivan” party and it was related to the “energy” file!

We should hope Ford and his Minister of Energy, Todd Smith have seen the light about the “net-zero” push and realize it may be the train in the tunnel heading for us Ontarians and will wipe out their current majority come the next election! 

*I was informed by two knowledgeable engineers the Pickering Units must all go through the VBO process at the same time.

Expensive Renewables get Priority over Cheap Renewables-Why?

March 31, 2022 demonstrates how Ontario’s Spring weather frequently treats us ratepayers badly, irrespective of “climate change” or that net-zero 2050 target!

As it turns out the wind was blowing as it frequently does when Spring arrives in Ontario and it proved hurtful due to the favoured treatment granted to IWT (industrial wind turbines) for their generation.  For ten (10) hours IWT delivered more generation to Ontario’s electricity grid than our hydro capacity did. That seems odd as during the Spring the water is flowing as the snow melts and supplies our creeks, rivers and lakes with lots of water to run the many hydro dams evident throughout the province.  

On examination of the daily IESO generation output one notes for 5 of the 10 hours wind out-generated hydro in the middle of the night. During the same hours it appears that wind’s generation was also being curtailed (about 3,100 MWh) and it sure appears hydro was being spilled.  During those 5 hours the HOEP (hourly Ontario energy price) averaged $4.80* a MWh or 0.48 cents/kWh and our neighours in Michigan were scooping it up.

Collectively we sold Michigan net exports (exports minus imports) of 35,524 MW over the full 24 hours for the bargain basement price of $16.46/MWh or 1.65cents/kWh so we earned $584,725 which sure didn’t come close to its cost.  If what was sold was all generated by those IWT it would have cost ratepayers $4,796,000 and if one included curtailed wind the total cost would have been almost $5,168,000 or $145.48/MWh without including any costs for spilled hydro*. So, the net result of March 31st generation was an additional cost of $4,583,000 for those exports without including associated costs of the spilled hydro.  

So, during Spring while those IWT are chopping up migrating birds and bats, creating noises harming people and animals living close to them they are also adding costs to our daily living! 

We are doing the harm with technology eco-warriors tell us is cheap, abundant and beneficial but what we experienced in Ontario yesterday is atypical of our Spring and Fall seasons and is anything but cheap or beneficial and most often abundant when unneeded.

Unfortunately, the eco-warriors have convinced our Federal and Provincial politicians doing this will save the world from climate change! 

How dumb do they think we are and why are the politicians allowing IWT generation to take precedence over low-cost hydro?

*IESO fails to tell us when hydro is spilled or it’s associated cost nor do they disclose how much wind generation is curtailed and paid for. It’s time for full disclosure by IESO!

Wind and Solar forecast to Cost Taxpayers a tiny bit Less

The Province of Ontario just released the Third Quarter Finances report and seem happy as their press release noted they are “now projecting a deficit of $13.1 billion in 2021-22 – an improvement of $8.4 billion from the deficit forecast in the Fall Economic Statement.”

Revenue Surprise

In looking over the highlights from the report it appears one of the reasons for the improvement is they note revenue from OPG and Hydro One is now forecast to be $1,535 million versus the original forecast of $670 million so that alone produced $865 million or slightly more than 10% of the “improvement”!  Hmm, that presumably came from us ratepayers and the 129% contributed to the improvement was made without any appreciable increase in consumption!

Expense Shortfall

The other issue one should note is the costs contributed by taxpayers is forecast to come in at $112.3 million less or 1.7% below their forecast.  The original forecast for this expense suggested it would cost taxpayers $6,493.6 million but the revised forecast is now $6,381.3 million.  As most readers know the Ford government transferred responsibility for absorption of much of the costs of renewable energy (principally wind and solar) contracts to taxpayers. That move’s intent was to reduce the burden on ratepayers and presumably to also make Ontario’s electricity rates somewhat competitive with our neighbours!  The fact that the past year has seen slightly less output from wind and solar while some nuclear reactors were down for maintenance resulted in less curtailed wind generation and less hydro spillage saving taxpayers those costs.

The ups and downs of generation by IWT (industrial wind turbines) play a major role in the cost shifts from ratepayers to taxpayers and that is evident by simply comparing just two recent hours of IESO data.

Hour 9 on February 15, 2022 as the first example has IESO reporting IWT generated 384 MWh and the HOEP (hourly Ontario energy price or market price) which is what IESO sold our surplus power to our neighbours (NY, Michigan and Quebec) at that hour, was $111.64/MWh whereas at the same hour on February 16, 2022 the price we were selling surplus power dropped to  $43.23/MWh.  On February 16th those IWT were generating 4,387 MWh and we were exporting considerably more at that hour than we were the prior day!

If we then compare hour 12 those IWT on the 15th were generating a miserly 56 MWh and the HOEP price was $46.12 but on the 16th that price was only $14.36/MWh when those IWT were generating 3,566 MWh and another 400 MWh were curtailed.

Obviously, the hour of the day, if it’s a workday along with outside temperatures play a significant role in demand but IWT are insensitive and deliver power ONLY when the wind is blowing and also ignore seasonal swings which significantly affects demand.

Gas plants must be at the ready for our variably demand and they were; as at hour 9 on the 15th they were generating 6,610 MWh and at hour 12 they produced 5,606 MWh.    At hour 9 on the 16th, they delivered 3,108 MWh and by hour 12 only 1,733 MWh were needed.

What the foregoing points out is that without gas plants being at the ready on hour 9, as one example, we may been close to experiencing a rolling blackout or a brownout experience with low voltage power. 

Not only are Ontarians paying above market prices for contracted wind and solar generators but we are also obliged to pay for their penchant to fail.  What the latter means is, we pay for gas plants regardless of whether they are simply sitting at the ready or actually generating power due to the failure of IWT or solar to provide needed power!

Gas plants ensure we can keep the lights on.

Ontario Ratepayers Blinked, and Nothing Happened

In a little over four months from today Ontarians will find ourselves having to decide who to vote for in the forthcoming election?  After four years of the Doug Ford led government, we will, no doubt, look back and wonder, do they deserve another term?

Personally, I have been scratching my head and searching for their accomplishments, particularly as it relates to the “electricity” sector where my critical analysis started about a dozen years ago with the assistance of individuals with much better electricity generation insight.  Back when the OPC party sat in opposition their “official critics” of the ministry would often call me seeking input. The current Minister of Energy, MPP Todd Smith occupied that position for about three years and would seek my views. His predecessor, Vic Fedeli, would do the same prior to becoming finance critic.   

When the Doug Ford led OPC party won the last election with a significant majority the Wynne led Ontario Liberal Party became the “minivan” party.   Many of us who supported Ford et al, looked forward to seeing real action from the Ford appointed Energy Minister.  We expected they would change things reversing the electricity price climb that had increased ratepayer costs by well over 100%.

Ford appointed Greg Rickford as Minister of Energy, Mines, Northern Development and Indigenous Affairs and while Rickford may be a competent individual it wasn’t clear he was familiar with the complexities of the energy portfolio! Rickford moved quickly to kill the GEA (Green Energy and Green Economy Act) immediately announcing cancellation of 758 contracts that had not started.  The cancellation would reputedly save ratepayers $790 million but failed to mention it was over the full term of the 20-year contracts. The future savings were less than $40 million annually or about 0.2% of the annual cost of electricity to ratepayers.

Water tax allocation etc,                                                                                             

Rickford could have simply reduced the “water fuel expense” ie: tax, from the $11.2 million per TWh (terawatt hour) paid by OPG to $10 million/TWh and actually saved ratepayers $40 million per annum, but he didn’t! Ratepayers even pay the water tax when OPG is forced to “spill” water because the wind is blowing and/or the sun is shining and the “first to the grid” rights are given to industrial wind turbines (IWT) and solar panels. He could have allocated that cost to the IWT contracts at the very least. Rickford may also have been involved in the retirement of the Hydro One Board along with the CEO Mayo Schmidt, although Premier Ford was seen to take credit for that! That event didn’t save us money.

In my humble opinion the foregoing basically represents the bulk of what Rickford accomplished while Minister of Energy unless one accord’s him the credit for increasing the cost transfer to taxpayers from the 31.2% of my May 29,2018 hydro bill when Wynne was the Premier to 38.5% on my most recent bill.  The foregoing of course only served to increase the future cost to taxpayers who are also ratepayers. The C.D. Howe Institute estimated in their June 15, 2021 report taxpayer subsidies climbed to $6.5 billion for the 2021/2022 fiscal year.  

A mere three days after release of the C. D. Howe report a cabinet shuffle occurred and Premier Ford appointed Todd Smith to what is now labelled simply; The Ministry of Energy.

We will look at Smith’s accomplishments and directions over his first 8 months in the next post so stayed tuned!