Ontario’s fond hopes for wind power dashed by reality

Ontario’s energy minister will likely crow about the $146 million in revenue from selling surplus power recently … too bad it cost consumers $892 million

 If you visit the Canadian Wind Energy Association (CanWEA) website, the first page has the message:  “Wind is delivering clean, reliable and low-cost electricity”.  Anyone following my recent postings on how wind has either delivered almost no power or way too much, may have a different view.  You can also find this homily in the Energy Ministry’s just released 2017 Long-Term Electricity Plan, Delivering Fairness and Choice: “Wind power is also being produced more efficiently,” which distorts the truth!

Recent facts:

One day of wind power

Tuesday October 24, 2017 was a day when the wind was blowing strongly for 24 hours. IESO had forecast the approximately 4,220 MW of Tx (transmission-connected) capacity could have delivered 88,200 MWh of generation, meaning they would operate at over 86% of capacity.  Using that capacity value for the 580 MW of Dx (distributor-connected) turbines, another 12,080 MW were no doubt being generated at the same time — that meant almost 30% of Ontario’s total demand could have been supplied by wind.

As it stands, however, Ontario’s demand suggested we didn’t need all that power so IESO directed Tx connected turbine generators to curtail over 52,000 MWh. So, that same day, Ontario exported 40,300 MWh of free power to New York and Michigan, 11,700 MWh less than IESO curtailed.

The delivered and curtailed (paid for but not delivered) wind power on October 24th that wasn’t needed cost Ontario ratepayers $13.5 million or $280.60/MWh (28.1 cents/kWh).  If that happened every day the annual cost to Ontario’s ratepayers would be in excess of $5 billion.

Nine months of wind power

Let’s look at the nine months starting January 1, 2017 to the end of September and see what wind has contributed — and cost — Ontario ratepayers.  In the first nine months of 2017, industrial wind turbines could have produced about 9,820,000 megawatt hours (MWh) from Tx and Dx connected capacity — if curtailed generation was included! IESO however, forced curtailment of over 2,209,000* megawatt hours (MWh) or 22.5% of forecast generation to avoid compromising our grid and causing blackouts or brownouts.  Ontario ratepayers picked up the cost of curtailed power at $120 per/MWh costing them more than $265 million. The grid-accepted wind (7,620,395 MWh) cost; at $135/MWh added to the cost of curtailed wind brought the cost to ratepayers to almost $1.3 billion and more than $170/MWh (17cents/kWh). We would note when wind generation is high, IESO frequently instructs OPG to “spill water” and Bruce Nuclear to “steam off” power. Ratepayers also pick up those costs.

Nine months of (net) exports

From January 1, 2017 to September 30, 2017, Ontario’s net exports (exports minus imports) were 9,058,008 MWh. Those net exports were sold at somewhere close to the HOEP or hourly Ontario electricity price which to the end of September averaged $16.15MWh, so net exports sales generated about $146 million in revenue.  The sale price does not include the GA or Global Adjustment (the difference between contracted or regulated rates and the HOEP), meaning Ontario’s ratepayers picked up the average GA costs to the end of September.  The GA averaged $98.48/MWh for the first nine months of the current year, so the 9,058,008 MWh of net exports cost Ontario’s ratepayers just over $892 million dollars!   That is the equivalent of almost $200 per average residential ratepayer.

And the year isn’t over.

To put those net exports in context, Ontario’s net exports represented slightly over 92% of both the curtailed and delivered wind generation in the first nine months of the year, yet we were burdened with the cost of $892 million dollars for them, along with the costs of wind curtailment of $265 million.

The foregoing makes CanWEA’s claim of “low-cost electricity” and the Energy Ministry’s comments about wind power “being produced more efficiently” look to be simply fond hopes!

 

 

* My thanks to Scott Luft for his ability to generate reliable wind data using IESO’s files.

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Weekends or weekdays: wind is a waste

October 20, 2017

Proof of the need to repeal the Unfair Green Energy Act

Tuesday October 17, 2017 was a typical Ontario fall weekday with electricity demand relatively low.

Total Ontario demand for power was slightly over 335,000* MWh for the whole day, peaking at hour 19 (7 PM) at 16,318 MW, according to the IESO’s Daily Market Summary.

That hour has significance as during weekdays, it signals the time when off-peak hours start. That Tuesday, it also was the hour when the Hourly Ontario Electricity Price (HOEP) reached its high for the day, getting all the way up to $5.01/MWh or ½ cent per kWh.

All through the day the wind was blowing. Based on the IESO’s Generator Report and Capability and their “wind generation forecast” it could have produced just over 57,000 MWh — that could have met 17% of Ontario’s demand.  IESO only accepted 20,900 MWh, however, and the other 36,100 MWh were curtailed or cut back.

The collective cost of the grid-delivered and curtailed wind generation over the 24 hours was almost $7.2 million, making the cost of the grid-accepted wind $344.50/MWh or 34 cents/kWh. Also because of a surplus of generated power, Ontario exported 38,200 MWh (almost double what IESO accepted from wind generators), principally to New York and Michigan — they had to pay them an average of $1.13 per MWh to take it.

All this makes it clear: Ontario’s electricity ratepayers don’t need any of wind’s intermittent and unreliable power, but are forced to pay for it anyway. To make matters worse, that power we subsidize gets delivered to our neighbours at negative prices. Those costs wind up on our electricity bills, too.

It’s time for Premier Wynne to stop the bleeding and kill the Unfair Green Energy Act.

 

* Numbers are rounded

Wind power: if this is “reliable,” get ready for lights out!

The wind power developers’ lobbyist/trade association is proposing a tripling of Ontario’s wind turbine capacity. What would that look like?

A June 5, 2017 article by Brandy Giannetta, the Ontario Regional Director at the Canadian Wind Energy Association (CanWEA), states that “Ontario could reliably integrate 16,000 megawatts of wind energy” . Later in the article, she says wind power would be “low-cost, emission-free and increasingly reliable”.

The 16,000 MW of wind capacity suggested in the article would more than triple the current 4,000 MW of grid-connected industrial wind turbines (IWT) and the 600 MW of embedded (approximately) capacity.   CanWEA just recently repeated this suggestion in a Tweet, so apparently the lobbyist/trade association thinks it’s a real idea.

Let’s see how “reliable” wind power is, right now.

It is important to look at the pattern of wind power generation.  In the four hours from 10 AM to 2 PM on September 12th , the grid-connected industrial wind turbine (IWT) capacity of 4,000 MW generated almost 340 MWh, according to the IESO’s Generator Output and Capability report of September 12, 2017.   During those four hours, Ontario demand totaled about 58,500 MW, so the 340 MWh delivered by wind turbines provided .58% of Ontario’s power demand — yet they represent 10.9% of Ontario’s grid-connected capacity of 36.563 MW!

It is hard to fathom how delivering just over ½ % of Ontario’s demand can be vaguely considered as reliable.   The full CanWEA article suggests tripling the current contracted industrial wind so that .58% delivered during those four hours would have generated 1.7% of demand over the same four hours.   Connecting the additional 10,400 MW to the grid would mean major expenditures (and by that I mean, billions of dollars) on the transmission system, while neglecting spending on truly reliable generation and the various parts of the transmission system that have been neglected.

It would also cost ratepayers for additional reliable back-up generation.

The CanWEA article also suggests wind at the 16,000 MW level would avoid “about $49 per megawatt-hour of production costs” if it supplied 35% of Ontario’s electricity demand.  If the four-hour experience of power generation on September 12 shows wind turbines would supply only 1.7% of our demand, it also demonstrates one thing clearly: the last thing we need in Ontario is more wind turbines, generating intermittent unreliable power!

Ontario’s ratepayers can’t afford any more wind.

Parker Gallant

September 12, 2017

Wind power waste not healthy for Ontario

A few days ago (July 11, 2017) Ontario’s Minister of Health and Long-Term Care Dr. Eric Hoskins issued a press release saying 131 hospitals would receive $175 million for “repairs and upgrades”.  That’s an average of $1.3 million per hospital to be doled out, apparently because the Wynne government finally produced a “balanced budget”.

The press release states: “Funding from the province allows hospitals to make critical improvements to their facilities, including upgrades or replacements to roofs, windows, heating and air conditioning systems, fire alarms and back-up generators.”

One wonders if Minister Hoskins ever chats with Minister of Energy Glenn Thibeault who doles out money to industrial wind turbine (IWT) developments at a pace that would make his $1.3 million per hospital look like small potatoes!   In the first six months of 2017, the bill to Ontario ratepayers was approximately $1.089 billion for accepted and curtailed industrial wind.  That works out to approximately $475,000 per turbine … for six months!  (That assumes there are about 2300 turbines with an average capacity of 2 MW or megawatts currently operating in the province.)

Also in the first six months of 2017, grid-connected and distributor-connected IWT collectively generated 6,143,000 MWh and curtailed 1,906,000 MWh* according to IESO data and curtailed estimates by Scott Luft.  That means the cost per grid-accepted MWh was about $177 or 17.7 cents/kWh! If the next six months are similar to the first six, each average 2-MW wind turbine will cost $950,000** generating or curtailing the intermittent and unreliable power they are famous for.

Those wind turbines require back-up by gas plants and frequently cause the spilling of hydro power and the steam-off of nuclear plants. The costs of these grid managing activities to ratepayers easily drive the costs per turbine well past the hospital repair allocations.

Kicking the can down the road under the Fair Hydro Act will see the foregoing incredible waste of ratepayer dollars accumulate within OPG, and result in rate increases as high as those we have experienced over the past 10 years, once 2021 arrives.

Try to imagine how much better our health care system would be with that estimated annual waste of $2 billion ($40 billion over the 20-year terms of the contracts) allocated towards health care instead of handing it over to mainly foreign industrial wind developers.

The time has come to stop signing those contracts!

Parker Gallant

* The average curtailed wind for the first 6 months of 2017 was 23.6% and for May was 43.8%.

** This assumes accepted generation is paid $140/MWh and curtailed wind is paid $120/MWh.

May power cost stats a harbinger of worse to come

If May is any indication, the Wynne government’s “Fair Hydro” plan costs will be considerable

The “Fair Hydro” plan ushered in by the Wynne government is setting up ratepayers for higher bills as soon as 2021 arrives. When the hiatus ends, limiting increases to ratepayer bills to no more than the “cost of living” (COL) over the next four years, the cumulative debt acquired by OPG to “refinance” the reported $50 billion of electricity assets will have to be repaid.

Early indications suggest the costs will be higher than the $2.5 billion being set aside for the next three years by Premier Wynne and Energy Minister, Glenn Thibeault.

Evidence? A look at May 2017 compared to May 2016 indicates the increase in the Global Adjustment (GA) costs for Class B ratepayers was 7.9% higher than 2016 and well above the May COL index of 1.4%.  Any increase in costs above the inflation rate will be added to the $2.5 billion being refinanced and become the responsibility of ratepayers to pay when the hiatus ends.

Demand drops but the cost goes UP

The IESO May 2017 Monthly Market Report indicates Ontario Class B ratepayers consumed 344,000 megawatt hours (MWh) less than they did in May 2016, which represents a 4% drop. That’s about the same as 460,000 average households would consume for the month. The Global Adjustment (GA) costs on the reduced amount of electricity consumed, however, increased by $82.7 million from $931.2 million in 2016 to $1,013.9 million in 2017.  Many will recall in May 2016, lower consumption during the prior six months caused the OEB to raise rates!

So, what caused the 7.9% spike ($82.7 million) in GA costs?   It appears there were two principal causes with one of them related to Ontario’s “Net Exports”.*

In 2017, net exports averaged 600 MW per hour higher than 2016, meaning they increased by 446,400 MWh (600MWh X 24 hours X 31 days) in May 2017 (enough to power almost 600,000 average households for the month). The buyers in New York, Michigan, Quebec, etc., paid only the Hourly Ontario Electricity Price (HOEP) of $3.17/MWh, while Ontario’s ratepayers were required to pay the GA costs of $54.8 million or $122.89/MWh.

The other major cause of the GA spike appears related to power generation from wind and its record curtailment in May 2017. My friend Scott Luft posts both the generation from TX (transmission connected) and DX (distributor connected) industrial wind turbines (IWT), and also conservatively estimates “curtailment”.  In May 2016 TX and DX connected IWT generated 699,371 MWh, not including 130,000 MWh of curtailed generation.

Combined: wind power in May 2016 cost ratepayers about $113 million or $162/MWh.  May 2017 saw 669,011 MWh of wind power delivered either to the grid (TX) or to local distribution companies (DX). Curtailed wind in May 2017 was a record as Scott estimated almost 524,000 MWh (enough to power almost 700,000 average households for the month) were curtailed.   The cost for generated and curtailed wind increased to slightly more than $158 million for the month, which raised the cost of accepted wind generation to $236/MWh.

$100 million added … for just one month

What this means is, wind-generated and curtailed costs in May 2017 were $45 million higher. Coupled with the increase in net exports of surplus generation and related costs, $100 million was added to the GA … for just one month.  If May 2017 is in any way representative of the four years of the rate freeze (tied to the COL index), the costs of refinancing those assets will be much more than the March 2, 2017 press release suggested it would be:  “These new measures will cost the government up to $2.5 billion over the next three years.”

Based on past forecasts by the Ontario’s Liberal government, keeping the costs at $2.5 billion over the next three years may be a “stretch goal”!

Parker Gallant

*“Net Exports” are total exports less total imports.

 

Free power for a month for 4,000 Ontario families? Here’s how we missed that

How many homes could have benefitted from the excess power Ontario wastes, or sells off cheap?

Recently reading comments on an article related to the cost of wind power generation in Ontario, I was struck by a simple message.

The commenter had obviously visited the IESO “Data Directory”  and reviewed one item labeled Intertie Flows; he observed that IESO had exported 3,000 MWh (megawatt hours) in an hour.   He then observed that the exported power could have supplied 4,000 homes with free power for a month.  (Here’s the math: 3,000 MWh equals 3 million kWh; the “average” Ontario household consumes 750 kWh per month, so divide the 3 million by 750 and the answer is 4,000.)

This simple fact has not been picked up on by the media and yet, it is an easy way to shed more light on Premier Wynne’s “mistake” and our rising electricity rates.   The commenter also suggests going further and examining a full quarter to determine how many Ontario households would benefit from no exported power.

Excess wind and solar costs us

To be fair, while Ontario has frequently exported 3,000 MWh, we also import electricity generated elsewhere presumably at similar market prices. Those net exports or net imports (very infrequent for Ontario) are contained in the Intertie* hourly reports posted by IESO. Let’s look at the first three months of the current year.

To begin, IESO’s Monthly Market Reports for January, February and March of 2017 indicate Ontario’s “average net intertie schedule” for the first quarter of the current year totaled 2,909,000 MWh. While that was happening, industrial-scale wind turbines were generating over 3.9 million MWh in the same three months, and were also required (by IESO) to curtail (and be paid for) another 536,000 MWh.  So, the wind power developers picked up about $620 million for those three months.

To make matters worse, the average of the Hourly Ontario Electricity Price (HOEP) received (via the traded market) over those three months was only $22.72 per MWh or 2.27 cents per kWh.   That means Ontario received $66.1 million for the sale of the 2.9 million “intertie” MWh, while the average cost paid by ratepayers at 11.1 cents/kWh means the cost of those exports was almost $324 million.

Reducing power bills by 25% is peanuts—kill the contracts

Let’s go farther: if 1.3 million (28% of all residential households) of Ontario’s average ratepayers could have purchased those net exported kWh over the three months at the same price they were sold for, the 2250 kWh they consumed would have cost them $51 instead of the $250 they were billed. That would have reduced their cost of electricity by 390%. That makes Premier Wynne’s supposed 25% electricity bill reduction pale in comparison.

If the Premier really wants to lessen the burden on future ratepayer bills she should immediately cancel any wind and solar contracts that have not broken ground, and suspend any all future procurement of these unreliable and intermittent generation sources.

 

*Intertie is defined as an interconnection permitting passage of current between two or more utility systems.

CanWEA gets it wrong on energy costs: university professor

University professor in engineering and environment says CanWEA guilty of “willful blindness”; quotes him incorrectly in statement on energy costs

Just a few days ago, I wrote that the Canadian Wind Energy Association (the trade association for the wind power industry, also known as CanWEA) posted a statement by its Ontario representative that people who say wind power is adding to Ontario’s electricity bills are misleading the public. Ms Gianetta referred to University of Waterloo professor Natin Jathwani to support her views.

Professor Nathwani e-mailed me in response to the claims made by Ms. Giannetta’s in her recent post on CanWEA’s website, which I repeated in “Wind power lobby myth buster is busted”.

Professor Nathwani’s email:

Dear Mr Gallant:

In your Blog, you have cited Ms. Giannetta’s post on CanWEA’s website on April 24, 2017 as quoted below:

Her article points to two articles that purportedly support the “myth” she is “busting,” but both require closer examination. She cites Waterloo professor Natin Nathwani’s, (PhD in chemical engineering and a 2016 “Sunshine list” salary of $184,550) article of March 6, 2017, posted on the TVO website, which supports Premier Wynne’s dubious claims of “a massive investment, on the order of $50 billion, for the renewal of Ontario’s aging electricity infrastructure.” Professor Nathwani offers no breakdown of the investment which suggests he simply took Premier Wynne’s assertion from her “Fair Hydro Plan” statement as a fact! It would be easy to tear apart Professor Nathwani’s math calculations — for example, “The total electricity bill for Ontario consumers has increased at 3.2 per cent per year on average” — but anyone reading that blatant claim knows his math is flawed!

First and foremost, the record needs to be corrected since Ms Giannetta’s assertions are simply incorrect and should not be allowed to stand.

If she has better information on the $50 billion investment provided in the Ministry of Energy’s Technical Briefing, she should make that available.

The breakdown of the investment pattern in generation for the period 2008-2014 is as follows:

Wind Energy $6 Billion (Installed Capacity 2600 MW)

Solar Energy $5.8 Billion (Installed Capacity 1400 MW)

Bio-energy $1.3 Billion (Installed 325MW)

Natural Gas $5.8 Billion

Water Power $5 Billion (installed Capacity 1980 MW)

Nuclear $5.2 Billion

Total Installed Capacity Added to the Ontario Grid from 2008-2014 was 12,731 MW of which Renewable Power Capacity was 6298MW at a cost of $18.2 Billion.

For the complete investment pattern from 2005 to 2015, please see data available at the IESO Website.

In sum, generation additions (plus removal of coal costs) are in the order of $35 billion and additional investments relate to transmission and distribution assets.

I take strong exception to her last statement suggesting that the 3.2 percent per year (on average) increase in total electricity cost from 2006 to 2015 in real 2016$. The source for this information is a matter of public record and is available at the IESO website.

Ms Giannetta’s assertion is complete nonsense because she does not understand the difference between electricity bill and generation cost. Let Ms Gianetta identify the “blatant flaw.”

As for the electricity bill that the consumer sees, there is a wide variation across Ontario and this is primarily related to Distribution.

The Ontario Energy Board report on Electricity Rates in different cities provides a view across Ontario:

For example, the average bill for a for a typical 750kWh home Ontario comes is $130 per month.

In Toronto it is $142, Waterloo at $130 and Cornwall at $106. On the high side is Hydro One networks is $182 and this is primarily related to cost of service for low density, rural areas.

Your Table 2 Total Electricty Supply Cost is helpful and correctly highlights the cost differences of different generation supply.

Only wilful blindness on Ms Giannetta’s part would suggest that wind and solar are coming in at a low cost.

Warmest regards,

Jatin Nathwani, PhD, P.Eng

Professor and Ontario Research Chair in Public Policy for Sustainable Energy Executive Director, Waterloo Institute for Sustainable Energy (WISE)

Faculty of Engineering and Faculty of Environment Fellow, Balsillie School of International Affairs (BSIA)

University of Waterloo, Waterloo, ON