Wind: worst value for Ontario consumers

The wind power lobby continues to claim power from wind is great value and contributes to “affordable” electricity bills. But the facts of October tell a different story.

Ontario turbines near Comber: not helping

Right after Ontario Energy Minister Glenn Thibeault released his version of the LTEP (Long-Term Energy Plan), “Delivering Fairness and Choice,” CanWEA (the Canadian Wind Energy Association) issued a news release with the following statement:  “New wind energy provides the best value for consumers to meet growing demand for affordable non-emitting electricity.”

To back up that claim, CanWEA president Robert Hornung had this to say: “Ontario’s harnessing of wind power can help fight climate change while keeping electricity costs low. Without new wind energy, costs to electricity customers and carbon emissions will both continue to rise.”

Brandy Giannetta, CanWEA’s Regional Director for Ontario also had a quote: “CanWEA supports competitive, market-based approaches to providing flexible, clean, and low-cost energy supply, to meet Ontarians’ changing needs.”

The expression “I wish I had a dollar for every time I heard that,” immediately comes to mind but here’s the truth: industrial-scale wind turbines have failed miserably in producing anything resembling “low-cost” energy and is instead one of the reasons consumers’ electricity bills “will continue to rise”!

If Hornung and Giannetta had waited just five days, they could have visited my friend Scott Luft’s spreadsheet and noticed how wind performed in October.   They would have discovered it was pretty dismal: 37.9% of possible grid-connected (Tx) wind power generation was curtailed (paid for but not used).  

The IESO (Independent Electricity System Operator) was concerned that too much wind power generation could cause repercussions such as a blackout or brownout, so 481,243 MWh (megawatt hours) were not accepted throughout the month. However, Ontario’s ratepayers will still pay for those undelivered MWh at a cost of $120 each, meaning the GA (global adjustment) increased by $57.7 million (481,243 MWh X $120. = $ $57,749,160).

Add that $57.7 million to the 787,627 MWh of the Tx  generation accepted into the grid, the total costs rise to $165 million or $208.32/MWh — the equivalent of 20.8 cents/kWh (kilowatt hour).   (That calculation is 787,627 X $135/MWh = $106,329,645 + $57,749,160 = $164,978,805.  Simply divide the latter amount by the Tx accepted generation and you get the $208.32 MWh or the 20.8 cents/kWh.)

It is important to note that the costs calculated and reported here do not include the transmission charge, delivery charge, regulatory charge or the HST.  Additionally, another 158,609 MWh of wind were delivered to local distribution companies (Dx) at a cost of $135/MWh, bringing IWT costs for the month to $185 million — for power we didn’t need.  No doubt during the month we were also steaming off clean nuclear power from Bruce Nuclear and spilling clean hydro power from OPG’s hydro generation units. In both cases the cost of the steamed off nuclear and the spilled hydro will be added to the Global Adjustment pot and find its way to our future bills.

I hope Mr. Hornung and Ms Giannetta will rethink their claims and simply admit wind power generation is high-cost, and frequently displaces low-cost non-emitting nuclear and hydro power.

You can’t hide October’s facts!

 

Wind power myths busted on one fall weekend

Beautiful … but costly. All that “free” wind power. [Photo: The Weather Network}

October 21 and 22 was a beautiful fall weekend in Southern Ontario with lots of sunshine, beautiful colours, mild temperatures and gentle breezes. That combination meant low electricity demand: power demand for the two days was slightly less than 603,000 MWh (megawatt hours) for all types and classes of Ontario ratepayers according to IESO’s (Independent Electricity System Operator) “Daily Summary Reports”.  As a result we exported surplus generation to New York, Michigan, etc. at an average two-day price of $2.65 per MWh, but at the same time, that cost Ontario’s ratepayers about $120/MWh*.

So, the “Net Exports” (exports less imports) of just under 98,000 MWh sold to our neighbours recovered about $260,000, but cost Ontario’s ratepayers almost $11.8 million … even more if we attribute it all to wind generation.

It turns out, the blame can easily be allocated to industrial wind turbines as they could have generated about 107,000 MWh, but were partially curtailed by IESO. As the weekend unfolded, 38,000 MWh were curtailed and 69,000 MWh were delivered to the grid.   Ontario’s ratepayers picked up the tab for the curtailed wind at $120/MWh and $135/MWh for the grid-delivered generation, bringing the weekend wind costs to almost $14 million ($13.875 million).  You should note curtailed and grid-accepted wind generation exceeded our net exports by 9,000 MWh — that’s enough to power 10,000 average households for a full year!

As it turned out, we didn’t need wind generation at all and we normally don’t. A look at our generation capabilities on the weekend via the IESO’s “Generators Output and Capability Reports” also shows IESO were busy controlling the grid to prevent blackouts or brownouts, and frequently did so by getting Bruce Nuclear to “steam off.” It must be assumed that OPG were also required to “spill hydro,” our cheapest form of generation!  Needless to say, we ratepayers were also paying for that!

Once again, the past weekend demonstrates power generation from industrial wind turbines wasn’t needed.

But the way the Ontario Liberal government has negotiated the contracts with wind power developers means Ontario’s ratepayers are required to pick up the bill for the unreliable and intermittent nature of power that often winds up creating a surplus of unneeded power that is exported at a substantial cost.

It is clearly time to end the charade — kill the GEA and cancel any outstanding unbuilt wind contracts.

 

* Due to the nature of grids, it is impossible to determine what source of generation was actually exported so the suggested cost reflects (approximately) the GA (Global Adjustment) plus the HOEP (hourly Ontario electricity price) of all types of generation either contracted or regulated.

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

Wynne government hydro discount means larger costs looming

…and racking debt up for tomorrow, too

October 2, 2017

The Wynne government’s (apparent) 25% reduction in electricity rates for Class B ratepayers (ordinary folks, not huge corporations and businesses) under the Fair Hydro Act might have resulted in increased power consumption … but it doesn’t appear to have had that effect.  Should reduced demand for power continue in Ontario, the big discount will simply drive up the debt to be accumulated over the next ten years of the deferral (refinancing existing assets) under the act.

The Independent Electricity System Operator or IESO just released their Monthly Market Report for August 2017. Compared to the August 2016 report, overall consumption was down from 13,113,357 MWh to 11,350,008 MWh or 1,763,349 MWh (-13.4%). That’s enough to power about 200,000 average households for a year.

When one looks at the breakout between Class A and Class B ratepayers, however, IESO reports consumption by Class A ratepayers increased from 2.373 TWh (terawatt hours) in 2016 to 3.230 TWh in 2017 —  36.1% (.857 TWh).  Class B ratepayers consumed 22.9% less (2.515 TWh) reducing consumption from 10.962 TWh to 8.447 TWh.*

The lower consumption by Class B ratepayers was partially influenced by a slightly milder August in 2017; however, IESO notes in the recently released 18-Month Outlook “Weather-corrected demand was a similar 11.5 TWh and represents an all-time low for the month.”

Now looking at the Class A consumption, the combined rate (Global Adjustment + HOEP [hourly Ontario energy price]) dropped from $75.05/MWh to $70.53/MWh (-6%) from 2016 to 2017, and that ratepayer class appears to have taken advantage of the drop. Some of the increase was no doubt due to  an expansion of Class A ratepayers following a change in who qualifies under the Industrial Conservation Initiative program. That allowed companies with lower consumption to join the Class A group.  Energy Minister, Glenn Thibeault dropped the Class A attributes from peak consumption of 3 MWh to 1 MWh and then finally to 500 kWh^* in an effort to mollify the numerous medium-sized companies and associations who lobbied hard to get a lower electricity price.

Costs are up for regular folks, down for business

The weighted average (GA+HOEP) cost for “B” class ratepayers is up $15.47/MWh year over year, but down for class A by $4.52/MWh. Costs (GA +HOEP) in August for B class ratepayers was $118.37/MWh and those costs for A class ratepayers were $70.53/MWh.  The additional costs of $47.84/MWh that B class ratepayers are responsible for was 67.8% higher than A class costs in August. Under the Fair Hydro Act, 17%** of the B class costs will be deferred and IESO tracks those under a “Variance Account”.  The latter increased in August by $210.8 million to reach $605.5 million for just the first two months.  The monthly variance is being refinanced cumulatively and will come back to haunt ratepayers and whoever is the government, in 10 years

According to my friend Scott Luft, wind power generation in August from grid- and distribution-connected industrial wind turbines (IWTs) produced 597,537 MWh. Another 78,265 MWh were curtailed, or paid for but not added to the grid.

All-in, the cost of IWTs in August was approximately $90 million and represented 79.7 % of our export of surplus power of 847,416 MWh to our neighbours in New York, Michigan and elsewhere.

While we don’t know specifically the source of the power included in the grid, if all the wind generation was exported, we were paid about $17/MWh or around $10 million, meaning a loss of $80 million. Without wind power generation, the August “Variance Account” addition could have been lower by that $80 million.

The future: more costs

So, despite “B” Class ratepayers experiencing the “benefits” of the Fair Hydro Plan, instead they reduced their consumption by 22.9%.

 

Maybe they are concerned about what will happen in 10 years’ time, when they will be billed for that Variance Account the Financial Accountability Office said would be a minimum of $45 billion and could balloon to as much as $93 billion.

 

* The difference of 165,000 MWh between the Market Report and the breakout is presumably due to line losses billed to each ratepayer class and the 22.9% drop is no doubt related to the expanded ICI

** 8% of the 25% reduction was due to the canceling of the 8% provincial portion of the HST.

 

And the winner (loser) is … Ontario!

Ontario ratepayers well ahead in international competition to see who pays more for nothing.

Ontario turbines near Comber: money for nothing

A recent article appearing in Energy Voice was all about the costs of “constraint” payments to onshore industrial wind developments in Scotland.  It started with the following bad news:

“According to figures received by Energy Voice, the cost of paying wind farm operators to power down in order to prevent the generation of excess energy is stacking up with more than £300million* paid out since 2010.”  (£300 million at the current exchange rate is equal to about CAD $500 million. ) 

What Scotland refers to as “constrained” Ontario calls “curtailed,” but they mean exactly the same thing. Ontario didn’t start constraining/curtailing generation until mid-September 2013, or almost three full years after the article’s reference date for Scotland. Curtailment prevents the grid from breaking down and causing blackout or brownouts.

The article from Energy Voice goes on: “In 2016 alone, Scottish onshore wind farms received £69million in constraint payments for limiting 1,048,890MWh worth of energy”.

Ontario in 2016, curtailed 2,327,228 MWh (megawatt hours). That figure comes from Scott Luft who uses data supplied by IESO (Independent Electricity System Operator) for grid-connected wind power projects and conservatively estimates curtailed wind for distributor-connected turbines to compile the information.

What that means: in 2016 it cost Ontario’s ratepayers CAD $$279.2 million** versus £69 million (CAD equivalent $115.2 million) for Scottish ratepayers. So, Ontario easily beat Scotland in both the amount of constrained wind generation as well as the subsidy cost for ratepayers who in both cases paid handsomely for the non-delivery of power!

The article went on to note: “By August 2017, the bill had already reached in excess of £55million in payments for 800,000MWh”!

Once again Ontario’s ratepayers easily took the subsidy title by curtailing 2.1 million MWh in the first eight months of the current year, coughing up over $252.5 million Canadian versus the equivalent of CAD $92 million by Scottish ratepayers.

In fact, since September 2013, Ontario has curtailed about 5.5 million MWh and ratepayers picked up subsidy costs of over $660 million.

Ratepayers in both Ontario and Scotland are victims of government mismanagement and wind power industry propaganda, and are paying to subsidize the intermittent and unreliable generation of electricity by industrial wind turbines.

(C) Parker Gallant

* One British Pound is currently equal to approximately CAD $1.67.

**Industrial wind generators are strongly rumored to be paid $120 per MWh for curtailed generation.

One (megawatt) is the loneliest number

On one day recently, for one hour, Ontario’s thousands of towering wind turbines delivered just one megawatt of power. And still, Ontario  had a surplus that was sold off cheap.

May 27 was a Saturday which is usually a “low demand” day for electricity in Ontario, compared to weekday power demand and assuming weather patterns are close to average. The temperature on the recent May 27 was slightly below historic averages in Toronto; as people woke up and set about their activities that day, the demand for electricity built slowly.

According to the IESO’s (Independent Electricity System Operator) Daily Market Summary, Ontario demand peaked at 14,069 MW and averaged 12,751 MW (total Ontario demand was 306,024 MWh for the whole day).  If anyone checked IESO’s “Power Data” page at, say, just after 11 AM, they would have noted demand was 13,208 MW at 10 AM and the HOEP (Hourly Ontario Energy Price) was indicating a negative price of -$4.00 /MWh.   If one had also looked at the “Generator Output and Capability” and scrolled down to “Wind Total” they would have seen that under the heading “Output” the number appearing on the screen was “1”!

As in, one single megawatt of power.

About half the capacity of one ordinary wind turbine.

So, at 10 AM on May 27, 2017 the approximately 4,500 MW capacity of the more than 2,000 wind turbines installed throughout the province by the McGuinty/Wynne governments with lucrative, 20-year contracts, were delivering one megawatt of power.

And yet, to the best of my knowledge, Ontario didn’t experience a blackout or brownout because intermittent wind power generation was almost completely absent, nor did our emissions increase, as we got all the power needed from nuclear and hydro resources.   In addition, the almost 9,000 MW of gas generation was idling, operating at an average of about 2% of capacity almost all day.

Despite wind only producing an average hourly output of 75 MW for the day and just the “1” for hour 10, Ontario still exported 43,584 MW of power at a cost to ratepayers of $5.6 million*.

Despite the lackluster performance of industrial wind turbines May 27 and on many other occasions, a visit to the home page of CanWEA still claims:  “Wind is delivering clean, reliable and low-cost electricity”!

Sure!

Perhaps with another 4,500 MW of capacity in Ontario, the industrial wind turbines may have delivered TWO MW of power at 10 AM on May 27?

 

*Cost estimate assumes the second IESO estimate of May’s Global Adjustment of $127.76 holds up.

CanWEA wants to “reap” more “benefits” from wind energy

The wind industry association claims wind power is the “least-cost” option. The numbers tell a different story [Photo: IESO]

The past few days presented a couple of conflicting news events that made you want to scratch your head in wonderment.

First was a CTV news item June 5 headlined “Wasted green power tests China’s energy leadership”. The article stated: “In western China’s Gansu province, 43 per cent of energy from wind went unused in 2016, a phenomenon known in the energy industry as ‘curtailment.’ In the neighbouring Xinjiang region, the curtailment figure was 38 per cent and in northeast China’s Jilin province it was 30 per cent. The nationwide figure, 17 per cent, was described by Qiao’s organization as ‘shockingly high’ after increasing for several years in a row.”  It went on to say: “The problem threatens to slow China’s progress in clearing its air and controlling the greenhouse gas emissions that make it the top contributor to climate change.”

A CanWEA blog (Canadian Wind Energy Association) by Brandy Giannetta, also on June 5,  was headlined:  “Adding more wind to the Ontario grid: no problem!”

Ms. Giannetta made these claims:  

“Ontario could reliably integrate about 16,000 megawatts of wind energy (which would be able to meet more than a third of electricity demand in the scenario studied).

The additional amount of electricity generation reserves required to back up that 16,000 MW of wind (beyond the reserve capacity already in the system) would be as small as 196 megawatts, or 1.2 per cent of the wind energy capacity.

Wind energy, which is now the least-cost option for new electricity generation available in Ontario, would avoid about $49 per megawatt-hour of production costs within the electricity system if it supplied 35 per cent of Ontario’s electricity demand.”

The claims made on the blog supposedly used information from a partially taxpayer-funded, three-year study released in July 2016 co-sponsored by CanWEA and Natural Resources Canada and carried out by GE Energy Consulting, a subsidiary of General Electric. (GE’s website claims  “Our portfolio of turbines feature rated capacities from 1.7 MW to 3.8 MW (Onshore) and 6MW (Offshore), we are uniquely suited to meet the needs of a broad range of wind regimes.”)  As one would expect there is a “legal notice” (disclaimer) at the start of the report which names CanWEA as their client.

Needless to say, the report is extensive but looking at the 62-page Section 1, Summary Report, I noted the following, suggesting CanWEA suggest the small “reserve capacity” of  only 196 MW is required to back up the 11,000 MW of new wind capacity and could be integrated:

“1.11.9 Reduced Reserves from Conventional Generation    — This sensitivity examined the impact of reducing the level of spinning reserves obtained from conventional generation resources (thermal and hydro). Instead the reserves could be obtained from demand response, storage devices, or other nonconventional resources. This approach could reduce curtailment during periods where conventional generation resources are dispatched to their minimum output limits.”

The suggested CanWEA small 196-MW “reserves” being all that would be needed is a huge “stretch goal” (to use a phrase once favoured by the ruling Ontario government) and highly improbable!  It suggests dispatching existing “conventional generation resources” will allow wind to contribute a lot more of its intermittent and unreliable generation.

The same section contained a stumbling block in respect to containing further cost increases as it notes: “Production simulation results show no significant reduction in curtailment. This indicates that the system is not constrained by the commitment of conventional generation units for reserve services.”

What that means is, curtailment will remain as is, as long as ratepayers pick up the costs of constraining conventional generation. It infers industrial wind generation be treated as “base-load” with “first to the grid” rights!   Somehow, CanWEA view the expensive: “demand response, storage devices or other nonconventional resources” along with dispatch of conventional generation as an unrelated cost ratepayers must pay for unreliable and intermittent generation from industrial wind turbines, yet they claim “wind is now the least-cost option”.  This appears to be CanWEA’s contribution to the “Fair Hydro Plan” kicking wind’s integration costs to the ratepayers bills!

Now with two conflicting perspectives about IWT curtailment from China and CanWEA, let’s look at recent Ontario history sourced from IESO and Scott Luft’s Monthly Wind data.

IESO reported in their 2016 Year-End Data they dispatched 2,244,230 MWh  “representing 19 per cent of the total amount of wind energy produced in the province.” So, 2% more than China’s “shockingly high” amount garnered no attention in Ontario!   Dispatched wind in 2016 added approximately $270 million to the GA for undelivered power, and no doubt caused nuclear steam-off and spilled hydro adding additional costs to the GA pot.

Scott’s files contain TX (transmission connected) and DX (distributor connected) wind generation as well as what has proven to be relatively conservative estimates of “curtailed” generation. For the first five months of the current year, curtailed wind was 1,580,629 MWh, which represented 22.3% of grid delivered and curtailed wind. It looks like the current year will easily surpass the record amount dispatched in 2016 in MWh and percentage terms.

Combining the average costs of wind generated MWh along with dispatched MWh suggests an average cost of a kWh from industrial wind turbines for the first five months of 2017 was 17.5 cents /kWh and for May 2017 was 23.4 cents /kWh.

Those costs to Ontario ratepayers makes it relatively easy to understand Ms. Giannetta’s closing paragraph on her blog where the “we” in the following sentence suggests she is clearly speaking for the members of CanWEA!

“It’s increasingly obvious that we are only beginning to reap the benefits of wind energy in Ontario.”

© Parker Gallant

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.