The Dalton McGuinty Legacy continues with thanks to Gerald Butts and Katie Telford
The OEB recently issued their Price Report for the upcoming year November 1, 2019 to October 31, 2020 that defines the reason(s) for the increase in electricity pricing recently announced. Included in the 21 pages is the following chart referenced as “Table 2”
It is interesting that the chart indicates renewable energy in the form of wind, solar and bioenergy is credited with providing 12% of our “Supply” but 31% of the costs contained in the GA (Global Adjustment). The chart also provides a “Total Unit Cost” on a per kWh basis and the three renewable forms of energy are clearly the most expensive. The two largest ones (wind and solar) are also intermittent and unreliable. NB: See below.
The Global Adjustment keeps climbing
Reviewing IESO data related to the GA for the first 10 months of 2020 discloses it was $12.910 billion. What that means is the 12% of supply from wind, solar and bioenergy had a cost of $4.002 billion or 31% of the GA costs. If one looks at data for 2019 the same 12% cost of supply was $3.300 billion which suggests the additional GA costs for supply were $700 million. Data from my friend Scott Luft for the comparable 10 months indicates an increase in grid accepted wind of 510K MWh but a decline of 218K MWh in curtailed wind. While the overall cost of the net additional wind generation of 292K MWh represents an increase of around $430K the balance of the $700 millin probably came from increased solar costs. Unfortunately, most of the solar generation is embedded and IESO does not disclose what they have generated monthly so until 2020’s full data set becomes available we must assume the foregoing.
On a related note, total generation from wind, solar and bioenergy contracted supply in 2019 was about 18.6 TWh (including estimated embedded generation) which was 1.2 TWh less than our total exports (19.8 TWh) to our neighbours in NY, Michigan etc. We sold those exports at an average of 1.83 cents/kWh generating only $360 million in revenue but at the average cost of 12.83 cents/kWh (inclusive of all generation) levied to ratepayers/taxpayers meant the cost to Ontarians was $2.5 billion so we lost $2.140 billion. If all of the 18.6 TWh from renewable generation were exported the total cost of those exports would have been $5.1 billion and allowing for the $360 million received would raise the net costs to over $4.7 billion. IESO don’t disclose if wind and/or solar caused us to sell off our surplus generation and they presumably can’t tell us what the makeup of the generation exported was!
Thanks to former Premiers Dalton McGuinty and senior advisors (Butts and Telford) who played a major role in the creation of the Green Energy Act and their above market contracts for wind, solar and bioenergy the Ontario Liberal legacy lives on!
NB: Amusingly the University of Calgary, School of Public Policy days ago issued a very short paper titled: “Cheap Renewables Have Arrived” and in the paper laud the wonders of wind, solar and battery storage. This kind of one sided study makes one loose faith in the educational system and its ability to actually activate a truly analytical thought process.