Gerald Butts might not be happy

Ontario Power Generation is making some moves that may make Gerald Butts both happy and unhappy

[Photo: Delsan AIM Environmental Services]

Former McGuinty major domo and Trudeau chief of staff Gerald Butts posted a Tweet about the demolition of the Ontario Power Generation (OPG) Nanticoke coal power plant with this somewhat off the wall claim.

“Gerald Butts @gmbutts Aug 23  When Dalton McGuinty was elected in 2003, everyone (including OPG) told him this couldn’t be done. Then he and @DwightDuncan did it. This is what progress on #climatechange looks like. The end of 7550MW of coal in Ontario.”

He was inspired apparently by David Hains of the Globe and Mail who Tweeted about the demolition that “This is quite something not just for the spectacular visuals, but also how it closes the book on what was once the largest coal plant in North America, and the largest single source of greenhouse gases.”

So, here are some facts, to put Nanticoke into perspective with renewables.

Nanticoke versus solar

The 4,000 MW Nanticoke coal plant was able to produce 21 million MWh annually,* had 600 employees and has now been replaced by a 44 MW solar array that might produce 58,000 MWh** annually. This would make Gerald Butts happy!

Nanticoke could have produced 364 times more power than the 44 MW of solar panels! The 44 MW of solar panels sit on 260 acres and produce power when the sun shines, whereas the Nanticoke coal plant could produce power when needed. If OPG’s objective was to replace the 4,000 MW with solar (generating at an average of 15 per cent of capacity) they would require 364 times more solar panels and almost 96,000 acres*** of land! (One wonders if OPG had made that move how many employees would be required to sweep the snow off the panels come a blustery winter?)

Replacing Nanticoke’s potential generation with solar panels would have cost about $9.4 billion**** annually versus approximately $630 million at a cost of 3 cents/kwh.

Nanticoke vs. wind power   

Another OPG announcement in late May indicated they would abandon their one  industrial wind turbine (IWT)  and dismantle it.  The press release suggested: “At full power, it could produce enough energy to power about 330 homes.” What that implies is, the 1.8 MW turbine (located on the Pickering Nuclear plant site) operated at about 19% of its capacity to produce intermittent power for those homes. Had OPG opted to replace the Nanticoke coal plant with IWT generation operating at 30% of capacity they would have required 8,000 MW. As a matter of interest CanWEA reported 5,076 MW in operation in Ontario at the end of 2018. Those 8,000 MW of IWT may have supplied the 21 million MWh the Nanticoke plant was capable of generating but, only 35 per cent of the time when Ontario demand required it! The land needed for the 8,000 MW would be about 6,000 acres or twenty-three times the land Nanticoke used.

The annual cost of replacing Nanticoke’s generation with IWT would be north of $2.8 billion***** versus $630 million.

OPG back into fossil fuels

A very recent OPG announcement will surely make Gerald Butts very unhappy! An OPG subsidiary reached agreement with affiliates of TC Energy to acquire natural gas assets at a cost of $2.87 billion.  They are acquiring full ownership of the Napanee plant (900 MW) involved in the McGuinty/Liberal gas plant scandal, Halton Hills (683 MW) and the 50% (275 MW) of Portlands they don’t own.  In total, the 1,858 MW they are acquiring will cost $1.54 million/MW which appears on the high side; however, one would assume OPG would also retain the contracts.

In the case of the Napanee plant they will receive $15K per turbine per month for simply idling, meaning annual revenue should be $162 million.  It one assumes the remaining 958 MW will be paid at a lesser rate of say, $12K per turbine per month, that would add another $138 million annually.  In simple terms OPG should recover their full costs in just under 10 years!  What that hopefully means is the effect of the acquisition should be negligible in respect to ratepayers; however, it appears the Napanee plant has not been commissioned.  Ratepayers should hope the OPG agreement to purchase requires commissioning!

 

So, in summary, OPG is getting back into the fossil fuel business instead of adding renewable energy in the form of either solar panels or wind turbines. We ratepayers/taxpayers should remember the reason we needed the gas plants in the first place was to back up the intermittent and unreliable wind and solar plants that collectively represent about 7,500 MW of sporadic capacity and were instrumental in driving up electricity costs by a factor in excess of three times inflation rates.

PARKER GALLANT

*Enough to supply 2.5 million average Ontario households.

**Enough to supply 6,400 average households.

***That is almost equal to the area the City of London, Ontario currently occupies.

****At the current average cost of solar generation estimated as $$440 per MWh not including back-up

*****Estimated at a cost of $135 per MWh but without back-up.

The “great day for Canada”

The recent headline on the website North American Windpower read, “CanWEA Applauds New Carbon Pricing: ‘A Great Day For Canada’ “!

The article below the headline, as one would expect, had a cheering section from Robert Hornung, the President of CanWEA as follows:

“This measure sends a clear signal to investors,” comments Robert Hornung, president of CanWEA. “Ensuring that new natural gas-fired electricity generation will have all emissions exposed to the price on carbon by 2030 means that more carbon-free options like wind energy and solar energy will be deployed instead of fossil-fueled electricity generation, creating thousands of jobs and bringing investments into Canadian communities while protecting our climate. This is a great day for Canada.”

Instead of luring investors with the hope of riches in the wind, one might hope that Hornung’s diatribe sends a clear message to politicians and those responsible for managing the electricity grid (in the provinces affected) that they shouldn’t buy into the rhetoric! The reason most provinces have gas plants is to ensure there is power available when the wind doesn’t blow and those turbines sit idle (those forced to live close to the noisy machines love when that happens).

Ontario has seen high demand in recent days as temperatures rose and air conditioners were fired up to cool homes and businesses.   On July 2, total demand was 463,656 MWh and wind generation delivered to the grid from the approximately 4,500 MW of wind capacity in Ontario was 4,054 MWh over 24 hours or — that’s less than 1% of total demand.

While wind turbines were sleeping on that day, gas generators were required to fill in for them and supplied almost 34,000 MWh (7.3% of total demand).

In my view, all ratepayers (industrial, commercial and residential) should lobby the federal and (affected) provincial governments to alter regulations in respect to the “carbon tax” charge. The regulations should require both the wind and solar generators to produce power when required and if they are unable to do so, the applicable “carbon tax” should be charged to them during hours when producing power surplus to demand.

Presently that surplus generation is disposed of by either exporting it or curtailing it. Both of those actions currently come at a substantial cost to ratepayers. The regulation change would direct revenue from the charge applied to offset the additional cost ratepayers would be picking up from the carbon tax charge on gas generators when wind and solar are not generating needed power and they are called on to fill the gap.

To paraphrase CanWEA’s president, then a carbon pricing announcement would “send a clear signal” to the intermittent and unreliable wind and solar power generators that ratepayers are fed up with electricity rates that have soared in part due to costly and intermittent renewable wind.

That “carbon-free option” touted by Robert Hornung has cost ratepayers in Canada billions, to the benefit of mainly foreign owned companies.

It is time to reverse the trend!

Global Wind Day is coming: should you cheer or cry?

Canada’s wind power lobby says wind power is not only cheap, it is dependable enough to supply one-third of our power needs. Is this true? (No.)

Celebrate? Maybe not… [SmallSteps photo]

CanWEA (Canadian Wind Energy Association) recently posted an article about an upcoming event they seem quite excited about.  Apparently, “Every year, June 15 is Global Wind Day, a day to celebrate the incredible momentum of wind energy.”

CanWEA goes on to make extraordinary claims and these two top the list: “Costs have also dropped significantly in Canada, and a power auction in Alberta, in 2017, established wind energy as the most cost-competitive source of new electricity generation in Canada” and “… it could supply more than one-third of the country’s electricity without compromising grid reliability.”

Well, I just had to look into that, especially after Ontario’s experience with wind power. Thanks to Scott Luft’s data gathering from IESO and his ability to organize it nicely, it’s an easy task to see how wind performed in Ontario over the past three years.

As we are five months into 2019 let’s look back at that same period over the last three years and review wind’s performance. It is important to understand that wind generation, for some reason, gets “first-to-the -grid” rights and are also paid handsomely ($120/MWh) for curtailing their generation.

The meaning of ‘curtailment’                                                                                                                                   Starting with wind capacity*, which at the start of 2017 was about 4,460 MW with 570 MW of that embedded. At the beginning of 2018, capacity had increased to 4,900 MW with 580 MW of that embedded; at the start of 2019 we had 5,090 MW with 590 MW embedded. Wind’s capacity increased over those three years to the point where it represents over 10% of capacity.

Once industrial wind turbines represented a significant amount of capacity in Ontario, reality dawned: wind is unable to deliver generation when actually needed. This raised concerns with the grid operator, the Independent Electricity System Operator or IESO. As this situation constituted a possibility of lack of grid control, the deal struck with the wind generators was to get them to curtail their generation, when asked, in exchange for a significant payment.

When this agreement was reached, IESO began to curtail wind on a regular basis, particularly during Ontario’s low demand periods which occur during the Spring and Fall. That’s also exactly when wind generates power at its highest levels in Ontario. So, for 2017 wind developers curtailed 1,420.6 million MWh in the five months which earned them $170.5; in 2018 they curtailed 1,019.6 million MWh earning $120 million; and in 2019 curtailed 786,900 MWh which earned them $94.8 million.

Ontario’s ratepayers generously picked up the bill of almost $400 million for that curtailed generation for the first five months of each year since 2017.

Wind power generation                                                                                                                                       Power generation from wind in the first five months of 2017 (either grid-accepted or distributor-accepted) was 7,080.8 million MWh; in 2018 it declined slightly to 7,027.6 million MWh. For the first five months of 2019 it increased to 7,211.7 million MWh (up 2.6%). The cost of the generation (at $135/MWh) brought costs to ratepayer of $955.9 million for 2017, $948.7 for 2018 and $973.4 for 2019.

That represents a total cost to Ontario’s ratepayers of $2.878 billion for the 21.3 TWh (terawatts) either grid- or distributor-accepted.

The total cost of wind: more than you think

So now, let’s check to see if the costs of power generation from wind are falling as claimed by CanWEA. To do that, we must add the cost of curtailed wind to the cost of what was delivered.

That cost was $3.278 billion!

Looking at 2017, the math on what it cost ratepayers for the period of the first five months of each of the last three years works out to $159.10/MWH and for 2018 slightly lower at $152.40/MWh and for 2019 it fell slightly again to $150.00/MWh.

It appears, on its own, wind generation costs in Ontario fell from 15.9 cents/kWh in 2017 to 15.0 cents/kWh in 2019.

However, not accounted for is the annual “cost of living”** increase granted to wind power operators in their contracts. Also not accounted for is the cost of back-up generation (principally gas generation paid to idle) for when the wind isn’t blowing. And other unaccounted for cost is what wind does when delivering generation out of sync with demand! It drives down the market price (HOEP) and our exported power is sold for cents on the dollar and Ontario ratepayers pick up the losses on those sales.

On top of all those other costs, excess wind power generation out of sync with demand causes hydro spillage and nuclear steam off — both of which are paid for by ratepayers!

Clearly, this demonstrates that CanWEA’s claim that wind power is cost competitive is fictitious — it isn’t!

And the other claim – that wind could supply one-third of the country’s electricity needs — is also bogus. As a recent IESO report notes, “The transmission-connected supply mix has shifted from only synchronous generation facilities to more inverter-based generation facilities (e.g., wind and solar). This change has lowered system inertia, which is a critical element that supports the secure operation of the ICG, [IESO Controlled Grid] especially during light demand conditions.” Translation: Adding more intermittent and unreliable wind power to the grid severely impacts grid stability, particularly in the spring and fall when demand (in Ontario) can fall to almost 50% of the peak demand which occurs on hot summer days or very cold winter days.

In short, “Global Wind Day” is no reason to celebrate.

PARKER GALLANT

*rounded                                                                                                                                           **wind turbine contracts also included a cost of living annual increase to a maximum of 20% of the original contracted amount

#GlobalWindDay

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

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 30^th 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

 

 

The political web of EDPR and the Nation Rise wind power project

 

The power from Nation Rise would be like a fly on an elephant in terms of Ontario demand. Cancelling would save hundreds of millions.

Last week, a news article appeared in the Nation Valley News reporting the local Conservative MPP, Jim McDonell’s response to a question asking on why the government hasn’t cancelled the 100-MW Nation Rise wind power project. Mr. McDonell said, “We’ve always been clear: We would cancel any project we could cancel economically,” and he added “… we just can’t spend a billion dollars to cancel a project and get nothing from it.”

The same day, a press release from the Ford government noted that Premier Doug Ford told people attending the annual Rural Ontario Municipal Association (ROMA) conference, that “We’re lowering electricity costs”

I am at a loss to explain Mr. McDonell’s suggestion that cancellation of the Nation Rise IWT project would cost the same as the McGuinty/Wynne gas plant moves, but that’s what he said. It’s worth a look back at how this power project came into being, as it illustrates the disaster that has been Ontario energy policy for the last 15 years.

The Nation Rise wind project was one of five awarded contracts in March 2016; after that, its history gets really interesting … and very political.

Cost of the project

The Independent Electricity System Operator (IESO) at that time noted the average price for all the projects proposed was $85.90/MWh (or 8.5 cents per kWh). Over 20 years that would produce revenue of about $450 million, or less if their bid was lower than the average..

If the project were cancelled, no court would award them the full contract amount; it is more likely the government would be on the hook for perhaps 5 to10 % of that amount (on the high side).

There is no doubt that cancelling this project would save Ontario citizens hundreds of millions.

Timing of the approval

According to the Environmental Registry the Nation Rise entry for the Renewable Energy Approval or REA is dated May 7, 2018 and indicates it was loaded to the registry May 4, 2018.  That is just four days before the writ was drawn up by former Premier Kathleen Wynne, formally announcing the upcoming Ontario election.  It was known* the voting date would occur on June 7, yet the REA — a major decision — was given by the Ministry of the Environment and Climate Change (MOECC).  At that time, not only were polls forecasting a defeat for the Liberal government, “electricity prices” and hydro bills were a major election issue. The MOECC issued the decision anyway.

Is the power needed?

In 2015 (before the IESO called for more wind power proposals) Ontario had a huge surplus of generation. Our net exports (exports less imports) were 16.8 TWh (terawatt hours) or enough to supply almost 1.9 million average households (over 40% of all Ontario households) with their electricity needs for a full year.  It cost ratepayers an average of 10.14 cents/kWh to generate that power which was sold for an average 2.36 cents/kWh, representing a cost of $1.3 billion to Ontario’s ratepayers.

Due to the highly intermittent nature of output from wind turbines, the IESO’s projections of long-term capacity use only 12% of the nameplate capacity for wind power installations when calculating their contribution to overall capacity. So for Nation Rise, the IESO is projecting that the useable contribution of the project will be 105,120 MWh — just .0765% of the IESO’s forecast power consumption of 137.4 TWh. That is a fly on the flank of an elephant, in my estimation.

Cancellation of Nation Rise would not affect the long-term supply of electricity for the people of Ontario.

Worse, adding more capacity, particularly from an intermittent source, could result in more spilling of hydro, more curtailment of wind power generation, additional nuclear shutdowns or steam-off, all of which would drive Ontario’s electricity bills rates higher.

Property value loss

The property losses in value caused by the presence of 33, 650-foot industrial wind power generators throughout the countryside in the Nation Rise project will be in the tens of millions of dollars according to a study which notes: “Using research completed recently by a land economist with the University of Guelph and published in Land Economics, Wind Concerns calculates that overall, the property loss for houses within 5 km of the 33 planned turbines could be $87.8 million. Using other research that is less conservative, however, the property value loss could be more than $140 million.”

A loss of either magnitude would impact North Stormont’s realty tax base leading to either significant drops in revenue for the township or realty tax increases as a multiple of the COL (cost of living).

And then there’s the water

One condition among many in the REA given to EDP/Nation Rise was related to identifying and mapping all water wells in the project area within a set range of any proposed equipment, meteorological tower or wind turbines. This was due to concerns about construction activities on the local aquifer. While EDP identified 444 wells, the community group says there are more than 800 homes within the immediate project. Water wells in other areas of Ontario and elsewhere have become contaminated allegedly due to drilling and vibrations from wind turbines. There is significant concern about contamination of the wells, and the assessment taking place.

North Stormont is dairy farm country, and each farm operation uses thousands of litres of water every day — what would be the effect on these businesses, and Ontario’s food supply, if suddenly, the water wells were not functioning?

Who is EDP?

EDP (parent of EDPR) is a Portuguese utility company partially owned by two of the Chinese government’s companies; China Three Gorges (23.27%) and CNIC Co., Ltd., (4.98%) and the former has been trying for several years to acquire the balance of the shares. That attempt is speculated to be off; however, a recent NY Times article suggested otherwise, based on discussions with Portugal securities regulator CMVM.

Where is democracy?

North Stormont, where the Nation Rise wind project is planned, declared itself an “unwilling host” in 2015, well before the award of the contract or the issuance of the REA. The people perhaps relied on promises made by former energy minister and Ottawa Liberal MPP, Bob Chiarelli, when in 2013 he declared: “It will be virtually impossible for a wind turbine, for example, or a wind project, to go into a community without some significant level of engagement”. Despite their council passing the unwilling host motion, and also joining the 117 Ontario municipalities demanding a return of local land-use planning for energy projects, the IESO still granted Nation Rise the contract.

There are many questions about this project and many reasons why it simply isn’t needed. Cancelling this contentious project is a perfect way to lower future electricity costs, directly.

PARKER GALLANT

*The Toronto Star reported in an article dated October 19, 2016 the next Ontario election would be on June 7^th, 2018

 

A fallen (green) star in Texas

Texas small town Mayor Dale Ross meets up with reality

In early January I wrote about “virtue signaling” by the mayor of a small Texas city who was wooed by none other than Al Gore because he used “facts” to sign long-term contracts committing his city to purchase 100% renewable energy.

He has had a long hard fall from grace.

Dale Ross set himself up as a “green” hero, and claimed his social media news has been seen by 2.1 billion people around the world. He was even touted as a celebrity and interviewed by CanWEA at their convention last fall.

At the time, I said this about Mr. Ross and his claim to fame:

“This unexpected cost will presumably have a detrimental effect on the services that the city will be able to deliver OR service costs (electricity, water and waste removal) will spike much higher! These are just a couple of ‘facts’ that will make Georgetown’s utility consumers upset.”

Well, it now appears the bad news is out: the city’s ratepayers are facing increases in their electricity bills of more than $1,200 USD per year.

I surmise Mr. Ross will not be greeted warmly by his constituents.

To see why, watch this short video on Fox News!

https://video.foxnews.com/v/5996313943001/#sp=show-clips

Honesty, virtue and energy policy (3)

The previous two articles in this series pointed out how the mayor of the city of Georgetown, Texas and the former Ontario Liberal government endorsed the use of renewable energy to try to reduce emissions and save money for taxpayers. Led by environmental lobbyists (Pembina, Environmental Defence, David Suzuki, Al Gore and others) and proponents of wind and solar power generation, the politicians laid out the “facts” to persuade the public that doing so would both save money and create jobs.

The problem was, only some of the “facts” were presented and many of them were less than truthful!

Alberta-bound spin

What happened in Georgetown, Texas and Ontario has moved west to Alberta and the execution similarities are remarkable. In an article from the Calgary Herald November 24, 2016 the NDP Environment Minister announced, “We have chosen to incentivize new investment in clean energy and improve Albertans’ health by eliminating dangerous air pollution” and announced an agreement to pay $1.4 billion to shut three coal plants earlier than planned.

A government webpage titled: “Phasing out coal pollution” carries a message similar to what we were virtue signaled by Premier Wynne and her Environment Ministers noting: “Moving to more renewable energy and natural gas will protect the health of Albertans — especially vulnerable groups like children and seniors — and save money in health-care costs and lost productivity.”

Environmental push

Similar to what happened in Ontario in 2005 when a study was released about health costs (Liberal politicians claimed the cost was $4.4 billion annually) related to Ontario’s coal plants, Alberta politicians were handed a similar study. It was produced by Pembina Institute, the Asthma Society of Canada (ASC), Canadian Association of Physicians for the Environment and the Lung Association, and claimed the use of coal power cost $300 million annually in health costs. Using the 2017 Alberta census population figures for 2017 that works out to about $70 per resident. Using the 2005 census population figures for the Ontario study results in a cost of about $350 per resident. Something seems askew in the two claims, but in both cases, it provides the unverified “facts” politicians require to “virtue signal” and drive up electricity prices.

Political spin supported by wind power proponents                                                                                                                                     Alberta Premier Notley’s decision to phase out coal plants resulted in seeking out “more renewable energy” in the form of 600 MW of wind power generation. When the winning bids to the REP (renewable electricity program) were announced, the Premier was front and centre stating “It’s a new record for renewable energy pricing in Canada — the lowest price Canadians have ever seen, right here in Alberta.” The Premier went on to say in mid-December 2017: “Alberta isn’t only a leader in the [fossil fuel] energy that we are going to get to Tidewater. We are also a leader in renewable energy, and we are going to show our fellow Canadians, and the world, that economic growth and environmental responsibility can, and must, and will go hand-in-hand.”

Well, now it appears Premier Notley’s promise to get “fossil fuel” energy to Tidewater will not happen on her watch so that is just one “fact” she won’t be delivering on before the upcoming provincial election. Premier Notley went on to say: “In fact, our process was so competitive and so many companies wanted to invest, we got a 20-year price of 3.7 cents a kilowatt-hour.”

As one would expect, wind power trade association and lobbyist CanWEA (Canadian Wind Energy Association) was eager to get the word out, couched in language that made the announcement as wonderful as the Premier made it sound. Robert Hornung, CEO of CanWEA made it sound simply spectacular: “By attracting investment in the wind energy projects announced today, Alberta is diversifying its economy, driving economic growth and creating much-needed jobs in multiple sectors such as engineering, construction and local services.”

That sounds similar to what he said three years ago when he claimed: “Ontario’s choice to be the leading wind energy market in Canada has returned many economic benefits,” added Mr. Hornung, “As other jurisdictions consider a greater penetration of wind energy in their electricity systems, ‎this study clearly shows that the economic benefits associated with wind energy development are significant.” Pure fluff for the then Ontario Liberal government.

While the foregoing sounds impressive Premier Notley left out an important fact related to certain bonuses built into those contracts which include (RECs) “renewable energy certificates”.   Specifically, those RECs have a significant value which the recipients will be able to sell for revenue, boosting their income and the cost of electricity delivered to Alberta ratepayers. Those RECs will be tradeable in a market established in California in 2007.

From the Western Renewable Energy Generation Information System: (WREGIS) we would point out the following in a Q & A posting: “WREGIS issues one REC for each MWh of renewable generation. WREGIS accounts are similar to bank accounts; Certificates are deposited and managed within these accounts. Certificates can be transferred, retired, or exported to a Compatible Tracking System at the discretion of the certificate holder.” The value of a REC varies widely but as laws or regulations add such things as “carbon taxes”* to industries, (companies being charged a “carbon tax”) they can instead purchase an REC as an offset to the carbon tax and purchase it for less than the “tax”!

The monies will flow directly to those renewable energy companies.

What the foregoing suggests is the “20-year price of 3.7 cents a kilowatt-hour” may be a lot more as the future value of a “carbon tax” climbs over the $20/50 current cost, making the REC offset much more valuable than in today’s market. In summary, electricity prices will rise!

As politicians keep “virtue signaling” while only releasing selective “facts” we taxpayers/ratepayers must keep a vigilant watch.

PARKER GALLANT

*Current carbon tax in Alberta is $30/tonne and will increase further in 2021 to $40/tonne.

Honesty, virtue, and energy policy (2)

Yesterday’s post in respect to honesty and energy policy examined a small city in Texas and how its mayor has been courted around the world by proponents of renewable energy — because his actions sit into their narrative. However, I also showed how incomplete information given to the media can lead to bad results for those directly affected, the people who have to pay the bills for the “virtue signaling”.

What follows is how the two parties (politicians and energy proponents) collectively stomped on Ontario’s taxpayers/ratepayers!                                                                                                                

CanWEA spin

The Canadian Wind Energy Association (CanWEA) recently published an article that carried this claim:  “The Pan Canadian Wind Integration Study – the largest of its kind ever done in Canada – concluded that this country’s energy grid can be both highly reliable and one-third wind powered.”

The annoying part of the “study” is that it was completed by biased parties and used considerable taxpayer funds!

Perhaps Ontario’s grid operator, IESO, did make wind generation reliable but at what cost? As it turned out, in 2017, wind turbines delivered only 24.9% (9.2 TWh) of their capacity and curtailed* over 26% (3.3 TWh) of what they could have actually delivered.  That generation also caused hydro spillage of 5.9 TWh and nuclear steam-off of one (1) TWh!

IESO’s 18 Month Outlook Report also indicates they only rate the capability** of wind turbines to deliver generation 12.9% of the time it may be needed. Wind power generation also contributes to a reduction in the “real market” (HOEP) price, meaning we sell our surplus generation into the export market well below its cost.

Virtue signaling from former Ontario Premier Wynne                                    

Just over three years ago Ontario’s Auditor General released her report that noted the billions of dollars in extra costs Ontario ratepayers had to pay for the Liberal government’s green energy. The AG’s report said consumers would pay $9.2 billion more for 20-year wind and solar contracts signed by the Liberals than they would have under the former procurement system.

Premier Wynne’s response was: “There’s a cost associated with getting out of coal, of putting more renewables in place, and we’ve got other jurisdictions looking to Ontario as a model for how to do that,” said Wynne. “I’m happy to defend the changes that we’ve made.” She went on to say: “You only have to look at other jurisdictions that are struggling with air quality, with particulate matter in their air, with families that don’t feel they can let their kids play outside,” she said. “I know we weren’t in those serious straits, but the fact is we have reduced our pollution in this province.“

Apparently lost on her was the concept of the costs her government later imposed on those “kids” when in an attempt to win the last election she kicked in the neighbourhood of $50 billion down the road for them to pay via the Fair Hydro Act.

Premier Wynne earlier (about five years ago) got a pat on the head from Al Gore the climate crusader, when the last Ontario coal plant was about to be shut down.  In her speech she also referenced the children who will be paying back the above costs when she said: “And I would contend it’s our moral duty to take action to protect our children, our grandchildren, and our fellow citizens. We’re lucky today to be in the presence of a man who’s been fighting on these fronts for many years.”

In another announcement with Al Gore present she claimed: “Becoming a coal-free province is the equivalent of taking up to seven million cars off the road, which means we’ll have cleaner air to breathe, while saving Ontario $4.4 billion in health, financial and environmental costs”

It has now been four years since Premier Wynne said that so it would be nice to know, from a ratepayer and taxpayer perspective, what has happened to that $17.6 billion, we were supposed to have saved?

We should suspect Premier Wynne’s remarks was simply political spin meant to preserve her position as Premier while driving up our cost of living for a necessity of life. Our health care system has not improved in the last four years and the province’s financial situation has only become worse!

The self-evident virtue signaling has simply resulted in increasing a future cost for “our children, our grandchildren and our fellow citizens”.

PARKER GALLANT

*Those 3.3 TWh of curtailed wind cost Ontario ratepayers almost $400 million or more than all of the curtailed wind in the UK which was estimated as costing them more than £100 million in 2017 to switch off their turbines and NOT produce electricity. The equivalent of the UK’s cost was about $174 million Canadian!

**Forecast capability of capacity for other major generating sources are:  nuclear 81.9%, hydroelectric 68.4%, gas/oil 81.4% and solar 10%.

NB: If one wants to view what former Minister of the Environment and Climate Change, Glen Murray knew about the Ontario energy sector have a look at his interview at the COP 20 Conference in Lima, Peru here.  You will see that Minister Murray gave many incorrect answers and even wrongly cites the Atikokan (200 MW) coal station as the largest in North America.  It was Nanticoke (3,964 MW!

Honesty and energy policy

The new buzz is “virtue signaling” in which politicians espouse environmental solutions — but are they being honest? First in a three-part series

Texas small-town mayor Dale Ross: a star is born. But is he really a leader? [Photo: CBC]

An article penned just a couple of weeks ago focused on the spin emanating from industrial-scale wind power proponents and coupled their spin with less than honest political diatribe. Needless to say, the spin and diatribe continue.

Here is one example:

Mayor’s spin in Georgetown, Texas

Mayor Dale Ross* of Georgetown, Texas, population 70,000, has become an international celebrity. The reason: the city contracted for 100% renewable energy from a wind power development and a large solar farm, both hundreds of miles away. Because of this, Mayor Ross has been touted by Al Gore in his sequel to “An Inconvenient Truth,” interviewed by the UK’s BBC as well as many other national and international radio and TV stations. Mayor Ross, in this linked article estimated he has been seen by over 500 million people (now 2.1 billion-see below) around the world. What could go wrong? 

“To achieve 100% renewables, Georgetown negotiated two long-term (20+ year), fixed-price power contracts, one with EDF Renewables’ 194 MW Spinning Spur 3 wind plant beginning January 2016 and the second with NRG’s 154 MW Buckthorn solar site, effective July 2018. Details on pricing were withheld citing business confidential, but the contracts are for 144 MW of wind and 150 MW of solar for a combined annual quantity of nearly 900,000 MWh.”

Both of those generating sources were hundreds of miles away from Georgetown! 

Mayor Ross spins in Edmonton, Alberta

Mayor Ross was invited to speak at the 2018 Alberta Climate Summit organized by the Pembina institute. During that visit he was interviewed by the CBC where he claimed, in respect to a question about how he could support this as a Republican while the U.S. Republican president is pro-coal: “My daytime job is being a Certified Public Accountant and we make our decisions based on facts. In Georgetown, we put silly national partisan politics to the side and we just do what’s good for the voters and citizens that put us into office.”

Mayor Ross and CanWEA

Canada’s wind power trade association CanWEA naturally took an opportunity to interview Mayor Ross during his visit to Alberta and the Q & A session had the usual spin.  On closer examination however, some things Mayor Ross disclosed had a few bits of truth, but they were couched in such a way the reader would have to have knowledge of how electricity grids function to find them.

The Mayor said: “2.1 billion people have heard, read or saw my message”. When asked what advice he would give other communities, he had this to say: “In Georgetown’s case, it was mitigation and hedges to prevent negative pricing impacts of fuels components of energy production. Those take many forms and are often debated but certainly are a major component of electric generation pricing that use any form of fuel component in the process.”

If one reads about the subsequent events that have occurred to the public utility delivering electricity, water and waste collection in Georgetown, it is obvious Mayor Ross is really admitting that a few “facts” he and the City’s council based their decision on were missing.

What Mayor Ross didn’t say

“A recent article notes Georgetown’s average annual consumption is about 575,000 MWh, which means they were forced to sell the surpluses into the real-time market usually at prices well below the contracted rate, including negative prices.

This small city is now facing a problem! “Actual power purchases for 2016 were 22% over budget coming in at $42.6 million against an expected cost of $35 million. In 2017, costs surged again to $52.5 million and all indications are Georgetown electricity customers will take another bath this year.”

This unexpected cost will presumably have a detrimental effect on the services that the city will be able to deliver OR service costs (electricity, water and waste removal) will spike much higher! These are just a couple of facts” that will make Georgetown’s utility consumers upset!

The message, even from a mayor who claims as a Certified Public Accountant, his decisions are fact-based, is that “virtue signaling” outweighs telling your constituents the real truth!

PARKER GALLANT

*Reading about Mayor Ross of Georgetown reminded me of Chatham Kent (population 102,000) where Mayor Randy Hope has a love affair with wind power, and CanWEA awarded him the “Friend of Wind Award” in 2017. Mr. Hope was defeated in the municipal elections of 2018.