Friday, November 18, 2011

Ontario Power Generation Posts 3rd Quarter Loss

Ontario Power Generation posts third-quarter loss - The Globe and Mail:


I don't often reference comments I make on articles, but the figures I looked up to comment on this story fell into place much more neatly than I anticipated.



I don't believe the 'nuclear funds' should be included in OPG's reporting, so the headline number isn't a big deal to me. My concern has generally been the plundering of public assets for distribution based on dubious political goals.

I wrote about the structure of the heist here.

OPG's statement on 3rd quarter results is here.

OPG is not allowed to build solar or wind - only private companies are.
Public OPG produced, in the first 3 quarters:
36.6TWh @ $55/MWh with nuclear
14.5TWh @ $35/MWh with regulated hydro
10.3TWh @ $33/MWh with unregulated hydro
 3.1TWH @ $35/MWh with thermal (coal)
The average price to Ontario consumers over that period was about $71/MWh - meaning OPG was paid about $1.3 billion less for their production than it was sold for.
The difference funds a couple of things. Over $300 million will go into programs to reduce consumption, and some will go into funds writing off the coal plants, but mostly is distributed to private generators.
At 2.5 TWh, end of Sept YTD, that would include over $300 million to the wind companies.
There aren't good figures on the solar, but likely about 250MW of capacity probably puts the figure up to around $125 million.
A big chunk also would go to pay the owners of contracted natural gas capacity, which were lured to a market only by guarantees of Net Revenue Requirements (because as wind and solar capacity grows there was an expectation - probably incorrect - the plants would operate infrequently). Estimates put those contract prices averaging over 10 cents/kWh -- so $30/MWh above the market price on 17.4TWh would be around $525 million going to those producers.
The sum of OPA's demand reduction funding, wind, solar, and the capacity payments for gas (which are not unconnected to wind and solar policies) do equate closely to the value drained out of OPG's production, which is primarily hydro and nuclear.

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