(January 24, 2020) So many …

By Parker Gallant (a former banker who didn’t like what he was seeing in his Ontario electricity bills).

For the original version of this posting, see here.

For more analysis by Parker Gallant, check out his blog here:
https://parkergallantenergyperspectivesblog.wordpress.com/

Just a few days ago Robert Hornung, President of the Canadian Wind Energy Association, authored a post on the CanWEA website with the headline; “Ontario heading for a troubling investor-confidence tipping point.” Hornung was alluding to the recent notice of cancellation of the Nation Rise industrial wind turbine project that had been under construction in North Stormont. The project had been ushered through the final approval process by the Wynne-led government just days before the writ was dropped for the last provincial election. It was cancelled because it would cause serious and irreversible harm to the little brown bat (a species at risk).

What Mr. Hornung doesn’t seem to grasp was the “tipping point” for voters in the province was illustrated in the last provincial election when the ruling Ontario Liberal Party were tossed out, in large part, due to electricity costs more than doubling. The rise in the cost of electricity, since the Green Energy Act was passed in 2009, was principally caused by above market wind and solar contracts handed out to mainly foreign companies.

An illustration of the above can be found by looking at just the December 2019 grid accepted and curtailed wind to see what it added to our electricity costs. My friend Scott Luft uses IESO data to calculate grid accepted (TX) wind and estimates the distribution delivered (DX) as well as curtailed generation. Along with that he records the market trading price or HOEP (Hourly Ontario Energy Price) when the wind is delivered.

For December 2019 TX and DX accepted wind was 1,504.3 GWh (gigawatt hours) and curtailed wind was 254.5 GWh. At the price of accepted wind at $135/MWh and curtailed wind at $120/MWh, December’s wind contacts cost ratepayers about $233.5 million or 15.5 cents/kWh.

The likelihood of our exports for the month being higher than the accepted 1.5 TWh of wind is something, I would bet on, so we really didn’t need it. What the market valued it at was (per Scott’s data) only 1.5 cents/kWh. In other words, for every kilowatt hour of wind delivered it cost us 14 cents. Now we should all see that as a “tipping point” and cancel even more contracts but that might prove upsetting to Mr. Hornung!

IESO just released their Annual Planning Outlook and it indicates: “There are enough existing and available resources to meet our needs for the next decade.” The Outlook also links to a “Resource Adequacy” report that provides the seasonal effective capacity of all generation sources. Wind is rated at only 11% in the summer and 31% in the winter.  Typically, Ontario demand peaks in the summer so it is obvious IESO regard wind’s contribution during that high demand season as almost of no value. Even in winter peaks the 31% IESO suggests is their “effective capacity” is much less than wind generally provides during that season. The reasoning behind the latter is its habit of generating power when it isn’t needed—in the middle of the night! Mr. Hornung himself admitted the foregoing at their annual conference in Calgary when it was announced CanWEA will merge with CanSIA in an effort to somehow create synergy.

Hornung’s admission at their annual conference was no surprise to many but may have been one of the tipping points that may hopefully lead to more cancellations. Those cancellations would save species at risk, reduce possible damage to aquifers, reduce health problems caused by the audible and inaudible noises emitted and save Ontario ratepayers hundreds of millions of dollars annually.

As far as Ontario ratepayers are concerned that would be a great “tipping point’!

For previous blogs by Parker Gallant, published by Energy Probe: see here.