“Quebec Inc” scoops up Ontario renewable energy projects

Valuable contracts with above-market rates for wind and solar power are attracting investor attention

Perhaps unbeknownst to many, Ontario’s electricity ratepayers are accumulating debt in the electricity file (Fair Hydro Plan or FHP); that debt will reappear in future years to ensure electricity rate increases exceed inflation by a wide margin.

The cause of the FHP debt can be traced to the Green Energy Act (GEA) and the FIT and MicroFIT contracts handed out by the Ontario Liberal Government under Premiers McGuinty and Wynne.  Those lucrative above-market (confirmed by the Auditor General) contracts were granted to mainly foreign-owned companies. The companies rushed to Ontario to take advantage of the above-market rates offered for renewable energy of the wind and solar variety.

Many of those foreign-owned companies are now leaving Ontario, cashing out on the lucrative contracts by selling them to willing buyers. Our provincial neighbour “Quebec Inc.”, with its cheap electricity prices, is rushing in to scoop up many of those contracts along with others like the Canada Pension Plan Investment Board (CPPIB). The latter purchased NextEra’s portfolio (Head Office Florida) of 396 MW of wind and solar contracts, paying $1.871 million per MW for a total of $741 million CAD and assuming the debt (US $689 million).

“Quebec Inc’s” acquisitions are more “under the radar” and most costs are unknown, but some of the bigger investment players with Quebec headquarters are very active.

The one recent acquisition from “Quebec Inc.” caught the attention of many in Eastern Ontario was the purchase of a controlling interest in the unbuilt 100-MW Nation Rise wind power project in North Stormont, south of Ottawa. When newly elected Premier Ford’s government announced they were cancelling 758 renewable wind and solar energy projects, most Ontarians thought Nation Rise would be one of: it wasn’t. Somehow the bureaucrats in the former Ministry of the Environment and Climate Change managed to issue the REA (renewable energy approval) just a few days before the election writ was dropped despite wind power and this project in particular being a prominent election issue.

To top things off, the IESO (Independent Electricity System Operator) were satisfied that EDPR had met their “key development milestones” and issued the NTP (Notice to Proceed) on June 13, 2019, days after the election and weeks before the Ford government announced the new cabinet.

When the approval became public, community group Concerned Citizens of North Stormont, stepped up their fight to stop the power project.

Project developer EDPR then sold off controlling interest in the Nation Rise project along with other existing operating projects. Before that happened however, EDPR submitted an application dated October 11, 2018 to the Ontario Energy Board (OEB) for a electricity generation licence. Question 13 of the application asks the question; “Has the applicant secured financing?”

EDPR ticked the NO box.

The OEB appears to have overlooked the lack of secured financing (based on the application) and granted the licence December 20, 2018 without comment.

EDPR is a subsidiary of EDP a global energy company with its headquarters in Portugal and with significant renewable energy assets in North and South America. With 2,300 industrial wind turbines in the USA, EDP rank third in installations.

EDP has been a takeover target for several years by Three Gorges, a Chinese state-owned company who are already a significant shareholder. Because of the Chinese state ownership the US government expressed concerns with the possible purchase by Three Gorges. The principal concern is the volatility of US electricity grids and security issues surrounding them. Other EU countries with EDP electricity generation assets are also concerned with grid security issues in the event of a takeover by Three Gorges.

In the midst of takeover buzz, EDPR suddenly sold off controlling interest in some of their North American generation assets to a Quebec-based company, Axium Infrastructure Inc. Eight days after the OEB blessed the EDPR licence application for Nation Rise, Axium issued a press release announcing they had closed an agreement to acquire an 80-percent interest in three wind power projects, totaling 499 MW in the U.S. and Canada from EDPR.

Nation Rise was one of those acquired.

A month and a half earlier, Axium was the lead investor in the purchase from U.S.-based Pattern Energy Group of a 90-MW minority interest in the 270 MW K2* wind generation project. The purchase price was CAD $216 million.

Following OEB’s approval of the EDPR Nation Rise generation licence, Axium Infrastructure submitted an application to the OEB dated January 14, 2019 seeking approval of their majority (80 percent) acquisition. The application form asks no questions about financing, nor does it ask questions about bankruptcy or criminal issues for either the company or individual officers, unlike the “generation licence” application format.

The application to the OEB indicated Axium held investments in seven of Ontario’s wind turbine developments and 19 solar projects. It also included the following: “After completion of the Proposed Transaction and the Project, Axium and its affiliates will have a generation capacity of 1,050 MW** on a gross basis and 563 MW on a net basis within the Province of Ontario.”

On February 28, 2019 Axium issued a further press release reporting they acquired a 50-percent interest in a 101-MW solar portfolio in Ontario from Mitsubishi Corporation.

In short, Axium has been very aggressive in acquiring Ontario’s foreign-owned wind and solar projects and Ontario’s regulator, the OEB, have blessed everything Axium has done.

That’s obvious if one reads the short letter dated February 14, 2019 from the OEB notifying  Axium about their Nation Rise acquisition: “the OEB does not intend to issue a notice of review of the proposal.”  Was this due diligence?

Tomorrow, in Part 2 of my look at the “Quebec Inc” acquisition spree, I will attempt to explore who is behind Axium Infrastructure, the interaction with the Ontario Energy Board and how the latter executes its Vision: “The OEB supports and guides the continuing evolution of the Ontario energy sector by promoting outcomes and innovation that deliver value for all Ontario energy consumers.”

PARKER GALLANT

 

*K2 was a Samsung project commissioned in September 2015 so has about 17 years left in its contract and if it operated at 30% of capacity would generate approximately $540 million in gross revenue over the remaining term of its contract for the 90 MW of capacity now owned by the Axium consortium.                                                                                                                                 **That amount of renewable generation would represent approximately 14% of all current operating renewable wind and solar in Ontario.

 

 

 

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Another spring day, more big bucks for wind power operators

Mild spring weather, breezy days are money-making combo for wind power corporations

Wind turbine beside MIlford, in Prince Edward County: wind power not needed to meet demand

As very recently pointed out, utility-scale wind power operators love the spring because it brings nice breezes that result in lots of generation for which they are paid.  The bad news for Ontario electricity customers is that the power produced is generally not needed, but due to the wind power industry’s negotiated “first-to-the grid” rights, they must be paid regardless.

That was the case on May 8 and again the following day.

May 9 was another low demand day in Ontario as reported by IESO with only 337,700 MWh required to supply all of the province’s needs for electricity.  IESO’s forecast for power generation from wind was about 79,400 MWh, which would have represented 23.5 % of total demand.  However, a large part of it was forecast for low demand hours; no doubt that meant power from other relatively cheap sources of generation were dispatched off.

Low demand on a low demand day caused IESO to curtail 29,400 MWh (37.1%) of the forecast output and to sell off surplus generation to our grid-connected neighbours in New York, Michigan, Quebec, etc. The net exports of 41,600 MWh (rounded) sold to those buyers represented 83% of the accepted “output” of wind power.

In other words, Ontario didn’t really need any wind power!

The net exports were worth $3.70 per MWh (average of the Hourly Ontario Electricity Price or HOEP for the day) meaning they produced total revenue for Ontario of approximately $154,000.

So, you might ask, how much wind generation cost Ontario ratepayers for the day?

The 29,400 curtailed MWh at the $120/MWh IWT operators get paid was $3.528,000 and adding in the cost of the 50,000 MWh actually accepted at $135/MWh adds another $6,750,000 to the cost of wind. That brings the total cost of wind for that spring day to $10,124,000 if we deduct the $154,000 generated by the sales of our net exports.

Ten million paid, $150,000 recouped–makes sense doesn’t it?

So, wind power on May 9 cost Ontario ratepayers $202.48/MWh or 20.2 cents/kWh. That doesn’t include any of the other costs its generation may have caused such as spilling cheap hydro or steaming off cheap nuclear. To top it off, most of the day’s wind power generation, if exported, at an average price of $3.70/MWh means a loss of $198.78 for every megawatt hour sold.

The “average” Ontario ratepayer would love to be able to buy the 9 MWh they consume in a year at those bargain basement prices of $3.70/MWh. Imagine: it would cost them $33.30 for a full year’s electricity needs.  I’m confident our small and medium-sized businesses would also love the opportunity to pick up some of that cheap electricity, instead of being forced to pay for expensive, intermittent and unreliable wind and solar generation!

It’s time to sort out the mess created by the McGuinty/Wynne governments in respect to the electricity file.

If it isn’t, Ontario will continue to be stuck with climbing above-market electricity prices until the wind and solar contracts finally end.

PARKER GALLANT

Wind power operators love spring! Here’s why

Wind power operators don’t need flowers: they get money

Most Canadians love Spring simply because the snow is melting and that signals the summer is coming.

Ontario’s wind power developers love Spring, too! They know the wind will blow much stronger than in the hot summer weather and that means, their generation output will climb.

The fact the wind power lobby negotiated “first to the grid” rights with the Ontario government under Premier Dalton McGuinty means most of them will be paid 13.5 cents/kWh for whatever they produce, whether it is needed or not.

For example, May 8 was a day when the breezes were brisk throughout Ontario and the industrial-scale or utility-scale wind turbines were busy generating lots of power. The IESO (Independent Electricity System Operator) reports hourly on both the forecast for wind generation, as well as the actual output. That day, wind could have provided as much as 26% of total Ontario demand for power.  But here’s the important fact:  the total Ontario demand on an early May spring day is not what it is in the heat of summer or the cold of winter and that was the case on May 8.  Total Ontario demand was only 322,000 MWh for the day.

Money for nothing

Because of the low demand, about 36% (30,400 MWh) of IESO’s forecast for wind power generation looks as though it was probably curtailed (paid for but not used) and the wind power operators were paid $120/MWh. That means, Ontario’s electricity ratepayers paid almost $3.7 million for nothing. Zero.

The output actually accepted into the grid was just over 54,000 MWh, which cost ratepayers about $7.3 million. Coupled with the curtailment costs, that meant each kWh of wind “grid-accepted” cost 20.3 cents/kWh.

We should also assume that Ontario was probably spilling hydro or steaming off nuclear due to low demand, which would further drive up that price.

As if this information isn’t enough of a downer on a nice spring day, the HOEP (Hourly Ontario Energy Price), or what is referred to as the “market price,” was noted in their daily summary at an average of $1.75/MWh.

And the very next day …

Ontario’s demand was so low so we didn’t need any wind generation May 9, so IESO had to sell it off at the market price to U.S. and other grid-connected operators. The surplus demand of just under 44,000 MWh (81% of grid-accepted wind generation) was sold at $1.75/MWh generating total revenue of $77,000 but cost ratepayers in the order of $6 million.

This all simply demonstrates why the Global Adjustment charge keeps climbing. If the loss of $6 million daily for just the cost of exporting our surplus energy occurred every day of the year, it would represent in excess of $2.1 billion annually as a cost to Ontario ratepayers.

The time has come to fix this weird situation created by the former Ontario government.

PARKER GALLANT

How Ontario’s “little” electricity customers help out the big ones (with billions)

Class B Ontario ratepayers support Class A ratepayers–$6.2 billion and growing

It was almost six months ago when the Ontario Energy Board’s (OEB) Marker Surveillance Panel (MSP) released a review of the Industrial Conservation Initiative (ICI). The review looked at the impact it had on pricing since its launch in September 2011.

The ICI came into being after extensive lobbying for a reduction in electricity pricing by the Association of Major Power Consumers of Ontario (AMPCO) when Brad Duguid held the position of Minister of Energy.

The ICI model simply requires the “A” Class user to pick five “peak demand” hours over a year in order to gain a sizable discount to the price they pay.

An article written by yours truly, appeared shortly after the review’s release and pointed out the cost to Class B ratepayers, namely, residential and small/medium sized businesses. The article noted the failure by the OEB to act on its role which is: “The OEB supports and guides the continuing evolution of the Ontario energy sector by promoting outcomes and innovation that deliver value for all Ontario energy consumers.” The article noted it took the OEB seven (7) years to realize “the ICI as presently structured is a complicated and non-transparent means of recovering costs, with limited efficiency benefits.”

One should wonder if the recognition was a reflection of a change in government or, a realization the “value” didn’t apply to “all” of Ontario’s ratepayers the OEB is supposed to consider in its innocuous decisions!
The support of Class B to Class A ratepayers as of the end of 2017 “has shifted nearly $5 billion in electricity costs from larger consumers to smaller ones. In 2017, the ICI shifted $1.2 billion in electricity costs to households and small businesses—nearly four times greater than the amount in 2011.”

Almost six months have transpired since issuance of the MSP review and nothing has changed. Another year has gone by (the review reflected cost transfers to the end of 2017) and 2018 duplicated the shift of 2017 so add another $1.2 billion and push the total transfer to $6.2 billion since mid-September 2011.

What that represents is an average subsidy to Class A ratepayers of over $1,200 for each of the approximately 5.1 million Class B ratepayers over the 7 ½ years since the ICI came into existence.

The Market Surveillance Panel made several observations on how the ICI could be made more efficient and/or enhanced to make it fairer. The Panel’s first two observations would help to reduce the burden on Class B ratepayers so perhaps its time the OEB and/or the Ministry enable those changes which are:
*Costs that are not related to the fixed capacity costs of needed generation are removed from the Global Adjustment and recovered by other means.
*Only the cost of peaking generation is recovered based on consumption during peak demand hours; the cost of non-peaking generation should be allocated such that all consumers that benefit from that capacity pay for that capacity.”

Almost a year ago, many in Ontario voted for the Ontario Progressive Conservative Party, handing them a majority government. One of the chief reasons the Liberals were defeated was their mishandling of the energy file. Based on the foregoing, most voters anticipated the new Ford-led government would have tackled the file with all the might one would expect with the election promise that “help is on the way” followed by the declaration of Premier Ford in his victory speech stating; “My friends, help is here.”

The opportunities to demonstrate the “help” are there for all to see such as those recommended by the MSP.

The government could also use regulations to enforce noise controls (audible and inaudible) on industrial wind turbines, they should insist the UNIFOR wind turbine in Saugeen Shores be removed, they could cancel the 100 MW Nation Rise project to save future ratepayers hundreds of millions, and they could insist the OEB reflect its “vision” which claims it is responsible for: “promoting outcomes and innovation that deliver value for all Ontario energy consumers.”

Ontario’s Class B ratepayers are waiting for “help” to arrive and see the OEB deliver actual value!

Oh, and a thank you from the Class A ratepayers would be nice too!

PARKER GALLANT

Electricity bills in Ontario: promise made, promise missed?

More work to be done to get Ontario electricity bills down

In the campaign before last year’s election in Ontario, Doug Ford promised to cut hydro bills by 12 per cent if his party won. He said it would be on top of a rate reduction (25% under the Fair Hydro Plan/FHP) from the governing Liberals, whose plan he had repeatedly criticized.

He also said he would cut rates through a variety of measures that would save the average ratepayer $173 a year. When asked about their plans in respect to the FHP he said, “We’re going to be reviewing that. That was, as far as I’m concerned, the wrong thing to do, borrowing down the future and the only people who are going to pay for it is our children, our great-grandchildren.”

He also said he would give ratepayers the dividends from the government’s share of the partially privatized Hydro One.

Since being elected with a majority, the Ontario PC Party has often issued press releases suggesting “promises made, promises kept” but so far, we haven’t heard those words uttered in respect to the electricity file.

IESO reports are now available for the first three months of 2019, so we can compare the quarter with 2018 under the previous government to see if any progress has occurred.

To begin, if you look at the IESO report reflecting the “Variance Account under Ontario’s Fair Hydro Plan” you can discern the dollars being deferred went from $410.5 to $496.6 million, a jump of $86.1 million or 21%. That is money Ontario ratepayers will have to pay back in future years! The second quarter could be just as bad: Scott Luft has estimated April 2019’s combined HOEP (Hourly Ontario Energy Price) and GA (Global Adjustment) will set a new record high.

So, let’s look at Hydro One’s dividends to determine how far they would go to achieving the 12% reduction. The December 31, 2018 annual report for Hydro One shows dividends paid of $518 million to shareholders, so the 47% ownership of Hydro One by the province would represent $243 million!  If one than does the math for the promised annual average residential ratepayer saving of $173 the amount needed is about $807 million ($173 X 4,665,055 ratepayers = $807 million) for a shortfall of $564 million. Adding the additional FHP $86.1 million for the 2019 first quarter puts the shortfall at $650.1 million — so far.

For the first quarter of 2019, Ontario total electricity demand including net exports (exports minus imports) increased by 392 GWh (gigawatt hours) with Class A ratepayers increasing consumption by 486 GWh and Class B by 217 GWh while net exports declined by over 300 GWh. The weighted average of the GA and HOEP as reported by IESO on April 30th of each year climbed from $103.80/MWh in 2018 to $110.67 in 2019 a gain of $6.87/MWh or 6.6%. Multiplying the $6.87/MWh by Class B consumption of 25,628,600 MWh in the first three months of 2019 comes to approximately $44 million. That is about $42 million shy of the $86.1 million increased transfer to the FHP over the 2018 transfer. (We must assume, as frequently happens, IESO made an adjustment to the prior month’s transfer and that is the reason for the difference.)

In specifically examining wind generation and curtailment from Scott Luft’s post it appears year over year grid-accepted wind declined by 40,000 MWh and curtailed wind dropped 66,000 MWh. What that suggests is that the increase in costs is a reflection of the rate increases granted by the OEB to OPG for their nuclear generation at Darlington and Pickering.   This marks the first time over a long period when increased costs cannot be blamed on either wind or solar generation or both!

The foregoing 2019 first quarter results may present a major road block for Premier Ford in achieving his “promise made, promise kept” catchphrase in respect to the energy file.

Last December, former Minister of Energy Glenn Thibeault, was testifying at a committee hearing and responded to a question on the portfolio as follows: “There was lots that was happening on the file, and I was still learning it, right? As I said earlier, I was drinking from a thousand firehoses. Not that I’m trying to minimize the complexity of the file, but there was lots for me to learn and, at the same time, trying to find ways to reduce rates was, I think, the most important thing.”

Perhaps that point should be borne in mind by the current Minister, under Premier Ford. There are ways and means of reducing upward pressure on electricity costs, but so far Greg Rickford, Minister of Energy, Northern Development and Mines seems to have missed them or is still trying to digest the complexities of his portfolio.

My advice: Start with the cancellation of the Nation Rise 100-MW wind power generation project which will eliminate over $400 million from future electricity bills. And for those living with industrial wind turbines in rural Ontario, ensure they are in compliance with audible and inaudible noise regulations! Consultation with the Minister of the Environment, Conservation and Parks to ensure the regulations are followed would go a long way to reducing costs.

Minister Rickford could also consult with some external experts and find out what can be done to reduce costs, beyond getting rid of the “$6 million dollar man” from Hydro One!

PARKER GALLANT

 

 

5 reasons not to believe wind power lobby spin-Part 2

CanWEA points to Denmark as a fine example of “affordable” wind power — great if you think 47 cents a kWh is affordable [Photo Pioneer Institute]
In Part 1 of this series, I dealt with two of the five claims CanWEA makes for industrial-scale wind power development in its October 11, 2018 blog post, “Five reasons why wind energy is Ontario’s best option for new electricity supply”.

Refuting those two claims for omission of facts was relatively easy.

Here are the details on the remaining three.

3. CanWEA claim: “Wind energy will be necessary if Ontario is to keep Ontario’s electricity supply reliable through the next decade.”

CanWEA says the IESO “forecast a need for significant new electricity generation, especially from 2023 onwards, as the Pickering Nuclear station shuts down, other nuclear units are being refurbished, and generation contracts expire.”   Well, that is true as IESO did suggest a shortfall, but here are the facts: the forecast shortfall is 1,400 MW. The OPG Lennox generation station with 2,100 MW has a contract expiring that year. So the question is, will the contract be extended? I was recently taken on a tour of the Lennox facility where I observed they were in the process of refurbishing one of the four 525-MW units which suggests they anticipate a renewal of the contract. With the anticipated renewal the “need for significant new electricity generation” is simply a figment of CanWEA’s imagination.

This claim goes on to suggest: “New wind energy would help keep Ontario’s electricity supply reliable, as well as more affordable.” And, “Other jurisdictions around the world are proving this – for example, Denmark now produces more than 44 per cent of its electricity from wind turbines on an annual basis.” The Denmark example ignores the cost of residential electricity on Danish households which is the highest in Europe. Denmark’s household electricity price is 312.60 Euro/MWh or $471.10 CAD/MWh, based on current exchange rates.

Is CanWEA suggesting is that if Ontario’s ratepayers were paying 47.1 cents/kWh it would be affordable? That seems like a big stretch and would push many more households into energy poverty!

The same applies to the claim of it being “reliable.” As noted in a June 2017 peer-reviewed report by Marc Brouillette, wind generation in Ontario presented itself when needed only 35% of the time. If one considers that wind’s annual generation averages about 30% of capacity, it is therefore “reliable” about 10.5% of the time it’s actually needed. (Note: IESO values wind generation at 12% in their forecasts)

4. This CanWEA claim suggests: “Wind energy provides many services to system operators to keep electricity supply flexible.” Their view of “flexible” fails to align with what the grid operator IESO would consider flexible. As Marc Brouillette’s report noted, “… wind output over any three-day period can vary between almost zero and 90 per cent of capacity.” That variance often requires clean hydro spillage or nuclear steam-off or the export of surplus capacity or full curtailment.

All of those actions cost ratepayers considerable money. Wind is unable to ramp up if demand increases and is the reason Ontario has over 10,000 MW of gas/oil plant capacity, with much of it idling in case the wind stops blowing or clouds prevent solar from generating. CanWEA needs to review the definition of “flexible.”

Another amusing statement under this claim is that: “Wind energy can also provide a suite of electricity grid services, often more nimbly and more cost effectively than conventional sources, helping to ensure reliable and flexible electricity supply. These services include: operating reserve, regulation, reactive support, voltage control, primary frequency response, load following, and inertia and fast frequency response.”   The bulk of those “suite of electricity grid services” are requirements for any generators on the grid. The ones suggesting operating reserve, reactive support, load following and fast frequency support are really referencing the curtailment of wind generation as noted in the preceding paragraph.

5. CanWEA’s final claim is:Wind energy is essential to reducing greenhouse gas emissions” and goes on to suggest: “Ontario has achieved a 90 per cent reduction in electricity sector greenhouse gas emissions over the past 15 years, and wind energy has been an important contributor. Wind turbines do not emit greenhouse gases, just as they do not pollute the air.” If CanWEA bothered to be truthful, the trade association would not claim “wind energy has been an important contributor” in reducing greenhouse gas emissions.   If you review year-end data as supplied by IESO for the year 2004 and compare it to the data for 2018, you are obliged to reach the conclusion that wind generation played absolutely no role in the “90% reduction in the electricity sector greenhouse gas emissions.”

Ontario demand in 2004 was 153.4 TWh (terawatt hours) and in 2018 was 137.4 TWh representing a drop in demand of 16 TWh. Nuclear generation in 2004 was 77 TWh and in 2018 was 90.1 TWh for an increase in generation of 13.1 TWh. The drop in demand of 16 TWh, plus the increased nuclear  generation of 13.1 TWh, equals 29.1 TWh. Those 29.1 TWh easily displaced the 2004 coal generation of 26.8 TWh!

Ontario didn’t need any wind turbines to achieve the 90 per cent reduction in emissions by closing the coal plants, and CanWEA was totally wrong to suggest wind generation played anything more than a very small role.

As the saying goes, “there are always two sides to every story” but if it doesn’t fit the message you wish to convey, you simply ignore the other side! CanWEA has done that consistently while ignoring the negative impacts of industrial wind turbines.

Here are just five:

1.Providing intermittent and unreliable generation,

2. Causing health problems due to audible and inaudible noise emissions,

3. Driving up electricity costs,

4. Killing birds and bats (all essential parts of the eco-system), and

5. Possible link to contamination of water wells.

I could list other negative impacts, but I would first invite CanWEA to attempt to dispel those five.

Needless to say, the anticipated response will be “crickets”!

PARKER GALLANT

5 reasons you can’t believe the wind power lobby spin

Part 1 of an analysis of the lobbyist’s claims for low power prices and good times ahead

Since the new Government of Ontario announced it would repeal the Green Energy and Green Economy Act (GEA), the wind power trade association and lobbyist CanWEA, together with the Ontario NDP, Ontario Green Party and numerous environmental groups such as Environmental Defence, Greenpeace Canada, etc., have been throwing temper tantrums.

The consistent claim was “it will have a chilling effect on job creation and investors in the clean economy.” CanWEA have been one of the most outspoken complainers issuing several press releases  with spurious claims about wind power.

One blog post, on October 11, 2018, was the most blatant of the propaganda campaign.  It was titled “Five reasons why wind energy is Ontario’s best option for new electricity supply” and, then, in case you missed it, or to support a new PR onslaught in Ontario, it was reposted via their Facebook page March 31, 2019. The post references selected CanWEA and AWEA claims, including some prepared by others but paid for by CanWEA.

Let’s examine their claimed “five reasons” to choose wind power, starting with two

  1. CanWEA claim: “Wind energy is now the lowest-cost new electricity source” and note: “Alberta recently agreed to procure power from four wind generation projects at an average contract price of 3.7 cents per kilowatt hour – a price that is considerably below the cost of power generation in Ontario today.”

CanWEA fails to disclose that for each MWh of power, wind generators are given a REC (renewable energy certificate) which can be sold to anyone required to either reduce their emissions or purchase a carbon credit/REC. Valuations vary with demand but RECs generally have a value of $15/50 MWh or 1.5/5.0 cents/KWh. If the value of that REC was included in the CanWEA claim, they would have to say the “average contract price” was from 5.2 cents/kWh to 8.7 cents/kWh. Wind power generation in Alberta, as in Ontario, gets “first to the grid rights” meaning whatever is produced, no matter the need, must be accepted by the Alberta Electric System Operator/AESO.

If the wind power isn’t needed, AESO disperses other generation, which they presumably pay for, adding electricity generation costs to ratepayer bills. To make that clearer — In Alberta the AESO in a report notes wind generation negatively impacts pricing. A chart of wind’s capacity factor during “AIL (Alberta Internal Load) peak demand” (in the report) in 2017 shows wind reflected at 6% of its capacity!

That is a clear message that wind cannot be counted on to deliver power when needed.

Those same issues/problems are found in Ontario (wind rated at 12% of capacity) and most other regions around the world where industrial wind turbines represent a minor or major part of grid-connected capacity.

2.CanWEA claim: “Wind energy provides significant economic benefits” and states: “Ontario leads Canada in wind energy operations and wind energy supplies almost 8 per cent of the province’s electricity demand.”

One assumes the 8% refers to 2017, as 2018 results for Ontario were unknown at the time of the CanWEA post in October 2018. Total grid-connected generation, including gross exports in 2017, were 151.2 TWh. Wind accepted generation was 9.2 TWh which represents 6.1% of total demand.

If you include the 3.3 TWh of curtailed wind the wind power owners were paid for, the percentage rises to 8.1% .

That makes the delivered price for grid-accepted wind 17.8 cents/kWh.

And, that 17.8 cents/kWh doesn’t include the 6 TWh of spilled hydro or the 1 TWh of steamed-off nuclear, or the costs of idling gas plants (for when the wind doesn’t blow) which would add another $860 million more driving wind costs to ratepayers to over 27 cents/kWh.

CanWEA’s claim includes several other assertions.

Thousands of well paying, much-needed jobs in manufacturing, construction and local services” and provides a link to a report commissioned by CanWEA by Compass Renewable Energy Consulting Inc. In the Compass report, a chart indicates the economic benefits the 5,552 MW of industrial wind turbines in the province will create. Over the years (2006-2030) “Direct and Indirect Full Time Equivalents (FTEs) [of] 64,500”. They define FTEs as: “Full Time Equivalents refers to full time employment for one year. One FTE = 2,080 hours.” If one calculates the annual jobs the forecast of 64,500 FTE over 20 years (normal FIT contract terms) for 5,552 MW of wind power results in an average of 322.5 jobs annually. This is hardly something to be bragging about.

A stable source of income for landowners” which fails to mention the landowner is committed to a “non-disclosure agreement” meaning if adverse effects occur such as health problems experienced by the landowner families or animals, they can say nothing. Also, if the developer has incurred debt to erect the turbines, the lender will frequently register a lien on the property which may affect the ability of the landowner to borrow funds using the property as security. The landowner is also usually committed to extend the terms of the lease via the agreement for further periods of time in the event the developers contract may be extended.

Property tax revenue for municipalities” which is true, but … the revenue is nominal as the wind turbines are subject to industrial rates that have no connection to their capital costs (approximately $1.5 million per megawatt [MW]) whereas all other industry in a municipality, pay taxes on the full value of their invested capital. This means the decree by former Minister of Finance, Dwight Duncan to MPAC to assess IWT at only $40K per MW is still enforced with only minor adjustments.   The “tax revenue” to municipalities is often much less due to the declined values of households affected by the closeness of those turbines. It frequently causes a net tax loss to municipalities.

Funding for community-based initiatives” is something that was forced on wind developers as many communities wanted to fight back, but were thwarted in Ontario by the GEA. They tried using existing by-laws under their control but usually lost. In order for the developers to proceed with limited objection they proffered “community funding”! The funding was normally less than one half a percent (0.5%) of anticipated revenue so many municipalities accepted the tokenism.

New and sustainable revenue for Indigenous partners” which the Ontario Liberal Government built into the FIT program presumably to suggest support for First Nations by offering higher subsidies if some ownership was held by them. This allowed the developers to negotiate use of First Nations land for the erection of those IWT similar to the “Funding for community-based initiatives”.

Last, this assertion.

Ontario’s wind energy industry is at the heart of a growing wind turbine operations and maintenance business for Canada’s 6400+ wind turbines”. This claim came about because CanWEA established an     O & M (operations and maintenance)“ program to bring together stakeholders to address key challenges facing Canadian wind farm operators. Its key areas of focus are determined by program participants, and include benchmarking data, health and safety best practices, improved networking, and information sharing on critical issues like wildlife and the environment.” Why CanWEA brags about normal maintenance issues is beyond the pale, but claiming “improved networking and information sharing” should be read as their ability to lobby hard for the developers in respect to those “critical issues” that actually connect with the public like noise emissions and health problems, and the killing of birds and bats.

PARKER GALLANT

Soon: Part 2 in this series will deal with the remaining three claims made by CanWEA