High Carbon Prices sure Appear to Create Energy Poverty

A recent chart was posted by the OECD (Organization for Economic Co-operation and Development) whose membership consists of 38 “high income” democratic countries. The chart lists countries around the world with a “carbon pricing instrument” for the year 2021 with the lowest (Brazil) at the top and the highest (United Kingdom) at the bottom.  Canada was ranked as the sixth (6th) highest and four of the top six were European countries (Germany, France, Italy, and the UK) and the only other one in the top six slightly outranking Canada was South Korea!

The chart coincidently popped up when doing research on how countries were reporting on “energy poverty” amongst their households/populations.  All energy costs have risen considerably higher than they were even a year ago as we; in the Northern Hemisphere, face the upcoming winter so we should be concerned about how those higher energy costs will affect the general population.  Viewing the chart suggested a look at the six (6) countries, who have imposed the highest “carbon price”, to see what their “energy poverty” data disclosed. Data was not readily available in all cases but what was available told the story that “energy poverty” certainly affects a large percentage of the population in all six of those countries except for South Korea where no specific “energy poverty“ data could be found!

 Energy poverty country by country NB:

Korea:  A search demonstrated no articles or studies defining the percentage of households suffering from “energy poverty” but it is worth noting South Korea imports 95% of its energy needs so we should suspect “energy poverty” is high.  Korea’s overall poverty rate is estimated to be 15.3% by Statista as of the end of 2021 so we would expect a similar percentage of their population would be at or close to that level in respect to “energy poverty”!  

United Kingdom: There are many articles and research papers related to “energy poverty” in the UK and a recent report from the University of York states: “More than three-quarters of households in the UK, or 53 million people, will have been pushed into fuel poverty by January 2023, according to a new report authored by York academics.“ The article about the report goes on to note: “On 26 August Ofgem (Ofgem is the energy regulator for Great Britain) announced the energy price cap will increase to £3,549 per year from 1 October 2022. The electricity and gas price cap will rise again in January 2023. The size of the January increase has not yet been announced, but it is expected to take bills to £4,200 per year, with some sources predicting even larger increases.“  It’s worth pointing out the OECD chart claims the UK has the highest “carbon pricing instrument” which currently is 136% higher than Canada’s. With our rates scheduled to rise by $15/tonne annually it won’t be long before our rates surpass those of the UK. 

Italy: The above chart indicates Italy has the second highest carbon price in the world but there seems to be relatively scarce recent information reported about “energy poverty”.  One article from September 3, 2022 did disclose “One in six Italians, or up to nine million people, could sink into energy poverty due to soaring bills across the EU, Italy’s ANSA news agency reported on Saturday, citing the Italian General Confederation of Crafts.“ The foregoing suggests 15.3% of Italy’s current population will be or are now suffering from energy poverty. The article also notes: “Italy’s Ecological Transition Minister Roberto Cingolani planned to ask the entire population to turn the heating down, starting from October. Italy has already introduced some limits on the use of central heating in public buildings and apartment blocks, and these are expected to be tightened under the new measures.“  The article goes on to say: “Italy’s Serie A football league announced plans to put a four-hour limit on the use of floodlights in stadiums on match days, as part of energy-saving measures“. Does that suggest future games will be played partially in the dark or only during daylight hours?

France: France shows up on the chart as the country with the third highest carbon price and there is a fair amount of data about “energy” and “fuel poverty”!  One study titled “Energy Poverty in the EU” notes “the inclusion of transportation increases the energy poverty rate in France from 18% to 21%. This is particularly relevant as CO2 prices and thus fuel prices are expected to further increase to protect the environment and combat climate change.“  The foregoing indicates as many as 14.3 million people in France are experiencing “fuel poverty” whereas another article suggests in 2019 there were 3.5 million households facing “energy poverty”. Residents per household in France is lower than most countries with only about 2.4 residents per household suggesting, at that time, about 8.4 million were experiencing “energy poverty”!

Germany: A very recent article about “energy poverty” in Germany contained the following rather disturbing statement: “One in four Germans (approximately 21 million) are currently energy impoverished, up from one in six in 2018. The poor and disenfranchised are far more likely than others to slip into energy poverty. A member of Germany’s lower-middle class is now twice as likely to fall under the “energy poor” category compared to only one year ago. The German government is scrambling to ease the pressure of increasing prices for suppliers and consumers. “  The article says Germany is doing the “scrambling by various means such as: “One of Germany’s efforts to curb energy poverty is through reducing the use of natural gas, through both energy-saving measures and switching to different fuels. Most public buildings are lowering their thermostats, and monuments will no longer be lit at night. Heated swimming pools are banned. Germans are being encouraged to take cold showers. The government is also reducing taxes on other forms of fuel, giving discounts to people who switch to public transportation, and reopening old coal power plants.

Canada: Once again it is difficult to locate recent reports or articles related to how many households or individuals in Canada are experiencing “energy poverty” though yours truly has tried on numerous occasions over the past many years.  Natural Resources Canada published a 145 page “2021-2022 Energy Fact Book” which has one page (#37) providing a chart for 2019 suggesting “energy poverty” affected just 6% of Canadian households.  The foregoing would mean 1,060,000 households and with 2.9 people per household would be, 3.1 million Canadians (8.5% of our population) who experienced “energy poverty” in 2019!  One should suspect; as the data is from 2019, it came before energy prices from natural gas, electricity, furnace oil, propane, etc. jumped to current levels as pointed out in a very recent article.  Amusingly the NRCan report on page 38 notes “Canada’s energy prices in 2019 are relatively low” with comparisons to [surely coincidental to the OECD chart] France, Germany, Italy, and the United Kingdom. The only outlier was the USA and the latter beats Canada except for “electricity” costs possibly due to Quebec’s low hydro prices.  

It is interesting to note countries with the highest “carbon pricing instrument” in the G20 are those countries where energy poverty is the highest and Canada seems to be quickly heading in the same direction under the policies of Prime Minister Justin Trudeau and his minions such as Ministers, Freeland, Guilbeault and Wilkinson.

Surely with our carbon price scheduled to rise to $170/tonne by 2030 and the push to shut down fossil fuel extraction and generation it won’t be long before Canada’s “energy poverty” rates surpass those of the UK, Germany, etc. and Canada will be able to claim the title for both “highest carbon price” and for highest percentage of people living in “energy poverty”. 

Quite the legacy PM Justin Trudeau will leave our children and grandchildren!

NB: The data found in some cases specifically was related to “energy poverty” but in other cases it was referenced as “fuel poverty” which presumably includes fuel travel costs in addition to energy required by households.

With COP 27 Around the Corner the Push to get us to Net-Zero is Mind Blowing

The UNFCCC (United Nations Framework Convention on Climate Change Conference) or COP-27 is just around the corner and will be held in the Egyptian resort town of Sharm El-Sheikh in November (6th to 18th).  Tens of thousands of bureaucrats from around the world will be in attendance including (we must assume) hundreds from Canada including many from the Trudeau led governing party along with many from charitable institutions labelled (personally) as eco-warriors!  The very first COP (conference of the parties) was held in 1995 so for 27 years the concept that “mankind is responsible for climate change” has endured and we should all suspect; this upcoming conference will be no different! The race to achieve “net-zero” is progressing at a snail’s pace without the negative consequences continually professed by them! The developing countries in attendance will be seeking trillions of dollars from the developed nations to help them transition to that elusive “net-zero” target!

In support of the foregoing, Canadian eco-warriors living off charitable donations and government funding from coast to coast to coast are undaunted and continue to push their agenda believing mankind’s use of fossil fuels should cease. They do this seemingly, without the ability to weigh scientific facts against their angst and as each COP gets close, they ramp up their “end of the world is coming”, rants! Needless to say, COP 27 has raised their ire once again so let’s look at just two of the most recent apocalyptic rants from the climate cult.

The “Green New Bill”

A recent article appearing in “Branding.news” suggests if the federal government invests $20 in a “green and just recovery” it will mean: “$307.85 would be contributed to Canada’s GDP within 10 years”!  It also includes a video of less than two minutes outlining how and why that would happen.  “The banknote was designed with a coalition of Canadian grassroots groups including the Green Budget Coalition, the Strathmere Group, CAN-Rac, Corporate Knights, and the Task Force for a Resilient Recovery, led by the David Suzuki Foundation“.  Needless to say, the aforementioned “coalition” members have been around for years, and most have been included in previous findings pushing the “climate change” agenda. They have coalesced on numerous occasions using grants from cult supporting charitable foundations to push their views on government policy makers with great success!  The article includes a link to an Instragram AR filter to allow you to see how they calculate that $20 investment will translate to become the $307.85 in 10 years. A quick review suggests the overall concept has nothing to do with common sense or economics and is strictly cultist forecasts by the eco-warriors pushing us to eliminate the use of fossil fuels for the past 27 years.

Act Now to Expand and Decarbonize our Electricity System

Wow, it’s apparent Armageddon must be just around the corner or perhaps by 2035 or 2050 unless we electrify everything and end all use of fossil fuels if one is in agreement with a recent letter sent to the Prime Minister and Provincial and Territorial Premiers signed by 25 organizations.  The letter was reportedly signed by the David Suzuki Foundation, Pembina Institute, Blue Green Canada, CanREA and many others including the Canadian Chamber of Commerce, Electricity Canada, Mining Association of Canada, Global Automakers of Canada, etc. etc.  It seems very strange; capitalist associations have joined forces with eco-warriors pushing the net-zero agenda!  The letter makes many recommendations warning about our commitment to achieve “net-zero” emissions in only 28 years and how we must “prioritize the transformation of our electricity system”. The letter states the foregoing should be accomplished by procuring “non-emitting electricity generation” and the “build out of new transmission infrastructure”.  It also suggests “Increased use of electricity throughout the economy can also ultimately lower total energy costs for consumers – provided we act now to plan and implement the changes required in our electricity system.“  The letter doesn’t say how the foregoing will happen or once mention anything about estimated costs or who will pay for their recommendations.  This letter suggests we are living in strange times as pushback is lacking from those who will be most affected along with the dubious claim as to how it will lower energy costs for consumers. This was the message doled out by the UK, Germany and the EU and they are now living through what they have wrought on their citizens driving millions into energy poverty with skyrocketing electricity prices.  At the same time those increased energy costs have pushed up their inflation rates further damaging their economies.

Realism Versus Cultism

Some recent events strongly suggest the “net-zero” push may be similar to the Attenborough false claim back in 2019 when he suggested walrus’s falling off cliffs were caused by “climate change”.  Shortly after he made it, his claim was easily debunked by individuals with skill sets he lacked!  Could the same thing happen to the eco-warriors and those who have joined the fray for the net-zero push?  A few recent events suggest it is probable.

1.Germany is Dismantling a Wind Farm to Make Way For a Coal Plant was one such article posted October 26, 2022, which strongly suggests Germany is facing a bad “energy short” winter. For that reason, they are firing up three of their previously shuttered 300 MW capacity coal fired electricity plants.  As it happened the lignite coal mine is where a wind farm was located presumably back in the days when Germany was hell bent on managing their economy using wind and solar as their principal source of electricity generation.  My, how times have changed!

2.Yet another article on October 26, 2022, in the Financial Post referenced a recent poll conducted by Leger in respect to support for Europe in the form of our enormous supply of oil and gas and 72% of respondents supported the development and export of our oil and gas to reduce their dependence on Russia.  The article went on to state; “The Trudeau government seems to have taken its marching orders from the 13 per cent of Canadians who are either “strongly” or “somewhat” opposed to exporting more of our oil and natural gas.” Does Trudeau really believe him, and his minions are doing a good job at managing our economy with polling numbers showing support for just one of his policies at 13%?  Time for him to wake up and smell the roses!

3. Another recent shot at the impact of renewable energy with a US focus was articulated by Jeff Currie, economist, and Global Head of Commodities Research at Goldman Sachs in an interview on CNBC’s Squawk Box.  Currie stated in respect to the USA: At the end of last year, overall fossil fuels represented 81% of energy consumption. 10 years ago, they were at 82%. $3.8 trillion of investment in renewables moved fossil fuels from 82% to 81% of the overall energy consumption.”

Summary:

Canada contributes 1.6% of global emissions so no matter what we do, China, India and other developing countries will replace them quickly and well before we achieve our targeted reduction.

What the foregoing should communicate to our leaders in Canada and in the developed world is to expect a pushback from the developing countries at COP 27 and the “net-zero” push!  They will either need to promise trillions of dollars of support to the developing world countries or back away from the concept fossil fuels are the engine controlling climate change.

 

IESO, Great Weather Forecasting or Simply History Repeating Itself

We ratepayers and taxpayers must assume IESO, who control the Ontario electricity grid, look at weather forecasts daily as they post data with hourly forecasted generation we will get from wind and solar over the 24 hours. They don’t do that for baseload generation such as nuclear and hydro or even natural gas but do for the two intermittent and unreliable sources of electricity.

The question becomes did IESO look at longer term weather forecasts confident IWT (industrial wind turbines) would replace the baseload of the 3,000 MW capacity of Pickering Nuclear (related to the VBO [Vacuum Building Outage])?  Then again, on October 13th, did IESO bless Bruce Nuclear closure of their G8 unit with a capacity of 800 MW for maintenance (?) confident we ratepayers would have sufficient power? 

Suddenly Ontario is without baseload capacity of about 3,800 MW (about what 3 million average Ontario households consume daily) but no problems or worries about rolling blackouts or smart meter control to reduce consumption. IWT have apparently stepped in to fill the gap. 

Looking at the past three days clearly demonstrates how IWT are intermittent but not just hourly, as has been obvious from reviewing their generation since the first of them were planted in rural communities in the province.  Their proven habits in the past decade have shown their generation is skewed with lots of generation in the Spring and Fall when demand is low but come hot summer days or very cold winter days when peak demand is often well over 20,000 MW they hardly show up.

October 12th IWT generated over 74,000 MWh and had another 5,000 MWh curtailed meaning they could have operated at over 67% of capacity. Peak demand reached 16,290 MW at hour 19.  October  13th they generated about 42,500 MWh and had only about 500 MWh curtailed so combined; operated at over 36% of capacity.  Peak demand again occurred at hour 19 reaching 16,277 MW. On October 14th those IWT were still humming generating 55,500 MWh and had another 7,900 MWh curtailed so combined they operated at 53.9% of rated capacity. Ontario’s peak hour once again struck at hour 19 reaching only 15,444 MW.  Over those three days IWT operated at an average of 52.6% of capacity whereas over a full year they average in the range of 29/30%.

The positive outcome from the missing 3,800 MW of baseload was the HOEP remained at reasonable market levels whereas if one looks at past HOEP averages it was $13.90/MWh in 2020 and $28.50/MWh in 2021.  What that suggests is Class B ratepayers/taxpayers reduced their subsidization of our surplus exports and Class A customers.  This current lack of the 3,800 MW of baseload power will help to drive up the HOEP continuing the drop in our subsidies.  The negative is our manufacturing sector will experience higher costs for their electricity consumption.

In summary we should be confident IESO, by allowing the nuclear shutdowns, were not forecasting weather events over the next month or more.  IESO were simply looking at data from the past which consistently shows the large drop in demand during our Spring and Fall seasons and based on past bad habits were confident those IWT would do as they have done for most years. They also knew those natural gas plants were at the ready when the wind isn’t blowing.

We will need that baseload power back operating when the cold weather is upon us in the coming winter as those IWT will once again show us how they are missing in action when needed.

It sure appears IESO has looked back and is confident history will repeat itself!

NB:  The first 13 hours of October 15th indicate IWT generation plus curtailed power has them operating at 77.9% of capacity collectively showing 49,614 MWh.

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.

Ontario Expanding Energy Efficiency to Help Families and Businesses Keep Costs Down

The following is a copy of the e-mail I sent to Ontario Minister of Energy, Todd Smith October 4, 2022, seeking information related to the captioned press release. If, and when I receive a response, I will post it!

“Minister Smith,

Your recent press release starts with:  

The Ontario government is increasing funding for the province’s energy-efficiency programs by $342 million, bringing the total investment to more than $1 billion over the current four-year electricity conservation framework.

I have read this over several times and fail to find anything other than the following that suggests rates will decline:  

This funding will support a new voluntary Residential Demand Response Program with an incentive for homes with an existing central air conditioning or heat pump unit and smart thermostat to help lower energy use at peak times and lower bills.

So turning up our air conditioners and turning down our electric furnaces (etc.) along with walking around in the dark will reputedly deliver these savings ($650 million) according to the following  in your press release!  

“By 2025, this expansion of energy-efficiency programs will help deliver enough annual electricity savings to power approximately 130,000 homes every year and reduce costs for consumers by over $650 million

The release also says:  

Our government’s success in driving electrification of industry and transportation and strong economic growth is increasing electricity demand

So demand will supposedly increase with the foregoing “electrification of industry and transportation” but by using less we Households “reputedly” will see a reduction in costs!  

Am I missing something or will this annual “$650 million” of “reduced costs” be allocated to taxpayers or has your ministry suddenly discovered some cheap source of electricity generation via new technology or some “net-zero” imports from our neighbours for a cheap price?

As my local MPP and a taxpayer I sure would appreciate a little clarification!

Yours truly,

Parker Gallant,

A concerned resident of your constituency”

Response from Ontario Ministry of Energy:

“Dodsworth, Michael (ENERGY) <Michael.Dodsworth@ontario.ca>   
to me, Todd

Good morning Parker,

Minister Smith forwarded me your message which I am pleased to respond to on his behalf.

Energy efficiency programming is a fast and cost effective measure that can save families money and reduce demand for electricity from the grid. These programs, which include supports for energy efficiency retrofits, Distributed Energy Resources and the Residential Demand Response Program you referenced, all will mean reductions in demand for electricity.

These programs are a complement to the government’s comprehensive plan for addressing increased demand for power due to economic growth and electrification, including ongoing capacity resource procurements, rather than an alternative.

By reducing demand and in particular peak demand, we can offset the need for some new electricity generation resources. This will mean a cost reduction for ratepayers and a net system benefit of ~$300 million (the cost reduction of $650 million less the increased investment of $342 million).

I hope this addresses your question satisfactorily.

Best,

My response to the Ministry:

Michael,

Thank you for your response but I fail to see how it will, as you state: “mean a cost reduction for ratepayers and a net system benefit of ~$300 million”!

Let’s examine your response bit by bit!

Energy efficiency (1.) programming is a fast and cost effective measure that can save families money and reduce demand for electricity from the grid. These programs, which include supports for energy efficiency retrofits, (1.) Distributed Energy Resources (2.) and the Residential Demand Response Program (3.) you referenced, all will mean reductions in demand for electricity.

1.Your claim on how “energy efficiency” will save families money ignores the fact “supports” for the programs are provided by taxpayer funds.  I would guess ratepayers without the ability to provide the additional funds from those taxpayers will be unable to afford their portion of the costs.  I would point out most ratepayers are also taxpayers so those unable to come up with the additional funds will be unable to invest in those “energy efficiency retrofits”

2.Distributed Energy Resources are those such as: “rooftop” or “ground mounted” solar, “wind turbines” “battery storage”, “small hydro” etc. and are contracted at rates well in excess of those of the likes of OPG, Bruce Power, etc. as they exist outside the purview of the OEB!

3.From my personal observation point this is the only one not supported by other ratepayers or taxpayers however the “installed cost” of a “smart meter” is a higher cost than an analog meter and the costs of those are spread throughout all ratepayers. It is also a fact smart meters have a shorter lifespan than an analog meter meaning they must be replaced sooner adding to the costs of this endeavour.

These programs are a complement to the government’s comprehensive plan for addressing increased demand for power due to economic growth and electrification( 4.), including ongoing capacity resource procurements, rather than an alternative.

4.While you and Minister Smith reference “electrification” and the OCP’s full support of the concept it appears the cost of that objective and the new capacity required by Ontario to meet that target have not had any serious focus.  To look at just one study; 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!

By reducing demand and in particular peak demand (5.), we can offset the need for some new electricity generation resources. This will mean a cost reduction (5.) for ratepayers and a net system benefit of ~$300 million (the cost reduction of $650 million less the increased investment of $342 million).

5.Should we assume a cost study has not been done based on the claim there will be a “cost reduction for ratepayers” or is this a false claim?  Many of us ratepayers lived through the McGuinty/Wynne days and constantly were fed similar stories from them related to the GEA. Under pressure from the largest manufacturing companies in the province they reacted to the false message and came up with the ICI (Industrial Conservation Initiative) which allowed those companies to benefit from significant cost reductions by reducing demand during just five (5) annual “peak demand” periods which still exists today. The incentive was so great those companies invested heavily in a variety of gas generators to take advantage of the incentive.  It should come as no surprise, due to this push by Ontario and many other jurisdictions around the world opining for “net-zero” that manufacturers of those generators have benefited greatly as a quote from a recent article suggests: “The global gas generator sets market is expected to grow from $7.82 billion in 2021 to $8.3 billion in 2022 at a compound annual growth rate (CAGR) of 6.48%. The gas generator sets market is expected to grow to $11.15 billion in 2026 at a compound annual growth rate (CAGR) of 7.57%.”  It is equally important that you and Minister Smith should be aware that many stand alone administered “public sector” corporations such as colleges, universities, etc. are now ICI beneficiaries which equates to an indirect and hidden form of taxation. 

In summary, I and my blog followers, would love to see some proof the recent moves by the Ministry of Energy (reputedly endorsed by IESO) will achieve that “net system benefit of $300 million” you allude to in your response!

Looking forward to your response,

Regards,

Parker Gallant,

Parker Gallant Energy Perspectives

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.

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?