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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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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Conservation: wasted in Ontario

If you follow my work you already knew of natural gas-fired power plants having their contracts essentially bought out. Antonella Artuso has provided the opportunity to read the story presented with the skill of a professional journalist – and she uncovered an estimate on the savings provided:

“Atlantic Power Corp. has announced it is idling plants in North Bay, Kapuskasing and Nipigon but will be paid until the end of its contract on Dec. 31, 2017, while Northland Power’s Iroquois Falls facility says it will produce less power until April.

TransAlta Corp. has stated that its new contract provides a fixed monthly payment until Dec. 31, 2018, with “no delivery obligations.”…

The IESO will not provide information on how much the NUGs are paid, but told the Toronto Sun that the replacement NUG contracts will generate “ratepayer savings of up to $53 million over the next two years.

Included in my post on the same topic;

Should numbers be disclosed, the value of the IESO’s employees in “conservation” roles could be established. The difference between the cost of not having supply from the four contracts redone/bought-out for 2017 and having that generation should benchmark the price of conservation to evaluate spending in that area.”

So now that we have a number of “up to” $53 million, I’ll use that to estimate the value of the IESO’s conservation spending.Read More »

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…

View original post 627 more words

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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