Why Wind and Solar Owners Love Energy Storage

Yesterday, November 26th, 2022, demonstrated why Ontario’s numerous contracted wind and solar owners are so excited about the Ontario Minister of Energy’s objective to secure 1,500 MW of storage capacity be it pumped hydro or BESS (battery energy storage systems)!

Both IWT (industrial wind turbines) and solar panels generated lots of unneeded electricity over the day based on IESO daily generation report and it was more than they tell us: the reason why, is there are approximately 600 MW of IWT capacity and 2,200 MW of solar capacity that are DER (distributed energy resources) so those are not reported by IESO as their minimum reported capacity per generation source is 20 MW and DER’s generation is used by local distribution companies to supply power to communities they serve.  They also include other generation sources such as small, hydro, natural gas, and biomass!

The day was atypical of Ontario’s spring and fall demand as reflected by the fact Ontario’s peak demand was a relatively low 16,345 MW and it occurred at Hour 18 (hour ending at 6 PM).  Throughout the day the wind was blowing and resulted in IESO forecasting IWT would generate almost 76,600 MW but they only reported about 70,500 were accepted into the grid suggesting 6,100 MW were curtailed.  The foregoing translates to a cost of $732,000 for curtailed generation and $9,518,000 for the grid accepted generation. This resulted in an average cost per MWh (megawatt hour) of $145.39 for IWT generation.

Over the day the HOEP averaged only $7.84/MWh and for hours 12 to 15 was $0.00/MW.  In those 4 hours we saw our neighbours in Michigan, NY and Quebec receive 7,314 MW at zero cost which is about what 813 average Ontario households would annually consume and what 243,000 households would consume daily. If those MW we gave away were generated by ground mounted solar (contracts pay them $440/MWh) the cost would have been $3.2 million and if IWT generation the cost would be about $987,000!

Now, it is worth reflecting on how IWT and solar owners could further benefit from those low HOEP market prices.

If the BESS or pumped hydro storage units are owned by the same companies who generated that surplus power for which they were paid either $440/MWh or $135/MWh (sold for 0.00/MWh) turned around and simply scooped that power up via a licensed electricity trader and stored them they could simply hold them until the price jumped the next day or two. 

All those “storage owners” would need to do is check the weather forecasts to see if the sun will shine or the wind will be blowing in the next day or two.

As it turns out today (November 27th, 2022) is a perfect example of how they could increase their revenue at the expense of Ontario’s ratepayers.  Today the wind is not blowing much, and the sun isn’t shining throughout the province. At Hour 7 AM today the HOEP jumped to $69.25/MWh and since then, has averaged $62.25/MWh meaning those 7,314 MWh at zero cost if sold back would have generated $455,297.  The foregoing would simply add to the revenue those solar panels and IWT generated yesterday at the expense of Ontario’s ratepayers.

It should be recognized yesterday could have allowed them to generate a lot more revenue via storage as the example above only reflected the four hours of $0.00/MWh whereas the overall average for the full 24 hours was a paltry $7.84/MWh or 0.078 cents/kWh.

It seems obvious the IWT and solar generators recognize the unique ability to reach even deeper into Ontario ratepayers’ pockets but what is not obvious is if our Minister of Energy, Todd Smith and the IESO will prevent them from doing so. 

Based on the directive to obtain “a minimum of 1,500 MW of storage” it appears the politicians and bureaucrats may well allow them to do exactly what those IWT and solar owners are hoping for and planning to do!

Hydro One Signals Full Electrification May Be Just Around the Corner?

Hydro One Survey

Hydro One is surveying their customers throughout the province and the “survey questions” suggest they are trying to determine where grid upgrades will be required as the push by our politicians for “full electrification” gains speed.  The survey asks questions such as, are you planning on purchasing an EV or converting your gas or furnace oil heating system to electric in certain time periods. They require the supply of both your e-mail address as well as your area code which presumably will signal them as to where grid upgrades may be required.

When you purchase that EV you will need a 200-amp service electrical panel for the charger meaning the wires and associated transformers bringing electricity to our homes will need upgrading as well as your homes electrical panel and the latter will cost you a few thousand dollars. Upgrades will be required in places where several homes have purchased EV or added electricity demand to the system.

It seems as if Hydro One is planning for an upcoming future demand increase which will allow them to tell the OEB and the Ontario Ministry of Energy the costs associated with the “electrification” process.  In other words, they are reviewing cost/benefit attributes of the conversions mandated by our politicians because “fossil fuels”, in the politician’s minds, are evil and cause global warming!

One would have thought those shining lights we elected Federally and Provincially would have done a cost/benefit study before they considered “full electrification” but perhaps that is too much for us voting minions to expect. 

While the Hydro One survey appears directed to just their 1.5 million distribution customers, we should suspect they are also seeking input from all electric distribution companies such as Toronto Hydro, Hydro Ottawa, etc. etc. as electrification will also substantially impact their transmission business.  

It is worth noting the following from Hydro One’s 2021 annual financial statement reflecting their impact on ALL electricity ratepayers in the province due to their transmission monopoly:  “Hydro One Limited, through its wholly-owned subsidiaries, is Ontario’s largest electricity transmission and distribution provider with approximately 1.5 million valued customers, approximately $30.4 billion in assets as at December 31, 2021, and annual revenues in 2021 of approximately $7.2 billion.“  Net income (before financing charges and taxes) from Hydro One’s transmission business was $942 million and exceeded distribution net income by $248 million or 24.8%.

Hydro One owns and operates over 30,000 KM of transmission lines (98% of all transmission lines) in the province and delivers the power to 43 local distribution companies (LDC) and 88 large, connected companies.  They also operate over 300 transmission stations and 25 cross border connections.

Full electrification will entail billions of dollars of spending for upgrades to those transmission stations and transmission lines should the Provincial and Federal governments continue the push for electrification.

The spending of billions by Hydro One to upgrade Hydro One’s transmission system coupled with the billions spent by the LDC to upgrade their delivery of electricity to your household or business will obviously drive up the cost of each kWh (kilowatt) you consume.  At the same time try to imagine the costs of additional “emission free” generation NB: that will need to be added to the grid. The cost of storage (battery and pumped hydro, etc.) more wind and solar generation and perhaps new nuclear and electricity rates will climb even higher.

 All one has to do is look at the UK and Europe where spiraling inflation has been mainly driven by rising energy costs and taxpayer subsidies have become the norm in an attempt to keep household residents from freezing in the dark and businesses from closing while various countries run up huge annual fiscal deficits.

We should expect the same here in Ontario and the rest of Canada should our politicians continue on the path to save the world from “climate change”!

Hydro One’s survey should signal our politicians where we may be heading but perhaps that is too much common sense for them to appreciate.

NB: The following is from a recent exchange with the Ontario Ministry of Energy with my observation:  NREL, a national laboratory of the US Department of Energy, in their study stated, “Widespread electrification increases 2050 U.S. electricity consumption by 20% and 38% in the medium and high adoption scenarios, respectively and relative to the reference.” For Ontario let’s focus on the “medium scenario!  At the end of 2021 IESO reported total grid connected capacity in Ontario was 38,079 MW. If we assume Pickering Nuclear gets approval to extend its life that reflects the need to add 7,600 MW of NEW capacity (20% of 2021 capacity) or 10,600 MW (28%) should Pickering renewal not receive the green light! Please note the study states “consumption” which means both wind and solar plus storage would need to be at least triple that capacity level!

Conservative Conflicts Begets Confusion

Plato is credited with saying, “Strange times are these in which we live when old and young are taught falsehoods in school. And the person that dares to tell the truth is called at once a lunatic and fool.

A couple of recent events occurred that when viewed, should strike us all as “strange” but depending on one’s perspective who is telling the truth and who is the “lunatic and fool” may well differ.

Joe Oliver, former Federal Minister of Natural Resources and Minister of Finance under the Harper led Federal Conservative Party penned an article in the Financial Post on September 1, 2022 and it castigates the Justin Trudeau led Federal Liberal Party about the damaging consequences of its green policies. 

The opening two sentences of Oliver’s article were words of wisdom and common sense as he stated: “Prime Minister Justin Trudeau should be feeling isolated in his campaign against fossil fuels, especially Liquefied Natural Gas (LNG), as leaders around the world reduce their countries’ reliance on inadequate renewable energy and tone down their own rhetoric about lowering GHG emissions. But for political and ideological reasons his government cannot admit to the terribly damaging consequences of its green policies and the urgent need to fundamentally change course.”

When Greg Rickford was the Ontario Minister of Energy, Northern Development and Mines he appointed Mr. Oliver to the Board of Directors of IESO (Independent Electricity System Operator) and a couple of months later he was elected as Chair of the IESO Board of Directors. IESO is responsible for managing Ontario’s power system and defines their responsibilities as: “The IESO is the coordinator and integrator of Ontario’s electricity system. Our system operators monitor the energy needs of the province in real time – 24 hours a day, 7 days a week – balancing supply and demand and directing the flow of electricity across Ontario’s transmission lines.”

Ontario’s current Energy Minister, Todd Smith, (appointed June 18, 2021)  and formerly the critic on the “energy” portfolio when the Ontario Conservative Party were in opposition) on August 23, 2022 issued a directive to IESO which contained some surprising instructions to the President.  Needless to say, the directive was also copied to the Hon. Joe Oliver, P.C., Board Chair!

The directive from Minister Smith babbles on about how “Ontario is on track to acquire the electricity generation we need to power our government’s success in driving electrification and strong economic growth, including unprecedented investments that are creating new jobs in electric vehicle and battery manufacturing and green steel.”

Anyone who has followed the news about the foregoing investments in EV and battery manufacturing and green steel will be aware both the Ford led Provincial government and the Trudeau led Federal government joined hands and have handed out billions of our tax dollars to achieve those “unprecedented investments”.  It is also worth noting those “new jobs” are not new as the handouts to the various companies were simply to “retain” the jobs associated with the automotive and steel manufacturers that were already here in the province. 

The concept of a “net-zero” buy-in by Minister Smith seems evident with the push to both declare a moratorium on gas generation and “replacing natural gas with green fuels such as hydrogen and renewable natural gas, or the development of utility-scale carbon capture and storage” as a directive from October 27, 2021 via his “Pathway to Achieve Zero Emissions in Ontario’s Electricity System” suggests.  The above seems to have been confirmed based on his comments in a recent CBC article where he clearly states:

I’ve asked the IESO to speed up that report back to us so that we can get the information from them as to what the results would be for our grid here in Ontario and whether or not we actually need more natural gas,” Smith said Tuesday after question period.

I don’t believe that we do.”

No estimation of the costs of the “Pathway” are noted and no castigation of the Trudeau government by Minister Smith would strongly suggest he is on the same page as Trudeau and those in the Trudeau cabinet such as Steven Guilbeault, the Federal Minister of the Environment and Climate Change. The comment above: “I don’t believe that we do” implies he is obviously conflicted with the Honourable Joe Oliver, Chair of the IESO Board.

As Plato suggests and we Ontarians should wonder; is Oliver “the person that dares to tell the truth” and Smith the one who is calling him “a lunatic and fool” or is it the other way around?

Eco-Warriors Bubble Up Again

The Narwhal is pushing pumped storage on behalf of Northland Power and dear old Jack Gibbons of the OCAA (Ontario Clean Air Alliance) is excited.  They are also excited about battery storage.

I took a run at the Northland plans back on November 18, 2013 and didn’t like what it was suggesting at that time.  I wouldn’t think things have changed much except for the increasing capital costs which suggest it would be even worse now than it looked like almost nine years ago.

While You Were Sleeping, Quebec, Michigan and New York Raided Your Piggy Bank

The IESO reports from Midnight to 7 AM on June 7th indicate over those seven hours they sold off Ontario’s surplus generation* to our neighbours in Quebec (7,178 MWh), Michigan (6,849 MWh) and New York (3,114 MWh) for an average price of $1.25/MWh generating a pitiful $21,426  for those 17,141 MWh.  Ontario’s electricity demand during the bulk of those hours was in the 12,000 MW range which it frequently experiences during nights in the Spring and Fall months.  

As the foregoing suggests we didn’t need any other power beyond what nuclear and hydro can easily provide yet those wind turbine contracts give them “first-to-the-grid” rights and even pay them for curtailed power!

As it turned out, a large part of the 17,141 MWh sold off during those seven hours to our three neighbours were related to how those IWT (industrial wind turbines) were operating! IESO had forecast IWT would generate 13,481 MWh during those hours but they only accepted 8,068 MWh and curtailed 5,413 MWh.

The above exercise meant just the IWT cost was $1,738,740 and coupled with the cost for the other exported generation (9,073 MWh) at an average cost of $116/MWh (the latter includes about $30/MWh paid by Ontario taxpayers) brings the total cost to $2,791,200 or about fifty-three cents for each of the 5.3 million Ontario households.

While 53 cents per household is only 7.6 cents per hour; if it happened for the 8760 annual hours per year it would amount to over $600.00 per Ontario household and be a major hit to the 50% of families who are only $200.00 away from being able to pay their bills!

The time has come for the re-elected Ford led Government to do something about this mess and stop the continued bleeding of our after-tax dollars for this fictional “non-emitting” generation harming those 5.3 million Ontario households.

*Low demand coupled with nightly IWT generation drives down the market price referenced as the HOEP (hourly Ontario energy price) forcing ratepayers to pay for the difference between the contracted price and the market price.

June 4th; Just Another day of Generosity by Ontario ratepayers and taxpayers

Well, once again, Ontario’s electricity generators were producing power we didn’t need. Nevertheless, the ratepayers and taxpayers of Ontario were obliged to give it away to our neighbours in Michigan, Quebec and New York.  This is a regular occurrence during the Spring and Fall seasons as demand is generally at the lowest levels for us but the GEA (Green Energy Act) imposed by the Liberal government during the McGuinty/Wynne years declared wind and solar generation were the future so they gave them contracts with very high rates and “first-to-the-grid” rights!

Ontarians have been paying the price for over a decade and despite the fact Liberals were found guilty of their stupidity on the electricity file and booted out of power, the current and recently reelected Ford led Conservative Party has done nothing to change things over their prior four years of power!

So, Saturday the fourth of June was simply another example of how the mess continues!

Peak demand in Ontario occurred during the 18th hour and peaked at 14,437 MW. Nuclear and hydro alone at that hour generated 14,631 MWh so wind and solar were not needed but those damn contracts stand in the way. At that hour wind was operating at 16.9% of their capacity and they could have peaked at 45% of their capacity at 1 AM but IESO (Independent Electricity System Operator) had them curtail 1,200 MW. 

IESO were busy selling off our surplus power throughout the day to our neighbours and did so with slightly over 24,000 MWh to Michigan, 22,300 MWh to Quebec and about 12,000 MWh to NY!  That power was sold at the astronomical (sarcasm intended) average HOEP (hourly Ontario energy price) of $6.34/MWh.

What the preceding tells us is we are giving Michigan and New York, clean green power to help then keep energy costs low and reduce their emissions. Quebec benefits by not using their hydro generation which they have presold to US States like NY under lucrative contracts.  No benefit for Ontario’s ratepayers or taxpayers as the following outlines!

If we simply assume the approximately 58,000 MWh, we exported earned us only $368,000 (58,000 MWh X $6.34/MWh), we should consider what it cost us!

The mix of electricity sold presumably included wind generation (26,000 MWh including curtailed), solar, hydro, nuclear and perhaps even a little natural gas. The minimum cost was approximately $116/MWh based on the GA (Global Adjustment) estimate by Scott Luft and the 2nd estimate by IESO for May and includes the $30/MWh taxpayer subsidy. Using the $116/MWh the cost of those exports becomes $6,728,000 and including the 4,900 MWh of curtailed wind total costs rise to over $7.3 million.  So, for what cost Ontario ratepayers/taxpayers $7.3 million we received less than $400K.

What the foregoing points out to the politicians in charge is that there is something inherently stupid with the way our electricity system is managed. We changed the political parties once because of the electricity file but the Ford government simply shifted a large part of the costs to the taxpayers so it was hidden from sight.

Perhaps the next election will be focused on the provincial debt and include the costs the Ford led government hid inside our Provincial debt.

If they actually do something to sort out the mess created by the Liberals it could reduce the provincial deficits by $6.9 billion as reported by the FAO of Ontario assuming they can keep electricity costs flat, perhaps by taxing the intermittent and unreliability of that expensive and harmful wind generation.

Only time will tell!

Ford Energy Act Revolt (FEAR)

An earlier article reflected on how the Ford led government is kowtowing to the Trudeau led government and FEAR mongering in respect to the “climate change” crusade. It suggested the Minister of Energy, Todd Smith was pushing for more negative action in respect to Ontario’s energy sector via directives to both IESO and the OEB that would serve to punish ratepayers/taxpayers for fossil fuel consumption.

The alarming ones were referenced as Ministerial directives from Minister of Energy, Todd Smith, to IESO with the first related to “Clean Energy Credits” and the second to “Pathways to Decarbonization”.  He also has asked the OEB to investigate options for a “New Ultra-Low Overnight Electricity Rate”.

Let’s examine the directives to IESO!

Clean Energy Credit Directive to IESO

Energy Minister Smith’s letter of direction to IESO instructed them “to provide further value for ratepayers by supporting the creation of a voluntary clean energy credit market“. That suggests he is a believer in increasing costs to consumers to eliminate “emissions”!  Is he simply following orders from above?

Needless to say, IESO take instructions from the Ministry so they have commenced the process by issuing an “Engagement Plan” meant to respond to the Ministerial directive! The amusing thing about his directive is he says the objective is; “making life more affordable and I believe ratepayers can reap further value from the electricity system that they have built.“ Hard to believe requiring ratepayers to purchase Clean Energy Credits (CEC) will make “life more affordable”.  It is somewhat mindboggling to research CEC values as they are all over the map in respect to prices.  A somewhat dated article (January 22, 2021) about prices in the New England states show their costs as anywhere from $11.05/MWh to $233.75/MWh depending on the state involved.

Because Ontario’s electricity sector is one of the lowest emitters of CO 2 Minister Smith seems to believe we can, as an example, get an agreement to those using fossil fuels to heat our homes or running a business to purchase CEC!  The revenue will then be used to reduce our costs; making “life more affordable”.  It sounds too much like the Federally imposed “carbon tax” which does nothing more than increase the number of bureaucrats taxpayer’s support while increasing our cost of living! The “credit offerings” will include: “nuclear, waterpower, wind, solar and bioenergy.“ Smith’s letter doesn’t clarify; if you have solar panels on your roof will you be asked to hand out a CEC or whether you will be paid for doing so? One should suspect the various contracted parties under the FIT (feed in tariff) programs will not willingly pass those CEC’s on unless they are compensated.  The other issue is by requiring those who emit CO 2 to purchase CEC means any household using natural gas as a heating source may be required to purchase those CEC.  We should note those same households are already paying carbon taxes imposed by the Federal Government along with the Provincial Sales tax.  CEC simply look to be a further tax increase!  

One would hope the IESO point out the fallacies with the Ministerial directive and stand up for us ratepayer/taxpayers!

Pathways to Decarbonization

On October 7, 2021 IESO released a report titled “Decarbonization And Ontario’s Electricity System” which was a response to thirty (30) municipalities who had pressured the Ministry of Energy to phase out natural gas plants.  IESO’s report of 27 pages outlined the cost to do that would hit ratepayers with $27 billion and raise the price of household electricity bills by $1,200 annually; an increase of 60%. Not quite what the McGuinty/Wynne led government put us through but still very significant during this high inflation period.

Despite that rather shocking news Minister Smith on the same date (October 7, 2021) as IESO’s report, issued a directive to them and it stated “I would ask that IESO evaluate a moratorium on the procurement of new natural gas generating stations and develop an achievable pathway to zero emissions in the electricity sector.”  One should wonder, did he read the 27 pages of the IESO report or not equate what he was suggesting we do in Ontario with what was happening in Europe?  An article just nine days before he issued the directive noted electricity prices climbing to record highs in the UK and EU countries. Renewable energy’s failure in the form of wind and solar’s absence coupled with low water levels were causing electricity prices to climb to record highs at the same time as a price spike in natural gas arrived.  Anyone even casually, following the news at that time out of the UK and most other European countries would have discovered how the efforts to reach net-zero were causing both economic pain and energy poverty. Needless to say, things are much worse now and all of North America has been affected by the increase in the market prices of oil, gas and coal.

Despite the foregoing, IESO will follow Minister Smith’s directive and have commenced the “engagement process” to develop their response.  One would assume the evaluation will mirror that of their earlier report and likely suggest costs will be even higher.

As the heading on this article implies, we should all be “fearful” of what the Ford government is doing as it seems set to create another sharp rise in the cost of electricity despite the fact Ontario has one of the cleanest non-emitting grids in the world. 

Virtue signaling is costly so perhaps the time has come to repulse the “FEAR” and revolt!

PS:  More to come.

What Should Ontarians Take Away from Energy Minister Todd Smith’s recent Speech

The very recent article concerning where Minister Smith said Ontario ratepayers are heading in directives issued to IESO and his speech at the Empire Club noted responses were sought from a few knowledgeable individuals that had been intimately involved with the province’s energy sector! Here is their Feedback:

From the first responder who didn’t watch the speech:

“However, I did read the associated press release:

My initial impression is that it strikes me a lot like the “buy wind” BullFrog material.

All I can see it giving is an opportunity for some friends of the government to make an extra buck.  Trouble is, every time somebody is making an extra buck, someone else at the bottom of the pile has to pay a buck-fifty to ensure that the administrative charges get dealt with.  Does it make anything better?  Not very likely.

Will it be used to justify more expensive power, wind solar, and battery / storage – for sure.

Does it mean the government are devoting the attention they should – to actually addressing the problems with wind turbine located too close to homes, or paying non-dispatchable sources a premium, instead of those who should be paid a premium, who can be available 24/7.  Not that I see,

So, in summary, am I impressed … no. I’m finding myself stuck between the proverbial rock and hard spot.  The PC’s have had 4 years and done next to nothing to improve the situation with our energy supply, or addressing the harm done to citizens.  Conversely, had we had a Liberal or NDP government, they might have made the situation even worse.  Not much of a choice.”

From the second responder:

“Good Morning Parker. I am about 20 minutes into the Todd Smith epistle. The PC’s are sounding more like Liberals and NDP every day. Here’s why. They have no shame.

Small Modular Reactors – Doug Ford – LIUNA – BWXT (subsidiary of AECON).
FYI … it is AECON whom are the prime contractor in the nuclear reactor refits for both OPG Darlington and for Bruce Power at Tiverton / Kincardine.

Aecon has their collective labour agreements with ….. (drum roll svp) …. LIUNA.

It was AECON who sought suitors in 2016 and 2017 … offering control of the company in exchange for access to greater amounts of working capital; which in turn would increase the leverage of Aecon to build the massive P3 regional rail electrification projects proposed by Metrolinx; as well as the municipal LRT projects in GTA, Hamilton and Ottawa (2nd phase).

Aecon went so far as to sell their lucrative Ft Mc Murray oil sands mining division in order to raise more cash.

You may recall the Chinese takeover of the company that was quashed by Ottawa in May 2018 … due to concerns of “national security”.

Aecon was bullish on building all of the electric rail projects proposed for Ontario. They formed a new division by poaching people from other companies. To my knowledge as of this date their record of rail electrification contracts obtained still remains at .. zero. As a result, some of those whom were “poached”; left Aecon and went elsewhere.

I will finish listening to the Todd Smith epistle … but so far, it is crystal clear the PC’s are heading in the direction that LIUNA and Aecon wants them to go.”

As is obvious the responses received to the direction Minister Smith has put forward, are not seen as very positive by those whom I consulted despite the enthusiasm exhibited by the Minister in the press release and his speech.  I was particularly struck by the following comment from the first responder:

The PC’s have had 4 years and done next to nothing to improve the situation with our energy supply, or addressing the harm done to citizens.

Which is it Minister of Energy, Todd Smith, a Surplus or an Emerging Supply Need?

Minister of Energy, Todd Smith, was the featured speaker at the prestigious Empire Club of Canada’s “Zoom Event” on January 28, 2022.  Smith was coincidently introduced by the VP of LiUNA (Laborers International Union of North America) who back in 2018, just prior to the last provincial election, changed their support from the Ontario Liberal Party to the Ontario PC Party!

Smith’s 20-minute speech included much of what was also outlined in his January 26th and January 27th directives to IESO.  The first directive was associated with the “Lake Erie Connector Project“ which would reputedly provide some “intertie enhancements” and “the creation of new opportunities to sell Ontario’s surplus electricity to the benefit of Ontario ratepayers by lowering electricity costs“!  As noted in an article penned back on April 24, 2021 with the scheduled closure of the Pickering Nuclear Plant and it’s 2,500 MW capacity in 2025 it is apparent Ontario will not have the surplus power available for export.  That suggests the Lake Erie line will provide only a marginal benefit associated with the “intertie enhancements” but ratepayers will be saddled with the full costs even though a large part of funding will come from the federal taxpayers via a $655 million investment from the CIB (Canada Infrastructure Bank). While Minister Smith includes some caveats in his directive about the connector project it seems strange that he even bothers to instruct IESO to push ahead with examining it further.

The second directive of 17 pages (English/French) of January 27th includes a “Background” which amongst other strange claims has a conflicting statement of the directive issued the previous day related to selling “Ontario’s surplus electricity”:

 “After more than a decade of stable electricity supply, and at times, a surplus, IESO has forecasted an emerging supply need that grows through the latter part of the decade. This is a result of the upcoming closure of the Pickering Nuclear Generating Station, refurbishment schedules of other nuclear facilities, expanding electrification and increasing business investment in the province. Fulfilling this forecasted supply need will require IESO to procure electricity products and services from both existing and new resources.

The foregoing comments seem ironic coming, as they do, from the Conservative Minister considering most of the prior decade the electricity file was misdirected by the Ontario Liberals under Premiers McGuinty and Wynne and drove energy prices up by well over 100% indicating an unstable supply from wind and solar that created the huge jump in ratepayer costs. Why would Minister Smith suggest his predecessors provided a “stable” supply; almost patting them on the back for increasing costs by well over 100%?

We should also take issue with the comment “at times, a surplus,” as the “surplus” has been significant since the addition of those reputedly “green” non-emitting IWT and solar panels. Ontario’s net exports (exports minus imports) soared averaging well over 10 TWh (terawatt hours) for the past several years and were sold for pennies of their actual costs.

Another worrying issue raised in just that first paragraph is the reference to “expanding electrification” and later on it mentions acquiring “storage facilities” presumably meaning batteries or pumped storage both of which will add costs.  In Minister Smith’s speech at the Empire Club, he mentioned “electrification” several times suggesting he or Premier Ford has bought into the concept of ridding the province of gas- and diesel-powered transportation along with reliable gas plants.

When Minister Smith gets into the actual Directives, we should view 1. (related to 4.) and 3.e.as concerning!  

Looking first at 3.e.; associated with MT RFP (Medium-Term Request For Proposal) note it states: “IESO shall offer contract extensions to contract counterparties whose facilities are successful in the MT RFPs, and whose existing contracts with IESO have expiry dates that occur before the start date of the respective facility’s MT RFP Commitment Period.”

Does the foregoing suggest he is in favour of extending expiring contracts for wind and solar or allowing them to be refitted?  The implications of the foregoing are profound as they had promised to rid the province of IWT due to the harm they do to the rural human population and nature itself by killing birds and bats as well as negatively affecting aquifers in certain areas of the province!

The directives 1. And 4. are obviously about either battery storage or pumped storage or both but # 1. doesn’t reference either as the script is about; “Unforced Capacity (UCAP) basis, calculated in accordance with IESO’s published methodology for calculating such value for different electricity resources.“ UCAP was the subject of a IESO May 28,2021 Resource Adequacy Engagement and based on its 74 pages I was able to discern UCAP seems to be the ability to provide (on demand) a maximum of four (4)  hours of power during peak demand periods. That clearly signals Minister Smith will be blessing the Oneida battery storage project and either or both of the two proposed pumped storage projects. One of the “pumped storage” projects is proposed by Northland Power for Marmora and an article penned about it back in late 2013 can be found on the Energy Probe website.  Another article about the Oneida Battery Storage and the TCE pumped storge was written just over a year ago. Needless to say, those reviews on the three “storage” projects were not positive.

It sure appears while Minister Smith, in his speech at the Empire Club, claimed the Ford led government had reputedly resolved the electricity mess created by the McGuinty/Wynne leadership team they haven’t and want to make it worse.  Minister Smith has declared a moratorium on any new gas plants as part of the “electrification” process and is seeking ways to close them down.

Should he have bothered to simply look at the mess the energy system is in the UK and the rest of Europe where electricity prices are skyrocketing to astronomical heights due to their dependence on renewable energy and their move to non-emitting “electrification” sources he might remember some of the chats we had back when he was simply the “critic” on the energy file!

How times have changed and does he not recognize taxpayers are now picking up about $6.5 billion annually just in an effort to not increase ratepayer costs further!

NB: When Minister Smith’s speech at the Empire Club became available, I reached out to several individuals with skill sets far surpassing mine seeking their views. I will bring those thoughts out in a separate post in a few days without naming names.