Amherst Island: perfect example of why wind power can be a bad choice

Ontario’s Energy Minister Glenn Thibeault, at the launch of planning for the next Long-Term Energy Plan, said “We have a robust supply of all forms of energy for at least the next 10 years.”  The month prior to the launch he announced the suspension of LRP II  slated to acquire another 1,000 MW of renewable energy.  His claim at that time was, it would save ratepayers $3.8 billion in electricity costs over the projected term of the contracts.

Cancel the contracts 

Why didn’t he go further and cancel contracts that have not broken ground and saved billions more?   Amherst Island’s “Windlectric” project, owned by Algonquin Power & Utilities Corp., project is just one. On its own, cancellation could save Ontario ratepayers over $500 million in future costs.  Those contracts, signed years ago, either have not been built or are involved in litigation preventing them from breaking ground.   Their sunk costs are small in comparison to their full costs over 20 years and canceling them outright would represent a nominal cost to ratepayers while saving, birds, bats, butterflies and endangered species from harm as well as prevent human health effects, and depreciation to property values.

Cancellation would reduce the amount of surplus energy that is exported at a cost to ratepayers or simply curtailed, but paid for by ratepayers. Savings would be in the billions.

Amherst Island—Owl Capital of North America

 In the July/August 2003 copy of “Wildbird”, Kevin T. Karlson wrote this article “Owl Capital of North America.” and said “An occasional glance at these ‘owls in wonderland’ always brings a smile to my face.” The Owl Woods is the only place where it is possible to see ten species of owls in one day.

Amherst Island, 66 square kilometers in size, is situated west of Kingston along the northeastern shore of Lake Ontario close to the St. Lawrence River and considered a “Hidden Cultural Gem.” The island is the first of the world famous 1,000 islands based on the water flow. The permanent population of about 450 residents swells to over 1,000 during the summer months and attracts visitors from all over the world. People come to see the culture and history of a settlement dating back to the late 1700s by the Empire Loyalists and the Irish immigrants who followed. Many also come to see the birds as the island is on the IBAs (Important Bird Areas) list. Amherst Island is home to “as many as 34 different species at risk known to rely on the Island’s natural environment for survival.” including the threatened Blandings turtle.  

The foregoing paragraph should make the reader wonder exactly why, back in 2011 the Ontario Power Authority (OPA) granted the contract to a shell company (Windlectric) established by Algonquin Power & Utilities Corp. Subsequent to the contract award the Ministry of the Environment (MOE), since relabeled the Ministry of the Environment and Climate Change (MOECC), granted a Renewable Energy Approval (REA) with some modifications to the original contract.  One wonders why the REA was granted as Amherst Island was already designated as an IBA and known as the Owl Capital of North America.  Was it simply because the OPA (now merged with IESO [Independent Electricity System Operator]) gave them a contract, or was the MOECC unconcerned about the heritage of the island and the many species at risk?  

For over 10 years, residents of Amherst Island and their onshore supporters have battled proposals to blanket the Island with industrial wind turbines. The support received by APAI (Association to Protect Amherst Island) has been overwhelming coming from many different groups and individuals, including those who support wind power as renewable energy. Among them are Nature Canada and Ontario Nature who jointly wrote an 18-page letter to the Ministry of Environment and Climate Change in March, 2013. Their logical defence of wildlife had no effect on the outcome of the appeal to the Environmental Review Tribunal.

In fact, the decision of the Tribunal in August of 2015 was a major failure according to Nature Canada: “The Amherst decision is a reminder that we are missing adequate government policy that both promotes renewables in the right places while recognizing and protecting our key biodiversity areas including Canada’s nearly 600 Important Bird and Biodiversity Area (IBAs) such as Amherst Island and the South Shore of Prince Edward County.” 

Organizations as diverse as Heritage Canada The National Trust, Mohawks of the Bay of Quinte, Kingston Field Naturalists, the Dry Stone Wall Association of Ireland, BirdLife International, the Maryland Ornithological Society, the Hawk Migration Association of North America, Pennsylvania Ornithological Society, and Brereton Field Naturalists’ Club all oppose turbines on Amherst Island.

Economic impact

 The Windlectric project proposes 26 wind turbines with a capacity of 74.3 MW and according to the specifications, would be Siemens turbines each with a total height in excess of 500 feet with a hub height of about 330 feet and a blade radius of almost 180 feet. If they generate electricity at the anticipated norm of 30% of capacity, they will produce about 195,000 megawatts (MWh) intermittently and out of synch with Ontario demand. Windlectric will be paid $135 per/MWh plus cost of living benefits up to 20% more, so as much as $162 per/MWh in the latter years of their contract term. At an average of $140 per/MWh, the gross revenue to Windlectric will be $27.3 million annually, or about $550 million over the life of the contract.

Loyalist Township, where Amherst Island is located, was obligated to allow the Windlectric project to proceed because the Green Energy Act in 2009 stripped all municipalties’ local land use planning powers as regards an energy project. The best the township could do was reach agreement on a “Community Benefit Fund” for an annual payment of approximately $520K. Added to that will be realty taxes of around $240K. Ontario limits the assessed value of wind turbines to only $40K per MW. The assessed value of the 26 turbines will be less than $3 million, but their capital cost is over $200 million.

All-in, the township will get about $760K annually — 2.8% of the revenue to Windlectric. Obviously, the contributions Algonquin Power and other large renewable energy companies gave to the Ontario Liberal Party were worth the money.

So, Ontario has a “robust supply” of electricity, wind turbines will harm the 34 endangered species, and we are exporting surplus generation at pennies on the dollar while curtailing wind, spilling hydro and steaming off nuclear energy.   Ontario doesn’t need the intermittent power from the turbines on Amherst Island. We don’t need them in Prince Edward County either (White Pines) (or Dutton-Dunwich, or La Nation, or North Stormont). The Minister should demonstrate that he means what he said recently in North Bay:  “There are some families in this province that are struggling to meet their energy bills. It’s why I’ve recognized and the premier has recognized that we need to do more …That is why we’re making sure we can find ways to reduce bills. Everything is on the table within reason.”

The Minister has an opportunity to save ratepayers $1 billion dollars in future rate increases by simply canceling the Amherst Island Windlectric project and the Prince Edward County White Pines project, to name two.

He should take it.

How much is wind power really costing Ontario?

For the cost to provide a small portion of Ontario’s power, wind is no bargain

Not a chance ...
Not a chance …

Most electricity ratepayers in Ontario are aware that contracts awarded to wind power developers following the Green Energy Act gave them 13.5 cents per kilowatt (kWh) for power generation, no matter when that power was delivered. Last year, the Ontario Auditor General’s report noted that renewable contracts (wind and solar) were handed out at above market prices; as a result, Ontario ratepayers overpaid by billions.

The Auditor General’s findings were vigorously disputed by the wind power lobbyist the Canadian Wind Energy Association or CanWEA, and the Energy Minister of the day, Bob Chiarelli.

Here are some cogent facts about wind power. The U.K. president for German energy giant E.ON stated wind power requires 90% backup from gas or coal plants due to its unreliable and intermittent nature.  The average efficiency of onshore wind power generation, accepted by Ontario’s Independent Electricity System Operator (IESO) and other grid operators, is 30% of their rated capacity; the Ontario Society of Professional Engineers (OSPE) supports that claim.  OSPE also note the actual value of a kWh of wind is 3 cents a kWh (fuel costs) as all it does is displace gas generators when it is generating during high demand periods.  On occasion, wind turbines will generate power at levels over 90% and other times at 0% of capacity.  When wind power is generated during low demand hours, the IESO is forced to spill hydro, steam off nuclear or curtail power from the wind turbines, in order to manage the grid.  When wind turbines operate at lower capacity levels during peak demand times, other suppliers such as gas plants are called on for what is needed to meet demand.

Bearing all that in mind, it is worth looking at wind generation’s effect on costs in the first six months of 2016 and ask, are the costs are reflective of the $135/MWh (+ up to 20% COL [cost of living] increases) 20 year contracts IESO, and the Ontario Power Authority awarded?

As of June 30, 2016, Ontario had 3,823 MW grid-connected wind turbines and 515 MW distributor-connected. The Ontario Energy Reports for the 1st two quarters of 2016 indicate that wind turbines contributed 4.6 terawatts (TWh) of power, which represented 5.9% of Ontario’s consumption of 69.3 TWh.

Missing something important

Not mentioned in those reports is the “curtailed” wind. The cost of curtailed wind (estimated at $120 per/MWh) is part of the electricity line on our bills via the Global Adjustment, or GA.  Estimates by energy analyst Scott Luft have curtailed wind in the first six months of 2016 at 1.228 TWh.

So, based on the foregoing, the GA cost of grid-accepted and curtailed IWT generation in the first six months of 2016 was $759.2 million, made up of a cost of $611.8 million for grid-delivered generation (estimated at $133 million per TWh) and $147.4 million for curtailed generation. Those two costs on their own mean the per kWh cost of wind was 16.5 cents/kWh (3.2 cents above the average of 13.3 cents/kWh).  The $759.2 million was 12% of the GA costs ($6.3 billion) for the six months for 5.9% of the power contributed.

But hold on, that’s not all. We know that wind turbines need gas plant backup, so those costs should be included, too. Those costs (due to the peaking abilities of gas plants) currently are approximately $160/MWh (at 20% of capacity utilization) meaning payments to idling plants for the 4.6 TWh backup was about $662 million. That brings the overall cost of the wind power contribution to the GA to about $1.421 billion, for a per kWh rate of 30.9 cents.   If you add in costs of spilled or wasted hydro power to make way for wind (3.4 TWh in the first six months) and steamed off nuclear generation at Bruce Power (unknown and unreported) the cost per/kWh would be higher still.

So when the moneyed corporate wind power lobbyist CanWEA claims that the latest procurement of IWT is priced at 8.59 cents per kWh, they are purposely ignoring the costs of curtailed wind and the costs of gas plant backup.

22% of the costs for 5.9% of the power

 Effectively, for the first six months of 2016 the $1.421 billion in costs to deliver 4.6 TWh of wind-generated power represented 22.5% of the total GA of $6.3 billion but delivered only 5.9% of the power.  Each of the kWh delivered by IWT, at a cost of 30.9 cents/kWh was 2.8 times the average cost set by the OEB and billed to the ratepayer.  As more wind turbines are added to the grid (Ontario signed contracts for more in April 2016),  the costs described here will grow and be billed to Ontario’s consumers.

CanWEA recently claimed “Ontario’s decision to nurture a clean energy economy was a smart investment and additional investments in wind energy will provide an increasingly good news story for the province’s electricity customers.” 

There is plenty of evidence to counter the claim that wind power is “a smart investment.” But it is true that this is a “good news story” — for the wind power developers, that is. They rushed to Ontario to obtain the generous above-market rates handed out at the expense of Ontario’s residents and businesses. And we’re all paying for it.