written by Gary Mooney, and reproduced here with permission.
I contacted the Ministry of Energy by phone to ask if 20-year electricity generation contracts – e.g. wind and solar — were going to be extended to match the government’s new 30-year amortization period for capital expenditures.
The answer that I got back was:
* There will be no negotiations to extend contracts at this time.
* But generators will be offered the opportunity to continue producing electricity beyond the 20-year point, at the market price (or a negotiated price, not sure which was mentioned).
This is consistent with Minister Thibeault’s comment, in justifying a longer amortization period, that wind turbines have a useful lifetime of 30 years.
The idea of an extension of wind contracts will be a major concern to those living with turbines, as they have been expecting that the problem will go away after 20 years. And worse, if there are no negotiations now, these folks will have to live with uncertainty for anywhere from 10 years (the earliest contracts) to 20 years.
To make an extension of the amortization period work, the province needs continued power generation over the whole period out to thirty years, either:
Ladies and gentlemen, we are gathered here today to pay our respects to Ontario’s utility-scale wind industry, which has passed away from unnatural causes (a lack of government support).
Those of you knew who knew Ontario will recall it was a place of great passion for renewable energy. In just a short time, Ontario grew to become Canada’s leading wind province. And with the passage of its Green Energy and Green Economy Act of 2009 – which introduced North America’s first feed-in tariff – the province became a leader on the global stage. Those were good times. Soon after the act’s unveiling, global energy players, such as Samsung Renewable Energy and turbine manufacturer REpower Systems (now Senvion), as well as U.S. developers, such as Invenergy and Pattern Energy Group, set up shop north of the border. And Ontario was also an early pioneer of climate change. In 2014, the place rid itself of coal-fired generation.
You could continue reading at the wind site, but at this point let me remind you the industry did remarkably well considering it was born with neither a brain nor a heart.
It’s survivors seem to be similarly lacking in intelligence and empathy. Read More »
A standard LED bulb now costs only about $3, less if you buy in bulk or live in an area where they are subsidized by the local utility. And the LED uses 8.5 watts to produce the same amount of light as a 60-watt incandescent. The Department of Energy generally calculates costs based on assuming a light bulb is used 3 hours per day, but let’s be super conservative and assume it’s only used one hour a day. And let’s assume you pay the average residential retail rate for electricity in the U.S., 12.73 cents per kilowatt-hour. If that’s the case, then in the first year you would save $2.39, 80% of the purchase cost.
Better if you live in Ontario (Canada that is) – because the IESO and its couponing:
So the IESO will assure you get a full return on your LED lightbulb – don’t worry if you’ve got specialty bulbs that cost a little more, because the IESO gives you a little more for those.
Except, in the IESO’s world, you’ll likely end up down on the deal anyway.
Replacing all of the incandescents in your house is likely to save you $50 per year or more.
That may be true in California (where he is located), but in Ontario it isn’t enough to guarantee saving you anything.
Because Ontario has committed to purchase far more power than it consumes, there is no collective saving in conservation. What there can be is cost transfers.
Revising Borenstein’s statement above:
Replacing all of the incandescents in your house, and installing them in your neighbour’s house, is likely to save you…
It seems impossible to convince most people that the IESO’s wasting $400 million a year on conservation can only increase the total charged to consumers by $400 million because of today’s surplus.
Anybody know how to get that light bulb to go off?
Yesterday Ontario’s system operator released a number of reports. Personally these reports provide opportunities to check the performance of the system compared to my expectations, and estimates, and they also provide an indication of how well the IESO adjusted to taking over the responsibilities of the former Ontario Power Authority (OPA) after 2014.
The data released includes:
Updated Ontario Energy Report website with 2016 1st quarter information, with related electricity report (.pdf), and data file (.xlsx)
2016 Q1 Progress Report on Contracted Electricity Supply (.pdf)
18 month outlook (.pdf) and related date file (.xlsx)
On first flip through the reports, the graphic that most caught my eye was the 18-month outlook’s “Table 4.1 Existing Generation Capacity as of…” This table shows not only what the IESO considers the capacity, by fuel type, participating in their market, but also what I will call “Capacity Value” and they call “Forecast Capability at Outlook Peak.” This is an important number because it’s used to measure the system’s ability to meet anticipated peak demand. The numbers that caught my attention were a 280 megawatt (MW) capacity of solar, with the forecast capability at peak of 28 MW. The 10% capacity value that indicates is sharply reduced from the 18 month forecast of June 2015.
Let’s ignore the low installed value for solar for a fleeting moment, and concentrate on the reduced capacity value. This June’s 18 month report explains it:Read More »
Ontario’s Minister of the environment and Climate Change delivered a speech at the Economic Cub today which followed a report in the Globe and Mail on a leaked draft document featuring his government’s plan to create a new body with a sweeping mandate to overhaul energy use in the province.
“Please stop buying internal combustion engine cars,” Murray exhorts his audience. “Next time you buy a car, go electric.”
[Minister] says auto execs tell him switch to electric cars “isn’t going to work. But they have no alternative”
Somebody should remind the Minister about a number of things, but particularly that his government just recently incentivized Toyota to move off of electricity from Ontario’s relatively clean grid to produce it’s own electricity, from natural gas.
“Ontario is probably the worst electricity market in the world”
Friday, April 8th, Ontario’s market provided more evidence supporting that premise.
This tale doesn’t involve surplus “baseload” or huge wind output or even particularly low demand. This tale involves the price of natural gas and the Ontario market’s inability to recover even that small fuel cost.
The closing price of natural gas on the Dawn hub (in Ontario) on April 8 was $2.68/mcf. My quick estimation just multiplies that by 7.5 to calculate fuel cost of producing one megawatt-hour of electricity: about $20/MWh.
April 8th, like all days, saw most natural gas fueled electricity produced by non-utility generators, with 3 exceptions: Halton Hills, St. Clair and Thorld generating stations also operated, and until hour 19 (7-8 pm), they all generated electricity well below the fuel cost of generating electricity.Read More »
That first point may sound flip, but if anybody detects a hint of the implication a market signal could trigger economic actors to enter, or exit, the market for electricity generation in the province, please let me know. For me the headline is this is a central planning document which would go nicely with a call to return to a unified public Ontario Hydro model.
After 14 years Ontario neither has a competitive market nor does it demonstrate any learning of what that is and how it might be accomplished.
First, for no particular reason, I’ll note slide 23 – which struck me due to its display of possible emissions, including those from imports. Ontario almost exclusively imports from essentially emissions-free Quebec. In addition to today’s healthy trade, anti-nuclear activists continue to tout Quebec imports as an option to replace the Darlington Nuclear Power Plant. I’ve written Ontario’s electricity future isn’t this Quebec Diversion, and this chart indicates the IESO is open to imports from elsewhere to meet much smaller needs than Darlington’s closure would necessitate.