An article posted on my blog on February 17, 2019 was related to IESO’s release of grid-connected (TX) 2018 Electricity Data. It disclosed the cost of electricity for the average Class B ratepayer had fallen ever so slightly from 2017, reducing costs by about $5 annually. The savings on the electricity portion of the average bill may have been eaten up by additional delivery and/or regulatory charges, so was probably not even noticed by most ratepayers.
As I noted then, what caused rates to drop was that we consumed more in 2018 than 2019, resulting in less wasted generation. In 2018, Ontario’s total demand was 137.4 TWh (terawatt hours) — up from 2017 when we consumed 130.3 TWh, for an increase of 7.1 TWh or 5.4%. Nuclear and hydroelectric generation in 2018 generated 92.5% of total Ontario demand, not including spilled hydro or steamed-off nuclear which is paid for via the GA (Global Adjustment).
As an example of less wasted generation, OPG reported in 2018 that due to SBG (surplus baseload generation) they spilled 3.5 TWh, whereas in 2017 they spilled 5.9 TWh. That was 2.4 TWh less wasted hydroelectric generation we didn’t have to pay for!
Since IESO’s release of the grid-connected data, we are now able to see exactly where all Ontario generation came from, including both grid (TX) and distribution-connected (DX) due to the recent release of the OEB report “Ontario’s System-Wide Electricity Supply Mix: 2018 Data”. The OEB report indicates total Ontario generation of 154.4 TWh in 2018 up from 2017 when it was 150.75 TWh.
About the same time as the OEB released their report, the Ontario Energy Report was also released and it includes both TX and DX generation in detail. It also includes specific information on our exports and imports of electricity plus individual capacities of our generation sources.
Looking at some of the specifics causing our electricity rates to soar since the advent of the Green Energy Act (GEA) in 2009, it is relatively easy to see the principal causes. Wind and solar generation’s inability to deliver power when needed, despite its “baseload” designation, has factored in rising costs in two ways. The first is its detrimental effect on the HOEP and the second is its preponderance to create surplus generation that must be exported, curtailed, spilled or steamed off.
The HOEP in 2017 was the lowest ever, averaging 1.58 cents/kWh increasing to 2.43 cents/kWh in 2018. That means our exports of 18.591 TWh in 2018 generated revenue of approximately $451.8 million ($24.3 million per TWh) but cost ratepayers around $2.138 billion.
That means we lost almost $1.7 billion. The bulk of our exports (15.531 TWh) were sold to New York and Michigan so $1.4 billion of the $1.7 billion in ratepayer costs went to provide cheap power to those two US States.
The further driver to increased costs can be blamed on what we pay wind** and solar generators. For wind it averages $135/MWh and for solar $445/MWh. In 2018 TX plus DX wind generation was 12.3 TWh and curtailed wind was 1.9 TWh for which we pay $120/MWh. Total wind generation costs in 2018 therefore were about $1.888 billion. Solar generation in 2018 from DX and TX connected plants was 3.5 TWh and cost $1.55 billion bringing costs for the two intermittent sources of “baseload” generation to $3.438 billion or about 22 cents/kWh.
The combined cost of losses on exports plus the costs of wind and solar was $5.1 billion. Is it any wonder our rates are so high?
Perhaps the time has come for all energy ministries to recognize wind and solar are not “baseload” power as defined due to their intermittent and unreliable nature.
Wind and solar power’s designation should logically be changed from “baseload” power to “abstract” or “symbolic” power! That change would better reflect their ability to deliver power when needed.
*Includes both the GA and the HOEP (hourly Ontario energy price).
**IESO suggests we can only count on wind to produce at a level of 13.6% of its capacity. For solar it’s at about the same level suggesting solar is (in IESO’s view) actually more dependable!