CanWEA’s “White Paper” opens doors to lower rates

Shortly after CanWEA’s President, Robert Hornung lamented about the Ontario governments cancellation of an industrial wind turbine project a post on their blog raved about a recently released whitepaper* titled “Wind Energy and the Ontario Market”. The paper was prepared specifically for the Canadian Wind Energy Association by Power Advisory LLC. The latter is the employer of Jason Chee-Aloy, former Director, Generation Procurement with the OPA (Ontario Power Authority), a McGuinty creation that has merged with IESO. One should assume Mr. Chee-Aloy played a significant role in contracting the many wind and solar projects by the OPA spread throughout the province and was probably the author of the “whitepaper”!  He presumably knows his way around the contracts he instigated.

The 45 page “paper” is sprinkled liberally with acronyms including one labelled “EAs” or environmental attributes and notes: “Within nearly all IESO contracts, the IESO retains ownership of all EAs, or similar non-emitting products, produced by generators under these contracts.  This is definitely the case for all wind generators under IESO contracts, no matter the contract type or vintage.”

While ratepayers would disagree with many recommendations in the paper the ones related to the foregoing suggesting IESO monetize those EAs has merit as noted in Recommendation # 6:

The wind energy industry should work with the IESO and other contract counterparty generators to explore monetizing associated EAs/RECs, where the revenues from the sale of EAs/RECs would be shared between these generators and the IESO.  The IESO could then credit all Ontario electricity customers with these revenues helping to lower electricity costs for them.”

No doubt, most ratepayers in the province would agree if we can monetize those EAs lets’ do it; BUT there is no need to share any revenue generated with the operators as they already receive well above market rates from those contracts that drove up electricity costs.

The monetization process would result in the issuance of “renewable energy certificates” (RECs) which could be sold by IESO in the carbon/emissions trading market and all revenues could be applied by them to reduce ratepayers’ monthly bills.

While we’re at it let’s do the same for solar, biomass, hydro and nuclear generation which are all deemed “emissions free”!

If the existing wind contracts can’t be cancelled let IESO at least be directed to generate revenue for the benefit of all ratepayers without sharing any of the revenue with the generators.

The other benefit that may well occur is the ability for the Ford led government to argue against the carbon tax imposed by the Federal Government in the upcoming Surpreme Court appeal.

This could turn into a big win for Ontario’s ratepayers and taxpayers!

*The term “white papers” originated in England as government-issued documents. One famous example is the Churchill White Paper, commissioned by Winston Churchill in 1922. Today, the term is most commonly applied to “deep dive” style publications.

Ecojustic, the ironic charity

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.

Truly ironic!

Ontario ratepayers and taxpayers pay up for Hydro One’s Niagara transmission line

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.

Conclusion

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.

November 2019 a reflection on the cost of reducing emissions in Ontario’s electricity system

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.

  1. The Ontario Energy Quarterly shows our CO2 emissions fell from 20 megatonnes at the start of 2010 to 2 megatonnes at the end of the 2019 second quarter.

More of CanWEA’s wind spin

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.

Pan-Canadian Expert Collaboration, Phase Five

There has been a discernible decline in interest to the posts related to the P-CEC, however, as the expression goes, “there are still more tales to tell”.  This Phase will look at two more of those on the list of “collaborators” connected to Bruce Lourie and the Ivey Foundation.

It is important to understand one of the most influential “collaborators” in the P-CEC, is the self-proclaimed, “Canada’s Ecofiscal Commission,” and they have recently called for the “carbon tax” to be increased to $210 a tonne!  As this article is being written our new Environment and Climate Change Minister, Jonathon Wilkinson is in Madrid, Spain, attending the UN’s COP25 conference and it’s an unknown as to what he will promise on Canada’s behalf but be prepared for further hits to your pocketbook.

Up to this point we have connected Bruce Lourie to seven (7) collaborators, including the Ivey Foundation where he is the existing President. This will suggest there are at least two more they are connected with on the P-CEC list.  They are:

Trottier Family Foundation—a P-CEC “collaborator”                                                                                  Visiting the Trottier website one is struck by their vision to make a meaningful and positive impact on the world”. The co-founder of the Foundation is Lorne Trottier who along with Bruce Lourie sits as an “advisor” to the Ecofiscal Commission.   The Trottier Foundation is a member of the Lourie founded CEGN (relabeled as Environment Funders Canada) and provided $80K in grants from 2016-2018. They also donated to the Clean Economy Fund and as previously called; Summerhill Foundation (a Lourie creation) and granted them $225K from 2016-2018.  In 2016 The Trottier Foundation reputedly donated $315.5K to the Ivey Foundation but Ivey Foundation’s filing with the CRA and their 2016 annual report both fail to indicate they received that donation.  It appears the CRA failed to note this discrepancy!

The Trottier Foundation in their 2018 CRA filing had total revenue of just over $13 million and $7.7 million of that came from charitable donations they received and issued tax receipts for. The “Foundation” then reputedly handed out $9.7 million to “qualified donees” with one of the larger ones ($650K) made to The David Suzuki Foundation and one for $660K was handed out to McGill University, presumably to support the Ecofiscal Commission.  In 2017 the Foundation’s gross revenue was just over $90 million of which $81,5 million was donations where they issued tax receipts. It seems truly odd that a charitable foundation such at this would seek charitable donations to the extent of the two years reviewed unless there were perhaps, favourable tax benefits for the donators? Unfortunately, the CRA doesn’t seem to require any declarations on who donates to these “charitable foundations” or one might be able to reach a conclusion as to why that happened.  The Trottier Foundation has one (1) permanent staff member so it’s unclear how they will add a lot of “expert” input to whatever it is the   P-CEC researches and recommends to the new Minister of the Environment and Climate Change.

Canadian Energy Systems Analysis Research (CESAR), University of Calgary—a P-CEC “collaborator  CESAR’s report is a collaborative effort with the Institut de l’energie Trottier, Polytechnique Montreal as noted in their opening preamble:  “This report was initiated by the Ivey Foundation in December 2017 as a way to integrate the work of the authors with the discussions that occurred in a number of workshops over the past two years (see Appendix 1). The purpose of this report is to make recommendations on how to achieve the objectives laid out by Canada and the provinces in the Pan-Canadian Framework on Clean Growth and Climate Change [4]. The authors thank the Ivey Foundation for their support of, and assistance with, this work.  We also appreciate the critical input and advice from the following reviewers: Ralph Torrie, Robert Hoffman, Lorne Johnson, Bruce Lourie, Katherine Wynne-Edwards and the staff at CESAR.  DBL is grateful to the Edmonton Community Foundation, without whose support many of the ideas presented here would not have been developed. LB thanks the Trottier Family Foundation for supporting energy and climate change related initiatives that helped in the production of this report. While the two authors of the report David B. Layzell, PhD, FRSC of the University of Calgary and Louis Beaumier, MASc, Executive Director,  Institut de l’énergie Trottier (IET), Polytechnique Montréal thanked the Ivey Foundation, the Trottier Family Foundation and the Edmonton Community Foundation it was impossible to locate information as to the actual funds supplied by the three foundations for this summary report other than a $20K donation by the Ivey Foundation.

The odd thing about the latter’s donation is another donation Ivey Foundation reported on their website for 2017 for $100K sounded exactly what they wanted to obtain from CESAR as it said the following:

 “Engaging and Supporting the federal government’s implementation of the Pan-Canadian Framework on Clean Growth and Climate Change to ensure meaningful actions on both carbon pricing and complementary policies.” 

The donation was for another Lourie connection where he was Chair of the Board ie:  Environmental Defence!  A search of the Ivey Foundation’s filings with the CRA for the 2017 year failed to locate that donation so one must assume either the Ivey Foundation was wrong in making the statement or they didn’t report it to the CRA!  

It should be noted the Institut de l’énergie Trottier (IET), Polytechnique Montréal is another of the P-CEC chosen “collaborators” as are the Ivey and Trottier Foundations.

The review prepared by the two “experts” pulled together various recommendations developed at several other events* focused on climate change and recommended; “the establishment of an Institute [Working title: Canadian Climate Change and Clean Growth Institute (C4G Institute)] with a mandate to build capacity across Canada for systems change modelling and analysis. It would provide governments (federal, provincial, territorial and municipal) with independent science- and evidence-based analysis, policy options and advice regarding how they could meet their Framework commitments related to climate change and clean growth.” It is obvious the P-CEC announced on April 9 2019 was predestined to happen however the title suggested by Messrs. Layzell and Beaumier wasn’t chosen!

The above brings the Ivey/Lourie related connections to nine of the chosen members of the P-CEC  including the Institut de l’énergie Trottier (IET). It highlights his impressive ability to bring together so many climate change advocates located across the country and augment that with donated funds for the research to the current government they seek to convince us of the actions they plan.

Surely the results will culminate in a higher carbon tax and other pressures resulting in the citizens of Canada suffering from a reduced standard of living but will fail to reduce global emissions.

NB: The next one in the series will be the final one!

*Many of the events were initiated and/or sponsored by the Ivey Foundation or the Trottier Family Foundation and Natural Resources Canada were a participant in a few of them.

October, another month with climbing electricity costs

IESO just released their October 2019 Monthly Market Report and it contained more bad news for taxpayers and ratepayers in the province.  The all-in cost to Class B ratepayers, without inclusion of delivery and regulatory charges, produced a “weighted average” cost of $144.05/MWh or 14.41 cents/kWh for the “Electricity” line on your bill. The HOEP was $7.25MWh and the GA $136.80/MWh.

Consumption by Ontario ratepayers dropped by 366 GWh (gigawatt hours) or 3.2% compared to October 2018 but the cost per kWh jumped 1.03 cents/kWh (up 4.7%). Net Exports, compared to October 2018 were almost flat and totaled 1,405 GWh versus 1,381 GWh!  Our net exports in 2019 however cost us quite a bit more as the HOEP price was 7.25/MWh versus $13.84/MWh in 2018 and the cost to Ontario Class B ratepayers, reflected in the GA, came in at $136.80/MWh in 2019 versus $120.59/MWh in 2018.  The differences added about $26 million to the monthly costs raising our losses on net exports to $192.3 million in October 2019 versus $$166.5 million a year ago.

As if the foregoing wasn’t enough, wind generation, from both TX (transmission connected) and DX (distributor connected) sources and its curtailment for the month totaled 1,457 GWh as reported by my friend Scott Luft.  That means it was slightly more than our net exports.  At a price of $135/MWh for accepted generation and $120/MWh for curtailed generation the bill to ratepayers was $189.6 million and the dollar amount is very close to what we lost on our exports.  Ontario’s ratepayers were forced to accept those costs which for October generated an average of $192/MWh or 19.2 cents kWh. If one were to include costs for spilled hydro, steamed off nuclear along with gas plant backup, industrial wind generation costs would be even higher.

Now what was somewhat surprising for the month was not so much, the amount of the total GA of $1,209.6 million (it appears to be the 3rd highest since the GA was created) but the amount moved to the Variance Account (Ontario Fair Hydro Plan).  The amount moved to the Variance Account was only $159.1 and the lowest so far in 2019.  In September the GA was $1,082.9 million but IESO moved $493.2 million to the Variance Account.

There appears to be something amiss in the data used by IESO when executing the transfer to the Variance Account and it would be useful if they disclosed exactly where and how they messed up.

Transparency is something Ontario ratepayers and taxpayers should expect!

OPG 3rd Quarter 2019 results best since 2010

OPG released their 3rd Quarter results November 12, 2019 and no one noticed!

They had the best 3rd Quarter results since 2010, generating net income of $323 million up $48 million or 17.2% over 2018.  Generation was up modestly by .8 TWh (terawatt hours) or 4.4% with nuclear generation up 1 TWh to 11.6 TWh and hydro down by .2 TWh from 7 TWh to 6.8 TWh.  In the latter case the report notes “foregone” (spilled hydro) increased to .7 TWh in the 3rd Quarter (up from .4 TWh in 2018). The .7 TWh “foregone” could have supplied 300,000 average Ontario households in the quarter.

Revenue was up year over year by $138 million or 9.8% and the principal reason was the blessing from the OEB (Ontario Energy Board) to start the recovery process on the Darlington nuclear refurbishment process. It’s now in the third year of the 10-year plan.  As a result, just over $100 million of the increase in revenue came from increased prices on nuclear generation.  Comments in the report state: “The Darlington Refurbishment project, the execution of which began in 2016, continues to track on schedule overall and to the $12.8 billion budget.”  Let’s hope that continues! The rest of the increase came from the hydro sector and perhaps from the acquisitions made in the US by OPG.

The report notes, OPG generation in the quarter represented 50.4% of total generation (including net exports) in the province as reported by IESO up from 48.7% in the comparable 2018 quarter.

One disturbing find in the report marked as: Environmental and Sustainability went on to note:

Under the federal Greenhouse Gas Pollution Pricing Act (GGPPA), an Output-Based Pricing System (OBPS) for industrial facilities took effect on January 1, 2019 and a fuel charge came into effect on April 1, 2019 in Ontario. On July 10, 2019, OBPS regulations were published, including fuel-specific performance standards for electricity generation that apply retroactively beginning January 1, 2019. OPG has implemented processes to comply with the federal requirements and recover associated carbon costs to the extent possible.”

With the recent announcement OPG will acquire TC Energy’s (formerly TransCanada Corporation) portfolio of Ontario gas plants for $2.87 billion, one would assume under the GGPPA the Federal Government will seek increased fuel charges. The increased charges will result in OPG’s application for a rate increase to the OEB so that those costs will further increase the cost of electricity in Ontario.

The demise of the Wynne/McGuinty government who were responsible for Ontario’s electricity rates more than doubling during their term in office is over. Ontario ratepayers hoped to see a slowdown in those increases.  Now it looks to be taken over by the Feds who will impose their concept on how to generate our electricity.

There appears to be no end in sight to cleaning up the electricity mess in the province!

Wind power: not in evidence on Ontario’s hot summer days

Looking for wind power for fans and A/C? Don’t bother

While the wind power lobby claims it could supply as much as one-third of our power, the hot summer days tell a different story — wind is pretty much nowhere to be found

A post on the wind power lobbyist the Canadian Wind Energy Association/  CanWEA’s website about seven months ago (December 6, 2018) stated:  “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.”

Based on the hot days of July 2, 3, and 4 we have just experienced here in Ontario, the “one-third” of wind generation required would have been 482,430 MWh meaning wind capacity would have to be quite a bit larger than the 4,486 MW* currently grid-connected.

On top of that, the wind turbines would have to operate well in excess of the level they operated at during those three days.

Over the three days, total electricity demand was high-averaging just under 483,000 MWh per day. While nuclear, hydro and gas provided almost all of the power (1.448 TWh) needed the 4,486 MW of grid-connected wind generating capacity contributed 12,056 MWh in total over those three days.

That output represented a meagre 0.83% of total demand.

What that suggests is this: operating at that level would require in excess of 86,000 MW of wind capacity (2.3 times Ontario’s existing total grid connected capacity) to simply meet the “one-third” claim.

It would be a big stretch to ever see them contribute the self-proclaimed “one-third” of power the wind power lobby claims.

Hot muggy summer days and very cold winter days when electricity demand is at its highest is generally when industrial wind turbines take the day off!

One-third wind powered would be the antitheses of a “highly reliable” grid.

PARKER GALLANT

*Partially funded by taxpayer dollars

**4,486 MW of capacity operating at 100% would produce approximately 323,000 MWh over three days

 

Bugs, biomass and carbon tax: the confusing world of climate initiatives

Did this guy wreck our forest carbon sink? Tax it! [Photo: Purdue University]
Trying to understand the various issues surrounding “climate change” and the upcoming federal carbon/pollution tax or provincial cap and trade programs can be confusing when trying to research why they are being imposed.

It gets more confusing when you try to figure out, are Canada’s forests, a carbon sink or a carbon emitter?

A CBC article from a few years ago claimed forests absorb a third (2.4 billion tonnes a year) of the world’s C02 emissions. The CBC reported the study was “by an international team of government and university researchers published Wednesday in Science” and quoted a scientist “with  Natural Resources Canada’s Canadian Forest Service” who co-authored the paper. The article said “the study found that the amount of carbon absorbed annually by Canadian forests from 2000 to 2007 was about half the amount they absorbed annually from 1990 to 1999.” That was because trees killed by forest fires and by insects such as mountain pine beetle were no longer taking in carbon.

Fast forward to a recent CBC article which had this to say: “When you add up both the absorption and emissions, Canada’s forests haven’t been a net carbon sink since 2001.” The article goes on to claim our “managed forests” do absorb some emissions but: “our forestry practices would only negate roughly three to four per cent of our greenhouse-gas output each year.” And,  “In 2015, largely due to raging wildfires, these forests kicked a whopping 237 more megatonnes of carbon dioxide into the atmosphere than they absorbed. But when you exclude natural disturbances like fires and insect infestations and look only at the areas directly impacted by human forestry activity, the picture changes.”  The picture, as far as this article suggests, changes slightly suggesting we “have been a net sink of roughly 26 megatonnes annually since 2001.”

Pretty small potatoes considering Canada possesses about 12.5% of the world’s forests, second to Russia with 20%.  Russia claims its forests are a carbon sink, absorbing between 300 to 600 million tonnes of emissions annually. Russia has not signed on to the Paris Agreement so it’s not obligated to do what the UNFCCC tells them they should do, unlike Canada!

An interesting aspect of forests affected by the mountain pine beetle and other invasive species is related to those dead or dying trees. Those dead or dying trees are used to make wood pellets or biomass. Much of the manufactured biomass is exported to countries around the world and used for home heating and/or for generating electricity. Wood pellet exports from Canada and the U.S. for 2018 were projected to reach 2.4 million tonnes from Canada and 6.2 million tonnes from the U.S., as noted by Canadian Biomass, the media partner of the Wood Pellet Association of Canada.  The industrial pelletizing process uses energy to create the end product by using: a grinder, a rotary drum dryer, a magnetic separator, a ring die pellet maker and finally a counter flow cooler.  Needless to say, these actions create greenhouse gas emissions and are (or will become) subject to a “pollution tax.” The wood pellets are then transported by cargo ships burning diesel oil to destinations across the Pacific and Atlantic oceans.

For importers, the pellets reaching their destination oftentimes translate to ROCs (Renewable Obligation Certificates) or “carbon credits” as they do for the Drax Power Station in the U.K.  Reference to Drax and those ROCs can be found in an article by the writer where Drax is described as:  “It has a capacity of 3,906 megawatts (MW) and produces around 20 terawatt-hours (TWh) of power a year, 65% or more using compressed wood pellets, a form of sustainably sourced biomass.” Drax receives an ROC for each MWh (megawatt hour) it generates using those imported wood pellets which they can then sell to “carbon emitters.”

Needless to say, those ROCs generate considerable income for Drax while we here in Canada pay for the emissions created by those wood pellets manufactured in Canada.

Are you confused yet? There’s more.

The energy created using biomass emits 150% the CO2 of coal, and 300 to 400% the CO2 of natural gas, per unit of energy produced.  Apparently that concept is blessed by the UNIPCC: “The Intergovernmental Panel on Climate Change (IPCC) also says that biomass can only be considered carbon neutral if all land use impacts have been considered first.”  It is noteworthy that “Around half of the EU’s target for providing 20% of energy from renewable sources by 2020 will be made up by biomass energy from sources such as wood, waste and agricultural crops and residues, according to EU member states’ national action plans.” The article goes on to state: “Wood makes up the bulk of this target and is counted by the EU as ‘carbon neutral’, giving it access to subsidies, feed-in tariffs and electricity premiums at national level.”

An opinion by the European Environment Agency’s Scientific Committee  argued that “legislation that encourages substitution of fossil fuels by bioenergy, irrespective of the biomass source, may even result in increased carbon emissions – thereby accelerating global warming.”

So, bearing the above in mind, why do our politicians, ENGOs, and the UNIPCC want to tax us Canadians when others are receiving “emission credits” for using our deadwood?

Clean Energy BC in a posting on their website says: “Biomass generation, pursued on a sustainable basis, is endorsed by Greenpeace, the Sierra Club, and the David Suzuki Foundation.”  Hmm, one wonders if it occurred to these ENGO that supporting biomass might actually accelerate global warming? Would they also endorse the use of “dung” as an energy source?  An article on “energypedia” claimed “More than 2 billion people across the planet burn dried animal dung for energy.”  Is that where our politicians and those ENGOs such as Greenpeace, the Sierra Club and the David Suzuki Foundation want to take us?

Perhaps our politicians can examine how they could tax the “lighting storms” causing the forest fires, the wood boring pine beetle, the emerald ash borer and the fungus responsible for Dutch elm disease instead of us environmentally aware taxpayers!  That might (temporarily) get us off the path to energy regression they and their supporters seem determined to put us on.

PARKER GALLANT