Spilling: Ontario’s water taxes and surplus baseload generation

Following a recent post in which I displayed the growth in hours the market failed to produce a positive price for electricity I was advised a much better indication of Ontario having too much committed supply is when the price exceeds the taxes on hydroelectric generators. I’ve since performed some research, and analysis, that do show this is a better methodology for estimating periods of surplus baseload generation (SBG).

The Ontario Ministry of Finance shows two charges levied on hydro-electric (hdyro) generators: property taxes and a water rental charge of 9.5% of “a stations’s gross revenue from annual generation”. The property tax escalates with the production level: 2.5% (of revenues) on the first 50 gigawatt-hours (GWh),  4.5% on the next 350 GWh, 6% on the next 300 GWh, and 26.5% on all annual generation above 700 GWh. This makes the top rate 36% (combining water rental and property tax).

OPG’s hydro generators have a number of rates, but all are between $40 per megawatt-hour (MWh), and $45/MWh. For simplicity, I picked $15/MWh (36% of $41.67/MWh) to query IESO data in order to estimate the percentage of hours  Ontario has experienced surplus baseload generation.Read More »

Surplus power: the other side of wind’s “success story”

Great post from Parker Gallant

Parker Gallant Energy Perspectives

Napanee gas plant: more flexible resources needed to offset intermittent wind -- trouble is, they also push emissions up Napanee gas plant: more flexible resources needed to offset intermittent wind — trouble is, they also push emissions up

January 23, 2017

The Canadian Wind Energy Association (CanWEA) summarized their submission on Ontario’s long-term energy plan (LTEP) to the IESO on their website.  “Ontario is the Canadian leader in clean wind energy with 4,781 megawatts of installed capacity, supplying about 5 per cent of the electricity that Ontarians depend on,” CanWEA said. “Wind has been the largest source of new electricity generation across Canada over the past decade. Over this time, costs have come down as capacity factors have increased.”

Here’s the other side of that apparent success story. It’s not as rosy as CanWEA, the wind power industry lobbyist, would like you to believe.

The IESO just released the 2016 Electricity Data indicating industrial wind turbines (IWT) were responsible for the generation of 9.0 terawatts (TWh) of power, representing…

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Ontario electricity powers 2.5 million homes in Michigan and New York

During the past decade’s green dumbing down of electricity communication the standard unit of output became the “home”. The unit is derived from dividing the annual output of a generator (usually one with unpredictably sporadic production) by the average annual consumption of a residential consumer. I updated my databases with the latest (2015) US EIA data, grabbed what the IESO admits to importing and exporting, and graphed out Ontario’s net exports to New York and Michigan in the trendy “homes” unit.

Net2NY_MI.png

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Industrial wind turbine industry found dead in Ontario

North American Windpower has Mark Del Franco Eulogizing Ontario’s Wind Industry

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.
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Climate Heretic: to be or not to be?

Judith Curry discusses 3 thought provoking articles – all worth a full read.

“The truly astonishing thing about all this is how little climate heretics – such as myself, Roger Pielke, and Matt Ridley – actually diverge from the consensus science position: RP Jr. hews strictly to the IPCC consensus; Matt Ridley is on the lukewarm side of the IPCC consensus, and I have stated that the uncertainties are too large to justify high confidence in the consensus statements.

RP Jr and Matt Ridley provide appalling examples of the personal and arguably unethical attacks from other scientists, journalists, elected politicians and others with government appointments.

Scott Adams provides some genuine (and as always, humorous) insights into the psychology behind the dynamics of the climate debate.

As to the question: to be or not to be a climate heretic?

I’m planning a climate heretic blog post shortly after the first of the year. After seeing RP Jr’s title, perhaps I will title it ‘Happy Heretic’ (stay tuned). Here’s to hoping that the Age of Trump will herald the demise of climate change dogma and acceptance of a broader range of perspectives on climate science and our policy options .”

Climate Etc.

by Judith Curry

On experts, lukewarmers, and unhappy heretics.

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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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Accolades for OEB’s regular regulation

The Ontario Energy Board (OEB) has issued a decision today on guidelines for funding the expansion of natural gas delivery. The ruling is extraordinary in adherence to sound regulatory principles – at least in light of the willful plundering that’s been allowed to fall on electricity consumers for years, and which I noted was continuing just two days ago.

Contrast the government’s spend/contract first, do the math never, electricity experience with:

This proceeding is a generic hearing convened by the Ontario Energy Board (OEB) to establish a framework within which natural gas service could be expanded to communities in the province of Ontario that are not currently served.

Despite the benefits of natural gas, there are still areas of the province that are not being served. In most cases, these are rural and/or remote communities where there are challenges to building out natural gas infrastructure (primarily pipelines) in an economic way. Although the costs of building the infrastructure can be high, so too can the benefits of having access to natural gas. Despite some of the high up-front costs, it appears that for many communities the economic benefits of having natural gas would greatly outweigh these costs. In spite of this, many of these communities are not being served under the existing framework. Clearly, there are barriers. The purpose of this proceeding is to assess what these barriers are, and to determine what steps, if any, can be taken to overcome them.

Under the existing framework, utilities are generally only permitted to expand to communities where the incremental revenues that will be generated from the expansion will, over time, cover the costs of the expansion. If the revenues do not recover the costs over time, an up-front payment in the form of a capital contribution will be required from new customers. This ensures that existing customers do not have to pay higher rates to subsidize the extension of natural gas service to new communities. This is known as the “benefits follow costs” principle, and has been used for many years in Ontario and other jurisdictions.

The OEB has determined that [a requirement to charge customers that are in the same rate class the same rate] is one of the primary barriers to expansion, and it will therefore allow utilities to charge “stand alone” rates to new expansion communities.

The other chief measure proposed to enable more expansions was a subsidy from existing customers. … The communities that receive the benefit will be the ones paying the costs.

Bravo.

I would hope the OEB would reflect on all the electricity sector spending they’ve allowed costs recouped on – along with profits – and ask what communities that spending benefited.

And which it did not.