Quarterly stats show wind power blowing Ontario electricity costs higher

A power project that began operating in 2017 … wind power causes waste of other, less expensive sources of clean power due to lucrative contracts

A cold, windy winter cost Ontario electricity consumers. And if the first quarter of 2018 is typical, we’ll pay even more…

The IESO (Independent Electricity System Operator) recently released the March Monthly Summary along with the Generator Output by Fuel Type Monthly Report, so that interested parties can see a year-to-year comparison for the first quarter of 2018 versus 2017.

What the “Generator Output” shows for the first three months of 2018 versus the same period in 2017 is, grid-connected generation output was up by over 600,000 MWh (+1.6%). That suggests the colder than normal winter created increased demand, which it did by just over 700,000 MWh.  As it turned out, gas generation increased year over year by about 750,000 MWh, while Hydro generation decreased by almost 200,000 MWh.

Grid-connected industrial-scale wind turbines (IWT) also generated almost 180,000 MWh* more in the first three months of 2018 versus 2017, and saw curtailed (paid for but not used) generation increase by over 50,000 MWh.

Both of those elements increased costs for ratepayers.

In 2017, the approximate cost of wind power generation in the first quarter, coupled with curtailed generation, was just shy of $532 million. In 2018 it was $30 million higher ($562 million). If the first quarter is typical, the cost to Ontario’s ratepayers for the full year could be over $2.2 billion — just for wind power! (Note the foregoing cost estimate does not include spilled water, steamed off nuclear or the high costs of back-up generation in the form of gas plants standing “at the ready” when the wind isn’t blowing.  On the latter issue a 2017 peer reviewed report by Marc Brouillette for the Council for Clean and Reliable Energy showed wind turbines produce power of value to the grid only 35% of the time.)

To reflect on what the IESO report suggests: even though winter months are considered high demand, the grid-accepted wind power presents 65% of the time when it’s not needed. Wind power, in addition to causing waste of other (clean) sources of power such as spilled hydro, steamed off nuclear, etc., results in the IESO selling surplus power to our neighbours at prices well below the cost of wind power production due to their lucrative contracts.  Proof? Look at the grid-accepted wind power versus Ontario’s net exports.   Grid-accepted wind in the first three months of 2017 was 3.46 terawatts (TWh) and net exports (exports less imports) were 2.92 TWh; the comparable period for 2018 saw grid-accepted wind generation of 3.64 TWh and net exports of 2.86 TWh.  In other words, the wind power, if all exported, was done with only partial recovery of its costs and was excess to actual demand.

That raises the question:

Why did Ontario contract for it in the first place and why was it given “first to the grid” rights? And, why don’t we cancel any outstanding contracts** that haven’t been started if what it generates is surplus?

Paying over $500 million per quarter and as much as $2 billion annually for wind power generation increases energy poverty and sends Ontario’s manufacturing jobs south.

Parker Gallant                                                                                                                                 May 1, 2018

*Thanks to Scott Luft for his data on wind generation and curtailment!

** The government awarded five contracts for almost 300 megawatts of new wind power in 2016, one of which has reached Renewable Energy Approval. The contracts will add $1.3B to Ontario’s electricity costs.

 

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Ontario Power Generation report: good news and bad news

Ontario Power Generation (OPG) just released its annual report for the year ended December 31, 2016.

It’s a mix of good and bad news.

For example, gross revenue (net of fuel expenses) increased by $137 million and $34 million of that increase found its way to the bottom line, for a $436 million profit.

Generation from 2015 increased slightly from 78 terawatt hours (TWh) to 78.2 TWh, with nuclear generation increasing by 1.1 TWh and hydro decreasing by .9 TWh, which was further exacerbated (see next paragraph) by spillage due to surplus base-load conditions.

The bad news was that 4.7 TWh of hydro was “spilled” or wasted in 2016, up from 3.7 TWh in 2015. Those wasted 4.7 TWh of power could have supplied more than 500,000 (approximately 11% of all residential ratepayers) average Ontario homes with electricity for the full year.

The spillage by OPG didn’t affect their revenue, however, as they are paid for spillage at an average of about $44/MWh or $44 million/TWh. That means they received $207 million for wasted power and paid the Ontario Ministry of Finance the “water rental” fee for the spillage (although the latter wasn’t disclosed in the report).

Other “good/bad” news indicates OPG sold their Head Office on University Avenue in Toronto with closing scheduled for the second quarter of 2017. They expect the sale will generate an after-tax profit of $200 million.  The bad news is, OPG is obligated to turn over the profit to the Consolidated Revenue Fund. The land, building and maintenance costs fell to the ratepayers of Ontario to pay for via the electricity rates, yet the profit generated on its sale will be tossed into the bottomless pit of the Finance Ministry, instead of going towards reducing OPG’s costs of generation which could have benefited ratepayers.  That $200 million won’t even pay the interest on Ontario’s debt for a week!

SOLD! But the money won’t help you ..

The previous Energy Minister Bob Chiarelli on June 9, 2016 (four days before he was replaced by Glenn Thibeault) also issued a “declaration” to OPG instructing them: “to transfer, sell, dispose of or divest all of the Corporation’s interest in the Lakeview Site, comprised of the Municipal Park Lands and the Uplands”.  The Lakeview site is 67 acres running along the Lake Ontario shoreline and the Municipal Park Lands are the remaining 110 acres of the Lakeview Site.  Any excess revenues associated with the sale is to be transferred to the Government (Consolidated Revenue Fund), again rather than going to reduce electricity rates.

Ontario’s ratepayers absorbed the impairment costs of closing the coal plants in 2003, absorbing a “loss of $576 million as a result of the termination of cash flows from these stations after 2007.” The ratepayers of the province deserve to benefit from any recovery resulting from the write-off of the plant closings!

All this is more evidence of the “shell game” being perpetrated on Ontario ratepayers and taxpayers and the continuing legacy of the McGuinty/Wynne-led governments.

More to come …