Mild weather might mean lower power demand and savings for electricity customers … but not in Ontario
February 28, 2018
The IESO has responsibility for ensuring the electricity system in Ontario keeps the lights on. They must manage the flow of generated electricity and keep it within the confines of producing too much or too little which could lead to either brownouts or blackouts.
That task has become more difficult as frequent Energy Minister directives, mandating the acquisition of more and more intermittent and unreliable wind and solar power generation, have made reliability an issue of concern, particularly during times of low demand. They are concerned with “surplus base-load” which in the past generally meant nuclear and “must-run” hydro. Wind and solar generation joined that latter group under those mandated directives pushing the potential “must run” power generation much higher.
Higher base-load on low demand hours/days could cause the system to fail. And, it’s obvious that managing the system today has a much higher cost.
Example: February 25, 2018
The 25th of February saw higher than normal temperatures in Ontario, resulting in lower demand. Demand in one hour was only 12,716 MW and the average was 14,390 MW/per hour for the day according to IESO’s daily summary. Total Ontario demand for the day was only 345,000 MWh. The IESO summary discloses the market valued all generation (including surplus exports) on that day at “0” meaning our net exports (exports minus imports) of 48,000 MWh were sold at a substantial loss.
Another issue facing IESO on the 25th was the fact it was a windy day. The forecast was for wind turbines to generate 89,100 MWh. But only 49,500 MWh were accepted into the grid and the balance (39,600 MWh) were curtailed (paid for but not used). Ratepayers pick up the costs for both accepted and curtailed wind. It is worth noting our net exports of 48,000 MWh for the day, were only slightly less than the grid-accepted wind power generation.
Because of low demand and excess wind power generation, OPG were no doubt spilling water at IESO’s instructions. IESO don’t disclose spilled water, but a reasonable estimate for this day would be 45,000 MWh — which ratepayers are obliged to pay for.
Yet another source of power would have been our gas plants which receive payment(s) for idling at a contracted amount (payable monthly per MW of capacity). As one would expect, they were not called on to produce any power for the day which would have been cheap (fuel costs plus a small markup). Gas plants are essentially the back-up for the approximately 7,700 MW of intermittent wind and solar capacity now either grid- or distributor-connected in the province.
So let’s look at what ratepayers paid just for wind power for the day:
One day’s cost for unreliable intermittent wind!
Wind accepted: 49.500 MWh at $135/MWh = $ 6,682,500.
Wiind curtailed: 39,600 MWh at $120/MWh = $ 4,752,000.
Total wind costs: $ 11,434,500.
Spilled Water (estimated): 45,000 MWh at $45/MWh = $ 2,025,000
Gas plant idling costs (estimated): $ 2,500,000
Gross wind costs: $ 15,959,500
Less: Recovered from net exports (estimated): $ 720,000
True net wind generation cost: $ 15,239,500
Cost per MWh: $15,239,500/49,500 = $307.87/MWh or 30.8 cents/kWh
If all the days in a year were like last Sunday, annual costs would be well over $5 billion for unneeded high priced generation from wind power projects.
This all just goes to show, Ontario ratepayers were filling the pockets of IWT developers so they could sip the champagne while IESO kept did its best to keep the lights on!
NB: All of the numbers above are rounded to the nearest hundred.