The declining value of Ontario exports

Yesterday Statistics Canada’s daily news included Electricity supply and disposition, 2016. 

Geoff Zochodne, a reporter at the National Post, gleaned this message from the release:

“Ontario exported more power to the U.S. last year than it has in a decade, and at a relatively low value.”

This initiated some e-mailing, which drew me into the data quagmire again, but also reflecting on my history reporting on exports. Instead of putting my thoughts into private e-mails, I thought I’d make them the content of this public blog post.

I’ll return to the newly posted Statistics Canada data later, but for now I’ll declare my bias as printed in the Financial Post early in 2016: “…StatsCan data is awful. It can’t be the basis for anything.” The recent release has mostly meaningful data, but some big errors mean it’s far from the best data to serve in analyzing Ontario’s exports – or anything else.

Some background on my involvement reporting on exports – if only to satisfy my sudden nostalgia.

Reporting on losses of exports is what got my blogging noticed back in January 2011. I’d started writing a couple of months earlier – to maintain skills in data analysis and, hopefully, develop some writing ability. January 1st, 2011 was warm (for winter) and it was windy. I wrote of records:Read More »


hot Sunday, windy Sunday

I noted Sunday morning curtailment of potential generation was around record levels – a claim repeated Sunday afternoon at a rally against a facility in Prince Edward County. My friend Parker Gallant subsequently wrote on the wasted wind that day. I thought a post comparing the past Sunday to other days might be instructive.

I developed a single page daily report some time ago – something Parker felt useful. The report for Sunday October 15th estimates the cost to a Class B consumer of consuming one megawatt-hour of electricity at $145/MWh.

$145/MWh was up steeply from the $108/MWh I estimated as the average cost for Class B consumers on the previous day. That $37 difference is greater than the difference estimated for exporters: on Saturday their price averaged $27/MWh; on Sunday it was free. The difference in cost for exporters is due to the change in the Hourly Ontario Energy Price, which dropped from $135/MWh in hour 9 on Saturday, when wind was forecast to produce 149 megawatts, to negative prices overnight and back up to $0/MWh in hour 9 on Sunday when wind was forecast to produce 3,876 megawatts. The correlation is not difficult to spot:

chart (41).png

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ON Politics: polls first

Some recent political stories that caught my attention.

A story by Alison Jones, of the Canadian Press, was carried on the CBC website with the title, Ontario government polling shows improving numbers on hydro file:

…polling conducted by the Gandalf Group — headed by the man leading the Liberals’ 2018 re-election bid — found large support for the government’s plan for a $15 minimum wage, general support for carbon pricing, if not necessarily the specifics, and even improving assessments of the hydro file, over which the government has been consistently hammered.

The Gandalf Group is led by David Herle, Premier Kathleen Wynne’s campaign manager. Mr. Herle is, in my opinion, a very good policy person and astute pollster. I wrote on his work influencing policy last September (opposition Finance Critic Vic Fedeli cited my work in his Focus on Finance 4).

This isn’t meant to imply policy-by-poll is a good thing. It’s entirely possible the people polled prefer not only poor policy, but ignorance.

Within days of the first story on new government policies polling well (without noting they became policies because they polled well), the Liberal Party friendly Toronto Star published Kathleen Wynne wants you to like her policies, not her. The Premier has implemented this shtick in her canned pre-campaign appearances.

There is a saying in politics that “anger is not sustainable.” I believe that, but I’m not sure most potential voters are simply not liking, or even angry with Premier Wynne. Anger is an energy, but disgust is a sense.

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Turbine Approval Revoked

Bayshore broadcasting reports:

Approval for wind turbines in Clearview Township has been revoked.

The Environmental Review Tribunal released its decision today (Wednesday) to revoke the previous Renewable Energy Approval.

Although the article notes the proponent has 15 days to appeal, I’ve switched the status to “Cancelled” on my map of industrial turbines in Ontario.

The Environmental Review Tribunal’s action might prove contagious. It’s unclear why the IESO is not exercising contract clause’s to revoke other feed-in tariff (FIT) contracts. I reviewed FIT 1 contracts and found this:

Article 9
9.1 Events of Default by the Supplier
(j) The Commercial Operation Date has not occurred on or before the date which is 18 months after the Milestone Date for Commercial Operation, or otherwise as may be set out in Exhibit A.
So I checked my import of data from an IESO contract data listing (should match this). Aside from the Fairview site just cancelled, the off-shore contract persists despite a ban on offshore. The Amherst Island project has advanced to the stage of barge sinking in harbour – but not far beyond that, while White Pines was greatly reduced by the ERT yet ponders a future despite having run out the clock.
What’s in Exhibit A of these deals preventing the IESO from terminating?

Alberta electricity, July 26th, 2017: Base truths

On July 26th Alberta’s electricity market hit its regulated peak price of $1000 per megawatt-hour (MWh) and stayed there for hours 17, 18 and 19. The price soon dropped back down but the commentary continues.

Upon seeing there had been a price spike, I checked to how industrial wind turbines had performed and saw they’d performed exactly as I’d expected, with output dropping from hour 14 to hour 18.

AESO July 26

I expected that as I’d seen it in 2014 and in 2012. I didn’t think this was a particularly big event. Prices have been very low in Alberta and this spike will do little to change the yearly average. Alberta is examining a capacity market, and the intent of those is to prevent high price hours – but Texas is an example of a jurisdiction thus far avoiding capacity markets/costs by upping the maximum peak market price. Theoretically, peak pricing can be healthy in encouraging new market entrants with peaking generation, or demand reduction, products. While seeing the one event as not particularly problematic, I did put some short thoughts up on twitter:

Capacity credit is an awkward term I’ll return to.

A response to my tweet tagged Andrew Leach who later put some other suspects for the cost spike up on Twitter, including:

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The Class A cost transfer

Parker Gallant has a new post covering the Industrial Conservation Initiative (ICI), or Class A Global Adjustment mechanism: Ontario’s class distinction stings ordinary hydro customers.

 In early 2010, then Minister of Energy Brad Duguid issued a directive to the OPA (Ontario Power Authority) instructing them to create and deliver an “industrial energy efficiency program” specifically for large transmission connected (TX) ratepayers.

That directive led to the creation of the two classes of ratepayers that now exist in Ontario.

It’s an appropriate time to revisit the topic because this past week Ontario’s Minister of Energy was touting the electricity cost-saving opportunities for businesses that qualify for participation in a newly expanded ICI, because those savings come from shifting costs to other consumers.

If you are unfamiliar with the topic the latest article may inspire you to learn more, I recommend some articles for doing so at the end of this short post.

One statement Parker makes is not entirely correct: “IESO did not start disclosing the consumption by ratepayer class until 2015.” While they did not publish the data to their website, they did share it with those who asked.

chart (1).png

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I’m no longer advocating for clean energy; here’s why.

“Realism never makes for a good copy, as long as there are people who make a living from selling a dream instead”

Perhaps those that remain in the quagmire will speak of this one who got out.
Maybe not.

The unpublished notebooks of J. M. Korhonen

My Finnish readers will already know that I announced some time ago that I’m done with energy/climate change discussions. I’ve been following the debate actively since about 2007 and have been writing about it since late 2010. I’ve written two books about the topic, one of which is translated to five languages, and blogged fairly regularly. But now it’s time to do something else.

The main reason why I’m refocusing is because I think the debate is going nowhere, and I don’t want to waste my time on a futile project. We are not going to get a decarbonized energy system by 2050. We are going to fail the climate targets, probably by a large margin, and I suspect that a warming of about 3 degrees centigrade is going to be almost inevitable. It’s perfectly possible that self-amplifying feedback mechanisms under way will amplify this change even more. What…

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