Ka-ching! Windy days blow away ratepayer dollars

Consumers pay: wind power is surplus, and expensive — emissions-free power is wasted

Wind power on two recent windy days cost Ontario electricity customers three times the current rate … and the surplus meant emissions-free hydro and nuclear was wasted

 

A simple Google search “wind power is cheapest energy” will generate 1.2 million hits.

If you search “wind power is most expensive energy” you get 2.1 million hits.

Two days last week in Ontario are real-world proof of the cost of wind power, no matter what the government or wind power industry spin tells you. Tuesday, December 5th and Wednesday December 6th were two very windy days, an excellent opportunity to examine both the power generation from industrial wind turbines in Ontario and their delivered cost of power to the grid.

The numbers for those two days:

$$$   IESO forecasts indicated that wind could have delivered 23.8% (177,100 MWh) of total Ontario demand (755,200 MWh) via the 4,200 MW of grid-connected wind capacity.

But wind turbines have a bad habit of generating power when it’s not needed (middle of the night, spring and fall) so the intermittent power must often be curtailed (constrained/wasted but paid for).  It was!

$$$   The IESO curtailed 41.8% of their forecast generation meaning 74,000 MWh were not used!

Via the contracts in place with wind power companies, IESO is obliged to pay for both delivered and curtailed power at prices for grid-accepted power at $135/MWh and $120/MWh for curtailed power.

$$$   Quick math: the cost for grid-accepted wind on those two days meant Ontario ratepayers got charged approximately $22.8 million or $221.14/MWh for grid-accepted wind. That means it cost ratepayers 22.11cents/kWh (kilowatt hour), well above what the average time-of-use rates would be for the average Ontario ratepayer!  The cost of the delivered wind power for those two days was almost three times the current levied* “average” cost of 8.22 cents/kWh, and 3.7 times the off-peak cost of 5.9 cents/kWh.

There’s more (sorry): be assured IESO instructed OPG to spill water over the hydro dams and Bruce Nuclear to steam off nuclear power — so power from our two reliable, emissions-free sources of power generation was also wasted.   OPG and Bruce will be paid for that waste and the cost will be added to our bills.  At the same time gas plants (backing up wind and solar) were being paid for idling.

Those two December days also saw sales of surplus power of 93,700 MWh to our neighbours in New York, Michigan, and others for pennies of the actual cost. In all probability, we recovered around 15% of their generation costs meaning, we bit the bullet for another $10/11 million.

Total: too much

Just the cost of the curtailed and grid-accepted wind and the losses on our surplus exports for those two days was $32/33 million for absolutely no benefit to any of us ratepayers. If every day of the year was like those two days last week, Ontario’s ratepayers would be shelling out over $6 billion annually, due to the abysmal planning and management of the electricity sector by the current Ontario government.

Imagine how far $6 billion would go to improve our health care system.

Parker Gallant,

December 10, 2017

 

* This price reflects the 17% deferral under the Fair Hydro Act.

Advertisements

Wind waste should worry Ontario ratepayers

Ontario’s electricity ratepayers paid more than $500 million in 2017 for nothing

With only one month left in the current year, the bad news on the electricity sector keeps getting worse.

Well before the official sources such as IESO report on how much power industrial wind turbines generated and how much was curtailed (constrained, or paid for but not added to the power grid), my friend Scott Luft has published his estimates for both the former and the latter for the month of November.

As he reports (conservatively), curtailed wind in November was over 422,000 megawatt hours (MWh)  that could have supplied 562,000 average Ontario households with free power for the month.

Instead, no one got free power; the cost of the 422,000 MWh of undelivered wind power to Ontario ratepayers was $120/MWh.  That $50.7-million cost for the month was simply added to the costs of the electricity bills ratepayers will be obliged to pay, while some of it will deferred to the future as part of the Fair Hydro Plan.

Somebody’s enjoying cheap power — not you  

No doubt the wasted wind power presented itself when it wasn’t needed; if it had been accepted into the grid, that extra power could have caused blackouts or brownouts, so it was curtailed.  At the same time, much of the grid-accepted wind was exported to our neighbours in New York, Michigan and elsewhere, at discount prices!  Curtailed wind for November 2017 compared to 2016 was almost 55% higher.

How bad is it? Let’s review the first 11 months of the current year, compared to 2016.

So far in 2017, curtailed wind is about 786,000 MWh higher (+33.8%) at just over 3.1million MWh.  The cost of all the curtailed wind so far in 2017 is approximately $373.6 million, or $94.3 million more than 2016 costs.

And wind wasn’t the only source of power generation constrained. When Ontario Power Group reported their third Quarter (September 30, 2017) results they said this:

“Baseload generation supply surplus in Ontario continued to be prevalent in 2017, resulting in forgone hydroelectric generation for OPG of 1.1 TWh*: and 4.5 TWh in the three and nine month periods ended September 30, 2017, respectively, compared to 0.5 TWh and 3.9 TWh during the corresponding periods in 2016.”  

Translation: ratepayers will pick up the approximately $165 million cost of that waste via their electricity bills.

Not only are we curtailing wind and spilling hydro, but we also steamed off nuclear power generated by Bruce Nuclear at the same time we pay for idling gas plants to back up intermittent wind and solar power generation.

Intermittent wind and solar cost us

The cost of “greening” Ontario with unreliable and intermittent wind and solar keeps climbing, no matter what their proponents or politicians say.  As ratepayers and taxpayers we should reflect on why 25% of the waste of the noted 7.6 TWh of undelivered power and its cost of $539 million (so far this year) is being deferred via the Fair Hydro Plan.  And at the same time, we should recognize that we have experienced the worst possible planning in the Energy Ministry in the history of the province.

The energy sector in Ontario needs real planning by experts that will provide real value for money and save ratepayers from paying more than $500 million a year … for nothing!

~

*  1 (one) terawatt is equivalent to 1 billion kWh

The secret is out: wind power costs plenty

This past weekend’s stats are not kind to the wind power cheerleaders

The wind power trade association, the Canadian Wind Energy Association or CanWEA, uses every opportunity to push for more wind power development, and often uses “selective facts” to promote their claims.   One of the latest relied on investment firm Lazard by stating:  “A December 2016 report from the U.S. investment firm Lazard found that wind energy is the lowest cost option for new supply in the United States without any subsidies. Wind energy costs continue to fall, offering an attractive electricity source to provinces seeking to clean and diversify their electricity systems.”

That statement is included in CanWEA’s recently released brochure “The Secret is Out, Wind is in”.

Had the unknown author(s) at CanWEA simply looked at the Ontario Energy Board’s (OEB) semi-annual Regulated Price Plan they would have noted Table 2 on page 21 of the April 20, 2017 report that the cost of a wind-generated kilowatt hour (kWh) in Ontario is shown as 17.3 cents ($178/MWh), as the cost of “curtailed” (not added to the grid) wind is also included as a cost input.

Had the author(s) also simply looked at IESO data they might also have noticed that maybe wind energy costs are not continuing to fall!   Saturday, November 25th was an example: it was a very windy day in Ontario with an especially windy night. Unfortunately for the wind power cheerleaders, our demand for power from 12 AM until 7 or 8 AM was relatively low, but the wind was really blowing. That meant the 4,200+ MW of wind capacity were running at 90% (approximately) of their capacity, at the same time as Ontario’s demand for power was hovering mid-way between 11,000 and 12,000 MW. That’s very close to what our nuclear plants can provide on their own without help from other generation sources.

As a result, IESO ordered wind’s curtailment, hydro’s spilling and nuclear steam-off. At the same time, they were exporting whatever the market would take.

So, all together on November 25, the IESO curtailed 35,600 MWh of grid-connected wind and accepted 30,600 MWh into the grid, while scrambling to prevent brownouts or blackouts by exporting about 50,000 MWh over the day.

Industrial-scale wind power developers get paid $120/MWh for curtailed wind and $135 MWh for grid-accepted wind.

Quick math on all that means:

Ontario’s ratepayers picked up the costs of almost $8.6 million for curtailed and grid-accepted wind power produced when it wasn’t needed.

The cost of the grid-accepted wind (30,600 MWh) was therefore just over $280/MWh or 28 cents per kWh or, 10.7 cents more than the OEB reported back in April. On top of that, we ratepayers also ate the costs of spilled hydro, steamed off nuclear and the losses on the 50,000 MWh exported at a price close to zero.

Now if that author or authors who cranked out the latest CanWEA “selective facts” brochure were brutally honest, they would immediately change the title to:

“The Secret is out: wind is horribly expensive, intermittent and unreliable!”

Wind power peaks match power use lows

Once again, the numbers show: wind power shows up when it’s not needed, adding to consumers’ electricity bills

The IESO/Independent Electricity System Operator just released their October 2017 Monthly Market Report.

As usual, it was full of bad news.

Ontario power consumption was down 2.6% from October 2016 and was the third lowest consumption month of the 10 so far in 2017.

October 2017 was also the fourth highest month for curtailed wind* in 2017 with 37.9% (481,243MWh [megawatt hours]) curtailed, compared to May’s record curtailment of 49.3%, April’s of 42.6% and June’s curtailment of 38.1%.  History has shown wind’s generation levels in Ontario tend to always be higher in the Spring and Fall months, so this was no surprise.  What it does underscore, again, is that the months of lowest power consumption line up with wind power’s best days on the job. Power when its not needed!  Curtailment of wind in October cost Ontario ratepayers about $58 million.

On top of the wind power curtailment, Ontario also was busy exporting surplus power to our neighbours in New York, Michigan, etc. providing them with cheap power subsidized by the ratepayers of Ontario.  Net exports (exports minus imports) averaged 1,438 MW per hour so 1,069,872 MWh were delivered elsewhere.  Based on the record Global Adjustment (GA) for the month of $125.63 and the very low HOEP (hourly Ontario electricity price) of $8.75 MWh (0.088 cents.kWh) the cost to Ontario ratepayers; after recovery of the HOEP, transmission and congestion charges was approximately $107 million.

In summary, Ontario ratepayers picked up costs of curtailed wind of $58 million plus lost revenue from exports of $107 million for 1,550,000 MWh (rounded) generation of no value to them.  Those 1,550,000 MWh were enough power to have supplied 172,000 average households with power for a full year or almost 2.1 million average households with power for the full month of October.

No doubt we also spilled cheap clean hydro and steamed off emissions free nuclear while paying for idling gas plants, at the ready; to ensure power when clouds passed over solar panels and the wind refused to blow.

This all adds up to very Un-Fair Hydro Plan!

Parker Gallant

November 23, 2017

Note: “constrained” means the power was not needed so not added to the grid … but paid for anyway.

* Thanks to Scott Luft for his invaluable data!

Ontario’s energy poverty: how we got here and why government plans won’t work

 

Former Energy Minister Chiarelli told us not to worry about costs — now hundreds of thousands live in ‘energy poverty’

An OEB report dated December 22, 2014, completed at the request of the then Minister of Energy Bob Chiarelli opened with this remark: “The Minister asked the Board to provide advice on the development of an Ontario Electricity Support Program (OESP), which would assist low-income customers who are spending a disproportionate amount of their income paying for electricity.”

The report used various methods to determine the potential number of households in the province in that category and concluded: “Using LIM (Low Income Measure) as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households. The OESP is estimated to reach 571,000. This estimate recognizes that not all low-income households in the province pay their electricity bills directly (i.e. utilities included in rent).”

It went on further to state: “Using LICO, (Low-Income Cut-Off) Ontario has 606,100 low-income households, and the OESP would reach only 484,900. Using LICO plus 15 per cent, the current LEAP (Low-income Energy Assistance Program) measure of low-income, the number of households would be 687,300 and 550,000, respectively.” 

What that suggests is that, at the time of the OEB report the StatsCan data in 2014, using LICO, indicates approximately 13,5% of households were “spending a disproportionate amount of their income paying for electricity”. Using LIM, the number jumps to 15.8%! Rate increases from November 2014 to November 2016; according to the OEB, were 1.6 cents/kWh (+17%) for an average residential household, so we would expect more households were thrown into “energy poverty”!*

So what did the Ontario government do to alleviate the problem?

The LEAP (Low-income Energy Assistance Program) kicked off in 2010 requiring all local distribution companies (LDC) to contribute 0.12% of distribution revenue (net of the cost of power).  The total amount allocated for this program is less than $5 million annually.

The RRRP (Rural and Remote Rate Protection) has been around since 2003 and provided relief to some rural and remote residential ratepayers.  The annual cost of $170 million was paid by other ratepayers and was recently (January 2017) expanded by the current government to cover more Hydro One customers increasing the annual cost to an estimated $243 million now paid from tax revenues.

The OESP (Ontario Electricity Support Program) as noted above was triggered by a directive from Bob Chiarelli when he was the Minister of Energy and was estimated to cost between $175/225 million to support those hundreds of thousands of households living in energy poverty.  The program was initiated in January 2016 and paid for by all Ontario ratepayers via the regulatory charge on hydro bills. The program has been expanded to provide more support to low-income households and the costs are now paid out of tax revenues.  The projected cost increased to approximately $300 million per annum!

The First Nations On-Reserve Delivery Credit is a new incentive providing approximately 21,500 customers with free delivery charges (estimated at $85.00 per month) at an annual cost of $21 million.

The Affordability Fund is also a new program funded by taxpayers to provide qualifying households with: LED lights, appliance upgrades, insulation, heat pumps, etc., all for free at the taxpayers’ expense, estimated at $100 million.  It’s not clear if this is to be an annual or a one-time fund!

All of the above initiatives, with the exception of the LEAP program, are now funded by taxpayers, so about $370 million was transferred from ratepayers to taxpayers and annual funding costs increased to approximately $660 million!

That’s on top of the $40 billion deferred under the Fair Hydro Plan!

How was so much energy poverty caused?

The quick answer to the above question is, it was caused by the Green Energy Act (GEA) which gave long-term contracts to mainly foreign industrial wind and solar developers. Wind and solar provide unreliable and intermittent generation and must be backed-up by gas plants doubling up on the costs.  The results have been evident since those power sources were added to our grid in larger and larger quantities.   The following highlight some of the estimated costs for the first nine months of 2017:

  • Nine months of curtailed (could have been generated but wasn’t needed) wind of 2,209,000 MWh (megawatt hours) were paid $120/MWh so cost ratepayers $265 million.
  • Nine months of spilled (over the dam but not through the turbines) hydro power of 4,500,000 MWh by OPG cost ratepayers almost $185 million.
  • Nine months of subsidized surplus power of net exports (exports minus imports) of slightly over 9 million MWh to our neighbours cost ratepayers about $800 million.
  • Nine months of “conservation” spending is estimated to have cost Ontario ratepayers $300 million.

Totalling up the above, and forgetting about the costs of steamed-off nuclear or money paid for idling gas plants to back-up wind and solar, gets this result: Ontario’s electricity system paid for 15.7 million MWh that provided no power for Ontario’s ratepayers.

That 15.7 million MWh could have supplied over 1.7 million average Ontario households with power for a full year, but instead added their costs to our electricity system.   Those costs of an estimated $1.550 billion were 2.3 times the relief provided to households living in energy poverty!

To conclude, what created more “energy poverty” in the province is to simply point to bad planning (no cost/benefit analysis) by the incumbent government. Their plan to resolve it? I will simply repeat former Minister of Energy Bob Chiarelli’s promise, “it’s just the price of a Timmies cup of coffee”—every day of the year for many, many years!

 

* Energy poverty is generally defined as 10% or more of disposable income is spent on heat and hydro!

Boldface type on hydro bills doesn’t make statements true

 

The baby’s not smiling… he can see the future

If you just received your monthly electricity bill from Hydro One (presumably all local distribution companies will have the same message), you will be drawn to the boldface type declaring:  “Ontario’s Fair Hydro Plan saved you $XX.XX on your bill. This amount includes the 8% Provincial Rebate.”

The next paragraph elaborates on that message by telling you “Ontario’s Fair Hydro Plan substantially lowers electricity bills for typical residential consumers.  This includes the eight percent rebate introduced in January 2017 and builds on previous initiatives to deliver broad-based relief on all electricity bills.” (“Previous initiatives”? Huh?)

Also included with your bill is a leaflet (English on one side and French on the other) expanding on the wonders of the Fair Hydro Plan with a picture of a happy smiling family (mom and dad but not the one-year-old in mom’s lap) viewing a laptop computer. Right above the picture is a white on black square with the words “Ontario’s Fair Hydro Plan Bringing electricity bills down”.

The baby is right not to smile: the information on the bill and insert contain only selective facts.*

What’s missing: 

Missing on the bill and the brochure was an explanation on why our cost of electricity climbed well over 100% due to the Green Energy and Green Economy Act which handed out long-term, above market contracts for intermittent and unreliable wind and solar generation.

Missing was information about the cost of moving two gas plants to save Liberal seats in Oakville and Mississauga.

Missing was any information about why we pay gas plant generators hundreds of millions of dollars to sit idle to back up intermittent and unreliable wind and solar generation.

Missing was any mention about the Global Adjustment Mechanism (GA) forcing Ontario to export surplus generation to NY and Michigan for pennies on the dollar causing ratepayers to pick up hundreds of millions of missing dollars to cover the cost of surplus generation.

Missing was any mention of the hundreds of millions of dollars the curtailment of wind generation, steaming-off of nuclear or spilling of hydro costs ratepayers.

Missing is any mention of the costs of hundreds of millions of dollars to annually pay for discounts for LED lights, an energy-efficient furnace or a new energy-efficient refrigerator, etc., etc.

Missing was any mention of the hundreds of thousands of families placed in “energy poverty” who have had to choose to either buy food or pay their hydro bills.

Missing is any claim to the harm caused to humans and nature by the thousands of unreliable, intermittent wind turbines erected or any mention about how their installation is now affecting water aquifers in certain parts of the province.

Fairness is in the eye of the beholder and the current claim that the government is “Bringing electricity bills down” should be expanded to state what most Ontarians know: “Bringing electricity bills down” today, will cause them to rocket upwards in the near future due to our complete mismanagement of the energy portfolio.

(C) Parker Gallant

November 18, 2017

 

* Selective facts are “true” facts that only tell us part of the story.

 

 

 

 

 

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.