Should you want to listen to the podcast of me on the Marc Patrone Show on NEWSTALK SAUGA 960 AM this morning (July 23, 2020) you can find in either on the podcast starting at 30.40 here:
or on the NEWSTALK CANADA website here:
Should you want to listen to the podcast of me on the Marc Patrone Show on NEWSTALK SAUGA 960 AM this morning (July 23, 2020) you can find in either on the podcast starting at 30.40 here:
or on the NEWSTALK CANADA website here:
The IESO has recently released data consumption and costs for April 2020. Needless to say, it brings ratepayers a continuation of bad news propagated by the previous Liberal government and their affection with renewable energy.
In line with the Covid-19 lock-down IESO reported grid connected Class A and Class B consumption fell this April from 10.683 TWh (terawatt hours) in 2019 to 9.781 TWh; an 8.4% drop. The drop for Class A ratepayers (large industrial companies) was significant falling from 3.301 TWh in 2019 to 2.764 TWh in 2020 for a 16.3% drop (.537 TWh) whereas Class B (small/medium sized companies and residential) consumption fell from 7.382 TWh in 2019 to 7.017 TWh (.365 TWh), down 4.9%.
Despite the cumulative 8.4% drop in Ontario demand of .902 TWh however, the cost of consumption per MWh (megawatt hour) for both Class A and Class B ratepayers increased with the principal cause being a drop in the HOEP (Hourly Ontario Electricity Price) or “market price” and an increase in the GA or Global Adjustment. Those events coincided with an increase in surplus generation exported to our neighbours at the HOEP price average of $5.78/MWh. Our “net exports” increased 662,000 MWh from 1,427,000 MWh to 2,089,000 MWh and the additional exports cost Ontario ratepayers about $75 million. In April 2019 we exported 13,4% of what we consumed and in April 2020 it jumped to 21.4%.
Anyone involved in planning, no matter the industry, would suggest; IESO has done a horrible job of it! IESO presumably could however, turn around and suggest it was because of political interference by the McGuinty/Wynne governments their planning was obscured .
To a certain extent, many would be inclined to agree with the forgoing, as one particular type of generation played a major role in creating the expensive mess in Ontario’s electricity sector. It was mandated by the governing Liberals during their 15 years in power! The particular generation causing most of the fiscal pain (in addition to solar) is of course industrial wind turbines (IWT) which are both unreliable and intermittent. In both April 2019 and April 2020 wind generation drove up our costs of power and regardless of whether it’s accepted or curtailed, we are still obliged to pay for it.
Scott Luft tracks IESO data for wind and reviewing his spreadsheet for April 2019 indicates wind collectively (grid accepted, transmission accepted and curtailed) was about 1.453 TWh or 97% of our gross exports and in April 2020 wind (collectively) was 1.447 TWh and approximately 67.6% of our gross exports.
What the foregoing clearly shows is those bird and bat killing IWT were not needed and have damaged Ontario’s ability to both attract and retain our manufacturing base due to our expensive electricity prices.
IWT have been a detriment, not a benefit, to the province, including any notion they played a role in helping to close the coal plants!
As soon as this pandemic subsides the Ford government needs to focus their efforts on sorting out the electricity file to weed out expensive and wasteful renewable energy.
I have been interviewed by veteran journalist and CRTC former Commissioner, Marc Patrone, the host of the Marc Patrone Show, from 9 AM to 11 AM weekdays on SAUGA 960 AM. The interview; “Exposing the Green Scam” will be on his show tomorrow morning but I’m not sure when during those two hours. I have tried to provide some history as well as some specifics on how we wound up with our very high cost electricity in Ontario.
I believe it will be also be available on the 960 AM podcast of his show later that day and also available on: NewstalkCanada.
Web link for SAUGA 960 AM is:
The link for NewstalkCanada is:
Have a listen and take a break from the overly depressing Covid-19 news.
The Ontario Power Generation (OPG) announced their financial results March 12, 2020 for the year ended December 31, 2019 and the media appears to have been so focused on Covid-19 to even notice. At first glance the $1,126 million of after-tax income reported appears to be less than 2018’s $1,195 million but the latter includes after-tax income of $205 million associated with the sale of the Lakeview Generating Station and unrelated to earnings from power generation.
Power generation was 77.8 TWh (terawatt hours) in 2019 versus 74 TWh in 2018 and gross revenue climbed by $485 million from $5,537 million to $6,022 million. Payments, in lieu of taxes, were $190 million versus $141 million in 2019. All-in, the province will be able to include $1,316 million as revenue. That, as Scott Luft points out, is a long way from covering the $5.5 billion in costs for the “Ontario Electricity Rebate”* (OER) for the upcoming March 31st year-end budget.
Noted in the financial report is the following: “The Enterprise Total Generating Cost (TGC) per megawatt hour (MWh) was $50.82 for 2019, compared to $53.24 for 2018.” While it appears the claim in this statement is the cost of generating a MWh decreased on a year over year basis, OPG do not define what is included in the “TGC” calculation. One should suspect a number of substantial costs, paid by ratepayers, are not included in the TGC!
This writer’s preference is to calculate the actual costs per MWh by simply dividing gross revenue by actual generation. If one does that calculation for 2019 for OPG; the per MWh cost is simply $6,022 million (total revenue) divided by 77.8 TWh (generation reported). Resulting from this calculation; the cost per MWh for 2019 was $77.40/MWh or 7.74 cents/kWh (kilowatt hour). Ratepayers in the province would be happy if that was the average of TOU (time-of-use) rates, but ratepayers know, other factors played a role in increasing costs. Wind and solar generation have driven prices up over the past 10 years by over 100% due to above market, contracted prices and the inability of wind and solar to generate power when it is actually needed causing us to export surplus generation for pennies on the dollar to our neighbours.
Looking back in OPG’s past is interesting. If one reviews their financial statements for 2009 (the year the GEA was passed) the same calculation as noted above indicates a per MWh cost of $60.97 (6.1 cent/kWh). That means we have seen an increase of $16.43 per MWh or 26.9% over the 10 years! Ontario’s inflation rate over those same 10 years was 17.97% so the cost of OPG’s generation over that time-frame was slightly above Ontario’s inflation rate.
While we can commend OPG for keeping their costs of generation at reasonable levels it is unclear why they suddenly went south of the border to acquire a string of hydro electric generating stations at a cost of C$1.12 billion. The acquisition of Cube Hydro (merged with Eagle Creek Renewable Energy) adds 627 MW of (mainly) hydro electric capacity but does absolutely nothing (on its surface) to benefit Ontario ratepayers. As a provincial crown corporation their focus should be to ensure the delivery of cheap reliable power to Ontario ratepayers!
We ratepayers will need to keep our eyes fixed on OPG to ensure they don’t loose sight of their mission which is noted on their website as “ Ontario Power Generation’s mission is to provide low-cost power in a safe, clean, reliable and sustainable manner for the benefit of our customers and shareholder.”
*The OER replaced the Wynne led governments “Fair Hydro Plan” subsidizing rates for residential customers.
Just a few days ago Robert Hornung, President of the Canadian Wind Energy Association, authored a post on the CanWEA website with the headline; “Ontario heading for a troubling investor-confidence tipping point.” Hornung was alluding to the recent notice of cancellation of the Nation Rise industrial wind turbine project that had been under construction in North Stormont. The project had been ushered through the final approval process by the Wynne led government just days before the writ was dropped for the last provincial election. It was cancelled because it would cause serious and irreversible harm to the little brown bat (a species at risk).
What Mr. Hornung doesn’t seem to grasp was the “tipping point” for voters in the province was illustrated in the last provincial election when the ruling Ontario Liberal Party were tossed out, in large part, due to electricity costs more than doubling. The rise in the cost of electricity, since the Green Energy Act was passed in 2009, was principally caused by above market wind and solar contracts handed out to mainly foreign companies.
An illustration of the above can be found by looking at just the December 2019 grid accepted and curtailed wind to see what it added to our electricity costs. My friend Scott Luft uses IESO data to calculate grid accepted (TX) wind and estimates the distribution delivered (DX) as well as curtailed generation. Along with that he records the market trading price or HOEP (Hourly Ontario Energy Price) when the wind is delivered.
For December 2019 TX and DX accepted wind was 1,504.3 GWh (gigawatt hours) and curtailed wind was 254.5 GWh. At the price of accepted wind at $135/MWh and curtailed wind at $120/MWh, December’s wind contacts cost ratepayers about $233.5 million or 15.5 cents/kWh.
The likelihood of our exports for the month being higher than the accepted 1.5 TWh of wind is something, I would bet on, so we really didn’t need it. What the market valued it at was (per Scott’s data) only 1.5 cents/kWh. In other words, for every kilowatt hour of wind delivered it cost us 14 cents. Now we should all see that as a “tipping point” and cancel even more contracts but that might prove upsetting to Mr. Hornung!
IESO just released their Annual Planning Outlook and it indicates: “There are enough existing and available resources to meet our needs for the next decade.” The Outlook also links to a “Resource Adequacy” report that provides the seasonal effective capacity of all generation sources. Wind is rated at only 11% in the summer and 31% in the winter. Typically, Ontario demand peaks in the summer so it is obvious IESO regard wind’s contribution during that high demand season as almost of no value. Even in winter peaks the 31% IESO suggests is their “effective capacity” is much less than wind generally provides during that season. The reasoning behind the latter is its habit of generating power when it isn’t needed—in the middle of the night! Mr. Hornung himself admitted the foregoing at their annual conference in Calgary when it was announced CanWEA will merge with CanSIA in an effort to somehow create synergy.
Hornung’s admission at their annual conference was no surprise to many but may have been one of the tipping points that may hopefully lead to more cancellations. Those cancellations would save species at risk, reduce possible damage to aquifers, reduce health problems caused by the audible and inaudible noises emitted and save Ontario ratepayers hundreds of millions of dollars annually.
As far as Ontario ratepayers are concerned that would be a great “tipping point’!
The charity, Ecojustice Canada Society, claims, “everything starts with the law” but, certain events related to their involvement in recent court actions suggest what should be added to their statement is; “as long as it suits our views”!
Ecojustice recently noted on their website; “In about 48 hours, my colleague Harry Wruck and I will appear in the Supreme Court of Canada (SCC). We’re arguing that British Columbia has a right—and a constitutional duty—to protect communities and the environment from toxic diluted bitumen spills.”
So, in the above case they were arguing provincial jurisdiction should take precedent over Federal jurisdiction but only one month earlier their website had the following statement; “That’s why for the last year, we’ve helped the David Suzuki Foundation and the Athabasca Chipewyan First Nation participate as interveners in Ontario, Saskatchewan and now Alberta’s attempts to derail national-coordinated efforts to take action on climate change, including putting a price on carbon pollution.”
The argument they plan to make in the upcoming SCC cases, by supporting the Federal jurisdiction against the provinces, is of course related to the “carbon tax” implemented by the Federal government under the “Greenhouse Gas Pollution Pricing Act”.
In the latter case, perhaps, because they received “charitable” status, their aim is to protect that status by having others pay tax so they can remain tax-free. Others of their ilk will be pleased to support them due to their ability to receive a tax receipt!
Those oxymoronic views entice you to examine Ecojustice’s CRA filings where one notes they (over the five years of financial reports) spent $3.658 million on fundraising activities and raised $1.806 million as a result. Logic suggests by not spending money on fundraising activities they could have saved $1.852 million of tax-free funds which may have been useful for other court actions.
Also, over those five years, Ecojustice received almost $5.4 million in donations from other CRA registered charities including; the University of Ottawa, two Tides registered charities, the McConnell Foundation, Ivey Foundation, etc. and several were (surely a coincidence) also funders of the Ecofiscal Commission and the Pan-Canadian Expert Collaboration. Of the total revenue ($30.895 million) reportedly received by Ecojustice over five years, 58% ($17.932 million) was expensed for compensation and 52.7% ($16.278 million) was reputedly allocated for “charitable activities”-like fighting for a carbon tax!
It is also noteworthy, despite Ecojustice’s many claims, they also fight on behalf of “species at risk” yet they’ve never intervened in any actions in Ontario in support of groups fighting the intrusion of industrial wind turbines (IWT) and the harm they cause to “species at risk” (birds, bats, turtles, etc). Various nature groups in Ontario have fought IWT intrusion in front of ERTs (environmental review tribunals) and Ontario courts and not once has Ecojustice joined them. One should wonder why?
Ecojustice supports continued implementation of a carbon tax in support of the Liberal, Federally imposed tax by working against the province’s elected governments. The carbon tax will have no effect on the planet’s climate! On the other hand, Ecojustice claim they fight on behalf of species at risk, but don’t defend those “species at risk” when harmed by industrial wind turbines.
The 76-kilometre Niagara transmission line, meant to strengthen power ties between New York State and Ontario, with a capacity to import/export as much as 800 megawatts of electricity has finally been completed.
Recently, information submitted to the OEB (EB-2018-0275) in a rate application stated: “The Project was originally approved by the Ontario Energy Board on July 8, 2005 pursuant to EB-2004-0476 but construction was halted in 2006 until earlier this year due to a third-party land dispute.”
The Niagara transmission line was finally completed August 30, 2019, or over 14 years after construction started. It’s been a long road!
The decision and order from the OEB blessed the application (they generally do for Hydro One) noting; “Niagara Reinforcement Limited Partnership’s (NRLP) interim 2020 revenue requirement request of $9,389,914 is approved.”
The approval for NRLP rather than Hydro One is a reflection of well over a decade of negotiations to satisfy the Six Nations of the Grand River and, the Mississaugas of the Credit First Nation. Contained in a note in the 3rd Quarter financial results of Hydro One, indicates a portion of the Niagara line was sold to them in the entity now referenced as NRLP. The pertinent part of the audit note stated: “Hydro One Networks sold to the Six Nations of the Grand River Development Corporation and, through a trust, to the Mississaugas of the Credit First Nation a 25.0% and 0.1% equity interest in NRLP partnership units, respectively, for total consideration of $12 million, representing the fair value of the equity interest acquired.” The Mississaugas also hold an option to purchase another 20%. NRLP was created for the sole purpose of allowing that to happen.
On November 5, 2015 an article headlined “Powerline to nowhere” on CTV, noted the cost of the line to that point was $100 million plus $54.5 million in interest payments (including $5 million in interest payments for 2016). If one adds another $10 million in interest payments for 2017 and 2018 it appears the total cost of the Niagara line was in the neighbourhood of $165 million at a minimum. In NRLP’s submission to the OEB the actual costs of the line were claimed to be $120 million, but it’s unclear if that included any interest. Either way the cost of the line was north of $165 million yet 25% of it was sold for $12 million which seems like a pretty good deal. Details on the Mississaugas option were not disclosed.
It should be noted Hydro One had to seek an injunction in July 2019, after repeated attempts were made to block work on the transmission project. They stated; “Work stopped again in January when members of the Haudenosaunee Confederacy Chiefs Council (HCCC) blocked access to the construction sites and issued a “cease and desist” order. The CBC reported; “Hydro One’s statement of claim says the defendants “have a long history of organizing blockades, causing public disruption, breaching court orders” and interfering with land development and utilities as a tactic to negotiate compensation and other benefits to members of the Confederacy.” The article also said: “The Six Nations and Mississaugas will have 45 per cent ownership* of the project, said Hydro One, and the project will create jobs and economic benefits.” The injunction was granted by the judge in that appeal and as noted the line was completed August 30, 2019
The estimated cost of the line (north of $165 million) mentioned above has now been passed on to Ontario ratepayers via the OEB decision. There were lots of other costs picked up by taxpayers in Ontario** and the rest of Canada as suggested in the partial list of material contained in the Chronology of Events at Caledonia in the former Federal Indigenous and Northern Affairs Canada Ministry website suggesting the other activities associated with the happenings in Caledonia also may have cost the Canadian taxpayers as much or more than the $165 million associated with the Niagara transmission line but that is for someone else to determine.
Perhaps we in Ontario should be grateful for the delay in completing the transmission line as it prevented the sale of even more of our surplus power from wind and solar etc. to New York for pennies on the dollar. The delay may have accidentally saved us ratepayers hundreds of millions of dollars due to the 14 years it took to complete.
*Acquisition details related to the Mississaugas’ 20% purchase option are not available but are believed to expire quickly.
** The Ontario government agreed to pay $20 million to residents and business owners of Caledonia who suffered through the native protest at a housing development in Caledonia.
IESO finally released the November 2019 Monthly Market Report in early January and compared with November 2018 overall costs (GA + HOEP) for Class B ratepayers was down slightly from $123.69/MWh to $120.54MWh (12 cents/kWh) or 2.8%. Falling exports of 975,600 MWh (down by 151,200 MWh or 13.4%) from 2018 resulted in Ontario experiencing a drop in overall costs despite the GA being slightly higher (98 cents/MWh) in 2019*. The drop in exports resulted in ratepayer costs of $97.1 million versus $111 million in November 2018. Ontario ratepayers are obliged to pick up the GA costs**.
Intrigued by the marginal good news for November 2019 and the arrival of 2020, nostalgia overtook my brain waves! A decade ago, I started my quest to explore the electricity sector in Ontario. My quest coincided with a high electricity bill and the passage of the Green Energy and Green Economy Act (GEA) in 2009. The GEA passage led to the OPA (Ontario Power Authority) receiving directives from various Energy Ministers in the McGuinty/Wynne led Liberal provincial governments telling the bureaucratic experts how to run the system. It was meant to signal the world; Ontario was a beacon in emission reductions.1 The ministerial directives were aimed at contracting for renewable energy (principally in the form of industrial wind turbines [IWT] and solar panels) and closing two coal power plants. Due to above market rates offered to (mainly foreign) companies and the lack of a cost/benefit analysis rates skyrocketed as projects were commissioned. The consequence of creating the highest electricity rates in Canada and the US resulted in total defeat of the Ontario Liberal Party in 2018.
Based on the “nostalgia” it is perhaps worth going back a decade to November 2009 and compare it with the one just passed.
All-in Generation Costs for November 2009:
The IESO Monthly Market Report for November 2009 indicated the weather over the month was warmer than normal whereas in November 2019 is was colder than normal and as one might expect the latter resulted in higher Ontario demand coming in at a daily average of 375,178 MWh versus 370,578 MWh in 2009. The extra 138,000 MWh we consumed in 2019 would translate into higher costs even if the cost of generation had remained the same. The weighed average cost (GA +HOEP) for November 2009 was $68.39 MWh so the additional 138,000 MWh Ontario ratepayers consumed should have added approximately $9.4 million. It is worth noting back in 2009 there was only one ratepayer class so the $9.4 million would have added 84 cents for each additional MWh consumed. The average household back then was consuming 800 kWh monthly. The total consumption of 11.117 TWh (terawatt hours) by Ontario ratepayers in November 2009 had a cost of $760.4 million.
All-in Generation Costs for November 2019:
So, ten years later in November 2019 the 11.255 TWh consumed by Ontario ratepayers cost considerably more than the $760.4 million suggested above. The weighted average cost for this recent November came in at $120.24 for Class B ratepayers; an increase of $51.85/MWh or 75.8% for the 8.106 TWh they consumed. For Class A ratepayers the ten-year increase was only $3.59/MWh or 5.2% for the 3.384 TWh they consumed. Putting the foregoing in perspective if Class B ratepayers consumed 8.106 TWh in 2009 the cost would have been $554.4 million and in 2019 it was $974.7 million or $420.3 million more for just November! For Class A ratepayers the increase would have been a much lower amount of only $12.1 million costing them $243.6 million versus $231.4 in 2009.
As one can deduce from the foregoing the $760.4 million all-in costs for one month of electricity generation in 2009 jumped to $1.218 billion (up $457.9 million) in the decade. The jump of $457.9 million impacted Class B ratepayers (residential and small and medium sized businesses) to a much greater extent than Class A businesses and is only representative of one month.
What caused the jump?
The increased costs drove our average rate of 6.84 cents/kWh in November 2009 to 12.02 cents/kWh (UP 75.7%) in November 2019. That increase is about four times the inflation rate and there are several reasons for the jump in costs.
One of the major causes of the increase was the addition of industrial wind generation and solar to our grid(s) over the decade. Their intermittent and unreliable ability to generate electricity when needed meant back-up capacity (principally gas plants including the $1 billion to move two of them) was required. To top things off the intermittency of wind generation caused the market price (HOEP) to fall and the GA to increase. The GA is not included in the sale of surplus electricity to our neighbours so we earn less for our exports to NY, Michigan, etc. but Ontario ratepayers must absorb the difference (the GA) in the contracted value and the HOEP market price.
A rough calculation of the additional losses on our exports in November 2019 versus November 2009 indicate it represents about $68 million of added costs. Thanks to Scott Luft’s wind generation and curtailment files I was also able to calculate IWT generation costs which increased considerably from November 2009 adding $178 million to the increase. Those two additional costs of about $246 million represent about 54% of the $457.9 million increase. The balance of increased costs can be attributed to payment for additions in; solar generation, gas plants (idling costs), biomass, and some of OPG’s expenditures on Big Becky ($1.5 billion) and the Lower Mattagami ($2.6 billion) hydro projects.
If November’s comparison becomes a measure of how the GEA harmed our electricity sector by driving our electricity rates up almost 76% in the last decade we will be looking at total additional costs of around $5.5 billion in 2019 versus 2009. The $457.9 million is but one month of comparison out of the 120 months since the start of 2009 so the final number for the decade will probably be in the tens of billions of dollars to achieve those emission reductions sought by the governing Ontario Liberals.
*The GA or Global Adjustment rate for Class B ratepayers has been higher in 10 of 11 months in 2019 compared to 2018. **Exports are sold at the HOEP (hourly Ontario electricity price) price via the market to traders who buy/sell our surplus energy to Michigan, New York, Quebec and other grid connected markets.
Wind energy is “reliable and cost-competitive”
Shortly after Ontario’s Ministry of the Environment Conservation and Parks revoked the REA (Renewal Energy Approval) for the North Stormont, Nation Rise wind turbine project, CanWEA (Canadian Wind Energy Association) reacted. They issued an apoplectic press release which beyond suggesting; the sky is falling, made the claim, wind energy is both “reliable and cost-competitive”!
Anyone who has taken the time to read any of my rants over the past 10 years will know I have pointed out the fallacies of CanWEA’s claims on numerous occasions with two recent ones pointing out wind’s tendency in Ontario to generate energy when it’s not needed. That bad habit creates surplus generation that must be curtailed (and paid for) or accepted into the grid and then causes the HOEP (hourly Ontario electricity price) to fall. One should suspect those surplus MWh (megawatt hours) it generates causes IESO to sell off unneeded power to our neighbours in NY, Michigan, etc. at rock bottom prices.
Those two recent articles mentioned above highlighted five December days of additional costs of almost $40 million caused by wind generation. That generation brought absolutely no benefit to Ontario ratepayers but we were obliged to pay the costs due to the generous contracts awarded after the GEA (Green Energy Act) was passed in 2009 by the previous Ontario led Liberal government.
Three more days of unreliable and costly wind energy:
The existing TX (grid connected) industrial wind turbines (IWT) operating in Ontario over December 30th and 31st along with January 1, 2020 were humming and collectively generated 155,228 MWh of grid accepted energy and their owners were also paid for 81,250 MWh (rounded) for curtailed generation. The costs of the foregoing at $120/MWh for curtailed wind and $135/MWh for TX connected generation produced income of approximately $30.7 million for the owners over the three days or about 20 cents per kilowatt hour (kWh) accepted into the grid. One should also assume OPG were obliged to spill water and were paid for doing so and the gas plants were paid to idle to back up both intermittent wind and solar. None of those costs are included in the 20 cents/kWh we ratepayers were forced to absorb.
Three days of exporting surplus for pennies:
The reference to selling our surplus generation for pennies is not an exaggeration as the average sales price over the three days was .39 cents a MWh. Remember there are 1000 kWh in just one MWh!
IESO sold off 201,936 MWh* in three days for pennies while Ontario ratepayers picked up the costs of wind energy (grid accepted and curtailed) of 236,478 MWh. Its not a stretch to note, without wind energy net exports would have been less and the HOEP would have been much higher than the average it achieved for those three days. The $78,755.00 at .39/MWh earned by IESO from the export of those 201,936 MWh fell very short of the cost to generate them! Using the all-in average Ontario commodity rate for 2019 of $111.80 MWh as estimated by my friend Scott Luft those exports cost us Ontario ratepayers in excess of $22.5 million.
Without the unneeded wind energy and its cost of $30.7 million, Ontario’s nuclear plants, running at their current capability level could have provided 834,000 MWh over three days. Hydro running at only 50% of its capacity could have provided a minimum of 282.000 MWh which collectively would have been more (1,116,000 MWh) than Ontario’s demand (1,052,000 MWh) over those three days.
The time has come for CanWEA to do an about face and admit: wind energy is both “unreliable and costly”!
*What 2.7 million average Ontario households would consume in three days.
NY and Michigan benefit while Ontario ratepayers pick up the costs
Well, I guess it was inevitable; IESO would be forced to continue with their “Black Friday” sale as the Christmas week produced “mild” winter weather on Christmas day, Boxing Day and the Friday following them. Mild weather meant average Ontario demand over the three days was a low 341,221 MWh per day even though Christmas lights were in full bloom! Base-load power from nuclear and must-run hydro could have easily supplied our needs however, wind and solar are also classified as base-load and the wind was definitely blowing.
IESO sold off net exports of 178,152 MWh (what 2.3 million [50% of all households] average Ontario households would consume in three days) at big discounts to NY, Michigan, Quebec and a few other neighbours. The average sale price over those three days was $14.74/MWh or 1.5 cents/kWh. Based on the (so far in 2019) annual average cost reported by IESO for October (GA+HOEP = $127.55MWh) the sale price represented an 88.4% discount. Net exports were sold for a loss of $20.1 million!
Over those same three days curtailed wind was about 21,900 MWh and grid accepted wind generation came in at 103,652 MWh so collectively represented 70% of Ontario’s net exports and added $16.6 million to the costs of electricity. If all grid accepted industrial wind generation was sold as part of net exports it would have earned only $1.63 million instead of the $16.6 million of its cost for curtailed and grid accepted generation.
If Ontario had absolutely no industrial wind turbines in the province, our net exports over those three days would have cost us a maximum of $5.13 million ($20.1 million – $16.6 million + $1.63 million). In fact, it would have probably cost even less as those trading in the HOEP market are aware of our surplus generation and bid in at very low prices knowing IESO must sell it to avoid grid related problems.
So, another three days saddles Ontario ratepayers with costs of $20.1 million without any reduction in either our carbon emissions or the carbon tax the Federal government impose!
Perhaps it’s time the Federal Government handed out carbon credits to Ontario ratepayers for our long standing support in reducing emissions for New York, Michigan, Quebec and those other markets benefiting from our clean electricity exports. Based on the loss over those three days of $20.1 million annualized ratepayer costs would amount to almost $2.5 billion.
If us long suffering Ontario ratepayers were handed some “carbon credits” to help us offset those new and annoying “carbon taxes” on our home heating and other bills we might be able to put up with this continuing debacle!
If not IESO should find a way to fix this mess!