OPG’s 2017 results grate

Yesterday Ontario Power Generation released their 2017 Financial Results:

Ontario Power Generation Inc. (OPG or Company) today reported net income attributable to the Shareholder of $860 million for 2017, compared to $436 million in 2016.

That must be considered a great number in the context of the income history at OPG as it’s the highest they’ve ever accomplished. The apparently excellent results may leave some wondering what critics commenting on the sector have been braying on about. I, a critic, have reviewed the results and found some things to bray about.

OPG annual financial results

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Ontario’s system operator reports 200% rise in annual wind curtailment

The IESO has updated its 2016 year-end supply data page to include annual totals for “wind dispatch” and “Nuclear Manoeuvres and Shutdowns.”

Added to data from OPG on “hydroelectric generation due to [surplus baseload generation] conditions” this provides a more complete picture of annual curtailment.

annual curtailment.png

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Alternative (Energy) Facts – from Environmental Defence, et al.

I started receiving messages last night on a sorta report by Environmental Defence (ED), and as I am still receiving them, I thought I’d write some thoughts – if only to simply copy a link when again asked for my thoughts.

Here is how ED’s Keith Brooks begins a blog post on their latest “work”:

Electricity prices in Ontario have risen in recent years, putting the squeeze on some Ontario residents and businesses. There are many reasons for the increase in electricity prices and renewable energy is one of them.  However, the role of renewables in diving up electricity bills has been vastly exaggerated.

I wrote on a poor 2014 ED work and noted their new backgrounder contains a graphic with the same information as Figure 1 of their 2014 work. Without acknowledging any level of competency in the compilation of data for either ED graphic, here’s the elements of residential electricity bills as they report them for 2016 and 2014:

edcomp2

Perhaps the “role of renewables in driving up electricity bills” is perceived as being significant because:

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Rebuttal of Ontario Clean Air Alliance re: Darlington refurbishment

I’m often asked about claims from the Ontario Clean Air Alliance, and I usually don’t prioritize acknowledging them publicly.

Privately I have, and because the topic continues to come up, I thought I’ll post based on a quick e-mail I produced regarding this OCAA graphic – which is from a more comprehensive document where they reference the sources of most of the figures:

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Electricity rates held steady by Ontario’s inept energy regulator

The Ontario Energy Board (OEB) released regulated price plan (RPP) rates for Winter 2016-17 on October 19th, leaving rates unchanged from summer 2016 rates. The lateness of the news had me expecting they were being politicized, so maintaining existing rates didn’t surprise me. Reading the report rationalizing the prices, there is some good news for consumers as rate pressures decrease (as predicted in the government’s Long Term Energy Plan forecasts). There’s also some very bad news for consumers, as the OEB has negligently punted costs down the road – again.

Reviewing and setting prices every six months protects consumers from fluctuating commodity prices and provides stability and predictability on the electricity line of their bills. It also ensures supply costs are fully recovered so that the system continues to operate effectively.   OEB news release

The goals of rate setting are to recover the full costs of supply with “stability and predictability.” The rate setting methodology for accomplishing this is set out in Regulated Price Plan Price Reports – I’ll call these RPPPR.

Essentially these reports forecast all supply cost, how much of that cost is to be recovered from Regulated Price Plan (RPP) consumers (while the vast majority of consumers in Ontario are charged this way, the exclusion of larger consumers from the plans means only a little over 40% of all provincial consumption). The RPPPR is very much a forecast of what the market rate, plus the “class B” global adjustment rate, will average over the next 12 months (although rates only apply for 6 months, when the process repeats). For those familiar with the sector’s jargon, the RPP is a forecast of the Class B commodity rate.

Part of the RPPPR process is recognizing a variance account tracking the extent to which the RPP fails to recover the full costs, or recovers too much. Ignoring the variance account, the newly released Winter 2016-17 RPPPR calculates a rate of $110.13 per megawatt-hour (MWh), or 11.013 cents/kWh. One year ago the RPPR calculated a rate of $109.49, but the variance account provided a reduction of $2.22/MWh a year ago, whereas the recent report included a charge of $2.26/MWh reflecting rates not recovering the full cost of supply over the past year. This is curious – keeping rates down despite the variance account growing indicating rates were too low to recover all supply costs.

“[Ensuring] supply costs are fully recovered,” is a stated goal of the regulator.Read More »

Curtailment of contracted electricity supply still rising in Ontario

October 1st is here, so the third quarter of 2016 is now history. Seems like a good time to review some things – like Ontario’s move towards world leader status in the curtailment of potential supply from wind turbines – mostly paid whether or not their output can be handled by the grid.

Over the first 3 quarters, I estimate curtailment of supply from industrial wind turbines is three and a half times greater than the same period in 2015 – and 14 times higher than in 2014.

image-82

The kicker here is that the greatest period for curtailment in the past has been the fourth quarter.

Curtailment data is difficult to find (which is why I produce it), but increasingly of interest across the world. China is often noted for high curtailment – one report shows 21% of all potential generation in that country curtailed in the first half of 2016.

It’s difficult to compare jurisdictions, but Ontario seems to be chasing China for lowest utilization of potential wind output. Depending on whether or not calculations included estimated distribution-connected turbines (which we have little reporting on in Ontario, but expect can’t be curtailed), I have the 12-month running average curtailment levels at 16-18.3%, and I expect that to rise rapidly until cold sets in.

A warm December and Ontario could set a record for annual wind curtailment levels.Read More »

Estimating Ontario’s Electricity Supply Costs with OEB data

I’ve been asked on a couple of occasions for costs of Ontario’s electricity from unbiased sources. I answer with a single snapshot source, but that – in my opinion – can’t communicate much about what is behind changing pricing, so I also provide some other sources so people could estimate costs in 2013, 2014 and 2015.

auditorFigure5

In this posts, I’ll cite the data sources, run the estimates, note some shortcomings – and end with a look at some of my own estimates.

The singular best data is from  the 2015 Auditor’s report chapter on power system planning – only the Auditor has extracted a coherent set of numbers on both production and costs from the system operators (IESO).

The data the IESO provided the Auditor is different than the data the IESO posts on its website. The difference is due to generation embedded in distribution networks, and the IESO’s inability to update its reporting to include that supply.

Most starkly, the IESO reports on its website 2014 solar generation of 0.0185 TWh (billion kWh). With the auditor they revealed 1.8 TWh-essentially 1.8 billion kilowatt-hours more.

So… for reputable accounting of annual generation and costs, I suggest looking at the less frequent, but more reliable, documents from the Ontario Energy Board (OEB).

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