Wind power in panic mode

Canadian wind power lobbyist CanWEA makes claims that don’t stand up to scrutiny. Boasting that wind power is “low cost” has nothing to do with what Ontario electricity customers pay…

CanWEA’s Robert Hornung (L) with then Ontario Energy minister Bob Chiarelli and a power exec during the boom times. The truth has now come to town.

October 8, 2018

The same day (September 20, 2018) the Government of Ontario announced the introduction of legislation to repeal the “Green Energy Act”, Robert Hornung, President of CanWEA (Canadian Wind Energy Association) issued a press release claiming the Government of Ontario has made inaccurate statements and misleading characterizations about the wind energy industry in the province.”

Needless to say, the Government’s announcement received wide media attention whereas the CanWEA press release received virtually none. The lack of attention to the CanWEA press release should be perceived as a strong signal mainstream media has become educated on the devasting effect of industrial wind developments in Ontario and the many erroneous claims made by CanWEA over the years.

What else did CanWEA claim in that press release?

Claim # 1

Wind energy is not the reason for high electricity bills or a significant electricity supply surplus in Ontario.

This claim is partly right: solar panels and generation from that source also helped to drive up costs, but a quick look at wind power generation for just 2017 will show what wind has done. In 2017, grid-connected industrial wind turbines generated 9.2 TWh (terawatt hours) and had 3.3 TWh of potential generation curtailed (not added to the grid).   Ontario’s ratepayers picked up the bill for both and that alone added at least $1.540 billion to electricity bills. As is the case for wind power generation 65% of the time, its generation was out of sync with demand due to its intermittent nature. Added to that cost, we should also include both the spilling of hydro (6 TWh) and steamed-off nuclear (1 TWh) which together added another $350 million to ratepayer costs. The foregoing alone raises the per kWh cost of IWT generation to 20.3 cents. Include gas plant generation of 5.9 TWh (backing up IWT) and you can add another $450 million resulting in a cost of over 25 cents/kWh! This is the “reason for high electricity bills”!

Claim # 2

In reality, wind energy projects are making significant contributions to Ontario’s economy across the province and are providing long-term, stable pricing for Ontario ratepayers. They are providing sustained revenue, as well as benefits agreements and green jobs that are helping rural and Indigenous communities thrive”.

Examining this claim highlights actual contributions of renewable energy.

The Concerned Manufacturers of Ontario is described by the CBC in March 2017 as “A group that represents hundreds of small to medium sized manufacturers across the province is urging the Ontario government to lower hydro fees for industrial users, or face the prospect of some factories packing up and moving to other jurisdictions where electricity is cheaper.”

The Canadian Federation of Independent Business with 42,000 members in Ontario was featured in a Globe and Mail article from December 2016 which contained a few member stories. Here’s one: “Tor Krueger has big plans for Udder Way Artisan Cheese Co., which sells handmade goat cheese in Stoney Creek, Ont. But crushing hydro bills are hurting the artisan cheese maker’s plans to modernize his facility so he can get federal certification and sell his cheeses across the country.” Mr. Kruger went on to note, “After payroll, hydro is consistently one of my top three operating expenses”.

Another association Canadian Manufacturers and Exporters sent a message to Premier Wynne in March 2017 that stated: “We need to reduce the barriers that are holding us back, particularly high electricity prices and the costs associated with cap & trade.”

The Ontario chamber of Commence in a Globe and Mail article in July 2015 had similar comments noting “This week, the Ontario Chamber of Commerce released a survey that suggested as many as one in 20 business are worried about their survival because of high electricity costs.”

Now, if one accepts the fact that the above mentioned four associations represent the vast majority of businesses in Ontario, it seems obvious the cost of electricity has caused job losses in the province. That observation clearly flies in the face of the claim by CanWEA’s President who stated “wind energy projects are making significant contributions to Ontario’s economy across the province and are providing long-term, stable pricing for Ontario ratepayers.” In 2017 nuclear and hydro generated over 97% of grid-connected Ontario demand at prices of less than 7 cents/kWh for nuclear and 5 cents for hydro. So, shouldn’t CanWEA realize the remaining 3% came from all of the other generating sources including wind at costs as noted above under “Claim # 1”!

Claim # 3

As the lowest cost source of electricity available in Canada today, wind energy is the best choice for new electricity generation when it is needed in the future and can help the Ontario Government meet its objective of an affordable and reliable electricity system that benefits Ontarians.”

Mr. Hornung’s claim that wind energy is the “lowest cost source of electricity” doesn’t specify what he is referring to! One should suspect the reference is to either the LOCE (levelized cost of electricity)* or the cost of fuel (wind is free) but in either case his claim has nothing to do with what Ontario ratepayers pay for the intermittent and unreliable nature of the actual wind power generation. That annually averages only 29/30% of its capacity and is out of sync with actual demand 65% of the time.

Claim # 4

“… the report provides no consideration for the value returned by the province’s strategic investment in renewable energy, most notably its role in eliminating smog days”

That claim from a CanWEA press release just over a week later (October 4, 2018) had Mr. Hornung responding to a report released by the Fraser Institute which suggested the Doug Ford-led government should cancel contracts because “According to our study, cancelling the subsidized contracts would reduce the GA charge by almost 40 per cent, thereby reducing residential electricity prices by, again, roughly 24 per cent.”                                                                                     

CanWEA’s response reiterated much of what they claimed in their earlier press release including the suggestion cancelling the contracts would undermine “investor confidence” and the one above noted as “Claim # 4”.

What is interesting about this latter claim is that the Fraser Institute back in January 2017 in another report stated: “The Ontario Ministry of the Environment and Climate Change undertook a special analysis of the role of U.S. emissions in Ontario air quality in 2005, which showed that a majority of O3 (ground level ozone) and PM2.5 (particulate matter) was due to U.S.-based emissions and would not be reduced by cutting emissions in Ontario.”

As the backlash over the cost of renewable energy, along with its other failings, is finally being discovered by politicians around the world and now includes Ontario, it is obvious CanWEA’s concern is that it will affect the targeted provinces of Saskatchewan and Alberta where they have signaled they want more wind power generation. The revelations emanating from Ontario may well impact those current deliberations and slow or stop the IWT march affecting CanWEA’s members!

One can almost see the tears in Robert Hornung’s eyes!

PARKER GALLANT

 

*Levelized cost of electricity (LCOE) is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-megawatt hour cost (in discounted real dollars) of building and operating a generating plant over an assumed financial life and duty cycle. 4 Key inputs to calculating LCOE include capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs, financing costs, and an assumed utilization rate for each plant type.” 

 

 

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Energy stakeholders to the Wynne government: the new plan should focus on costs

January 11, 2017

Last October, Energy Minister Glenn Thibeault launched the “Discussion Guide to Start the Conversation” with the objective of “Planning Ontario’s Energy Future”. The Long-Term Energy Plan or LTEP when presented in 2017 will be the sixth LTEP (including 1 and 1[a], discarded by Smitherman) developed by the current government in the past nine years, which says a lot about “long-term” planning.

Naturally when an opportunity to contribute to policy comes along, organizations offer their views on the direction the plan should take. I have prepared a review of some of the comments made to the Ministry of Energy on the LTEP.

First we have Robert Hornung (MA, Political Science), president of wind power trade association and lobbyist the Canadian Wind Energy Association or CanWEA, who suggested “The only way to meet those goals [reducing carbon emissions] is to increase the use of electricity, particularly electricity generated from sources that don’t emit carbon. Wind is well-positioned to meet that need.”

Then Jack Gibbons (former Toronto Hydro commissioner) of Ontario Clean Air Alliance said: “While the world shifts to green sources, Ontario is doubling down on nuclear, rebuilding ten aging reactors, while pushing renewable energy to the fringe. This is a bad plan and an economically disastrous direction . . . Ontario should set a target or moving to 100 per cent renewable energy by 20150.” [sic]

Now that is what I call “long-term planning”!

On the other hand we have organizations who are interested in ensuring electricity rates stop rising at multiples of the inflation rate.

Canadian Federation of Independent Business – The CFIB suggested in their comments to the Energy Ministry that “Ontario Hydro rates are out of control”; they met with the Minister of Energy and made the following recommendations.

• Eliminate all time-of-use (Smart Meter) rates for small businesses and implement a lower cost rate system on the first 3,000 kilowatt hours (kWh) of electricity consumed per month.
• Accelerate the removal of the Debt Retirement Charge from commercial hydro bills, which is currently slated for April 1, 2018.
• Require the display of the “Global Adjustment” on all hydro bills to increase transparency.
Canadian Taxpayers Federation – The Canadian Taxpayers Federation website posting shows their concern:
“If Hydro Rates are ‘Urgent Issue’ for Wynne, She Must Repeal Green Energy Act” and also, “Ontario customers have seen the largest increase in electricity prices anywhere in Canada – more than 60 per cent higher than the national average between 2006 and 2015.”

Ontario Chamber of Commerce – The Ontario Chamber of Commerce (OCC) were more subdued but their report of July 2015 commented: “The price of electricity is a major factor in the overall cost of doing business for many companies. As such, it is also a critical component of a jurisdiction’s competitiveness in the global economy. Jurisdictions with high electricity prices are at a disadvantage when it comes to creating jobs and attracting investment.”
The OCC’s submission on this LTEP noted in muted tones: “the addition of renewable energy resources under the Feed-in Tariff (FIT) program has contributed to overall systems costs by guaranteeing long-term and above-market payouts to generators.”

Canadian Manufacturers and Exporters – The Canadian Manufacturers and Exporters (CME) were much more aggressive in their submission on the LTEP. “We are calling for immediate relief for manufacturers from Ontario’s sky-high electricity rates and a longer term plan to use the system as a tool for economic development” said Ian Howcroft, Vice President of Canadian Manufacturers & Exporters (CME) Ontario Division. And “we urge the government to push further and faster to bring rates in line with competing jurisdictions.”
CME’s priorities for reductions included several recommendations including: Providing relief targeting smaller to medium sized manufacturers that aren’t covered by existing programs, and eliminating the Debt Retirement Charge (DRC), and “Offering more surplus capacity to manufacturers” among other suggestions.
Finally, they added this grave warning: “Lower manufacturing rates are necessary to retain and attract investment in Ontario rather than seeing it go to other jurisdictions.”

Ontario Society of Professional Engineers – A September 2016 article by Terence Corcoran of the Financial Post noted “Experts and analysts have been warning of the excess wind and solar expansions for years. The Ontario Society of Professional Engineers’ Paul Acchione warned in 2012 that wind expansion is ‘costly’ and ‘technically difficult to integrate’ into the Ontario system.” OSPE’s submission on the LTEP is a focused document that carries a lot of interesting facts. For example, they say this about power generation from wind:
“Wind generation has relatively little economic value in Ontario’s low emission power system.”

OSPE’s recommendations on ways to reduce the price of electricity are: Reduce operating costs or increase revenue from the sale of surplus electricity; Move existing costs not directly associated with producing electricity into tax-supported accounts; Transfer market risks from electricity consumers to investors; and, Remove government sales and water use taxes on electricity.
While the recommendations appear short and simple people “in the know” will recognize the seriousness subtly expressed in each of those four recommendations.

Strategic Policy Economics – Marc Brouillette’s excellent submission on behalf of Bruce Nuclear also carries some sane observations such as “Wind generation has not matched demand since its introduction in Ontario” and, “Over 70% of wind generation does not benefit Ontario’s supply capability.” And this one, which is becoming more evident as ratepayers are forced to pay for curtailed generation: “Wind generation will not match demand in the OPO Outlook future projections as 50% of the forecasted production is expected to be surplus.”

The recommendation that will cause the most handwringing will be: “The LTEP should integrate the objectives of Ontario’s environmental, energy, industrial, and economic policies for the long-term future benefit of Ontarians.”

Wind Concerns Ontario – The coalition of community groups and individuals throughout Ontario had this to say by way of advice to the Ministry: “The government policy to promote “renewables” such as wind and solar have been a critical factor in the grave economic situation today. Wind power for example, now represents 22% of electricity cost, while providing only 5.9% of the power. Worse, that power is produced out-of-phase with demand, as has been detailed by two Auditors General; so much of it is wasted. This is unsustainable.

“Clearly,” WCO continued, “the direction for the Ministry of Energy is to formulate a new Long-Term Energy Plan that will take immediate action on reducing electricity costs. Those actions must include a review of all contractual obligations for power generation from wind, and action to mitigate further costs to the system, and the over-burdened people of Ontario.”

WCO called for cancellation of all the wind power contracts given in 2016, the FIT 5.0 program, and further, cancellation of all contracts for projects not yet built or which are not going to make a critical commercial operation date. In fact, all wind power contracts should be reviewed and paid out, as Ontario can save money by eliminating the need to dispose of the surplus electricity.

 

Time will tell what the Long-Term Energy Plan will look like, but if it doesn’t include direct action to reduce actual costs to the system, it will be no plan at all.