Solar’s near nil capacity value in Canada’s north

Alberta is issuing a Request for Proposal (RFP) for 135,000 MWh of “solar electricity”.  I think that’s a strange thing to buy, and pulled some Ontario data to explain why.

The amount is about 2.4 times the production from the 40 megawatt (MW) “Northland Power Solar Facilities” over the past 12 months, according to the hourly generator output and capability reporting of Ontario’s system operator. Those facilities are located in the area of Cochrane, Ontario. While very north from the perspective of most Ontarians, Cochrane is only slightly north of the 49th parallel which forms Alberta’s southern border.

I’ve pulled data for the Northland facilities and the Grand Renewable Energy Park near Cayuga Ontario, roughly 650 km south of Cochrane. July is usually the peak month for total solar generation, and January can be the least productive. I’ve compared by hour using capacity factor due to the different sizes of the facilities, and will also note Ontario systems can be overbuilt – for instance, Grand Renewable has about 140 megawatts (MW) of DC panel capacity behind a 100 MW (AC) connection point. For my measurement the contracted (connection point) capacity is used in calculating the capacity factor.Read More »

Negative pricing, and other, thoughts

A new post at the Energy Institute at Hass blog, Is the Duck Sinking?, discusses the growing appearance of negative pricing in California:

What do the negative prices tell us? At a fundamental level, they tell us that we have too much of a good and suppliers need to pay people to take it off their hands. Right now, California has too much renewable electricity. Emphasizing this point, a recent briefing from the California Independent System Operator [CAISO] noted that renewable “curtailments” were at record levels in March 2017, amounting to over 80 GWh, which is more than a typical day’s worth of solar production that month.

Is there anything to do about the negative prices? Negative prices certainly highlight the value of storage, where the basic idea is to buy low and sell high. Buying when prices are negative is especially lucrative…

Another solution is to expose more retail consumers to wholesale prices, or find other ways to encourage customers to respond to real-time prices. Economists have bemoaned the disconnect between wholesale and retail pricing for years…

If Catherine Wolfram’s post represents a significant concern for curtailments and negative pricing, it’s worth noting the situation in Ontario with Ontario’s system operator, the IESO.

It’s worth noting both because CAISO is noting the curtailment, and negative pricing, and it is acting on it.

This graphic, from the CAISO presentation noted above, shows monthly curtailment in their system:

CAISOcurtailment

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Premier Wynne’s Easter basket full of rotten eggs

I am lucky to have Parker Gallant to push data summaries to – it is saving me a lot of writing lately!
One thing I’ll add: last Wednesday the Hourly Ontario Energy Price (HOEP) hit its 3rd highest level ever ($1711.03/MWh, or $1.71/kWh). The records may be altered as the IESO often reviews, and sometimes reduces, these price events – this one may explain their recent inability to produce daily reports.

The Ontario Energy Board has a Market Surveillance Panel which investigates price spikes above $200/MWh.
With a nuclear reactor shut down during the weekend of surplus still offline, hour 22 yesterday saw the HOEP spike to $281.25.

Despite April having plenty of supply, and very low demand, last night’s was the 5th $200+/MWh hour of the month, which is a record for April since market opening.

The inability to produce reports may not be the system operator’s most significant challenge.

Parker Gallant Energy Perspectives

Count the eggs! $50 million plus, lost in just 3 days!

The nice weather on Easter weekend in Ontario disguised the fact that April 14th, 15th and 16th were really bad days for electricity customers.

Scott Luft’s daily reports detailed the bad news, even before the Independent Electricity System Operator or IESO got out their daily summary for April 12th.   Some of the information in Scott’s reports are estimates, but they have always proven to be on the conservative side. These three reports paint a disturbing picture of what’s going on, and how badly the Ontario government is mismanaging the electricity file.

Here are a few of the events that our Energy Minister Glenn Thibeault and Premier Wynne should find embarrassing. They also confirm what many of us have been telling them for several years.

First, Thursday April 13th saw a disclosure from…

View original post 467 more words

Ontario’s perceived electricity cost inflation

Why are Ontarians upset by electricity prices?

The other day I read a paper* that referenced 1997’s, “Direction for Change: Charting a Course for Competitive Electricity and Jobs in Ontario.” Skimming the document that moved the province towards the current assortment of public, private and toxic entities, I came across the following graphic within a section titled, “Ontario Hydro’s Unsatisfactory Business Record.”

Unsatisfactory.PNG

I thought, presumably as most do when seeing a graphic such as this, I should reproduce this work, and extend it to the present time. Not being overly ambitious, I simply use Consumer Price Index data (from CANSIM Table 326-0020), so my graphics will omit data from industrial entities; not being without curiousity I also grabbed data for average annual residential electricity prices (from the U.S. Energy Information Administration (EIA) site).

A little math to reset the base years that will equal 100% and:

increased sharply.png

It’s not been a good 3 decades for Ontario electricity consumers.

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cutting wind in Ontario

If the wind project is paid $0.08/kWh (the average tariff for projects in the province’s first renewable RFP)…

The quote is from a 2005 document, Ontario Landowner’s Guide to Wind Energy, produced by the Ontario Sustainable Energy Association.

The Bank of Canada’s inflation calculator indicates 8 2005 cents equate to 9.6 2016 cents.

In 2016, Ontario announced new Large Renewable Procurement (LRP) contracts at 8.6 cents/kWh

5 wind contracts totalling 299.5 MW, with a weighted average price of $85.94/MW…

Comparing the cost of industrial wind turbines in Ontario by the procurement cited in the 2005 report, and the one run by the IESO in 2016, there has been little change in price.

In between these two procurements, over a decade apart, prices soared. There are no consumer benefits from the feed-in tariff mechanisms, introduced after the passage of the Green Energy Act.  Between the start of 2009 and the end of 2012 the government, through the Ontario Power Authority, contracted about 4,400 megawatts of industrial wind turbine capacity at rates around $135/MWh. The increase in rates above those shown in 2005, $40/MWh (4 cents/kWh), would add about $500 million a year to Ontario’s electricity costs for the 20-year terms of the contracts.

Ten billion dollars is not the full-term cost of the contracts, only the incremental cost of the feed-in tariff mechanism employed – and/or the rank political culture that employed it.Read More »

Can 20 year contracts be amortized over 30 years?

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:

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