tag:blogger.com,1999:blog-4462100480068271572024-03-13T03:55:29.052-07:00Cold Air CurrentsCold Air Currents: Articles of interestScott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.comBlogger1275125tag:blogger.com,1999:blog-446210048006827157.post-31747897925487818972023-05-12T02:49:00.000-07:002023-05-12T02:49:01.490-07:00Canadian experts recommend 3 bat species be listed as endangered The Committee on the Status of Endangered Wildlife in Canada is recommending the three species of bat be listed as endangered: hoary, silver-haired and eastern red bats. <div><br /></div><div>The Globe and Mail reports:</div><blockquote>“There’s lots of indication that all three have been precipitously declining,” said Stephen Petersen, director of conservation and research at Winnipeg’s Assiniboine Park Zoo, who co-chairs the committee’s work on terrestrial mammals.<br /><br />Among the causes that the committee identified as contributors to the bats’ decreasing numbers, “the mortality at wind farms seems to be the top threat,” he said.</blockquote><p>One of these three species was cited when the Ontario government led by Premier Doug <a href="https://www.cbc.ca/news/canada/ottawa/bat-concerns-province-cancel-wind-farm-1.5390885" target="_blank">Ford attempted to cancel the Nation Rise Wind Farm</a> - along with little and bit brown bats. Judges, far from batty, <a href="https://www.cbc.ca/news/canada/ottawa/north-stormont-wind-farm-court-bats-1.5569590" target="_blank">overturned the government</a>. It seems only a matter of time until the brown bats will follow the others into endangered status.</p><span><a name='more'></a></span><p>From the Globe's article published on May 11, 2023:</p><blockquote>Brandy Giannetta, vice-president of the Canadian Renewable Energy Association, said the domestic wind industry is aware of the issue and has been taking steps to reduce the impact on bat populations.<br /><br />“We are not surprised by the recommendation for listing,” she said.<br /><br />She added that turbine operators, using sound-based devices, can also detect when bats are near and, in some cases, can emit sounds that are intended to ward bats away.</blockquote><p>From the same representative of the industry, <a href="https://lfpress.com/2016/07/20/wind-turbines-killing-tens-of-thousands-of-bats-including-many-on-the-endangered-species-list" target="_blank">7 years ago</a>:</p><blockquote>A spokesperson for the Canadian Wind Energy Association said the association is concerned about reports that are based on limited data that have the effect of boosting estimates.<br /><br />In response, CanWea is developing its own system that will be released this fall that is designed to improve existing and proposed bat regulations, said Brandy Giannetta, CanWea's Ontario regional director.</blockquote><blockquote>"It aims to achieve this in part by enhancing knowledge of the existing data in order to drive science-based policy decisions and also by providing avoidance, minimization, and mitigation options that we hope operators and regulators alike will find useful in conservation efforts," Giannetta said ..'</blockquote><p>This was mostly bullshit in 2016 and remains so now. A "<a href="https://naturecounts.ca/nc/wind/about.jsp" target="_blank">Wind Energy Bird and Bat Monitoring Database</a>", but it is closed data submitted, voluntarily, by industrial wind industry participants: <i>"The data from this database can only be accessed by authorized users, which include those collecting data on birds and bats using the recommended guidelines (for the purpose of accessing their own data only) and selected representatives from BSC, CANWEA, CWS and OMNRF."</i></p><p>Those organizations must have a special feeling today as expert panels recommend listing rapidly declining species of bat as endangered. Could be worse - they could have open sourced the data, exposing it to the dangers of actual data scienc.</p><p>My prediction is the bat species go instinct before they are officially listed as endangered - as I don't view the current federal government as having anywhere near as much concern for the natural world as it does for its alliance with the wind industry.</p>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-68687933537703654742023-04-04T09:46:00.000-07:002023-04-04T09:46:05.795-07:00Nuclear bros and environmentalists<p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">I'm Scott. </p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">You may know me as a nuclear bro' as I'm male and staunchly support nuclear energy. I need to preface the following as I'm publishing it now, slightly edited with some extra paragraphs to compensate for me not having written down the terrific conclusion I had in mind last summer. The motivation to put it out in the wild now comes from things that impacted me in the past couple of days. On a positive note the federal government has shifted to include nuclear in programs aimed at eliminating emissions - perhaps it needs a push to reconstruct the Ministry of the Environment to align it with the new government position and this will provide it. </p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">Ignobly the greater motivation really comes from reading this interesting <a href="https://twitter.com/PatrickTBrown31/status/1642947937075339273">Twitter thread from the Patrick Brown associated with the Breakthrough Institute</a>, and the invasion of my Twitter thread with formerly curious and interesting climate commentators/academics who stagnated intellectually a decade ago and now come out mainly to bless the words of other old stale 'environmentalist'.</p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">__________</p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;"><br /></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">One benefit I’ve gotten from social media is learning I am hated by some people I’ve never met - or even heard of. It comes when I enter arcane discussions on obscure topics and some viciousness enters from the periphery. I recognize the emotion in the irrational histrionics as I’m not immune to behaving similarly when losing my composure. I empathize with my haters. After viewing profiles to learn something about them I realize they have reason for animosity as they draw income from some pursuit I’ve attacked, repeatedly, in the past. This has worried me - I do know and like some people in fields I am not keen on (such as solar and efficiency), and I think in recent years I’ve worked at remaining civil. Unfortunately, this is now problematic. The same institutions, and people, I railed against over a decade ago in fighting the assault on the Ontario electricity consumers launched by the Green Energy Act, and related feed-in tariffs, are being manipulated in the same way by many of the same people with the same playbook as they perceive a political environment receptive to their same manipulation. If there’s hating to be done, I’m damn well going to be doing it!<br /><br />What is an environmentalist?<br /><br />I suggest an environmentalist is somebody considered an environmentalist by others marketed as environmentalists. There’s some requirements for that group to emerge: money, influence/access to media, communication and social skills… cinematographers.<br /><br />What there hasn’t been is any requirement for accomplishment.</p><span><a name='more'></a></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><br />A decade ago it was suggested to me that the role of bureaucrats is to expand bureaucracies. I <a href="https://twitter.com/ScottLuft/status/277182754150567936">shared that thought with Richard Tol</a> and I am delighted to find that 6 years later he was still <a href="https://twitter.com/RichardTol/status/1056930729614024704/photo/1">tracking and graphing United Nations Framework Convention on Climate Change</a> (UNFCCC) annual meetings, and costs - and global greenhouse gas (ghg) emissions.<br /><br />There’s been no correlation
</p><blockquote class="twitter-tweet"><p dir="ltr" lang="en">CO2 emissions according to World Bank (1995-2014) and Global Carbon Project (2015-2017) <a href="https://t.co/XuI7BP1JDd">pic.twitter.com/XuI7BP1JDd</a></p>— Prof Dr Richard S.J. Tol MAE (@RichardTol) <a href="https://twitter.com/RichardTol/status/1056930729614024704?ref_src=twsrc%5Etfw">October 29, 2018</a></blockquote> <script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script>
<span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">.</span><br />For environmentalists there’s great news in the expansion of bureaucracies as it leads directly to more environmentalists through a couple of avenues. One is funding accrediting institutions (a.k.a. universities) in order to certify experts (a.k.a. employees) and environmentalists (a.k.a. graduates). I’ve no doubt government funding of allegedly non-Governmental Organizations has also soared in proportion to UNFCCC mandated meetings, and, perhaps best of all for environmentalism, people are just given money for things they claim will have an environmental benefit. The benefits are never measured, but the environmental quality of the government, and the business, isn’t measured that way: it’s measured by the amount of money dispensed and allies purchased.<br /><br />There are ways less directly tied to government to become an environmentalist. Both David Attenborough and David Suzuki benefitted from sharing a name with a mythologized slayer of a goliath and cinematographers. Both did benefit from the funding of public broadcasters - but I think it’s the cinematography that made them iconic. The first government of the second Prime Minister Trudeau’s Minister of the Environment and Climate Change, et cetera, famously <a href="https://www.ctvnews.ca/politics/mckenna-s-office-spent-17k-on-photographers-for-15-events-since-november-1.3041292?cache=khgvxzimi">spent lavishly on photographers</a> in ratcheting up her profile as an environmentalists and subsequently, in keeping with the movements ‘pay it forward’ way, ratcheting up the spending of that Ministry. The Minister was later rewarded with a move to Infrastructure where she could have a very meaningful impact in a real way - at which point she left the government for a broader stage without expectations of producing tactile things.<br /><br />The Prime Minister had, upon his first electoral victory (and only majority) picked failed Alberta candidate <a href="https://www.rmotoday.com/local-news/trudeau-handpicks-raynolds-for-senior-ottawa-position-1567993">Marlo Raynolds </a>as the Chief of Staff for the Minister of Environment and Climate Change etc. Raynolds is an environmentalist as he conspired with other environmentalists in opposing oil sands and nuclear energy while advocating all the soft path stuff invented by Amory Lovins nearly half a century ago in producing <a href="https://coldair.luftonline.net/2019/03/f-in-efficiency-free-riders-of-soft-path.html">the nothing/efficiency industry</a>. <a href="https://www.pembina.org/blog/leader-who-gave-pembina-institute-room-grow">Pembina, which Raynolds led for several years, shows his top 3 accomplishments</a> as opposing the oil sands, “laying the ground work for things like the Renewable Energy Act of Ontario”, and elevating the discussion of “energy issues as a whole in Canada.” This clashes with an actual review of the history of energy issues in Ontario as Pembina<a href="https://coldair.luftonline.net/2021/10/ignore-those-promoting-death-date-for.html"> campaigned for policy which would have driven emissions in Ontario far above where they’ve been</a> for the past decade. The backlash against the Green Energy Act halted growth in contracting of wind energy back in 2011 (solar slowed over a longer period), and the majority of voters support parties that moved to strong support for a nuclear base. This reality doesn’t impact on the perception of Pembina, and Raynolds, as environmentalists:<br /><blockquote> At the Pembina Institute… we knew what we were not –we were not a Greenpeace, we were not a WWF with a worldwide brand, we were not a David Suzuki Foundation with a Canadian icon, and we were not an EcoJustice with a team of legal expertise. <br /><br />…At our core, we were technical and policy analysts with a keen interest to collaborate with anyone we believed could move solutions forward. We largely became known as “the egg-heads of the environmental movement doing good analysis”. <br /><br />… we built up our skills in government relations and communications, and developed relationships with a strong network of opinion leaders. This is where we focused. <a href="https://muttart.org/wp-content/uploads/2013/12/Prepare-Your-Non-Profit-Organization-to-Help-Create-a-Wave-of-Positive-Change2013.pdf"> -Marlo Raynolds</a></blockquote><a href="https://muttart.org/wp-content/uploads/2013/12/Prepare-Your-Non-Profit-Organization-to-Help-Create-a-Wave-of-Positive-Change2013.pdf"></a><br />Bullshit - but it’s a playbook for popular environmentalism: first kiss the asses of others perceived as environmentalists and then claim a competence in analysis protected by the shields of your cabal. The referenced Ecojustice is better known as Équiterre. Another way into the environmentalists club is through a law degree. Not only are legal challenges key to impeding things being accomplished by people (generally considered bad), but regulatory bodies pay intervenors to challenge projects - if a degree shows them to be a professional, if not birthers of ideas and accomplishments in the actual relevant field (such as electricity), regulators will also recognize expert-in-law. It's not uncommon to see an expert-in-law, such as one connected to the acronym CELA, be an expert in many things - all of which, as an expert-in-law, they cruelly work to impede. <div><br /></div><div>In 2008 <a href="https://www.pembina.org/op-ed/1673">Pembina’s Raynolds and Équiterre’s Guilbeault were writing together</a> in opposition to the ‘tar’ sands production of ‘dirty’ oil - two adjectives they’d developed with others -<a href="https://open.alberta.ca/dataset/3176fd2d-670b-4c4a-b8a7-07383ae43743/resource/a814cae3-8dd2-4c9c-baf1-cf9cd364d2cb/download/energy-report-public-inquiry-anti-alberta-energy-campaigns-2021.pdf">domestic and foreign</a>. Today in Canada’s Ministry of the Environment one is the Chief of Staff and the other the Minister.<br /><br />Neither has generated anything useful.<br /><br />Quite the opposite.<br /><br />My annoyance of late is partially because <a href="https://twitter.com/bouchecl/status/1529629343709900801">a sage voice</a> alerted me to<a href="https://davidsuzuki.org/science-learning-centre-article/shifting-power-zero-emissions-electricity-across-canada-by-2035/"> a paper </a>by “Canadian icon” David Suzuki’s foundation. I’ll summarize my understanding of the report I briefly, although it seemed like an eternity, skimmed: the peeps at the org asked representatives of the most important race what an energy system ought to be (which coincided with what Suzuki/Lovins have wanted for nearly 50 years now), then they found a ‘university’ with a ‘model’ and an ‘algorithm’ to test the feasibility of such a system, and, after fiddling with parameters and inputs were able to conclude the process discovered all of the assumption they began with.<br /><br />A circular method for a circular economy!</div><div>No more need for a scientific method for a scientific period.<br /><br />I could put more work into debunking silly Suzuki stuff, but the quality of such reports is not a goal in their production: quantity is. I learned this a dozen years ago in fighting off that Green Energy Act that was one of Raynolds’ most prized accomplishments. I refer to them as zombie reports - because long after being killed with valid criticisms they’ll walk about in citations by other environmental organizations. I’ll simply, for now, note:<ul style="text-align: left;"><li><a href="https://coldair.luftonline.net/2014/04/zombie-docs-environment-defences-latest.html">a rebuttal, to an Environmental Defence report, I wrote in 2014</a> (which cites rebuttals I’d previously created to 10 of their citations);</li><li>a <a href="https://coldair.luftonline.net/2014/06/ontarios-electricity-future-isnt-this.html">rebuttal to the inappropriately named Ontario Clean Air Alliance (OCAA) on their claim of availability of imports from Quebec</a> (also in 2014),;</li><li><a href="https://coldair.luftonline.net/2016/07/wind-water-and-sunlight-jacobsons.html">my rebuttal to a silly paper by Mark Jacobson et al in regards to its claims of providing electricity in Canada with just wind, water and sun</a>, and;</li><li>My review of the<a href="https://coldair.luftonline.net/2016/07/new-wind-study-provides-good-argument.html"> NRCAN/CanWEA Pan-Canadian Wind Integration Study</a> (PCWIS).</li></ul>I note the last mainly because that 2014 work basically rebuts the plans in the Zombie paper just delivered by the Suzuki drones.The PCWIS calculated that at 35% of supply from wind level Alberta’s wind turbines would have a capacity value of 7.1% (I cited that in <a href="https://coldair.luftonline.net/2017/11/alberta-bound.html">a post on Alberta</a>) - and shows that value decreasing as share of generation grows.. The dangerously bad Suzuki study (which the industrial wind turbine industry provided help with throughout) plans primarily wind for Alberta anyway - it appears what is important to them is wind turbines, not Albertans.<br /><br /><img src="https://lh6.googleusercontent.com/hjeCb1sQN4wgJmi0wGe2p6ZFrQc7gOWa2shQWG-SiZbms-esGgBlIeUkJ3_HZGob3WNE4F7z80k34KfXEaD6-OeelMqW6gZWHEJ_3WBctavgMaRTxgNq5mW1B56QCCr4vbnAkCk_xrKxHcpZYp_9eA" /><br /><br /><br />The assemblage of low-quality reports to serve as zombies in being referenced by other low-quality reports provides as great an opportunity for green grifting under today’s Guilbealt/Raynolds Ministry than at any time since George Smitherman was capable of winning an election.<br /><br />The Guilbeault/Raynolds government signalled, last year, a funding bonanza with the release of a Green Bond Framework earlier this year. The ‘<a href="https://www.canada.ca/content/dam/fin/publications/green-bond/21265%20Green%20Bond%20Framework_EN.pdf">Summary of Exclusions</a>’ from that document:<br /><ul style="text-align: left;"><li>Transportation, exploration and production of fossil fuels</li><li>Nuclear energy</li><li>Arms manufacturing</li><li>Gambling</li><li>Manufacture and production of tobacco products</li><li>Manufacture and production of alcoholic beverages</li></ul>While there was some criticism of the exclusion of nuclear, I didn’t see a discussion of the reason it was venomously listed as an evil above weapons, gambling, smoking and booze. I suggest the reason is Ontario nuclear is perceived as green by many – so green that <a href="https://www.brucepower.com/2021/11/22/bruce-power-announces-500-million-issuance-of-first-green-bond-globally-for-nuclear-power/#:~:text=Bus%20Tours-,Bruce%20Power%20announces%20%24500%20million%20issuance%20of,Bond%20globally%20for%20nuclear%20power&text=Bruce%20Power%20announced%20the%20issuance,enabling%20a%20Net%20Zero%20future.">Bruce Power had successfully sold “Green Bonds” a few months earlier i</a>n an, “industry-leading step in the company’s environmental, social and governance strategy.” The faux environmentalists tried wielding national government power to invalidate a perception of nuclear as the best tool for producing trivial-emission electricity.<br /><br />Or perhaps it was just a gangster’s reflex response to some stranger doing business on their turf. That seems to be the case as insiders can snark to <a href="https://www.cbc.ca/news/canada/toronto/ontario-clean-energy-credit-system-1.6385451">the CBC</a> and <a href="https://thenarwhal.ca/opg-clean-energy-credits/">The Narwhal</a> when the government moves to sell clean energy credits (RECs) independently: a “Whitepaper on Wind Energy and the Ontario Market” prepared for CanWEA in 2020, by Power Advisory LLC, recommended “IESO should explore monetizing environmental attributes (EAs), revenues from sale of EAs could be shared with supplying wind generators and Ontario electricity customers.” The IESO owns the environmental attributes of all the wind it has contracted, so perhaps the position is those assets should be abandoned while new, “wind generation projects can seek to monetize their greenhouse gas emission reduction attributes.” I didn’t interpret it that way at all: the paper acknowledges the IESO retains the ownership of environmental attributes but implies wind suppliers should get a big cut of any revenue derived from the sale of the attributes anyway.<br /><br />The success of professional ‘environmentalists’ in finding careers without productivity is not actually without precedent.<br /><br />The results of the 2022 Ontario election suggested the general populace understands the clique known as environmentalists has an agenda that doesn’t involve them - that is certainly the case outside of central portions of the province’s largest cities. </div><div><br /></div><div>Jumping to the time of publishing I am encouraged that the efforts to oppose nuclear federally have failed. This is good. What is not good as all those faux environmentalists that did not call out the exclusion of nuclear are still considered environmentalists. A couple of them still lead a Ministry of Environmentalishism -as if it's not 2023!</div>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-13408161543756623272022-01-07T05:44:00.003-08:002022-01-07T05:44:38.047-08:00Hybrids before ev's?<p> I've read claims from Toyota that hybrids can reduce emissions much quicker than electric vehicles, but<a href="https://www.news.com.au/technology/motoring/motoring-news/why-toyota-says-buyers-should-think-twice-about-electric-cars/news-story/a4b031b921d85474ba3c683bac23bee1" target="_blank"> this is the best explanation I've yet encountered</a>:</p><blockquote>drivers who use their cars for short trips may be overcapitalising on electric cars with enormous battery packs responsible for significant carbon emissions throughout their life cycle...<br /><br />... Hybrids were more affordable than battery electric vehicles (BEVs) and would reduce “more emissions, sooner, than BEVs alone”...<br /><br />“According to our calculations, those 240,000 hybrids have had the same impact on reducing CO2 as approximately 72,000 BEVs...”<br /><br />“Yet the volume of batteries we’ve used to produce these hybrid-electric vehicles is the same as we’d need for just 3500 BEVs.<br /><br />“In other words, we can say that the batteries needed for 3500 BEVs have been used to achieve the CO2 emissions reduction effect of 72,000 BEVs.</blockquote><span><a name='more'></a></span><p>Within the expected lifetime of a new vehicle I think it is unlikely the grid will be efficiently utilizing the batteries on personal electric vehicles. Some smart homes may integrate them, but I think it will generally be true the battery will fail to be utilized much more than this article suggests. </p><p>In Ontario we saw an attempt at revising the building code to require charging infrastructure in new construction fail, probably largely due to requirements for 200 amp service which I suspect were considered an overreach by ane incoming government as it cancelled the updates.</p><p>A new vehicle decision now has lots of factors: a garage (which I call a house for my car - as it strikes me as a strange thing), electrical service and wiring. My most recent purchase decision kicked the can down the road as I went with a used vehicle. I suspect my wife and I could agree on a small SUV (Rav 4ish) with a 100-150 km range on the battery and an ICE, but maybe the next car will get its own house - and be electric.</p><p> </p><br /><br />Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-72132932497118082162020-04-10T02:33:00.003-07:002020-04-10T02:33:42.324-07:00Social isolation and food destructionI've been surprised to see articles on farmers destroying food in recent days.<br />
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It seemed strange to me at first, but I found the following articles informative as to why.<br />
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<a href="https://www.realagriculture.com/2020/04/yes-farmers-are-dumping-milk-heres-why/" target="_blank">Yes, farmers are dumping milk. Here's why</a><blockquote class="tr_bq">
Figures out of the U.S. (Canadian numbers should come soon) show increases through retail of 53% in milk, 84% in cheese, 127% for butter. All while food service demand collapsed. Keep in mind food service wants buckets of sour cream, not tubs, or 10 pound bags of shredded cheese, not packets. Tim Hortons uses a big bag of cream through a SureShot machine, while you want 500 ml at a time. Those processing lines can’t change overnight. It takes millions in new equipment and packaging to convert those. So you’ve got retail lines that can’t keep up while food service lines are completely backed up or shut down.</blockquote>
The article is, in some ways, specific to Ontario and Canada as milk marketing board decisions were involved - but the situation is the same for other farmers south of the border.<br />
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<a href="https://www.upi.com/Top_News/US/2020/04/06/Farmers-destroy-crops-grown-for-restaurants-hotels/2211585843469/" target="_blank">Farmers destroy crops grown for restaurants, hotels</a><br /><br /><blockquote class="tr_bq">
The closure of food-service establishments in many parts of the country in March meant that farmers who grow produce for those customers suddenly had a large surplus in storage and in the fields.<br />Growers said efforts to find retailers or food banks failed, forcing them to plow under their crops. </blockquote>
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<a href="https://www.rawstory.com/2020/04/farmers-stuck-with-rotting-produce-as-coronavirus-scrambles-supply-chains-its-really-weird-right-now/" target="_blank">Farmers stuck with rotting produce as coronavirus scrambles supply chains: It’s ‘really weird right now’</a><div>
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“What’s really weird right now in the supply chain is the grocery stores seem to be pretty heavy on product, farmers are throwing away stuff, and food banks are full,” said Brent Erenwert, CEO of the Houston-based Brothers Produce. “We don’t know where the demand lies.”</blockquote>
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It seems like somebody must be getting less to eat with retail not being capable of expanding to match the reduction in other markets. Perhaps that's due to social distancing reducing visits to food banks despite need.</div>
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"Our food banks are seeing 20 percent increases in demand, generally...When we set up drive-throughs, we are getting 50 percent more people than expected."<span style="background-color: white; font-family: Lato, sans-serif; font-size: 18px; letter-spacing: 0.36px;"> </span><a href="https://www.upi.com/Top_News/US/2020/04/06/Farmers-destroy-crops-grown-for-restaurants-hotels/2211585843469/"><span style="font-size: x-small;">(from middle article)</span></a></div>
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Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com1tag:blogger.com,1999:blog-446210048006827157.post-77450868529640107612020-03-02T05:29:00.001-08:002020-03-02T05:29:29.685-08:00A Frequency Control Ancillary Services storyFrequency Control Ancillary Services (FCAS) has not been the hot topic in public discussions of the electricity sector, but recent events in South Australia made <a href="http://www.wattclarity.com.au/articles/2020/02/dont-forget-about-fcas/" target="_blank">"Don't Forget About FCAS!"</a>, by Allan O'Neil at WattClarity, the most interesting article I've read in some time.<br />
<br />The grid in South Australia has one major interconnector to another grid, which was taken out of service by a storm on January 31st, 2020, essentially <a href="http://www.wattclarity.com.au/articles/2020/02/fri31jan2020-13headlinequestions/" target="_blank">"islanding" </a>the state's system. I first noticed discussion on events from <a href="https://twitter.com/ScottLuft/status/1225404074113339392" target="_blank">a tweet</a> listing generators (mostly wind) that would be "ramped down and constrained to zero" when "operational demand in South Australia falls below 800 MW". Operational would mean demand from the grid, which in South Australia is lessened significantly during the day as 1 in 3 houses are reported to have solar panels. For perspective, average consumption in the state is less than 1400 MW; demand following below 800 MW has been rare but occurences are growing (now 200+ a year).<br />
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The state was better prepared for the loss of transmission the year than it had been in 2016, when it <a href="https://www.abc.net.au/news/2016-09-29/rushing-to-renewables-risks-sectors-reputation:-uhlmann/7888290?pfmredir=sm" target="_blank">suffered a full blackout</a>. In part driven by changes made after the 2016 blackout the state has become a net exporter. Operational system peaks have been around 3,000 MW (now occurring after solar's productive hours), and the state's gas capacity (~2700 MW) is capable of meeting about 90% of that. The state also has about 2,700 MW of wind capacity, so stories coming out claiming the state survived the loss of the interconnector include phrases like "renewables saved the day" - although we know many wind generators were constrained off, natural gas climbed to 60% of production (it's usually about 50%), and demand wasn't high (averaging ~1,250 MW).<span id="goog_814114910"></span><br />
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All sorts of interesting aspects to be explored, but for me the most interesting was this: during the loss of the interconnector FCAS became more valuable in South Australia than "energy" (the production from generators).<br />
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<a href="https://1.bp.blogspot.com/-aZAGAqz5xzU/Xl0HTNC_69I/AAAAAAAAHoM/6njSDSDwW_kgybHf8mf5evYs19rT7mtWQCLcBGAsYHQ/s1600/AS%2BFCAS%2B7-RevSplit.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="783" data-original-width="1327" height="376" src="https://1.bp.blogspot.com/-aZAGAqz5xzU/Xl0HTNC_69I/AAAAAAAAHoM/6njSDSDwW_kgybHf8mf5evYs19rT7mtWQCLcBGAsYHQ/s640/AS%2BFCAS%2B7-RevSplit.png" width="640" /></a></div>
There's something in the <a href="http://www.wattclarity.com.au/articles/2020/02/dont-forget-about-fcas/" target="_blank">Watt Clarity article</a> for many different audiences - including battery performances from both the large grid-connected units and the appearance of FCAS being provided by aggregators of residential units.<br />
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<span style="color: #fff2cc;"><br /></span>
<span style="color: #fff2cc; font-size: xx-small;"><i><a href="https://1drv.ms/x/s!Ao012Fem8UCvg4EHxvjkxvPusgZVUw?e=wqBlwS" target="_blank">spreadsheet</a></i></span>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-90398972033159750402020-02-28T12:40:00.002-08:002020-02-28T12:40:18.365-08:00California utility changes efficiency metric to "avoided carbon"<a href="https://www.smud.org/en/Corporate/About-us/News-and-Media/2020/2020/SMUD-first-in-US-to-change-efficiency-metric-to-avoided-carbon" target="_blank">From the Sacramento Municipal Utility District (SMUD):</a><br />
<blockquote class="tr_bq">
<b>The new metric expected to encourage building electrification</b><br />The SMUD board voted to change the metric by which it measures the progress of its energy efficiency investments, switching from energy savings to avoided carbon emissions, making it the first entity in the United States to do so. The change will enable SMUD’s energy efficiency programs to focus investments on those that reduce carbon emissions at the lowest possible cost to customers and clear the way for expanded investments in building electrification alongside traditional efficiency approaches. </blockquote>
<blockquote class="tr_bq">
“With carbon as our new measuring stick, helping our customers go all-electric will be as important as helping them use less energy,” said Rachel Huang, director of Energy Strategy, Research and Development. “Additionally, because this change encourages electrification, our customers will benefit from improved indoor air quality and reduced monthly energy bills.”</blockquote>
<blockquote class="tr_bq">
Under SMUD’s recently-adopted<a href="https://www.smud.org/-/media/Documents/Corporate/Environmental-Leadership/Integrated-Resource-Plan.ashx"> Integrated Resource Plan</a>, building and transportation electrification are key strategies to achieve net zero carbon emissions by 2040. Switching to avoided carbon as a metric for energy efficiency investments aligns SMUD’s energy efficiency program with its net zero-carbon emissions goal...</blockquote>
Good to see a utility focus on selling their product with the intent of it being a net good.<br />
<br />
For my opinion on traditional conservation, or efficiency, programs, see "<a href="http://coldair.luftonline.net/2019/03/f-in-efficiency-free-riders-of-soft-path.html" target="_blank">f in efficiency: Free-riders of the soft path</a>"<br />
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<br />Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-87728460927435208852019-05-28T05:37:00.000-07:002019-05-28T05:37:08.524-07:00an avoidably big bad pictureThere's a think tank associated with Simon Fraser University (SFA) called Clean Energy Canada. The people there released a report last week called, "Missing the Bigger Picture." The content of the actual report, based on a quick look-over, is fine. The promotion/spin of the report has not been fine - it's been deliberately deceptive, and it seems to me that's because of Merram Smith.<br />
<br />
The <a href="http://cleanenergycanada.org/wp-content/uploads/2019/05/Report_TER2019_CleanJobs_ForWeb.pdf" target="_blank">report</a> is currently downloadable from a page currently headlined, <a href="http://cleanenergycanada.org/report/missing-the-bigger-picture/" target="_blank">Missing the Bigger Picture: Tracking the Energy Revolution 2019</a>. There is also a <a href="http://cleanenergycanada.org/wp-content/uploads/2019/05/2019-03-13-Clean-Energy-Economy-FINAL-REPORT.pdf" target="_blank">technical report</a> available there, which is where I found my expectations confirmed.<br />
<blockquote class="tr_bq">
Not only is Canada’s clean energy sector growing faster than the rest of the country’s economy (4.8% versus 3.6% annually between 2010 and 2017), it’s also attracting tens of billions of dollars in investment every year. And perhaps most importantly for the average Canadian, it’s a huge, and growing, employer.</blockquote>
<blockquote class="tr_bq">
...[The clean energy sector is] made up of companies and jobs that help to reduce carbon pollution - whether by creating clean energy, helping move it, reducing energy consumption, or making low-carbon technologies.<br />The jobs in the clean energy sector are in many industries and in every province. They include the Canadians who manufacture solar panels and wind turbines ...</blockquote>
And there, in Merran Smith's introduction to the report, is spin.<br />
<br />
The technical report confirms <a href="http://coldaircurrents.luftonline.net/2019/04/strange-wind-and-nuclear-goes-to-solar.html" target="_blank">what readers of this blog already know</a>: additions of solar and wind capacity slowed years ago (wind peaked in 2014 and solar in 2015).<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-O_2GWRCKSGk/XO0hGiJ4CiI/AAAAAAAAHa0/CeIhat3qUXcNbjVgCkK0Jgk3L44UGPNuwCLcBGAs/s1600/cec%2Bfigure7.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="387" data-original-width="793" height="312" src="https://1.bp.blogspot.com/-O_2GWRCKSGk/XO0hGiJ4CiI/AAAAAAAAHa0/CeIhat3qUXcNbjVgCkK0Jgk3L44UGPNuwCLcBGAs/s640/cec%2Bfigure7.png" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure from <a href="http://cleanenergycanada.org/wp-content/uploads/2019/05/2019-03-13-Clean-Energy-Economy-FINAL-REPORT.pdf" target="_blank">the technical report.</a></td></tr>
</tbody></table>
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<a name='more'></a>"Wind" is in the report 19 times - more often than "hydro". Here's an example:<br /><blockquote class="tr_bq">
Renewable and alternative energy supply—think hydropower and wind farms—is one of the biggest earners in the clean energy sector...</blockquote>
"Nuclear" is in the report once:<br />
<blockquote class="tr_bq">
Nuclear and hydro power were by far the biggest employers, making up 80% of jobs in this industry.</blockquote>
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<br />
Returning to the technical report, here's a graphic showing the energy supply ("think hydropower and wind farms"):<br />
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<a href="https://1.bp.blogspot.com/-nX26Ii8J2No/XO0msMcpqbI/AAAAAAAAHbA/Yw2kfIxf0ssa4Ull-jjY5QidJrRdKTyYwCLcBGAs/s1600/cec%2Bfig8.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="384" data-original-width="787" height="312" src="https://1.bp.blogspot.com/-nX26Ii8J2No/XO0msMcpqbI/AAAAAAAAHbA/Yw2kfIxf0ssa4Ull-jjY5QidJrRdKTyYwCLcBGAs/s640/cec%2Bfig8.png" width="640" /></a></div>
I didn't look into how the report defines GDP, but I'll note the output from solar generation costs Ontarians over $1.6 billion a year, and wind a little more than that (we know this from reporting on the global adjustment components - which is not the entire cost, but most of it).<br />
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Here's the names of some big "clean" projects: Site C, Keeyask, Muskrat Falls, Romaine and Darlington.<br />
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Picture those.<br />
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Here's the second rather dishonest spin - taken from the<a href="https://www.ctvnews.ca/business/clean-energy-one-of-canada-s-fastest-growing-industries-1.4433714" target="_blank"> generic Canadian Press piece</a> on the report (with industrial wind turbines pictured):<br />
<blockquote class="tr_bq">
All told, the study concluded, nearly 300,000 Canadians were directly employed in clean energy in 2017, nearly 100,000 more than Statistics Canada data said worked in mining, quarrying, and oil-and-gas extraction.</blockquote>
The comparison is unnecessary, and wrong. The 300,000 jobs tallied up in "clean energy" are shown broken into categories:<br />
<br />
<ul>
<li>Clean Buildings (6.6%),</li>
<li>Grid infrastructure and energy storage (15.8%),</li>
<li>Clean energy supply (20.1%), and</li>
<li>Clean transport (57.5%).</li>
</ul>
<br />
Many of these jobs involve fossil fuels too: the installers, and mainteners, of my natural gas furnace are clean energy workers (because it's efficient), as are the people who work to keep the fossil-fueled grids of Saskatchewan and Alberta delivering electricity,and the engineers guiding diesel-powered locomotives pulling tanks of oil. Also clean are the manufacturers of hydrid vehicles - although few are plug-in hybrids, and, of course, bus drivers.<br />
<br />
I'd like to claim I have no idea why such a vapid comparison was made, but I can't. It's a report by the good people showing their team outnumbers the bad people.<br />
<br />
I don't believe that - in a couple of ways.<br />
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Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-38095002796833122062019-04-20T02:39:00.001-07:002019-04-20T02:39:16.767-07:00The nuclear reactor decommissioning businessOne of the most prominent nuclear generating stations in the United States is changing owners after it ceases generating electricity.<br />
<blockquote class="tr_bq">
<a href="https://www.snclavalin.com/en/media/press-releases/2019/16-04-2019" target="_blank">Tuesday 16th April 2019 [SNC Lavalin]</a><br />
Comprehensive Decommissioning International, LLC (CDI), a joint venture company of SNC-Lavalin (TSX: SNC) and Holtec International, has agreed to enter into a Decommissioning General Contractor Agreement for another US nuclear decommissioning contract, expected to exceed CAD $1 billion.<br />
Entergy Corp. (NYSE: ETR) has agreed to sell the subsidiaries that own Indian Point Units 1, 2, and 3, located in Buchanan, N.Y., to a Holtec International subsidiary for decommissioning.</blockquote>
CDI, the joint venture, may be the best news for SNC Lavalin in some time. The <a href="https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/041619-entergy-to-sell-indian-point-reactors-in-new-york-to-joint-venture-for-decommissioning" target="_blank">pending purchase of Entergy's Indian Point reactors</a> follows within a year of its agreement to purchase <a href="http://www.world-nuclear-news.org/Articles/Oyster-Creek-sale-speeds-decommissioning" target="_blank">Exelon's Oyster Creek nuclear power plant</a> and <a href="https://www.prnewswire.com/news-releases/entergy-agrees-to-post-shutdown-sale-of-pilgrim-palisades-nuclear-power-plants-to-holtec-international-for-decommissioning-300689839.html" target="_blank">Entergy's Pilgrim and Palisades sites </a>(once the reactors are shutdown permanently).<br />
<br />
Most articles on the sales note CDI intends on decommissioning the sites much quicker than expected, but I thought it worth following up on the size of the decommissioning funds - which are part of the purchase. There are references in many articles to the size of the funds, but I'll use only one source: the <a href="https://www.nrc.gov/docs/ML1809/ML18096B539.html" target="_blank">U.S. Nuclear Regulatory Commission (NRC) 2017 Fund Status Reports.</a><br />
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Keep in mind the funds are as at the end of 2016 and the NRC's cost estimate is in 2016 dollars.<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://2.bp.blogspot.com/-h5oP9LG48TA/XLj8L1GoYmI/AAAAAAAAHYo/Ym6MqvE1ZNQY2XglaGioX8_S8OgDF-9qQCLcBGAs/s1600/US%2BNGS%2Bretired%2Band%2Bretiring.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="496" data-original-width="1097" height="288" src="https://2.bp.blogspot.com/-h5oP9LG48TA/XLj8L1GoYmI/AAAAAAAAHYo/Ym6MqvE1ZNQY2XglaGioX8_S8OgDF-9qQCLcBGAs/s640/US%2BNGS%2Bretired%2Band%2Bretiring.png" width="640" /></a></div>
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The reactor first retired in this list,<a href="http://www.world-nuclear-news.org/Articles/Vermont-Yankee-sale-complete" target="_blank"> Vermont Yankee, was sold </a>to another company, Northstar Group, despite<a href="https://www.reformer.com/stories/vermont-yankee-decommissioning-fund-grows-by-13m,521050" target="_blank"> concerns with adequacy of the decommissioning funds</a>. The sites being purchased by Holtec/CDI look to be better funded, with $4 billion in funds (as of 2016's end) for $3.7 billion in estimated costs.<br />
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Ontario readers may be curious how the funding is for decommissioning here. My understanding/confusion is limited but hopefully I won't mislead in summarizing it this way: Ontario Power Generation (OPG) collectd funds, through its rate for electricity, for a Decommissioning Segregated Fund and a Used Fuel Segregated Fund, and both are well funded. The funds are government by a nuclear funds agreement (ONFA) which allows the province to claim as revenue half of the over-funded position when the fund has a value exceeding the predicted liability by over 20 percent. Here are figures for both of the segregated funds from OPG from their <a href="https://www.opg.com/about/finance/Documents/20190307CombinedNewsReleaseMDAFS_OPGQ42018.pdf" target="_blank">2018 financial reporting,</a> but only the Decommissioning Segregated fund is the comparable to the U.S. figures discussed above.<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://4.bp.blogspot.com/-U2GnTar-tb4/XLkQDwVGPFI/AAAAAAAAHY0/9x3VQmc7FGElCYCDzIMvwxnDC0a_DALZwCLcBGAs/s1600/ON%2Bnuclear%2Bfunds.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="517" data-original-width="635" height="520" src="https://4.bp.blogspot.com/-U2GnTar-tb4/XLkQDwVGPFI/AAAAAAAAHY0/9x3VQmc7FGElCYCDzIMvwxnDC0a_DALZwCLcBGAs/s640/ON%2Bnuclear%2Bfunds.png" width="640" /></a></div>
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<br />
My understanding is the CDN$9 billion (US$ 6.75 billion) Decommissioning Segregated Fund is over-funded by CDN$4 billion (1/2 of the over-funding beyond 120% of liability is $1.5 B; twice that is $3 billion leaving $6 billion as the 20% over-funded position meaning the liability is CDN$ 5 billion).<br />
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Theoretically the province could sell off sites to decommissioning firms, but I'd note in the U.S. utilities have not done this with retired reactors - perhaps because their consumers take the downside risk.<br />
<br />
Bruce Power, Ontario's other nuclear provider, leases its site from OPG - so the figures for those reactors should be included in OPG's reported figures.<br />
<br />
Finally, approximately $3.5 billion shown in OPG's reporting as "Due to Province" does already appear on the provincial books on the asset side of the ledger, having to begun growing in fiscal 2007-08. I'm not sure I'd call it a hidden tax on nuclear, but its worth noting the nuclear funds are a net asset to the province.Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-27629810790535921362019-04-15T13:05:00.000-07:002019-04-16T11:59:13.454-07:00Strange wind, and nuclear goes to solar for new leadershipSometimes my time served battling the enormous waste on wind in Ontario comes flooding back - such as this weekend reading an article on the promise of renewables in Canada's most tell-you-what-to-think publication It's paywalled, boring and one-sided so I'm not going to link to it, but it did incent me to pull some <a href="https://canwea.ca/wind-energy/installed-capacity/" target="_blank">figures, from the Canadian Wind Industry Association</a>.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-oGcVd3LpSz4/XLSl0jZWT9I/AAAAAAAAHYQ/Q15otc5Ijfc_NQjQRpW8I9ieO9odAODswCLcBGAs/s1600/Industrial%2Bwind%2Bturbine%2Bcapacity%2Bin%2BCanada%2Bby%2Byear%2Bentering%2Boperation%2B%2528MW%2529.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="371" data-original-width="600" height="394" src="https://3.bp.blogspot.com/-oGcVd3LpSz4/XLSl0jZWT9I/AAAAAAAAHYQ/Q15otc5Ijfc_NQjQRpW8I9ieO9odAODswCLcBGAs/s640/Industrial%2Bwind%2Bturbine%2Bcapacity%2Bin%2BCanada%2Bby%2Byear%2Bentering%2Boperation%2B%2528MW%2529.png" width="640" /></a></div>
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I tried to colour Quebec and Ontario as silver and gold in graphing the increase in annual installed capacity through 2014, and subsequent decline, for reasons I hope become clear during a short review of the current situation for industrial wind in provinces across the country.<br />
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<a name='more'></a><br />
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Shortly after Nova Scotia elected a new government in 2017 its <a href="https://www.cbc.ca/news/canada/nova-scotia/wind-power-green-energy-renewables-emera-boston-nb-1.4230809" target="_blank">Energy Minister stated</a>, "Anything we add at this point is not going to be wind."<br />
Its neighbour, New Brunswick, issues an<a href="https://www.nbpower.com/en/about-us/our-energy/integrated-resource-plan/" target="_blank"> Integrated Resource Plan</a> that same year, which didn't foresee a need for any new generation until after 2026. It does have a target of 40% renewable supply by 2020, but it was already at 36% and was to concentrate on "Locally-Owned Renewable Energy Small Scale (LORESS)" to attain its goal.<br />
<br />
Quebec, home to 30% of Canada's industrial wind capacity, elected a new Premier last year, and he promptly halted the Apuiat wind project. Hydro-Québec celebrated its 75th anniversary with an event including 5 Premiers (including the current one). <a href="https://www.lapresse.ca/affaires/201904/14/01-5222143-hydro-quebec-lance-les-celebrations-de-ses-75-ans.php" target="_blank">Reports</a> mention future ambitions for only hydro, with the most promising potential project lying outside of Quebec in Labrador. Claude Boucher summarized the event (which can be viewed <a href="https://www.facebook.com/hydroquebec1944/videos/668775296926081/" target="_blank">on Facebook</a>) <a href="https://twitter.com/bouchecl/status/1117621534875635713" target="_blank">on Twitter</a>:<br />
<blockquote class="tr_bq">
3 distinct audiences were targeted in the <a href="https://twitter.com/hydroquebec">@hydroquebec</a> birthday bash:<br />
<ol>
<li> to HQ: gear up guys: next project is Gull Island</li>
<li> to NL: let bygones be bygones and let's make a deal. You don't have much of a choice.</li>
<li> to ON: we'll get it done. You should buy from us.</li>
</ol>
</blockquote>
Safe to assume Quebec and Newfoundland will both have their focus entirely on hydro sites for some time.<br />
<br />
Ontario, home to 40% of Canada's industrial wind capacity, also elected a new government it 2018 - one which promptly exercised the cancellation clause on every contract for wind generation it could.<br />
<br />
Manitoba was a trendsetter in turning from wind back<a href="https://www.cbc.ca/news/canada/manitoba/further-wind-power-development-not-viable-manitoba-hydro-1.2599303" target="_blank"> in 2014 it was noted</a>,<i> "Manitoba Hydro officials say wind power isn’t a viable option for energy production in the province."</i> It currently is focused on its own <a href="https://keeyask.com/" target="_blank">Keeyask hydro project</a> - and would look to the larger 1485 MW Conawapa project if there was a need. Like other hydro-rich provinces, Manitoba has searched for export markets, and it found one in Saskatchewan. <a href="https://leaderpost.com/opinion/columnists/manitoba-hydro-and-saskpower-deal-a-step-in-right-direction" target="_blank">Late last year the two provinces agreed </a>on increasing their transmission intertie capacity to allow more hydro-electric generation into Saskatchewan.<br />
<br />
Saskatchewan, and its western neighbour Alberta, are two provinces where the news for the wind industry has been good. Both provinces have goals for share of electricity supply from renewables, and both have been contracting wind to meet those goals, although there are likely to be changes to the situation in Alberta due to an election (tomorrow) so I won't waste time here except to note where I spent time writing on Alberta's situation before: <a href="http://coldair.luftonline.net/2017/11/alberta-bound.html" target="_blank">Alberta. Bound.</a><br />
<br />
British Columbia <a href="https://vancouversun.com/news/local-news/b-c-government-putting-alternative-energy-sector-on-ice" target="_blank">cancelled the Independent Power Producer policies</a> through which it contracted industrial wind generation - this following the publication of <a href="https://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/electricity-alternative-energy/electricity/bc-hydro-review/bch19-158-ipp_report_february_11_2019.pdf">Zapped: A Review of BC Hydro’s Purchase of Power from Independent Power Producers</a>.” From <a href="https://www.mccarthy.ca/en/insights/blogs/canadian-energy-perspectives/zapping-back-clean-energy-bc-responds-critical-review-bc-hydros-purchase-power-bc-ipps" target="_blank">an article</a> on that document:<br />
<blockquote class="tr_bq">
<i>Zapped </i>concludes that it is unlikely that wind and solar energy can be generated in a competitive manner in BC under current conditions, and that BC Hydro holds sufficient “green certified” energy to meet limited trading opportunities with California.</blockquote>
Seems most exporting provinces have arrived at that same conclusion.<br />
<br />
Wind's immediate future looks bound to the two western, high emission, oil and gas provinces. And maybe Prince Edward Island - which might elect a Green government.<br />
<br />
That'd cause some mind- molding articles.<br />
<br />
Breaking the mold today was the Canadian Nuclear Association.<br />
<blockquote class="tr_bq">
<a href="https://markets.businessinsider.com/news/stocks/canadian-nuclear-association-welcomes-john-gorman-as-new-president-and-chief-executive-officer-1028110190" target="_blank">OTTAWA, April 15, 2019 /CNW/ </a>- The Canadian Nuclear Association (CNA) is pleased to announce the appointment of John Gorman as President and Chief Executive Officer, effective May 13, 2019.<br />
Mr. Gorman is currently President & CEO of the Canadian Solar Industries Association (CanSIA), the national trade association for Canada's solar energy industries. He oversees all of CanSIA's activities including government affairs, research, communications and industry leadership.</blockquote>
This caused me some cognitive dissonance. I've been an opponent of expensive contracting of renewable for many years - and for my province (Ontario) solar has been similar in total cost to wind. And yet the wind industry created contempt in many communities it touched - I received e-mails on the weekend in disbelief the promotional piece in a supposed newspaper championed men who people feel hurt people - while I've not seen contempt for solar.<br />
<br />
Perhaps the positive view people have of solar, despite its historically enormous cost, is a credit to Mr. Gorman's leadership at CanSIA. I really hope so, because this is a very strong message coming from a person switching from the solar industry to nuclear:<br />
<blockquote class="tr_bq">
"Nuclear power has an indispensable role to play in decarbonizing global economies through clean electrification," said Mr. Gorman. "Canada's leading expertise in nuclear means that CNA's innovative member companies will be at the forefront of this exciting transformation. I'm pleased to be part of the nuclear industry and to serve our members during this pivotal time."</blockquote>
<div>
<div style="text-align: center;">
_______</div>
<br />
<h3>
POSTSCRIPT</h3>
I looked at solar to see if there's a difference in that trend, and it seemed to me the only difference was it peaked a year later, in 2015.<br />
<br />
The data is not good for solar. Statistics Canada's Table 25-10-0022-01 shows "annual generating capacity by type of electricity generation". It reports 2,298 MW for solar in 2017.<br />
I've worked with the IESO's Active Generator Contract Lists, and its microFIT reporting, and my tracking showed Ontario with more solar than all of Canada - which seems unlikely.<br />
<br />
<a href="http://2.bp.blogspot.com/-IyxNqK2qJPY/XLYkd64i2HI/AAAAAAAAHYg/41YABRNSFns0u4bnv0i2Jo6e8c17h08YQCK4BGAYYCw/s1600/Ontario%2BSolar%2BCapacity%2Bby%2Byear%2Bcontracted%252C%2Band%2Byear%2Bentering%2Boperation%2B%2528MW%2529.png" imageanchor="1"><img border="0" height="392" src="https://2.bp.blogspot.com/-IyxNqK2qJPY/XLYkd64i2HI/AAAAAAAAHYg/41YABRNSFns0u4bnv0i2Jo6e8c17h08YQCK4BGAYYCw/s640/Ontario%2BSolar%2BCapacity%2Bby%2Byear%2Bcontracted%252C%2Band%2Byear%2Bentering%2Boperation%2B%2528MW%2529.png" width="640" /></a><br />
<br /></div>
What does seem likely is most solar in Canada is located in Ontario, and Ontario's contracting of solar dropped sharply after 2011 with capacity entering commercial operation peaking in 2015.<br />
<br />
The most recent summary I can locate <a href="https://www.cansia.ca/solar-pv.html" target="_blank">from CanSIA</a> (the solar lobby) states:<br />
<blockquote class="tr_bq">
By the end of 2015, Canada had more than 2,500 MW of cumulative installed solar electricity generation capacity. In 2015 alone, a record 700 MW was added earning Canada a place on the top-ten largest national markets globally.</blockquote>
This indicated 6/7th's of 2015 installs were in Ontario, which matches my estimate that 86% of all capacity was in Ontario by that time. I suspect CanSIA have not reported totals for subsequent years as the news ceased getting better for them.<br /><br />
<div style="text-align: center;">
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<i>end-note: I wrote on BC in <a href="http://coldair.luftonline.net/2017/10/site-cing-bcs-electricity-adventure.html" target="_blank">Site C'ing: BC's electricity adventure</a></i>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-26503246685203112932019-04-14T13:41:00.002-07:002019-04-14T13:41:25.435-07:00Higher ROE and lower debt ratings: California's "precarious state"Articles from this past week on California's utilities include one on utilities seeking rate hikes with rather large Return-on-Equity (ROE) figures, one on a bond agency downgrading the same utilities, and another on the rookie governor's effort to address the issues driving these actions.<br />
<br />
<a href="https://www.utilitydive.com/news/southern-california-edison-requests-higher-roe-citing-wildfire-risks/552577/" target="_blank">Southern California Edison requests higher ROE, citing wildfire risks</a> (Utility Dive)<div>
<br /></div>
<ul>
<li>...Southern California Edison (SCE) on Thursday asked the Federal Energy Regulatory Commission to significantly raise its return on equity (ROE) due to "<a href="https://www.businesswire.com/news/home/20190411005446/en/">dramatic, material changes</a>" to its regulatory and financial conditions.</li>
<li>SCE is requesting an overall ROE of 17.12%, plus incentives...</li>
</ul>
<blockquote class="tr_bq">
...<br />"We do not believe a higher return on equity is a long-term solution to the urgent situation utilities in California are facing," Caroline Choi, senior vice president of corporate affairs for SCE and Edison International, said in a statement. "However, this is what is needed in the near term in order to attract the capital required to provide safe, reliable electricity."</blockquote>
The request come following months of warnings from debt rating agencies.<br />
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<a href="https://www.spglobal.com/marketintelligence/en/news-insights/trending/NaiINRvWoP7CkJgiOoSjIQ2" target="_blank">S&P downgrades SDG&E, SoCalEd, Edison International on wildfire, climate risk</a><blockquote class="tr_bq">
S&P Global Ratings on Jan. 21 downgraded Edison International, its subsidiary Southern California Edison Co. and San Diego Gas & Electric Co. to reflect that the companies "will continue to experience catastrophic wildfires because of climate change and without sufficient regulatory protections due to California's common law application of the legal doctrine of inverse condemnation."</blockquote>
<blockquote class="tr_bq">
...S&P Global Ratings said it could downgrade the ratings on SDG&E, SoCalEd and Edison International further if lawmakers and regulators do not take concrete steps to address the financial risks facing the companies.</blockquote>
California's Governor Newsom did take a step this past week.<br />
<br />
<a href="https://www.bloomberg.com/news/articles/2019-04-12/california-s-newsom-signals-pg-e-edison-will-get-wildfire-help" target="_blank">PG&E Caps Best Day Since Going Bankrupt as California Offers Help</a> | Bloomberg<blockquote class="tr_bq">
The governor issued a report Friday outlining possible solutions for how costs for destructive wildfires will be covered ...<br />The wide-ranging report gave Wall Street optimism that California will work with utilities to solve an intractable problem: who pays for wildfires as climate change threatens to make them deadlier and more frequent. Now, the task of developing a concrete approach falls to lawmakers...</blockquote>
<br />
Does this situation display the error of thinking laissez-faire governance is possible in the utility sector, or should regulators simply allow ever higher ROE margins for utilities?<br />
Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-78450275455570495092018-09-11T11:23:00.000-07:002018-09-11T13:26:06.021-07:00how to sell an industrial wind turbine<div>
The lovely thing about policies such as 60% renewables by 2030, and 100% carbon-free by 2045, is they provide easy messages to broadcast.<br />
<br />
In my<a href="http://coldaircurrents.luftonline.net/2018/09/wishing-winds-californias-sb-100.html" target="_blank"> previous post</a> I quoted David Roberts', "<i>in what is effectively a climate Dark Ages in the US, California is carrying a torch</i>." I've argued the state hasn't accomplished much to date, its additions of variable renewable energy resources (vRES) had been chunky and the rapid addition of solar over the past 5 years is unlikely to be sustained. My intent with the post was to show the path to 60% is not clear, but it's a lot narrower without broadening the connections with other states. Cost concerns are better addressed in this <a href="https://twitter.com/RichardMeyerDC/status/1037401275888029696" target="_blank">twitter thread</a>, within which <a href="https://twitter.com/cody_a_hill/status/1037732354717040641" target="_blank">Cody Hill neatly summarizes</a> the looming issues:<br />
<blockquote class="tr_bq">
1. In-state wind is essentially built out already, leaving practically nothing but solar to build locally, which leads to major value deflation </blockquote>
<blockquote class="tr_bq">
2. The fossil fleet is already struggling to stay solvent, and it is unclear what the best option is to maintain resource adequacy</blockquote>
</div>
<div>
California's goal is simple, but problematic.<br />
<br /></div>
Australia's former Prime Minister tried to sell a National Energy Guarantee (NEG) that was not simple - and that was a problem for him. I <a href="http://coldaircurrents.luftonline.net/2017/10/base-load-to-base-cost-and-back-again.html" target="_blank">liked it</a> a lot more than policies like 60% renewable, but The Australian noted, "<a href="https://www.theaustralian.com.au/news/inquirer/malcolm-turnbull-risks-all-with-neg-policy/news-story/a52f77d15e118172441d49a3f41f2990" target="_blank">Malcolm Turnbull risks all with NEG policy</a>"<br />
<br />
And then he was gone. Replaced by Scott Morrison (seen in "<a href="https://youtu.be/UByLTMHUszo" target="_blank">This is Coal</a>").<br />
New Prime Minister Morrison appointed Angus Taylor as energy minister (seen here addressing a sparse crowd at a <a href="https://youtu.be/evzuiIEgfmw?t=4m45s" target="_blank">2013 National Wind Power Fraud Rally</a>).<br />
<br />
I find this astounding. I've been raising the alarm on the impact of industrial wind policy on Ontario rates for many years (<a href="https://business.financialpost.com/opinion/ontarios-power-trip-power-dumping">ie.</a>), and ran a blog for Wind Concerns Ontario for about 18 months. I understood the general population's support for renewables which appeared in poll after pool, but it appears that support may be a mile wide but less than an inch deep.<br />
<a name='more'></a><br />
<br />
Opposition to wind may not be so wide, but it's passionate. Among the most disdainful of the industry is Australia's <a href="https://stopthesethings.com/" target="_blank">Stop These Things</a>.<br />
<br />
Ontario and Australia did not do well with cost containment while increasing vRES supply, and <a href="https://stopthesethings.com/2018/09/02/end-of-days-rocketing-power-prices-spells-armageddon-for-subsidised-wind-solar/">Stop These Things explains</a> how<a href="http://rogerpielkejr.blogspot.com/2010/09/more-on-iron-law-of-climate-policy.html"> Roger Pielke Jr.'s Iron Law</a> presented itself in Australia:<br />
<blockquote class="tr_bq">
<i>The nonsense being spouted about adding more chaotically intermittent and heavily subsidised wind and solar to bring down power prices is a reflection of the desperation that’s spread amongst renewable energy rent seekers and the zealots, charged with marketing the purported merits of nature’s wonder fuels.<br />Panic is not a strategy, but what follows when it’s revealed that what was thought to be a strategy, turns out to be a one-way ticket to oblivion. And oblivion is where Australia’s wind and solar industries are headed.</i></blockquote>
The "nonsense" here may not be that renewables could bring down prices, but that the same people who have been promising that, as prices rose, continue marketing their product on that basis.<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://stopthesethings.files.wordpress.com/2017/06/consumer-prices.png?w=460&h=340" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="460" height="472" src="https://stopthesethings.files.wordpress.com/2017/06/consumer-prices.png?w=460&h=340" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">graphic <a href="https://stopthesethings.com/2018/09/02/end-of-days-rocketing-power-prices-spells-armageddon-for-subsidised-wind-solar/" target="_blank">from Stop These Things</a></td></tr>
</tbody></table>
<br />
<div style="text-align: center;">
_____</div>
<br />
Which brings me to the Canadian Wind Energy Association (CanWEA).<br />
<br />
From <a href="https://canwea.ca/news-release/2018/07/13/canwea-responds-to-ontarios-renewable-energy-announcements/" target="_blank">CanWEA Responds to Ontario's Renewable Energy Announcements</a> here are 4 quotes I'll demonstrate to be as nonsensical as anything Australia's wind salers could possibly have produced:<br />
<br />
<ol>
<li>Ontario’s wind energy projects are providing long-term, stable pricing for Ontario ratepayers.</li>
<li>Wind energy is now the lowest-cost option for new electricity supply in Ontario, across Canada, and throughout much of the world.”</li>
<li>"Wind energy and Ontario’s electricity prices – let’s destroy the myth" discusses how wind energy is a relatively small contributor to Ontario’s electricity bills. More importantly, wind energy’s costs continue to fall...</li>
<li>Ontario will have a need for new electricity generation in the 2020s and recent procurements have demonstrated that wind energy is the lowest-priced option.</li>
</ol>
<div>
1, Ontario has not had long-term stable pricing, so wind, or anything else, providing it is impossible. The current rate relief being delivered to residential and other regulated price plan consumers in the form of the [un]Fair Hydro Plan comes at the expense of funds borrowed from future ratepayers.</div>
<div>
<br /></div>
<div>
2. Wind, by itself, is not an option for new electricity supply in Ontario - or Alberta. Everybody once knew sometimes it is windy and other times it is not before vRES proponents claimed it was always windy, and/or sunny, somewhere. Increasingly smart people are once again realizing it isn't always windy somewhere their grid reaches. So in Colorado, for instance, <a href="https://www.greentechmedia.com/articles/read/xcel-retire-coal-renewable-energy-storage#gs.D0T9raI" target="_blank">a utility puts together a package to replace 660 megawatts of coal capacity</a> with 383 MW of gas, 275 MW of storage, 707 MW of solar and 707 MW of wind. Nobody should care what the 707 MW of wind, in itself, will cost - as it alone is not an option for electricity supply.</div>
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<a href="https://dqbasmyouzti2.cloudfront.net/assets/content/cache/made/content/images/articles/Xcel_Colorado_Clean_Energy_Plan_2_1012_420_80.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="332" data-original-width="800" height="132" src="https://dqbasmyouzti2.cloudfront.net/assets/content/cache/made/content/images/articles/Xcel_Colorado_Clean_Energy_Plan_2_1012_420_80.jpg" width="320" /></a></div>
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3. Wind is not a small contributor to Ontario's electricity bill increases, and its cost have not fallen in Ontario so they could not possibly continue to do so. Wind is now directly adding close to $2 billion a year to Ontario's electricity costs, and is obviously responsible for much of the cost increase during the last decade. Less obviously, it's per unit cost continues to rise.</div>
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<a href="https://2.bp.blogspot.com/-6x1WuxUYssc/W5fWj00Sn4I/AAAAAAAAGzo/SBN3ABDKoWIrbKlxIh76n5kKgJrLzl4oACLcBGAs/s1600/wind%2Bcosts%2Brise.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="832" data-original-width="611" height="640" src="https://2.bp.blogspot.com/-6x1WuxUYssc/W5fWj00Sn4I/AAAAAAAAGzo/SBN3ABDKoWIrbKlxIh76n5kKgJrLzl4oACLcBGAs/s640/wind%2Bcosts%2Brise.PNG" width="470" /></a></div>
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As I concluded years ago in<a href="https://morecoldair.wordpress.com/2017/02/02/alternative-energy-facts-from-environmental-defence-et-al/" target="_blank"> debunking bad commentary </a>(which CanWEA continues to cite), <i>"There’s not only a perception that renewables have been driving up bills, it’s really quite obvious that they have been."</i></div>
<div>
<br /></div>
<div>
4. Wind alone cannot be cited as the "lowest-priced" option for fulfilling a need "for new electricity generation" because wind alone cannot fulfill that need.</div>
<div>
<br /></div>
<div>
I have to wonder if CanWEA is using nonsensical sales pitches because its leadership doesn't believe there is a compelling value proposition. Annual capacity addition numbers indicate CanWEA's stale value proposition is no longer compelling to others, having plummeted from their peak in 2013-2014.</div>
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<a href="https://1.bp.blogspot.com/-UQ7Q7utprjc/W5fmTqi5g5I/AAAAAAAAGz0/zVQeLh7xf080sHxNNhL3dXHSSRntbW0ZgCLcBGAs/s1600/CanWEA%2Bannual%2Badditions.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="847" data-original-width="1193" height="454" src="https://1.bp.blogspot.com/-UQ7Q7utprjc/W5fmTqi5g5I/AAAAAAAAGz0/zVQeLh7xf080sHxNNhL3dXHSSRntbW0ZgCLcBGAs/s640/CanWEA%2Bannual%2Badditions.png" width="640" /></a></div>
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<br /></div>
<div>
There are only two provinces that plan on adding wind where a genuine value proposition exists. </div>
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<br /></div>
<div>
Selling wind as fuel <a href="https://www.ospe.on.ca/public/documents/presentations/ontarios-electricity-dilemma.pdf" target="_blank">displacement generation</a> is possible at the $37/MWh pricing seen<a href="https://www.aeso.ca/market/renewable-electricity-program/rep-round-1-results/" target="_blank"> in Alberta </a>recently. While consumers will find $37 looks wonderful in comparison to what the wind lobby takes in Ontario, since 2008 even that price has been above the fuel displacement value where the avoided production is from an efficient natural gas fueled generator. According to a reference case<a href="https://www.neb-one.gc.ca/nrg/ntgrtd/ftr/2017ntrlgs/index-eng.html" target="_blank"> from the National Energy Board</a>, the $37/MWh would remain above fuel displacement costs in coming years too, but account for greenhouse gas emissions and the $37/MWh price will indeed provide consumers with value. </div>
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<a href="https://3.bp.blogspot.com/-giuEiSkdOnk/W5f-bjpQg8I/AAAAAAAAG0A/Cll54Y-KzsQ35zVbWOXqc2HxWuM0_EjYgCLcBGAs/s1600/Value%2Bof%2Bdisplacing%2Bfuel%2Bfrom%2Bgeneration%2Bwith%2Bnatural%2Bgas%2Bat%2B50%2525%2Befficiency%2B%25282016%2B%2524CDN%2529.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="633" data-original-width="847" height="478" src="https://3.bp.blogspot.com/-giuEiSkdOnk/W5f-bjpQg8I/AAAAAAAAG0A/Cll54Y-KzsQ35zVbWOXqc2HxWuM0_EjYgCLcBGAs/s640/Value%2Bof%2Bdisplacing%2Bfuel%2Bfrom%2Bgeneration%2Bwith%2Bnatural%2Bgas%2Bat%2B50%2525%2Befficiency%2B%25282016%2B%2524CDN%2529.png" width="640" /></a></div>
<div>
To be clear, there is little value in VRES, in Canada, where there is no fuel displacement. That includes Newfoundland, B.C. Manitoba, and Quebec. Nova Scotia's energy minister has said they have<a href="https://www.cbc.ca/news/canada/nova-scotia/wind-power-green-energy-renewables-emera-boston-nb-1.4230809" target="_blank"> no room for more wind</a>, and Ontario, which often runs with no gas-fueled generators to displace, has a new Premier who <a href="https://business.financialpost.com/commodities/energy/boralex-invenergy-ontario-clean-power-projects-hit-by-ford-1" target="_blank">campaigned on cancelling wind projects, and has acted</a> on those promises. Alberta and Saskatchewan are the provinces with fuel to displace in the electricity generating sector, but it won't be easy to convince jurisdictions with coal and gas resources that displacing them deserves premium pricing.</div>
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<br /></div>
<div>
<div>
CanWEA's membership might reconsider its leadership before their <a href="https://canwea.ca/events/canwea-annual-conference-exhibition-2/" target="_blank">October conference</a>. The talents that gathered exorbitant contracts from 2008-2012 are unlikely the same needed to lead a mature industry in delivering a product of genuine value.<br />
<br />
<br />
<br />
<a href="https://docs.google.com/spreadsheets/d/12osR8Ahg3HEDBWkfMg3C8mOjboGCOS0w9l_UmSDUPVw/edit?usp=sharing" target="_blank"><span style="color: #9fc5e8; font-size: xx-small;">Spreadsheet</span></a></div>
</div>
<div>
<a href="https://1drv.ms/x/s!Ao012Fem8UCvguEeytktDLgFp9ugSA" target="_blank"><span style="color: #9fc5e8; font-size: xx-small;">xlsl (CanWEA)</span></a></div>
Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-3096334709836374782018-09-06T11:19:00.000-07:002018-09-15T04:28:00.882-07:00wishing winds: California's SB 100I wanted to tie together some articles of interest I've read in a single post - but I instead I'll deliver two blog posts and spare myself the effort of convincing the reader of the connections between:<br />
<ul>
<li><a href="https://www.vox.com/energy-and-environment/2018/8/31/17799094/california-100-percent-clean-energy-target-brown-de-leon" target="_blank">California is this close to its boldest energy target yet: 100% clean electricity | David Roberts | VOX</a></li>
<li><a href="https://stopthesethings.com/2018/09/02/end-of-days-rocketing-power-prices-spells-armageddon-for-subsidised-wind-solar/" target="_blank">End of Days: Rocketing Power Prices Spells Armageddon for Subsidised Wind & Solar | Stop These Things</a> (with a big section quoting Judith Sloan's <i><b>Beginning of the end for subsidised renewables </b></i>in The Australian)</li>
<li><a href="https://parkergallantenergyperspectivesblog.wordpress.com/2018/09/03/canadas-wind-power-lobbyist-re-energizes-its-spin/" target="_blank">Canada's wind power lobbyist re-energizes its spin | Parker Gallant</a></li>
</ul>
For those not closely following the electricity scene, Stop These Things and VOX are dissimilar in the extreme. Those that are following are likely lined up with one or the other may have already abandoned reading this post - but don't worry VOX followers, this one only deals with California.<br />
<blockquote class="tr_bq">
<a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB100">SB 100</a>, the bill sponsored by state Sen. Kevin de León, would set a target of 100 percent carbon-free electricity by 2045. It passed the California Senate last year, passed the state Assembly on Tuesday, and was reconciled by the Senate on Thursday...<br />
...there’s enormous power and symbolism in “100 percent.”<br />
But it’s also important to understand that SB 100 is not some big leap for California...California’s transition to clean energy has been careful and deliberate.</blockquote>
SB 100 is a big deal, in my opinion, specifically because 2045 is not far away in planning electricity generation - and therefore it won't be just another symbolic step. <a href="https://www.eia.gov/todayinenergy/detail.php?id=34172" target="_blank">According the Energy Information Administration (EIA)</a>, "<i>The capacity-weighted average age of U.S. natural gas power plants is 22 years, which is less than hydro (64 years), coal (39), and nuclear (36)." </i>A building boom in natural gas power plants for 6 years at the start of the century drops that average age to 22 years, otherwise it would similarly show 2045 would be early years for a traditional power plant just being planned today. SB 100 is not binding, but I think it clearly increases the risk for any investor that would plan a generating source with significant greenhouse gas emissions in that state.<br />
<br />
Roberts alludes to a possibility the bill won't be signed into law;<i> "Gov. Brown is <a href="https://insideepaclimate.com/daily-news/brown-holds-back-california-clean-energy-bill-win-other-measures">threatening to veto SB 100</a> if legislators don’t also pass <a href="https://www.greentechmedia.com/articles/read/california-lawmakers-press-on-with-utility-wildfire-grid-regionalization">AB 813</a>, a bill that would set California on the path to joining a larger regional Western power market." </i>He doesn't take the possibility seriously, perhaps because of his belief that, "in what is effectively a climate Dark Ages in the US, California is carrying a torch."<br />
<br />
I'm in Ontario - if Americans are looking for a torch, they should look up here.<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-M2IWkDn56Og/W47SHupYIXI/AAAAAAAAGyA/T0nmme270Do4UgrZYRtMv7IxtmOEbhyWACLcBGAs/s1600/ON_CA_Emissions%2Bintensity.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="991" data-original-width="1387" height="456" src="https://3.bp.blogspot.com/-M2IWkDn56Og/W47SHupYIXI/AAAAAAAAGyA/T0nmme270Do4UgrZYRtMv7IxtmOEbhyWACLcBGAs/s640/ON_CA_Emissions%2Bintensity.png" width="640" /></a></div>
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<a name='more'></a><br />
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There are many ways emissions from electricity are reported by a jurisdiction. California reports them internally in a way that creatively accounts for the substantial imports - unlike the simple calculations I used to create the above graphic with data from 2<a href="https://www.eia.gov/electricity/data/state/" target="_blank"> annual EIA data files</a> and Canada's greenhouse gas inventory reporting. The progress in California Roberts describes as "careful and deliberate" didn't result in emissions being meaningfully reduced between 2005 and 2015.<br />
<br />
Growth from "renewables" in the last 5 years is only a solar story. California led the United States in wind generation for most of the 1990's, then Texas surpassed it, then Iowa, and Oklahoma, and Kansas. By 2016 California was in the middle of the pack (17th) in terms of share of internal electricity generation produced by industrial wind turbines.<br />
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<a href="https://1.bp.blogspot.com/-CwHiE5ypm8o/W48nFp19lUI/AAAAAAAAGyM/j_3djAfExdIyrY0OAB1tvcfEnPHza0wtwCLcBGAs/s1600/CA_Wind_Solar_1990to2017.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="740" data-original-width="1578" height="300" src="https://1.bp.blogspot.com/-CwHiE5ypm8o/W48nFp19lUI/AAAAAAAAGyM/j_3djAfExdIyrY0OAB1tvcfEnPHza0wtwCLcBGAs/s640/CA_Wind_Solar_1990to2017.png" width="640" /></a></div>
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California has a tendency to claim emissions reductions from imported electricity. I don't want to revisit all I've written (mostly <a href="https://twitter.com/ScottLuft/status/1017832020528058373/photo/1?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1017832020528058373%7Ctwgr%5E373939313b636f6e74726f6c&ref_url=https%3A%2F%2Fthreadreaderapp.com%2Fthread%2F1011650716438548481.html" target="_blank">tweeted</a>) on why it is suspect, but here will simply concentrate on the changes since 2009 as<a href="http://www.energy.ca.gov/almanac/electricity_data/total_system_power.html" target="_blank"> reported by the California energy Commission</a>.<b><span style="color: red; font-size: xx-small;">[1] </span></b>I've kept the units of the Y-axis the same to make the comparison between in-state and imports obvious - but to be absolutely clear the local solar trend doesn't extend to imports.<br />
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<a href="https://3.bp.blogspot.com/-e-6Ugy6YDIo/W5Basx0EPtI/AAAAAAAAGy8/8GqHItDkjm0KzoHy9KEZsc-T_jEYl8xBQCLcBGAs/s1600/CAimports_Axis2009.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="722" data-original-width="1566" height="294" src="https://3.bp.blogspot.com/-e-6Ugy6YDIo/W5Basx0EPtI/AAAAAAAAGy8/8GqHItDkjm0KzoHy9KEZsc-T_jEYl8xBQCLcBGAs/s640/CAimports_Axis2009.png" width="640" /></a></div>
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It is also notable that California Energy Commission claims more electricity generated by industrial wind turbines comes from imports than within the state. Paraphrasing Sartre, for Californians, like Torontonians, wind is other people.<b><span style="color: red; font-size: xx-small;">[2]</span></b><br />
<br />
I am unsure of the how large hydro fits into the 60% of electricity from renewables target for 2030, but a couple of aspects are relevant regardless. Hydro varies enormously from one year to another in California simply due to the availability of water. From 2015 to 2017 large hydro went from 5.4% of supply to 14.7% as in-state generation more than tripled. Imports have risen slower and this is presumably as it includes only contracted supply. Concerns with counting increased contracted "clean" energy from elsewhere as emission cuts in California are demonstrated <a href="https://energyathaas.wordpress.com/2018/08/27/what-are-you-getting-if-you-buy-clean-electricity/" target="_blank">by Catherine Wolfram </a>in discussing a California "clean" retailer; "<i>About half of its current energy procurement (2018-19) comes from large hydro. Keep in mind that the last <a href="https://en.wikipedia.org/wiki/List_of_largest_hydroelectric_power_stations_in_the_United_States">large hydro plant built in the Western US</a> went into service in 1966."</i><br />
<i><br /></i>
It's unclear how much of the other imported electricity is simply reshuffling existing supply, but assuming it's zero and trusting the California Energy Commission figures, renewables (excluding large hydro) were 29% of supply in 2017, up over 50% from 2013-2017. It's easy to see the exuberance in upping the goals for 2030, but 82% of that increase was due to solar - a variable renewable energy source (vRES) which produces about 80% of its annual output in around 20% of all hours. The exciting growth in California solar isn't unique, nor will the coming slowdown be.<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://www.energytoday.net/wp-content/uploads/2018/03/Sivaram_Figure_2.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="281" data-original-width="600" height="298" src="https://www.energytoday.net/wp-content/uploads/2018/03/Sivaram_Figure_2.jpg" width="640" /></a></td></tr>
<tr><td class="tr-caption">This is Figure 2 in Varun Sivaram's <a href="https://www.energytoday.net/renewable-energy/solar/a-tale-of-two-technologies-what-nuclears-past-might-tell-us-about-solars-future/" target="_blank">A Tale of Two Technologies</a></td></tr>
</tbody></table>
<div>
It's not apparent California will return to biomass or geothermal (long stagnant). Germany returned to wind after it's solar growth spurt, which looks unlikely on land in California, and less affordable offshore - although that is <a href="https://www.sfchronicle.com/business/article/California-wants-100-clean-power-by-2045-13200669.php" target="_blank">where Mark Jacobson thinks they should look</a>. But even if they do build out wind and solar the production profiles mean increasing grid connections with other jurisdictions would alleviate costs in allowing exports at times of excess generation, and imports when needed.</div>
<div>
<br /></div>
<div>
Gerry Brown may not have grounds to veto the bill, but he was on sound footing in tying it to expanding the market, and without increasing connections, given the recent success is due almost entirely to solar, the 60% renewables target for 2030 would be likely to expensively fail. </div>
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<blockquote class="tr_bq">
<u><i>related, next, post:<b> <a href="http://coldaircurrents.luftonline.net/2018/09/how-to-sell-industrial-wind-turbine.html">how to sell an industrial wind turbine</a></b></i></u></blockquote>
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<h3>
End-notes:</h3>
<br />
1. In 2009 the Commission's reporting introduced an "Unspecified Sources of Power" category, and it was over half of the total. This was likely due to cap and trade rules that rewarded California entities for selling ownership positions, and contracts with, coal-fired generators (in particular) outside the state. Electricity purchased on the market was considered gas-fired, allowing for great reductions in perceived emissions, if only on paper.<br />
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2. The only two large industrial wind turbines within 70 km of Toronto's city centre is a mock turbine that may no longer be even occassionally operational, and a single unit on the site of the Pickering Nuclear Generating station.<br />
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<a href="https://1drv.ms/x/s!Ao012Fem8UCvguAYCgeNWEr5S026Nw" target="_blank"><span style="color: #6fa8dc; font-size: xx-small;">xlsx with graphics</span></a></div>
Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-1651019480313408992018-04-21T14:21:00.001-07:002018-04-21T14:23:58.405-07:00Bad books: whither professional behaviourToday's Globe and Mail has an article by Mattew McClearn I hope those who follow me will read - but it is work and if you're not that invested in the Sousification of Ontario's accounting at least take a couple of minutes to watch the video embedded in <a href="https://www.theglobeandmail.com/canada/investigations/article-bad-books-how-ontarios-new-hydro-accounting-could-cost-taxpayers/" target="_blank">Bad books: How Ontario’s new hydro accounting could cost taxpayers billions</a>.<br />
<blockquote class="tr_bq">
The IESO changed its accounting policies in March 2017 and said the shortfall was an "asset".<br />
The government said this "asset" represented the IESO's right to recover the shortfall -plus interest charges and other expenses - from future ratepayers years from now.<br />
The Auditor-General says this "asset" does not exist.</blockquote>
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<tr><td style="text-align: center;"><a href="https://www.theglobeandmail.com/resizer/YzF7m2NocwuEIvRsRbcKiJlacYM=/620x0/filters:quality(80)/arc-anglerfish-tgam-prod-tgam.s3.amazonaws.com/public/CKQYS4TTWZCP3HSRRPRAUXQJEE.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="413" data-original-width="620" height="266" src="https://www.theglobeandmail.com/resizer/YzF7m2NocwuEIvRsRbcKiJlacYM=/620x0/filters:quality(80)/arc-anglerfish-tgam-prod-tgam.s3.amazonaws.com/public/CKQYS4TTWZCP3HSRRPRAUXQJEE.JPG" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Image from <a href="https://www.theglobeandmail.com/canada/investigations/article-bad-books-how-ontarios-new-hydro-accounting-could-cost-taxpayers/" target="_blank">Globe and Mail</a> showing Bay Street's seals of approval</td></tr>
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<div>
I don't wish to dwell on the article beyond recommending you read it, but I will expand on some topics I've touched on before to demonstrate why the article should be read as illustrative of a greater rot.</div>
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The "asset" is defined in the <a href="https://www.blogger.com/Bad%20books:%20How%20Ontario%E2%80%99s%20new%20hydro%20accounting%20could%20cost%20taxpayers%20billions" target="_blank">Ontario Fair Hydro Plan Act</a>:</div>
<blockquote class="tr_bq">
<b>Regulatory asset established</b><br />
<b>25</b> (1) Effective May 1, 2017, the IESO has the right, exercisable in accordance with this Act and the regulations, to recover the balance recorded in the variance account from specified consumers.</blockquote>
I would suggest the debt being packaged as an asset is essentially the sale of future consumers - and nothing else. The vast majority of Ontario electricity is generated by hydro-electric and nuclear generators that entered commercial more than 24 years ago - and most of the remainder is contracted supply where residual value beyond the contract terms should only be imaginable in <a href="http://coldairings.luftonline.net/post/157859145491/twisted-in-ivey-extending-electricity-contracting" target="_blank">disreputable places</a>.<br />
One thing I found fascinating in the article was how reputable anything can be deemed by some accounting firm:<br />
<blockquote class="tr_bq">
“You can go to any of the public accounting firms and get them to render an opinion on whatever you want,” [forensic accountant Al Rosen] said. “The ethics have gone all to hell.”</blockquote>
McClearn's Globe article displays an abandonment of any pretense of professional behaviour around former banker and current Finance Minister Charles Sousa - either within the finance department or in the broader financial culture he operates within. I want to end with a different type of disappointment displayed at the electricity system operator (the IESO) and attached to another public policy issue.<br />
<br />
From the article:<br />
<blockquote class="tr_bq">
...the IESO decided against adopting rate-regulated accounting when it was formed in 2015 – a decision supported by its auditor, KPMG. And earlier this year, Ms. [Kim] Marshall told the province’s public accounts committee that in February, 2017, she presented financial statements prepared in the usual way to her audit committee.<br />
The following month, though, she produced a fresh set of financial statements using rate-regulated accounting.</blockquote>
It does make me wonder if Ms.Marshall was comfortable with the direction.<br />
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<a href="https://4.bp.blogspot.com/-JJaNgn4xm4c/Wturv3UpqqI/AAAAAAAAGrs/zeG5rN6qflEsBGjOfDg0OrsmEMtQpGYAwCLcBGAs/s1600/IESO%2Bannual%2Bassets.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="483" data-original-width="781" height="394" src="https://4.bp.blogspot.com/-JJaNgn4xm4c/Wturv3UpqqI/AAAAAAAAGrs/zeG5rN6qflEsBGjOfDg0OrsmEMtQpGYAwCLcBGAs/s640/IESO%2Bannual%2Bassets.png" width="640" /></a></div>
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<br />
The IESO is the renamed IMO which dates back to Ontario's so-called market opening in 2002. It was not "formed" in 2015, as the article states, but that is the year it absorbed the Ontario Power Authority (OPA). The new organization included 2 women who had been Vice-Presidents at the OPA: Kim Marshall and JoAnne Butler.<br />
<br />
The IESO had no females in its 2014 Executive Leadership Team.<br />
<br />
In October the rookie President and CEO of the IESO, Peter Gregg, announced <a href="http://www.ieso.ca/en/sector-participants/ieso-news/2017/10/message-from-peter-gregg-president-ceo" target="_blank">a re-organization </a>and noted JoAnne Butler had "concluded [her] tenure" at the IESO. Today's Globe article notes, "<i>Ms. Marshall will step down as the IESO’s CFO at the end of this month. (No replacement has been named.)"</i><br />
<br />
And I really do wonder if Ms.Marshall was comfortable with the direction.<br />
<br />
Gender diversity is an issue the <a href="http://electricityhr.ca/workplace-support/diversity-inclusion/ehrc-leadership-accord/" target="_blank">industry has recognized</a>, but it remains far from clear the IESO leadership will/can meaningfully address it - nor is it clear that's their greatest diversity challenge.<br />
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<a href="https://docs.google.com/spreadsheets/d/1-Zy4WV4FYLUbT3mzD_T8KqfPoYUV5v2P-esTRHw2y7M/edit?usp=sharing" target="_blank"><span style="color: #cfe2f3; font-size: xx-small;">spreadsheet</span></a>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com1tag:blogger.com,1999:blog-446210048006827157.post-25598994482411799262017-10-28T12:11:00.000-07:002019-11-23T06:36:15.241-08:00base load to base cost - and back again?This week the government of my province, Ontario, released its latest Long-Term Energy Plan. There's not much in it that I haven't commented on before, rather specifically, so in this post I'll discuss some international energy events of the past month to try and put Ontario's decisions in a broader context - not for the benefit on Ontario, but for the jurisdictions copying mistakes made in the past decade around the world.<br />
<br />
The <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/654902/Cost_of_Energy_Review.pdf" target="_blank">Cost of Energy Review </a>produced by Dieter Helm notes the 2008 CCA <i>"commits the UK to reduce emissions by at least 80% by 2050."</i><br />
<blockquote class="tr_bq">
The review will provide recommendations as to how best to minimise the costs of energy consistent with the overarching objectives, taking account of the costs and benefits of the recommendations. It will set out options for developing and enhancing energy policy. </blockquote>
The very meaty meat of the lengthy report's digestible Executive Summary:<br />
<blockquote class="tr_bq">
The measures necessary to reduce the costs include: the unification of the capacity and FiTs <span style="font-size: x-small;"><i>[feed-in tariffs]</i></span> and CfDs <i><span style="font-size: x-small;">[contract for difference]</span></i> auctions on the basis of equivalent firm power (EFP); the gradual reforms of the structure of FiTs and CfDs in the transition to their eventual abolition; and further enhancements to competition in the wholesale and balancing markets. There should be significant reforms of the regulation of transmission and distribution focused on the role of system operators at the national and local levels, and the replacement of the specific licences for distribution, supply and decentralised generation with a general licence. A default supply tariff should be required and the margins published. Finally, carbon prices and energy taxes should be harmonised. </blockquote>
<blockquote class="tr_bq">
19. This package of measures is a major shift from the original market design and regulation model at privatisation, and moves on from EMR. It would create a simpler, more competitive structure fit for the new purposes. Instead of low-carbon technologies being grafted onto the fossil fuel-based system, the new world is radically different, backed up by new smart technologies, data and smart energy networks and services. A common carbon price would significantly lower the cost of decarbonisation and greatly enhance incentives.</blockquote>
The bombshell there is "equivalent firm power" being valued.<br />
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<a name='more'></a><br />
<blockquote class="tr_bq">
<b>(ii) The single equivalent firm power capacity auction</b><br />
<br />
114. The second way in which renewables policies lead to higher costs of energy is the different treatment of different technologies and the exemption from the system costs caused by intermittency.<br />
<br />
115. The first-best solution to this problem is to integrate the FiTs and low-carbon CfDs into the capacity markets, and make all technologies bid on an EFP basis. This directly confronts those that cause intermittency costs with the costs they cause, just as a carbon price confronts those that emit carbon with the costs they cause. <span style="font-size: x-small;"><i><a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/654902/Cost_of_Energy_Review.pdf" target="_blank">[page 114]</a></i></span></blockquote>
I interpret as saying technology specific adders (FiTs and CfDs) should be rolled in with the existing capacity market (one Helm feels successful). This is significantly different than the paradigm seeing one price for energy, and another for capacity - and that paradigm does seem designed to subsidize energy with no capacity value.<br />
<br />
On October 17th the government of Australia released an electricity platform that I felt was treated rather harshly in most press (particularly by American news organizations) - which its dubbed the <a href="https://www.pm.gov.au/media/2017-10-17/national-energy-guarantee-deliver-affordable-reliable-electricity" target="_blank">National Energy Guarantee</a>:<br />
<blockquote class="tr_bq">
The Guarantee is made up of two parts that will require energy retailers across the National Electricity Market to deliver reliable and lower emissions generation each year.<br />
<ul>
<li><b>A reliability guarantee</b> will be set to deliver the right level of dispatchable energy (from ready-to-use sources such as coal, gas, pumped hydro and batteries) needed in each state. It will be set by the Australian Energy Market Commission (AEMC) and Australian Energy Market Operator (AEMO).</li>
</ul>
<ul>
<li><b>An emissions guarantee </b>will be set to contribute to Australia’s international commitments. The level of the guarantee will be determined by the Commonwealth and enforced by the Australian Energy Regulator (AER).</li>
</ul>
</blockquote>
<blockquote class="tr_bq">
...we are not picking winners, we are levelling the playing field. Coal, gas, hydro and biomass will be rewarded for their dispatchability while wind, solar and hydro will be recognised as lower emissions technologies but will no longer be subsidised.</blockquote>
The responses to the policy announcement mostly communicated the biases of the responders. This is somewhat due to a lack of meat on the policy which was only <a href="http://www.coagenergycouncil.gov.au/sites/prod.energycouncil/files/publications/documents/Energy%20Security%20Board%20ADVICE....pdf" target="_blank">sketched out in a brief letter</a>. It's also due to the political situation in Australia, but I'll not address that here. The impetus for a change in direction is better known:<br />
<blockquote class="tr_bq">
...as outlined in AEMO’s <span style="font-size: x-small;">[Australian Energy Market Operator] </span>recent advice there is an increasing concern that there is currently insufficient incentive to both drive investment in new flexible, dispatchable resources and maintain existing such resources. This will be exacerbated in future years as current dispatchable generation (such as coal and gas) exits the market.</blockquote>
<blockquote class="tr_bq">
The ESB <span style="font-size: x-small;">[Energy Services Board] </span>is proposing the development of an obligation on retailers to meet a percentage of their load requirements with flexible and dispatchable resources, that is, resources that can be scheduled by the market operator depending on the real time operating needs of the system. This would allow both new and existing generation to meet the dispatchability requirement, and provide a greater incentive to maintain existing plant which is necessary for the secure and reliable operation of the power system....</blockquote>
A related policy approach may be occurring in the United States, where the Secretary of Energy has proposed the <a href="https://energy.gov/articles/secretary-perry-urges-ferc-take-swift-action-address-threats-grid-resilienc" target="_blank">Federal Energy Regulatory Commissions (FERC) </a>"take swift action to address threats to U.S. electrical grid resiliency."<br />
<br />
While most fervent advocates of wind and solar treat policy announcements rolling back, or eliminating, preferential pricing and/or quotas for their favoured sources, the Australian policy sketch, at least, shares some ideas with Michael Liebreich's <a href="https://about.bnef.com/blog/liebreich-six-design-principles-power-markets-future/" target="_blank">Six Design Principles for the Power Markets of the Future – A Personal View</a>.<br />
<blockquote class="tr_bq">
...wind and solar are variable resources. For all that they can produce cheap power on average, they are unable on their own to meet demand when the sun is not shining and the wind is not blowing. Their integration into the power system therefore depends on the presence of other technologies – demand response, power storage, flexible fossil plants or interconnections with neighbouring systems. Someone has to build and run these, and they too must be able to earn their cost of capital.</blockquote>
<blockquote>
... </blockquote>
<blockquote>
If it means anything, “base-load” means generating capacity that is rarely if ever switched off, indeed which is expensive or impossible to switch off. When coal and existing nuclear power plants were the cheapest sources of power, and before the risk of climate change was well understood, that might have been acceptable. But now, if consumers are to gain the cost and climate benefits from super-cheap renewable power, what is needed is flexible, dispatchable power by way of complement, not inflexible base-load that crowds it out.<br />
<br />
So, if the actual or de facto nationalization of our power system is the wrong answer, and an atavistic yearning for the simplicity of base-load is the wrong answer, what is the right answer?<br />
<br />
Truth be told, no one knows...</blockquote>
Market design for the unknown is presented as far more complex than the gaming of most markets that occurs today.<br />
<br />
I do want to note some conflicts in these papers/suggestions.<br />
<br />
Helm cheers the announced 2025 end of coal-fired generation in the United Kingdom as, <i>"a belated but welcome step to recognise that switching away from coal is the cheapest way to decarbonise." </i>That statement is far too confident - how it's replaced determines the expense. The Australian National Energy Guarantee proposal says nothing about coal - probably as there is an element of the ruling party that is pro-coal: but it certainly does not guarantee coal's future. The U.S. chatter of supporting coal seems more silly than anything at this point - demanding a 90-day on-site inventory at plants that might not actually use that much fuel over many years.<br />
<br />
Liebreich's design principles include a note on financing that explains a pricing benefit of quotas: "in order to produce power at these low prices, renewable energy projects need access to
cheap debt, and that requires guaranteed income for long periods – 15 years or more." I'll note in order for nuclear or big hydro - baseload - plants to access cheap financing, they need commitments for much longer than that.<br />
<div style="text-align: center;">
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I've browsed <a href="https://www.ontario.ca/page/ontarios-long-term-energy-plan" target="_blank">Ontario's new Long-Term Energy Plan</a> and found little I am motivated to expand on, but I do want to point to previous work I relate to it. I didn't find any new numbers - most of the planning figures came from the IESO's (Ontario's system operator) September 2016 Ontario Planning Outlook. Future supply mixes aren't dictated but will be determined by IESO's ability to run market-based technology agnostic procurement. I wrote on the themes <a href="http://coldair.luftonline.net/2016/11/ontario-energy-minister-previews-long.html" target="_blank"><span id="goog_583915840"></span>last November.</a><br />
<br />
I have some quibbles with political statements in the document, but overall I think Minister Thibeault produced a positively neutral document, for which I am grateful. I am particularly pleased the <a href="http://coldair.luftonline.net/2016/04/10700-ontarios-beastly-number.html" target="_blank">"beastly" 10,700 non-hydro renewables target </a>is found nowhere in the document - although a dubious jobs claim of "as many as 10,700" is.<br />
<br />
Ontario's plans have included refurbishing 10 more nuclear reactors, at the Darlington and Bruce sites, for some time - but this is the first LTEP that indicates the reminder of Ontario's electricity system may take into account the very large baseload supply component provided by existing nuclear and hydro-electric generators. That low-emissions baseload had Ontario's electricity sector greenhouse gas emissions down 75+% from 1990's level in 2015, and 2017's emissions will likely be half 2015's level.<br />
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Maybe baseload is still a thing - in which case rolling FiTs and such into capacity mechanisms into firm capacity mechanisms makes a lot of sense.<br />
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<br />Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-80564647469392026772017-10-25T07:57:00.002-07:002017-10-25T12:25:42.712-07:00Transcanada sell-off of Ontario solar assets an ugly reminder of FIT debacleTransCanada had issues<a href="http://www.marketwired.com/press-release/-2238335.htm" target="_blank"> a press release</a> announcing it's disposal of solar generation assets in Ontario:<br />
<blockquote class="tr_bq">
TransCanada Corporation (TSX:TRP)(NYSE:TRP) (TransCanada) today announced that it has entered into an agreement to sell its Ontario solar portfolio comprised of eight facilities with a total generating capacity of 76 megawatts to Axium Infinity Solar LP, a subsidiary of Axium Infrastructure Canada II Limited Partnership, for approximately $540 million. The transaction is expected to close by the end of 2017 subject to certain regulatory and other approvals as well as customary closing adjustments.</blockquote>
It's not uncommon to read of really low prices for solar somewhere in the world (<a href="https://data.bloomberglp.com/bnef/sites/14/2017/04/2017-04-25-Michael-Liebreich-BNEFSummit-Keynote.pdf" target="_blank">an example</a>), so I thought maybe displaying the price for specific projects in Ontario might be an interesting contrast.<br />
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The 76 megawatts of solar capacity being sold are:<br />
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<a href="https://4.bp.blogspot.com/-J1VZ6PIHA18/WfCjVZNpVwI/AAAAAAAAGe8/z_m87PG7iV0zLo_vAHog1o26d19jL34MACLcBGAs/s1600/TransCanada%2Bsolar.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="252" data-original-width="734" height="218" src="https://4.bp.blogspot.com/-J1VZ6PIHA18/WfCjVZNpVwI/AAAAAAAAGe8/z_m87PG7iV0zLo_vAHog1o26d19jL34MACLcBGAs/s640/TransCanada%2Bsolar.png" width="640" /></a></div>
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The math to estimate average cost per megawatt-hour (MWh) based on the remaining terms of the contracts and assuming a 16% average annual capacity factor:<br />
<blockquote class="tr_bq">
<i>540,000,000 divided by (76 * 365.25**15.8*24*.16) = <b>$320.63/MWh</b></i></blockquote>
32 cents per future contracted megawatt-hour is what TransCanada is selling for. The contracts are all Feed-in-Tariff (FIT) 1 deals. The FIT1 rate for projects like these (ground mounted and greater than 500 kW capacity) was $443/MWh. I'll leave it to others to attempt a net present value analysis - my recollection is FIT 1 rate multipliers were 25% of inflation, so tomorrow's dollars wouldn't be worth as much as today's.<br />
<br />
By 2018 <strike>TransCanada</strike> previous owners <span style="font-size: xx-small;">(corrected) </span>will already have received over <strike>$1.2 billion</strike> $198 million <span style="font-size: xx-small;">(corrected)</span> in FIT payments for output from the facilities (if the capacity factor assumption above is valid).<br />
<br />
___<br />
<br />
The news release included another curiousity:<br />
<blockquote class="tr_bq">
A large independent power producer, TransCanada currently owns or has interests in approximately 6,200 megawatts of power generation in Canada and the United States. </blockquote>
TransCanada has a significant interest in Bruce Power, which alone is 6,200 MW. They also have an interest in the Portlands and Halton Hills Generating Stations and is currently constructing the Oakville Generating Station - albeit far away from Oakville (they're now calling it Napanee).<br />
<br />
Calculating capacity by the TransCanada's ownership share, they'll have a little over 4000 megawatts of capacity in Ontario until Oakville/Napanee enters service, when they'll have a little under 5,000 MW.<br />
<br />
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<br />
<br />
<h3>
Postscript</h3>
<div>
<br /></div>
<div>
Geoffrey Morgan has a good report on the sale<a href="http://business.financialpost.com/commodities/transcanada-doubles-down-on-oil-and-gas-infrastructure-after-selling-solar-assets-for-540m" target="_blank"> in the Financial Post </a>- which led to another correction to my original post:</div>
<blockquote class="tr_bq">
<i>Calgary-based pipeline giant TransCanada sold its solar power portfolio to a subsidiary of Montreal’s Axium Infrastructure Inc. for $540 million, capturing a price appreciation of $83 million in around three years. The portfolio includes eight facilities that generate a total of 76 megawatts of renewable power, a sector which analysts say wasn’t a strategic fit for TransCanada, which bought the assets from Guelph-based Canadian Solar Inc. for $457 million through a series of transactions, the last of which was carried out in 2014.</i></blockquote>
I had the opinion when Canadian Solar got to build/overbuild Samsung's solar farms that saving that company was an important aspect of not simply killing the Samsung deal when the government had the chance. This information fits into that narrative.<br />
<br />
<br />
<br />Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-69950163750811255852017-08-02T12:06:00.001-07:002017-08-02T17:51:56.096-07:00regarding flexibility <div class="tr_bq">
There is a lot being written electricity storage these days, and capacity markets, and the integration of variable renewable energy resources. Most of the material originates with lawyers, philosophers, sales people, consultants, politicians and other economists. I invite you to listen to a professional engineer and system operator, very carefully, for 10 minutes.</div>
<br />
The system operator is Leonard Kula P. Eng.,Vice-President, Market & System
Operations and Chief Operating Officer of Ontario's IESO. If low greenhouse gas emissions are a genuine goal, the messages are pertinent far beyond Ontario. Over the first 7 months of 2017 the IESO shows ~2.8 terawatt-hours (TWh) generated by natural gas-fueled suppliers, which is only about 3.5% of all generation. The output from gas is down over 60% from the same period in 2016, which should push the greenhouse gas intensity of IESO grid generation down to around 15 kilograms CO2e per megawatt-hour - superb for grids that aren't entirely in jurisdictions blessed with plentiful hydro-electric generation sites. From a low emissions standpoint Ontario's system operator might be considered THE system operator.<br />
<br />
Lower gas use is one characteristic of Ontario's electricity system of late.<br />
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<br />
A less positive characteristic is rising curtailment of contracted supply - notably from wind.<br />
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While most curtailment looks to be due to surplus generation, either globally or in particular regions of the grid, there is another operational aspect of curtailment closely linked to the decline in gas generation.<br />
<br />
Earlier this year I ended a post, <a href="http://coldaircurrents.luftonline.net/2017/02/can-wind-and-solar-be-significant.html" target="_blank">Can Wind and Solar be significant contributors to a low emission electricity system</a>, with:<br />
<blockquote>
...many commentators...have been skeptical about the ability to operate the grid with little of the gas generation (and previously coal) online, and ready for ramping. I believe Ontario's actual operators of the system - the ones who do it on a daily basis - have a story to tell. That story would likely include improved forecasting, revised wind turbine (and perhaps solar panel) regulation to provide a programmed reactive power element, and rationalized market bid rules forcing the curtailment of wind and solar output prior to impacting nuclear units.<br />
It is variable renewable energy systems that need to be flexible.</blockquote>
Kula indicates the way to make variable renewable energy systems flexible is by curtailing their output.<br />
<blockquote class="tr_bq">
We added the ability to dispatch the variable generation facilities that are connected to the grid in 2013, and they are very fast acting resources. At times we have to reduce the output of these facilities to go ahead and manage congestions and/or surplus conditions, and once they dispatched down they are very quick and flexible to be dispatched back up.</blockquote>
The IESO's Kula spoke at <a href="http://ieso.ca/en/sector-participants/engagement-initiatives/overview/2017-stakeholder-summit" target="_blank">the 2017 Stakeholder Summit</a>. The IESO requires you <a href="http://www.meetview.com/ieso20170612" target="_blank">register before viewing the recordings</a> (it's a painless process). The section I am addressing is the panel on "Building Flexibility into the Electricity System". While I highly recommend the 10 minutes at the start of the panel in which Kula delivers <a href="http://ieso.ca/-/media/files/ieso/document-library/engage/2017-stakeholder-summit/2017-summit-kula-presentation.pdf?la=en" target="_blank">his presentation</a> , Rob Coulbeck is also worth listening to, as is the Q & A session.<br />
<br />
<a name='more'></a><br />
<br />
I think listening will position people to far better understand some power plant decisions being made throughout the world, including:<br />
<br />
<ul>
<li>a 100 megawatt battery, with 129 megawatt-hours of energy, <a href="https://www.tesla.com/blog/tesla-powerpack-enable-large-scale-sustainable-energy-south-australia" target="_blank">to be built by Tesla</a> and paired with Neoen's Hornsdale industrial wind facility (which I understand has a <a href="https://www.neoen.com/en/hornsdale-wf-phase-i/" target="_blank">100 megawatt (MW) first stage</a> operating and is on its way to <a href="https://green-giraffe.eu/article/hornsdale-stage-3-109-mw-closes-financing" target="_blank">a total 309 MW capacit</a>y).</li>
<li>a 100 megawatt "<span style="background-color: white; font-family: "arial" , "helvetica" , sans-serif; font-size: 14px;">battery energy storage system<a href="http://www.power-eng.com/articles/2017/07/aes-begins-construction-of-640-mw-california-gas-plant.html" target="_blank">" being built by AES as part of a 640 MW California Natural gas-fired power plant</a></span></li>
<li>the choice of twelve 18-cylinder Wärtsilä 50SG engines operating on natural gas for the 225 MW Denton (Texas) Energy Center. <a href="https://www.wartsila.com/media/news/21-09-2016-wartsila-supplies-225-mw-power-plant-to-the-city-of-denton-texas-usa" target="_blank">The project</a> now has some<a href="http://www.dentonrc.com/news/denton/2017/07/17/denton-energy-centers-troubled-past-makes-future-uncertain" target="_blank"> controversy attached</a> to it, but I don't think it's disputed engines were chosen over turbines due to a superior "ability of the plant to quickly start and stop." The engines are perceived as better complements to variable renewable generators.</li>
</ul>
<div>
These all seems to provide flexibility - in the case of the Tesla/Neoen batteries this is a more important aspect than storage.</div>
<div>
<br /></div>
<div>
On the a non-cutting edge technology point, people will also better understand why jurisdictions like Germany persist in burning coal while increasing variable renewable generators. Kula's explaination of how coal can be, from a flexibility perspective, superior to traditional natural gas generators is welcome, but hopefully this isn't a new message for readers of my work. Donald Jones (writer of <a href="http://coldaircurrents.luftonline.net/2011/01/more-wind-means-more-risk-to-ontario.html" target="_blank">the first guest post</a> on the blog) wrote <a href="http://ontario-wind-resistance.org/2010/06/08/time-for-the-ontario-government-to-rethink-this-gas-and-wind-thing/" target="_blank">this back in 2010</a>:</div>
<div>
<blockquote class="tr_bq">
The coal plants have served Ontario well providing baseload, intermediate load, peaking load, operating reserve, and high ramping capability for load following as well as frequency control and voltage control. Coal is much more flexible than gas. It has a much lower minimum load and a shorter minimum run time than the gas-fired combined cycle gas turbine units with their large complex heat recovery steam generators. Coal has over twice the dispatch flexibility range, between minimum loading and full power, which means either twice as many gas units would be needed to provide the same dispatch flexibility range as similar sized coal units or the gas units would have to have twice the capacity of the coal units... Dispatching combined cycle plants is much more complex than dispatching coal-fired plants since the steam turbine is a slave to the combustion turbines and various combinations of the multiple combustion turbines with and without the steam turbine are possible, with warm-up of the steam generators and steam turbine to be considered</blockquote>
I suggest jurisdictions really learning from Ontario's reductions in emissions will hesitate to enter into long-term contracts with the types of natural gas fueled power plants Ontario did, but alternatives remain uncertain.<br />
<br />
<br />
<h3>
Appendix: Transcription of Leonard Kula presentation</h3>
Some Recent trends:<br />
<br />
Generally as a system operator we have noted a decrease in system flexibility over the last decade or so.</div>
<div>
<br /></div>
<div>
Hydroelectric facilities are not as flexible as they used to be, for a variety of reasons:<br />
<ul>
<li>Public safety</li>
<li>Stewardship concerns</li>
<li>Recreation</li>
<li>Erosion</li>
<li>Fish spawning, and a number of other things</li>
<li>Mechanical – you’ve got old equipment that may not be as able to adjust their output as frequently as it did when the equipment was newer,</li>
<li>and as a system operator we frequently encounter what we call hydro-electric lock-outs: a dispatch of a change in output for a hydro-electric facility and then being unable to move it again for a number of hours.</li>
</ul>
We also see decreased flexibility on the system as we’ve increased the number of baseload facilities such as nuclear. Nuclear is a wonderful resource, has added emissions free megawatts to the system – it is able to move but it tends to operate as a baseload facility and if you need flexibility to go ahead and increase output [it] is already producing at its maximum output typically.<br />
<br />
In Ontario we’ve also noted a change from coal to gas. Coal units were characterized by very low minimum loading points which gave them a lot of room to maneuver. Natural gas facilities have higher minimum loading points and in Ontario when you’ve got increased amounts of baseload facilities over the past few years, and decreases in demand for a variety of reasons, we actually see that we are getting our coal fleet on the line – sorry, our natural gas fleet on the line – less than we used to get the coal facilities on the line.<br />
<br />
The picture is not all grim.<br />
<br />
We’ve added some flexibility back into the system.<br />
<br />
We added the ability to dispatch the variable generation facilities that are connected to the grid in 2013, and they are very fast acting resources. At times we have to reduce the output of these facilities to go ahead and manage congestions and/or surplus conditions, and once they dispatched down they are very quick and flexible to be dispatched back up.<br />
<br />
In 2016 we completed an operability assessment at the IESO that assessed the impact of increased quantities of variable generation. We found that the accuracy of the variable generation forecast is very good within an hour, and the accuracy the accuracy of the variable generation forecast is good, but not great, one hour out when you are scheduling imports and exports in and out of Ontario; five hours out, which is the typical time when we are committing our gas units; and 24 hours out when we schedule and commit resources day-ahead.<br />
<br />
So on this graph … the forecast error is depicted here. The sharp and steep graph is the forecast error that we see within the hour. The point of this slide is that within the hour we’ve got much better information which then feeds into what resources we have to dispatch on to the system.</div>
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<br /></div>
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<br />
<br />
… Bottom line is that we get much better information to go ahead and assess the resource fleet and what we need to do to balance the system within an hour.<br />
<br />
Given that we get much better information within the hour, we find however that there are limited available Ontario resources that are able to respond to supply shortfalls if wind and solar production is less than we expect or if electricity demand is greater than we expect.<br />
<br />
…[quotes from Richard Carlson]<br />
<blockquote class="tr_bq">
“The growth in generation from renewable generation resources such as wind and solar, creates a need for greater flexibility in the generation mix to ensure the reliability of the system.”</blockquote>
As a consequence of our 2016 Operability Study, we assess that we need an additional – about – 840 megawatts of flexible resources in Ontario by the end of 2018. Again coming back to my original statement of what does flexibility mean in Ontario,<br />
<br />
Flexibility is supply resources able to respond to IESO dispatch signals to increase their output within ~30 minutes.”<br />
<br />
This shortfall of flexible resources gets reflected in market results… [discusses price spikes in 1st quarter of 2017]<br />
…<br />
<br />
As a system operator, we need flexible resources today. When conditions exist for short term supply:demand imbalances and we expect there could be a reliability impact, as a system operator we are bringing on resources with longer start-up times that can then provide flexibility should there be an imbalance in real-time where you need the flexibility to respond.<br />
<br />
In the short term …[discusses these points from presentation]<br />
<br />
• To meet flexibility needs in the short-term, we need to:<br />
<ul>
<li> Incent greater flexibility from existing assets and participants </li>
<li> Signal the need for and dispatch flexibility</li>
</ul>
• Flexibility will also be addressed as part of Market Renewal: <br />
<ul>
<li> –More frequent intertie scheduling (15 minutes) </li>
<li> –Assessment of the need for a flexibility product/mechanism </li>
</ul>
• Ensure alignment with renewed design for energy and capacity products <br />
• Bring in lessons-learned from other jurisdictions<br />
<br />
<br />
<br />
<a href="https://www.blogger.com/goog_1225984157"><span style="color: #cccccc; font-size: xx-small;"><i><br /></i></span></a>
<a href="https://docs.google.com/spreadsheets/d/13azmctjEksxEsTcHQH4oqXKGkAP5MPbMO5tf8zcAGTs/edit?usp=sharing"><span style="color: #cccccc; font-size: xx-small;"><i>spreadsheet</i></span></a><br />
<br />
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Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-47150198774173828142017-05-11T05:58:00.005-07:002017-05-11T05:58:33.296-07:00Diesel and coal; standards and bans<div class="tr_bq">
<div style="text-align: center;">
<i>Alberta's coal-fired power plant operators are planning to cheaply convert plants to burn natural gas. National emissions standards should not be relaxed to extend the life of what will still be high-emission power plants.</i></div>
<br />
<a href="http://www.powerengineeringint.com/articles/2017/04/europe-votes-for-stricter-pollution-laws-on-power-plants.html">Europe votes for stricter pollution laws on power plants | Power Engineering</a></div>
<blockquote class="tr_bq">
Power plants in the EU will have to cut the amount of toxic pollutants such as nitrogen oxides they emit under new rules approved by a majority of member states.</blockquote>
<blockquote class="tr_bq">
Friday’s decision imposes stricter limits on emissions of pollutants such as nitrogen oxide, sulphur dioxide, mercury and particulate matter from large combustion plants in Europe.<br />
The <a href="http://www.powerengineeringint.com/search.html?q=European+Power+Plant+Suppliers+Association+%2528EPPSA%2529&x=0&y=0">European Power Plant Suppliers Association (EPPSA)</a> said they welcomed the move by the <a href="http://www.powerengineeringint.com/search.html?q=Industrial+Emissions+Directive&x=0&y=0">Industrial Emissions Directive</a> (IED) Article 75 Committee members on the Best Available Techniques Reference Document for <a href="http://www.powerengineeringint.com/search.html?q=Large+Combustion+Plants&x=0&y=0">Large Combustion Plants</a> (LCP BREF).<br />
...<br />
Several countries which are heavily reliant on coal, such as Poland, Bulgaria, Germany and the Czech Republic, were opposed to the changes.<br />
...<br />
National authorities will be able to use a derogation, or form of exemption, when costs would be disproportionate compared with the environmental benefits, while respecting environmental safeguards</blockquote>
<blockquote class="tr_bq">
...EPPSA also said it believes that for most of the existing LCPs, the implementation of the conclusions are economically and technically feasible through the state-of-the-art technologies currently available in the market.</blockquote>
Some history from the United States indicates the saving of <a href="https://www.vox.com/2015/6/29/8861167/supreme-court-EPA-ruling-mercury-coal" target="_blank">some emissions reductions, such as mercury, may not justify the costs</a>, whereas the reduction of others do - often in conjunction with reducing mercury. Courts ruled the Environmental Protection Agency (EPA) had not properly considered compliance costs, <a href="http://www.reuters.com/article/us-usa-court-pollution-idUSKCN0P91VK20150629" target="_blank">in 2015</a>, but did not require the rule rescinded and subsequently <a href="http://www.reuters.com/article/us-usa-court-mercury-idUSKCN0YZ1K2" target="_blank">rejected attempts to nullify t</a>he standard. Meanwhile,<a href="https://www.forbes.com/sites/jeffmcmahon/2016/07/10/nearly-all-coal-plants-now-comply-with-the-epa-mercury-rule-that-supreme-court-shot-down/#3e332be67ba7" target="_blank"> most plants had complied</a> with the rule - or closed.<br />
<div style="text-align: center;">
<div style="text-align: center;">
<i><span style="color: #666666;">aside: <a href="https://www.ft.com/content/18268438-2e3e-11e7-9555-23ef563ecf9a" target="_blank">India also introduced standards - but not the enforcement </a>of standards.</span></i></div>
<i><span style="color: #666666;"><br /></span></i>
The new EU power plant emissions regulations appear to borrow wisely from the American experience.<i><span style="color: #666666;"><br /></span></i></div>
For an example of negative outcome due to policies designed solely to encourage one fuel/outcome, one might look to Europe's experience with diesel in automobiles - as Maximilian Auffhammer has done in <a href="https://energyathaas.wordpress.com/2017/05/01/save-the-california-waiver/" target="_blank">Save the California Waiver! How a “little” California vehicle standard prevented an urban “airmaggedon”</a>:<br />
<a name='more'></a><br />
<blockquote>
European cities are living through an “airmageddon”, with concentrations of some of the most toxic particulate matter in major urban centers breaking record levels in recent years on bad days.<br />
Part of the problem is the incredibly high penetration of diesel engines in passenger cars. Germany registered <a href="http://www.kba.de/DE/Statistik/Fahrzeuge/Neuzulassungen/neuzulassungen_node.html">3.35 million new cars last year,</a> of which 45.9% had a diesel engine and 2% had alternative (read hybrid or CNG) engines. The reason for this is that regular gasoline is expensive. The cheapest gas I could find in Berlin is $5.56 per gallon. A gallon of diesel is $4.58 per gallon. This difference is not due to the underlying cost of the fuel but the fact that diesel is taxed at a significantly lower rate.</blockquote>
Europeans went the diesel route because, as Auffhammer notes, <i>"they appeared to be more fuel and somewhat more greenhouse gas efficient." </i>He attributes the lack of market penetration in California, and other states, to stricter tailpipe standards. A<a href="https://energyathaas.wordpress.com/2017/05/01/save-the-california-waiver/#comment-15241" target="_blank"> comment on the column by Dan Sperling</a> notes:<br />
<blockquote class="tr_bq">
The reason European diesel cars are dirtier than Calif/US is that in US we require all cars, diesel or gasoline, to have the same low standards. In Europe, they have always had more lax [standards for diesel] cars than gasoline cars.</blockquote>
As cities in Europe are introducing zones restricted to the cleanest of cars, and some consider banning diesel outright in densely populated areas, perhaps this should serve as a warning on picking technologies in the hope of reducing some emissions, and instead concentrate on standards restricting emissions.<br />
<br />
Which brings me to Alberta - on the way back to Ontario.<br />
<br />
An <a href="http://www.transalta.com/newsroom/news-releases/transalta-board-approves-plan-for-accelerating-transition-to-clean-power-in-alberta/" target="_blank">April 19th news release</a> on one company's Alberta power plant plans is demonstrative of popular counterproductive "green" energy policies:<br />
<blockquote>
<i>TransAlta Corporation (“TransAlta”...) today announced that its Board of Directors has approved a strategy to accelerate the transition of the Company to gas and renewables generation. This strategy includes the following steps:</i><br />
<ul>
<li><i>retirement of Sundance Unit 1 effective January 1, 2018;</i></li>
<li><i>mothballing of Sundance Unit 2 effective January 1, 2018, for a period of up to 2 years;conversion of Sundance Units 3 to 6 and Keephills Units 1 and 2 <b>from coal-fired generation to gas-fired generation</b> in the 2021 to 2023 timeframe, thereby <b>extending the useful life </b>of these units<b> until the mid-2030s</b>...</i></li>
</ul>
</blockquote>
The TransAlta press release anticipates, <i>"a reduction of approximately 40 per cent of carbon emissions.</i><span style="background-color: white; color: #666666; font-family: "open sans" , "arial" , sans-serif; font-size: 14px;">" </span>This implies approximately 50% more natural gas fuel will be required to produce a unit of electricity with the converted coal units than would be necessary from a modern combine-cycle gas turbine (CCGT) power plant. TransAlta intends on extending the useful life beyond a federally legislated limit - at least if the units remained powered by coal - 2012's <a href="http://laws.justice.gc.ca/eng/regulations/SOR-2012-167/FullText.html" target="_blank">Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulation (SOR/2012-167)</a> caps new plant emissions at an average intensity of 420t/GWh (CO2e) and limits the operational life of existing power plants.<br />
<br />
TransAlta's press release hints emissions from the converted units will be 50% above that intensity limit. Conversions of <a href="http://midwestenergynews.com/2017/02/24/conversion-to-natural-gas-brings-new-life-to-aging-coal-plants/" target="_blank">similarly sized coal-fired power plants</a> confirm a smaller reduction for carbon dioxide than a full plant replacement would achieve - and a limited reduction in nitrogen oxides.<br />
<br />
I only saw cheering for TransAlta's announcement; the cheerers seem to be against organic sedimentary rock to a greater extent than they are for cleaner air. Conversion of existing units to burn natural gas promises a 40% reduction in greenhouse gas emissions, whereas replacement with modern natural gas power plants would achieve a 60% reduction. In recent years 20% of the emissions from the 4 Alberta coal-fired power facilities TransAlta has some position in (Genesee, Keephills, Sheerness and Sundance) has been equivalent to all emissions from all power plants in Ontario.<br />
<br />
From my Ontario perspective a 40% emissions reductions from coal-fired power plants is a poor effort, where 60% is obviously attainable.<br />
<br />
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Another hint that things are a little out-of-control in Alberta is that while TransAlta made this announcement to run dirtier coal-fired power plants longer after converting to gas, it omitted from the announced conversions its newest, and I presume lesser polluting, units (Sheerness, Keephills 3 and Genesee 3) which may be shuttered in 2030 because of an agreement through which<a href="http://www.transalta.com/newsroom/news-releases/transalta-reaches-agreement-government-alberta-transition-payments/" target="_blank"> the Alberta government agreed to pay them to do so with the proceeds of a carbon emissions fee</a>.<br />
<br />
The European diesel experience is one example of championing a technology over championing standards.<br />
<br />
Apologist for continuing Alberta's history of relatively high electricity sector emissions should not be heeded in allowing the extension of coal units beyond the legislated period through a coal-to-gas fuel trick.<br />
<br />
At least not without restricting the hours plants can operate.<br />
<br />
In Ontario, necessary capacity to meet NERC reserve requirements is largely provided by the Lennox Power Plant, which can burn oil or natural gas. It's unfair to compare the emissions intensity of the two because they operational profile was far different, but I'll do so anyway because the legislated rate (420 tCO2/GWh) was <a href="http://coldair.luftonline.net/2012/09/canadas-engos-offensive-response-to-new.html" target="_blank">set assuming intermittent operation</a>.<br />
<br />
Lennox had higher emissions, per unit of electricity generated, than coal-fired Lambton did during its final years of operation.<br />
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<a href="http://2.bp.blogspot.com/-WQqg2fluFvM/WRRaA7zA4aI/AAAAAAAAGIw/auPKOpSuAB8GjDbj1Wh04vrnD0tbpJEYACK4B/s1600/Intensity_Lambton%2Band%2BLennox.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="394" src="https://2.bp.blogspot.com/-WQqg2fluFvM/WRRaA7zA4aI/AAAAAAAAGIw/auPKOpSuAB8GjDbj1Wh04vrnD0tbpJEYACK4B/s640/Intensity_Lambton%2Band%2BLennox.png" width="640" /></a></div>
<br />
The Lennox power plant entered operation around 1976 - so its 50 year run will end 2026, unless its owner (OPG - essentially the province) seeks the same exclusion from standards Alberta's coal-to-gas conversions would need.<br />
<br />
In my opinion no exclusions are warranted, but if any are granted, they should carry maximum annual run-times (ie. 100 hours).<br />
<br />
The manufactured hatred for organic sedimentary rock (coal) should not be allowed to justify high levels of greenhouse emissions, nor the unnecessary pollution of local air-sheds with the nitrous oxides that are an important ingredient in smog.<br />
<br />
<br />
<br />
<a href="https://docs.google.com/spreadsheets/d/1Ikpe0uAsmxTPHutQSpCTP2QGbux6RtTDo9zS6EkrllI/edit?usp=sharing" target="_blank"><i><span style="color: #6fa8dc; font-size: xx-small;">Alberta spreadsheet</span></i></a><br />
<a href="https://docs.google.com/spreadsheets/d/1ub6l0Pd8zUmg6AqTHfzLMXuN0owPdM49U75dl4NqP04/edit?usp=sharing" target="_blank"><i><span style="color: #6fa8dc; font-size: xx-small;">Lennox-Lambton spreadsheet</span></i></a>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-87302431843818910122017-05-03T08:46:00.001-07:002017-05-03T08:56:11.744-07:00California politicians propose new emissions pricing regime for 2020<blockquote class="tr_bq" style="text-align: center;">
<i>Making sure the climate transition benefits low-income neighborhoods and communities of color isn’t just the right way to pursue climate policy. In California, where policies to price carbon require a two-thirds vote before becoming law, it may turn out to be the only way.</i></blockquote>
The quote is from Danny Cullenward, which is a name I found in the first article I saw on a <a href="http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB775" target="_blank">new proposal</a> that would replace California's current cap and trade carbon pricing program (to which Ontario is linking). From the Wahington Post's <a href="https://www.washingtonpost.com/news/energy-environment/wp/2017/05/02/as-trump-reverses-climate-actions-california-considers-a-bold-new-step/" target="_blank">As Trump reverses climate actions, California considers a bold new step</a>:<br />
<blockquote class="tr_bq">
...a <a href="http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB775">new proposal</a>, announced Monday, would replace California’s current cap and trade carbon pricing program, its flagship effort to reduce the state’s greenhouse gas emissions, with an updated — and, according to supporters, more socially progressive — scheme. </blockquote>
<blockquote class="tr_bq">
“The state and the federal government were until recently working hand in hand on these issues,” said <a href="http://www.nearzero.org/wp/danny_cullenward/">Danny Cullenward</a>, an energy economist, lawyer and research associate with environmental research organization Near Zero, who helped advise the development of the new proposal. “In an era of the Trump administration, carbon pricing is one of the few tools that the state has to whatever the federal government does.”</blockquote>
<blockquote class="tr_bq">
...<br />
The new proposal establishes another cap-and-trade program — which will extend either until 2030 or until the state meets its 40 percent emissions reduction goal, whichever comes first — with some notable updates intended to make it more effective and more socially responsible.</blockquote>
<br />
<a name='more'></a><br />
Verbose self-described climate hawk David Roberts has an informative (yet smarmy) post at VOX, From <a href="https://www.vox.com/energy-and-environment/2017/5/3/15512258/california-revolutionize-cap-and-trade" target="_blank">California is about to revolutionize climate policy … again: The state’s cap-and-trade program would be replaced by a new, sleeker one</a>:<br />
<blockquote class="tr_bq">
Regulations, not carbon pricing, have been the main driver of California’s carbon reductions to date.<br />
...<br />
[The elegant new cap-and-trade system proposed in the California senate] has the following features, almost every one of which will cause a tingle in the toes of carbon wonks:<br />
<b>1) It is entirely new</b>...Allowances and offsets from the old program would not transfer over...<br />
<b>2) It includes a price collar</b>...a price collar creates a hybrid of [a carbon tax versus a cap-and-trad system]...<br />
<b>3) Prices start low and rise</b>, predictably, in perpetuity.<br />
<b>4) It has a border-adjustment tax.</b><br />
<b>5) In includes zero (0) offsets.</b><br />
<b>6) Most of the revenue will go to per-capita dividends.</b>.. The first and largest is the California Climate Dividend Program, which will rebate revenue on a per-capita basis...The second bucket is for “public infrastructure investments and investments in disadvantaged communities"...The third is for “climate and clean energy research and development.”<br />
<b>7) California is going to leave other states behind.</b></blockquote>
My greatest concern with pricing emissions has been the disposition of the revenues (see <a href="http://coldair.luftonline.net/2012/11/a-tool-to-heal-tool-to-steal-pros-and.html" target="_blank">A tool to heal, A tool to steal: Thoughts on a Carbon Tax</a> ), and social consideration in distributing revenues is the major driver of the new California proposal.<br />
<br />
Also addressed in the proposal is setting price ranges in a manner that would allow the price to "<i>[create] incentives for developing new technologies</i>", and inspire <i>"switching from high-GHG to low-GHG energy sources as their relative costs change."</i><span style="background-color: white; color: #333333; font-family: , , sans-serif; font-size: 16px;"> </span>The quotes are from <a href="https://energyathaas.wordpress.com/2016/08/15/fixing-a-major-flaw-in-cap-and-trade/" target="_blank">Severin Borenstein's post</a> arguing,<i>"with a credible price floor and ceiling [ cap-and-trade] can still be an effective part of the state’s climate plan." </i><br />
<i><br /></i>
A familiarity with Washington State's 2016 ballot Initiative 732 proposing a carbon tax for that state - which failed. From Inside Climate News, <a href="https://insideclimatenews.org/news/09112016/washington-state-carbon-tax-i-732-ballot-measure" target="_blank">Washington State Voters Reject Nation's First Carbon Tax</a>:<br />
<blockquote>
The carbon tax was expected to raise $2 billion annually through higher prices for gasoline and fossil fuel-fired electricity. It would have given all the money back, and then some, to the state's residents and businesses through a sales tax cut, rebates for working families and a tax break for manufacturers. Like all carbon taxes, Initiative 732 was designed to drive down global warming emissions by reducing demand for high-carbon fuels.<br />
But it was unpopular with many social justice, environmental and health advocates who sought to use the revenue for renewable energy, mass transit and other green infrastructure projects, and to aid communities most affected by fossil fuel pollution or climate change. </blockquote>
The story of Initiative 732 is, politically fascinating. It is one reason, along with the NRDC's influence of the Obama Administrations Clean Power Plan, that I now suspect most major legislation in recent years is being largely written by non-governmental organizations, so I investigated the <a href="http://www.nearzero.org/" target="_blank">Net Zero</a> organization cited in the Washington Post article.<br />
The quote at the top of this post is from a January post to Net Zero's site, <a href="http://www.nearzero.org/wp/2017/01/10/pricing-carbon-californias-unfinished-climate-priority/" target="_blank">PRICING CARBON: CALIFORNIA’S UNFINISHED CLIMATE PRIORITY</a> by Danny Cullenwood. The blog posts points to a longer article by Cullenward and Michael Wara at the Bulletin of the Atomic Scientists, <a href="http://thebulletin.org/pricing-carbon-california%E2%80%99s-unfinished-climate-priority10367" target="_blank">Pricing carbon: California’s unfinished climate priority</a>:<br />
<blockquote>
In order to bring the new goal [ to reduce its greenhouse gas emissions 40 percent below 1990 levels by 2030] within practical reach, California must renew its commitment to carbon pricing. But first, climate policy advocates need to build a broad coalition that benefits from the state’s plans for deep de-carbonization.<br />
Whether in the form of a carbon fee or via an overhaul of the state’s carbon market, carbon pricing will be essential for encouraging technological innovation and copycat policies around the world. Yet due to the state’s idiosyncratic tax system, in which any new levy must first receive two-thirds approval from the legislature, carbon pricing requires supermajority support.<br />
... Because carbon pricing generates revenue that can protect low-income communities from the cost of energy transitions—or even help them benefit from tackling the climate problem—this would seem like a natural alliance. In fact, a progressive use of carbon pricing revenue may prove to be the key that unlocks the politics of deep climate mitigation, especially in a state where concerns about the environment and concerns about growing inequality are increasingly intertwined.</blockquote>
<blockquote>
...a legally binding climate target is just an initial step because targets mean little without implementation strategies. Right now, the only legally viable strategy is to rely exclusively on traditional regulatory approaches. We are skeptical of the state’s ability to deliver using solely this approach, and pessimistic about the interest and ability of other governments to follow suit. Hence the need for a renewed commitment to carbon pricing—and new legislation to make it happen.<br />
<br />
...<br />
Carbon pricing is superior to a pure regulatory strategy for three key reasons.<br />
First, regulations will be successful only if the Air Resources Board accurately predicts the future of all major economic sectors and energy technologies...<br />
Second, regulations don’t scale easily...<br />
Third, carbon pricing will be needed to spur broad and rapid innovation.</blockquote>
From the length of my quote you'd be best served by reading the full article - but I'll spoil the ending in case you don't, because it takes us to the news today:<br />
<blockquote>
...the division within the environmental movement over carbon pricing in Washington reflected the failure of two coalitions to find common ground on revenue use. If those divisions can’t be overcome in California, there is no reason to expect a different result, whatever form carbon pricing takes.<br />
While that challenge may seem daunting, California’s success on carbon pricing could show the way forward for broader political coalitions to emerge on climate. We believe that revenue use will be the key issue to navigate in carbon pricing, especially since the carbon prices necessary to achieve California’s 2030 target are likely to be much higher than they are today. Hiding those costs in regulatory programs can work for modest efforts, but to begin deep de-carbonization requires the environmental movement to prioritize social equity. Harnessing markets has the added advantage of increasing the pace of innovation, too.<br />
Making sure the climate transition benefits low-income neighborhoods and communities of color isn’t just the right way to pursue climate policy. In California, where policies to price carbon require a two-thirds vote before becoming law, it may turn out to be the only way.</blockquote>
So... I don't see this as a slam dunk. While the social policy driving the disposition of revenues is a plus, a big issue in Washington was a renewables lobby wanting revenue spent on their stuff, and this California proposal again sticks to economics in structuring the pricing to incent generation choice -nob lobbyists. <br /><br /> It will be easy for a<a href="http://www.nationalreview.com/article/447244/wind-turbine-company-sues-small-towns-get-tax-credits" target="_blank"> Nextera - for instance </a>- to lobby that by not spending revenues on it the government is not being green.<br /><br /> A final note from the Ontario perspective - which had linked it's brand new cap and trade system to California's, and intended on keeping prices down by buying cheap <a href="https://cpi.probeinternational.org/2016/06/01/california-dreamin-in-ontario/">California (hot air) credits</a>. Furthermore, the <a href="https://www.ontario.ca/page/climate-change-action-plan">spending proposed under Ontario's Climate Action Plan</a> is mostly uneconomic - meaning revenue from pricing emissions is to be used to fund programs to reduce emissions at a far higher cost than emissions are priced at. This is fairly standard thinking on using proceeds from carbon pricing - and why I call carbon pricing a tool to steal.<br /><br /><br /> The proposal in California is far superior to the current regime there, and in Ontario, but I don't know that Ontario will be blind-sided by the changes. Ontario's cap and trade was a dusted off 2008 plan taken off the shelves in order to present a plan in times for a Paris climate change conference. The pricing in the California proposal is similar to that projected by Canada's federal government - and other provinces had point out they'd not be reaching that price when other provinces (Ontario) did not.<br /><br /><br /> California is not the only jurisdiction needing to reset its emissions reduction policies, and I suspect most in Ontario recognize that.<br />
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Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com1tag:blogger.com,1999:blog-446210048006827157.post-88286969981414100262017-04-20T21:26:00.000-07:002017-04-20T21:26:22.133-07:00News from Ontario's electricity bureaucracies, and more<div class="tr_bq">
A news day at Ontario's Electricity System Operator (IESO) and its nominal sector regulator, the Ontario Energy Board (OEB). </div>
<br />
The most anticipated news came from the OEB's announcement of rates to be introduced for May 1st. From the <a href="https://www.oeb.ca/sites/default/files/rpp_price_report_20170420.pdf" target="_blank">Regulated Price Plan Price Report | May 1, 2017 to April 30, 2018</a><br />
<blockquote class="tr_bq">
<b>...the OEB has historically included a portion of significant price changes that may occur in the forecast period because of the smoothing benefits for customers. </b><span style="font-size: x-small;"><u>[emphasis added]</u></span></blockquote>
<blockquote class="tr_bq">
In keeping with this practice, the OEB has considered it appropriate in this price setting to take into account a portion of the estimated impact of the government’s proposed Fair Hydro Plan. The OEB has done this by way of a reduction in the forecast amount of the Global Adjustment
of approximately $1B, which represents 50% of RPP consumers’ estimated portion of the
proposed refinancing of the Global Adjustment.</blockquote>
There's a lot of questionable assumption, some conflicting with other OEB practices, in this paragraph - but jumping to what will be of immediate concern to those only interested in immediate concerns...<br />
<br />
The forecast average price prior to the OEB considering new government interference is $114.90 per megawatt-hour (MWh), or 11.49 cents per kilowatt-hour (kWh), which is up about 3% from a year earlier (roughly the inflation rate). For sketchy reasons the OEB has reduced that average rate to $97.62/MWh (15%), reflecting their anticipation of what could comprise the government's boot the cost down the road (BCDR) plan - also known by the government's spin as the Fair Hydro Plan.<br />
<br />
The 1.7 cent/kWh reduction the OEB is making is half the cut in <a href="https://www.linkedin.com/pulse/ontario-electricity-extend-pretend-update-bruce-sharp-p-eng-" target="_blank">bill mock-ups by big new local distribution company Alectra</a> from the very day the government announced the BCDR policy. It was as if they knew what was coming. Coincidentally the IESO today<a href="http://ieso.ca/sitecore/content/ieso/home/corporate-ieso/media/news-releases/2017/04/new-leadership-to-focus-on-reliable-system-operations" target="_blank"> announced</a> Peter Gregg as its new President and Chief Executive Officer, noting<i> "recently he was President of Alectra Energy Solutions."</i><br />
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<br />
<a name='more'></a>The prices set by the OEB, in anticipation of BCDR regulations being introduced, don't match Alectra's projections, possibly because the OEB's pricing won't deliver the price reductions the BCDR is promising:<br />
<blockquote class="tr_bq">
This translates to a reduction of about 15% on the electricity line, and about 17% on the electricity bill (including the impact of the 8% rebate provided for under the Ontario Rebate for Electricity Consumers Act, 2016 and the OEB’s decision to remove the Ontario Electricity Support Program charge) for a typical residential customer relative to what prices would otherwise have been, once RPP prices come into effect on May 1, 2017. This is summarized in Table ES-2. </blockquote>
<blockquote class="tr_bq">
The government has indicated that it intends to introduce legislation that would, if passed, implement the proposed Fair Hydro Plan starting this summer. The OEB will then further adjust RPP prices as needed so that RPP customers receive the full rate relief as legislated.</blockquote>
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<a href="https://4.bp.blogspot.com/-hpVtnrS6MFQ/WPk4xTo9BfI/AAAAAAAAGFU/Xb1Vese65pYbEhziT1jXqW0OfPQQq9viACLcB/s1600/Navigant%2BRPP.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="148" src="https://4.bp.blogspot.com/-hpVtnrS6MFQ/WPk4xTo9BfI/AAAAAAAAGFU/Xb1Vese65pYbEhziT1jXqW0OfPQQq9viACLcB/s400/Navigant%2BRPP.PNG" width="400" /></a></div>
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I highlighted the source here because I've been implying that the OEB was making the arbitrary choices in this pricing, when in fact a consultant may be making the arbitrary choices the OEB feels fall within its mandate (if not its ability).</div>
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This is absolutely bizarre behaviour from what was intended to be an independent regulatory body.</div>
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In its <a href="https://www.oeb.ca/oeb/_Documents/EB-2004-0205/RPP_Price_Report_Nov2016.pdf" target="_blank">previous rate report</a>, last October, the OEB decided not to predict what rates would be paid to OPG as an outcome of its pending rate application, instead carrying on a base rate which, for 2017, functionally meant a steep decrease in the rate paid for OPG nuclear. Here is how the October price report described that choice:</div>
<blockquote class="tr_bq" style="clear: both; text-align: left;">
Consistent with past practice, the OEB has assessed whether it is prudent to take into
account some effect of the application in this RPP forecast. This approach is<b> in keeping with
one of the</b> <b>objectives of the RPP, which is to smooth changes in prices</b> over time. The OEB has
concluded that, given that the review of this application remains in the early stages, no
provisions for OPG’s application have been included in this forecast. Current payment amounts
are assumed to persist in real terms through to the end of the forecast period.</blockquote>
I noted at the time <a href="https://morecoldair.wordpress.com/2016/10/20/electricity-rates-held-steady-by-ontarios-inept-energy-regulator/" target="_blank">this was inept</a> - dropping the nuclear rate from about 7 cents/kWh to around 6, pending the OEB ruling on a rate application that was to push it back up to around 6.5, and doing so in the name of rate smoothing. The difference is not insignificant. Once the OEB rules on OPG's rate request, OPG will be likely be allowed a rate rider to compensate for lower revenues during this interim period. By May that will probably be around $70 million. There's no need for the OEB to resolve the rate application quickly though, as the Premier's promise to control rates means the full costs of their poor pricing decisions and tardy regulating will fall on far distant ratepayers.<br />
<br />
This rate setting period the OEB decided differently on OPG's rates:<br />
<blockquote class="tr_bq">
Consistent with past practice, the OEB believes that it is appropriate to take into account some
effect of the application in this RPP forecast. This approach is <b>consistent with one of the
objectives of the RPP, which is to smooth changes in prices over time.</b> Therefore, 50% of the
impact of OPG’s requested payment amounts, as smoothed by OPG’s updated smoothing
proposal, has been used for the purpose of calculating the RPP prices. The inclusion of an
amount in the RPP should in no way be taken as predictive of the outcome of the OEB’s
proceeding. </blockquote>
I don't think anybody could be taking this OEB's actions as predictive of anything - except unpredictability.<br />
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Meanwhile at the IESO...<br />
<blockquote class="tr_bq">
The Board of Directors of the Independent Electricity System Operator (IESO) has appointed Peter Gregg as its new President and Chief Executive Officer, Tim O’Neill, Chair of the IESO Board, <a href="http://ieso.ca/sitecore/content/ieso/home/corporate-ieso/media/news-releases/2017/04/new-leadership-to-focus-on-reliable-system-operations">announced today</a>.<br />
Gregg joined Ontario’s electricity sector in 2004. Most recently he was President of Alectra Energy Solutions...<br />
O’Neill also welcomed three new Directors to the <a href="http://ieso.ca/corporate-ieso/leadership/board-of-directors">IESO Board</a>: Ersilia Serafini, Chris Henderson and Glenn Rainbird.</blockquote>
<br />
Good luck to Mr. Gregg, but this looks like simply one more missed opportunity to alter the culture of the IESO.<br />
<br />
One of the 3 new selections for the board looks wise.<br />
Ersilia Serafini is a name associated with Summerhill, which is a name associated with confidence man Bruce Lourie (see <a href="https://morecoldair.files.wordpress.com/2017/03/el-hefe.pdf" target="_blank">here</a>, <a href="https://morecoldair.files.wordpress.com/2017/03/connections-with-summerhill.pdf" target="_blank">here</a>, <a href="https://morecoldair.files.wordpress.com/2017/03/bruce-lourie-web-captures-prey.pdf" target="_blank">here</a> and <a href="https://morecoldair.files.wordpress.com/2017/03/bruce-lourie-web.pdf" target="_blank">here</a>). Lourie is also on the IESO board. A quick search shows Serafini <a href="https://twitter.com/ErsiliaSerafini/status/834942460430336001" target="_blank">tweeting out a link</a> to <a href="http://coldairings.luftonline.net/post/157616933921/misinformation-on-darlington" target="_blank">Lourie's recent misinformation in the Toronto Star</a>. The original (mis)title of that article is a good indication of the IESO's disinterest in controlling consumer costs:<br />
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<a href="http://68.media.tumblr.com/a0d75657d148d098e422d7fe81a3e859/tumblr_inline_olu9mxk9mu1s24klx_500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://68.media.tumblr.com/a0d75657d148d098e422d7fe81a3e859/tumblr_inline_olu9mxk9mu1s24klx_500.png" height="238" width="400" /></a></div>
<br />
Shortly after the article appeared the Premier snapped her fingers and promised a 25% cut...<br />
<br />
The bad IESO board, not satisfied with board members who don't believe in lowering costs, also announced appointments to the Stakeholder Advisor Committee (SAC) today. One of them looks good too:<br />
<blockquote>
<i>The IESO Board of Directors have appointed six new members to join the Stakeholder Advisory Committee (SAC). The Committee gives senior stakeholder and community representatives the opportunity to provide policy-level advice and recommendations directly to the IESO Board of Directors and Executive on matters relating to the IESO’s mandate and other matters that may be of concern to stakeholders and the general public. The new SAC members are:</i><br />
<ul>
<li><i>Paul Norris, Ontario Waterpower Association</i></li>
<li><i>Brandy Giannetta, The Canadian Wind Energy Association</i></li>
<li><i>Jim Hogan, Entegrus</i></li>
<li><i>Rachel Ingram, Rodan Energy Group</i></li>
<li><i>Ted Leonard, NRStor Inc.</i></li>
<li><i>John Sherin, The Regional Municipality of York</i></li>
</ul>
</blockquote>
I see 1 new SAC'r directly with big wind, another aligned with many in wind, and 2 in the demand response space.<br />
<br />
Included on the agenda for the <a href="http://ieso.ca/-/media/files/ieso/document-library/sac/2017/sac-20170510-agenda.pdf?la=en" target="_blank">next IESO stakeholder meeting</a> is "Market Renewal." The Minister has spoken of technology agnostic procurement, the IESO chatters about capacity markets, and still they pursue demand response separate from other capacity, and technology.<br />
<br />
I've argued the market renewable plan of the IESO is for it to cease being bad; it is promising $5 billion in savings by improving the intertie relationships it handles, finally moving to the day-ahead market format used elsewhere, and procuring capacity more smartly.<br />
<br />
The appointments to the SAC don't add credibility to the market renewable promises.<br />
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A new paper from Russell William Houldin must be very serious because it's paywalled in a journal.</div>
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From <a href="https://www.blogger.com/Ontario%20electricity:%20When%20prophecy%20failed%20but%20rent%20collection%20succeeded" target="_blank">Ontario electricity: When prophecy failed but rent collection succeeded</a>:</div>
<blockquote>
"Ontario consumers have paid at least $40 billion (2015) more than was necessary since 2002. Depending on an audit of OEFC and the disposition of the DRC revenues, this figure could approach $50 billion. While not all of these excess costs to consumers were directly the result of the 1999 restructuring, all of the $40 billion rents are built upon the main elements of the restructuring policy: market competition, deregulation, and privatization. Corrective actions to reduce Ontario’s electricity costs follow from this identification of rents. The primary policy requires the abandonment of the idea that Ontario has a market for electricity. Immediate annual savings from the merger of the IESO with HONI, which would assume the role of Central Operator, would be about $250 million."</blockquote>
I don't agree with all of Houldin's paper, but liked spotting another suggesting the end of the IESO as a step toward controlling costs.<br />
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Also out today, in Policy Options, from John Haffner, Mark Cameron and Jim Burpee, <b><a href="http://policyoptions.irpp.org/magazines/april-2017/ontario-still-needs-an-electricity-policy-plan/" target="_blank">Ontario still needs an electricity policy plan</a></b>:<br />
<blockquote>
Some of Ontario’s recent policy decisions intended to benefit the environment have become a cautionary tale: neither the environment nor the economy is served by aggressive environmental policies that prove to be economically unsustainable. The energy transition requires good planning and sustained momentum. </blockquote>
<blockquote>
But the province has yet to revise its policies to reflect this lesson. For instance, it has not repealed the <a href="http://www.energy.gov.on.ca/en/green-energy-act/">Green Energy Act</a> which set <a href="http://globalnews.ca/news/3272095/ontario-energy-minister-admits-mistake-with-green-energy-program/">overly expensive</a> rates and led to overly generous long-term electricity contracts. It has <a href="https://news.ontario.ca/mei/en/2016/09/ontario-suspends-large-renewable-energy-procurement.html">suspended</a>, but not cancelled, the second round of its Large Renewable Energy Procurement (LRP II) process, despite forecasts showing that this additional electricity supply will not be needed. </blockquote>
<blockquote>
... to spend on conservation programs in a period of year-round over-supply does not make sense. Even as Ontario suppliers are selling surplus electricity to neighbouring jurisdictions <a href="https://cpi.probeinternational.org/2016/09/20/ontario-electricity-customers-have-paid-more-than-6-billion-to-dump-surplus-high-priced-power-study/">at a deep discount</a>, the government is subsidizing initiatives to reduce electricity consumption inside the province (through retrofits, light bulbs, etc.), thereby increasing the amount of surplus. Ontario is likely to remain over-supplied until about 2020. If the province cancelled planned spending on conservation between 2018 and 2020, it could save in the order of $1 billion...</blockquote>
The Policy Options column is the opposite, in some ways, of the Houldin paper - concluding with a suggestions such as "provide clear market signals".<br />
<br />
It doesn't note the signals from the market were clear in 2008.<br />
<br />
Maybe it's a people problem?</div>
Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-51544332012280236932017-04-09T17:52:00.002-07:002023-10-26T13:27:02.702-07:00Tribes and Sustainability Assessments<div class="tr_bq">
There is a lot of news to note regarding energy, environment and politics. This blog attempts to note such things on the assumption knowledge was important. Today it's probably more important to note that assumption is highly questionable. Hopefully I can write entertainingly so as to get readers through to the ridiculous conclusion of this post on sustainability science -ishness, and disposal of nuclear waste.<br />
<br />
Some very quick background before discussing the fall-out from two reports put out over the past week from bodies attached to the federal Ministry of the Environment and Climate Change.<br />
<br /></div>
Canada's second Prime Minister Trudeau<a href="http://www.rmoutlook.com/article/Trudeau-handpicks-Raynolds-for-senior-Ottawa-position-20151104" target="_blank"> reportedly hand-picked Marlo Raynolds</a>, a former head of the <a href="http://coldair.luftonline.net/2011/07/pembina-ia-oilfield.html" target="_blank">Pembina Institute</a> (an industrial wind lobbying organization that has historically marketed itself as an environment organization), to be the head of staff for the lawyer, <a href="https://www.canada.ca/en/government/ministers/catherine-mckenna.html" target="_blank">Catherine McKenna</a>, appointed Minister on Environment and Climate Change. It would be hard to find two individuals to better characterize the stereotypical image of an "environmentalist" imagined by the all-important affluent, urban voter.<br />
<br />
In August 2016 the Minister appointed a panel composed of bureaucrats and lawyers <i>"<a href="http://news.gc.ca/web/article-en.do?nid=1088199" target="_blank">to review and restore confidence in Canada's environmental and regulatory processes.</a>" </i>The "Expert Panel" was headed by Johanne Gélinas, a former Canadian Commissioner of the Environment and Sustainable Development. In 2007 The Toronto Star referred to her as "Environment Czar" in <a href="https://www.thestar.com/news/2007/01/30/environment_czar_calls_firing_a_surprise.html" target="_blank">writing of her firing </a>by a Conservative government. The article included, "John Bennett of the Climate Action Network said it was a sad day for the environment."<br />
<br />
Knowing the personalities is really all one needs to know the conclusions, but since the rejection of expertise is, it seems to me, generally a malady attributed to those on the right skeptical of most apocalyptic claims, it may prove antidotal to review this other tribe's tripping.<br />
<br />
This past week the Gélinas panel <a href="https://www.canada.ca/en/services/environment/conservation/assessments/environmental-reviews/environmental-assessment-processes/building-common-ground.html" target="_blank">provided the report </a>everybody expected them to - criticizing the processes of the previous government and suggesting more study and consultation, etc. The objects of those processes were pipelines and nuclear projects, making the bodies being judged the National Energy Board (NEB) and the Canadian Nuclear Safety Commission (CNSC).<br />
<br />
The report's first priority is the need for a new acronym:<br />
<blockquote>
...We believe that Canadians deserve better and that it is entirely possible to deliver better.<br />
<br />
... in our view, assessment processes must move beyond the bio-physical environment to encompass all impacts likely to result from a project, both positive and negative. Therefore, what is now “environmental assessment” should become <b>“impact assessment” (IA)</b>. Changing the name of the federal process to impact assessment underscores the shift in thinking necessary to enable practitioners and Canadians to understand the substantive changes being proposed in our Report.</blockquote>
I can think of some barriers beyond the admittedly huge "EA" acronym/obstacle preventing practitioners, and Canadians, from understanding the substantive changes being proposed. Chief among them, a process discussion not being considered a vehicle for substantiation:<br />
<blockquote>
We also outline that, as we listened to presenters and read the many submissions presented to us, we came to understand that any new effective assessment process must be governed by four fundamental principles. IA processes must be transparent, inclusive, informed, and meaningful.</blockquote>
The current processes are transparent and inclusive - which is a problem in having them perceived as informed and meaningful. Professional agitators are participating specifically to avoid meaning being found through the process. Politics means this review existed solely because the existing process was introduced by a Conservative government, and therefore opposed by the Liberal party that later defeated it.<br />
<br />
The major problem with the old EA process was it had outcomes the Liberal's allies (tribe) disliked.<br />
<a name='more'></a><br />
<br />
I learned of the release of the panel report from a tweet by ShawnPatrick Stensil of Greenpeace. I didn't much like his first tweet (nor at least one of my own responses), but I find <a href="https://twitter.com/SPStensil/status/849748842346106880" target="_blank">this tweet</a> a good short summary of the panel report as it related to nuclear matters:<br />
<blockquote>
Panel listened to both sides & concluded <b>CNSC [Canadian Nuclear Safety Commission] </b>wasn't trusted by non-industry interveners, so recommended an independent agency. Reasonable</blockquote>
"Reasonable" I question, because if non-industry interveners won't trust any body that concludes building anything is acceptable, reason is not relevant. Perception is:<br />
<blockquote>
A frequently cited concern was the perceived lack of independence and neutrality because of the close relationship the NEB and CNSC have with the industries they regulate...The apprehension of bias or conflict of interest, whether real or not, was the single most often cited concern by participants with regard to the NEB and CNSC as Responsible Authorities....<br />Additionally, some participants argued that these industry-specific regulatory agencies are more focused on technical issues than they are on the planning process that is fundamental to a thorough IA [Impact Assessment]. Participants felt that issues were not properly being assessed and were being put off to the post-decision regulatory phase. The [Canadian Environmental Assessment Agency], by contrast, was described favourably, largely for not being subject to the same pressures faced by the NEB and CNSC as regulators.</blockquote>
Some names I don't often see in my Twitter notifications appeared due to my exchange with Stensil, including John Bennett - who had lamented the firing of this Expert Panel's Gelinas back in 2007. Bennett <a href="https://twitter.com/john__bennett/status/849982967984390144" target="_blank">noted</a> he was "Sierra, Greenpeace, FOE and more" (I don't know if the more includes the Climate Action Network he was identified with in 2007 - or if there was a split with the other member of that group). As expected, he did not answer this question: <i>"Where do you think nuclear energy, and waste is well regulated?" </i><br />
<i><br /></i>
It seems to me it would only be reasonable to test the capability of a panel against a criteria of being trustworthy to those who are capable of accepting the decision of experts. Sierra is the exact opposite: it is a group with a mission to clutter the regulatory system as a tactic to prevent the construction of anything it opposes.<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://static1.squarespace.com/static/56a45d683b0be33df885def6/t/58dab7bc893fc0210c37b169/1490728897940/?format=750w" style="margin-left: auto; margin-right: auto;"><img border="0" height="300" src="https://static1.squarespace.com/static/56a45d683b0be33df885def6/t/58dab7bc893fc0210c37b169/1490728897940/?format=750w" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Image from <a href="http://www.environmentalprogress.org/big-news/2017/3/28/why-the-war-on-nuclear-threatens-us-all" target="_blank">Why the War on Nuclear Threatens Us All</a></td></tr>
</tbody></table>
Is it reasonable to design a process to appease interveners who have no interest in a legitimate process should it produce an outcome contrary to their position, or other fund-raising assets?<br />
<div>
<br /></div>
<div>
I think Bennet was pretending a position when <a href="https://twitter.com/john__bennett/status/849955053343518720" target="_blank">he stated</a>, "CNSC is a regulator - a technical function. EA is socio-economic-environmental function," but it does introduce the idea of social acceptance within the context of sustainability assessment. In my exchange with ShawnPatrick Stencil he showed Dr. Patsy Thompson, of the CNSC, responding to a chairperson's questioning, "Does the CNSC actually have...its own list of sustainability criteria with which to review [environmental assessments]?"</div>
<div>
<blockquote class="tr_bq">
"I would say that we don't. Essentially the focus of the CNSC staff assessments really focus on project assessments and whether or not they will meet the provisions of ensuring protection or the environment, the health and safety of the people." </blockquote>
<div>
The distinction between protecting the environment and health, and "sustainability", isn't an obvious one. My skepticism on the legitimacy of a "sustainability assessment" field resulted in a suggestion to read up the topic with <a href="https://www.amazon.ca/Sustainability-Assessment-Processes-Robert-Gibson/dp/1844070514" target="_blank">a book that has 5 times as many authors as reviewers</a>.</div>
<div>
<br /></div>
<div>
Searching through "sustainability assessment" on Google Scholar seemed a more productive use of my time. From the Abstract of the first<a href="http://www.sciencedirect.com/science/article/pii/S0195925504000447" target="_blank"> listed result</a>:</div>
<blockquote class="tr_bq">
Sustainability assessment is being increasingly viewed as an important tool to aid in the shift towards sustainability. However, this is a new and evolving concept and there remain very few examples of effective sustainability assessment processes implemented<br />
anywhere in the world.</blockquote>
The article is from 2004 - one could be forgiven for thinking Sustainability Assessment is a new-agey science-ish thing.<br />
The most cited article in the Google Scholar results is <a href="http://ac.els-cdn.com/S1470160X11000240/1-s2.0-S1470160X11000240-main.pdf?_tid=6a1da142-1d34-11e7-b119-00000aacb361&acdnat=1491749841_377a588ee435faa214a30655489961e6" target="_blank">An overview of sustainability assessment methodologies</a> (I suspect it's the most cited due to the free .pdf). From it's conclusion:<br />
<blockquote class="tr_bq">
Although there are various international efforts on measuring sustainability, only few of them have an integral approach taking into account environmental, economic and social aspects. In most cases the focus is on one of the three aspects. Although, it could be argued that they could serve supplementary to each other, sustainability is more than an aggregation of the important issues, it is also about their interlinkages and the dynamics developed in a system. This point will be missing if tried to use them supplementary and it is one of the most difficult parts to capture and reflect in measurements. If the indices are poorly constructed, this will provide misleading results.<br />
... Indicators of sustainable development should be selected, revisited and refined based on the appropriate communities of interest...<br />
the evaluation process involved could change through time according to the interests of the particular stakeholders involved in the construction of the indicator.</blockquote>
Sustainability Assessments are driven by politics.<br />
<br />
It occurred to me during this research that I may be a sustainability expert - and I know others, which I have written of on this blog. Before I discuss them, I'll note another brash output from the past week attached to the current federal Minister of Environment et. cetera.<br />
<br />
Point 1 in a <a href="http://www.ceaa-acee.gc.ca/050/documents/p17520/118537E.pdf" target="_blank">letter from the Canadian Environmental Assessment Agency (CEAA) to Ontario Power Generation</a> (OPG), regarding a deep geologic repository for low and intermediate level radioactive waste:<br />
<blockquote class="tr_bq">
<b><u>1.0 Study of Alternate Locations<br /> </u></b>The Minister of Environment and Climate Change requires that Ontario Power Generation (OPG) identify and consider the effects of alternative locations of the Deep Geologic Repository for Low Level and Intermediate Level Waste project (the Project) that are technically and economically feasible.</blockquote>
This is not a sustainability assessement, as the direction omits socially acceptable.<br />
<br />
One mainstream media <a href="http://www.torontosun.com/2017/04/07/feds-criticize-vague-report-on-burying-nuclear-waste-near-lake-huron" target="_blank">report </a>on the letter summarized it this way:<br />
<blockquote class="tr_bq">
the Canadian Environmental Assessment Agency criticizes the utility’s report as inadequate and asks it to try again — much to the delight of project opponents.</blockquote>
Of course - anything that delays and adds to costs delights opponents like Sierra.<br />
<br />
The mainstream media report concluded:<br />
<blockquote class="tr_bq">
...a feasibility study for disposing of highly radioactive spent nuclear fuel is currently underway and the assessment agency wants OPG to analyze how the two projects might interact environmentally.</blockquote>
The referenced "highly radioactive spent nuclear fuel" deep geologic repository (DGR) is the responsibility of the <a href="https://www.nwmo.ca/" target="_blank">Nuclear Waste Management Organization (NWMO)</a>.<br />
<br />
The NWMO presents the best example of an organization focused on sustainability assessments; its history and current activities demonstrate the ignorance of the current administration in that same discipline.<br />
<br />
The history can be displayed in quotes from<a href="https://www.ceaa-acee.gc.ca/default.asp?lang=En&n=0B83BD43-1&toc=show" target="_blank"> a 1998 study you can still find on the Canadian Environmental Assessment Agency website</a> (the same CEAA that 2 decades later is writing OPG, and the same CEAA surveys find interveners in hearings find more trustworthy than experts in the fields.):<br />
<blockquote class="tr_bq">
In a 1978 joint statement, the governments of Canada and Ontario directed Atomic Energy of Canada Limited (AECL) to develop the concept of deep geological disposal of nuclear fuel wastes. A subsequent joint statement in 1981 established that disposal site selection would not begin until after a full federal public hearing and approval of the concept by both governments.<br />
In September 1988, the federal Minister of Energy, Mines and Resources referred the concept, along with a broad range of nuclear fuel waste management issues, for public review. He made this referral under the federal Environmental Assessment and Review Process Guidelines Order. On October 4, 1989, the federal Minister of the Environment appointed an independent environmental assessment panel to conduct the review.</blockquote>
The Panel, reporting in 1998, concluded (20 years after a federal government led by the current Prime Minister's father directed the development of the DGR project),:<br />
<blockquote class="tr_bq">
<ul>
<li>From a technical perspective, safety of the AECL concept has been on balance adequately demonstrated for a conceptual stage of development, but from a social perspective, it has not.</li>
</ul>
<ul>
<li>As it stands, the AECL concept for deep geological disposal has not been demonstrated to have broad public support. The concept in its current form does not have the required level of accept-ability to be adopted as Canada's approach for managing nuclear fuel wastes.</li>
</ul>
</blockquote>
The greatest barrier to a DGR was, and is, social acceptability.<br />
<br />
The NWMO was formed by 2002 (again by a Liberal government), and began a site selection process in May 2010 after <a href="https://www.nwmo.ca/en/Site-selection/About-the-Process/How-It-Was-Developed" target="_blank">2 years of dialogue</a>. That process is ongoing. 13 communities that had expressed an interest in hosting the DGR are no longer under consideration, with 8 remaining locations. The process demands a willing host site: only after a location is deemed willing does the more intense scientific examination of conditions occur.<br />
<br />
Of the remaining<a href="https://www.nwmo.ca/en/Site-selection/Study-Areas/" target="_blank"> 8 sites in the running to host the DGR</a>, 3 are in the neighbourhood of OPG's Bruce site (South Bruce, Huron-Kinloss and Central Huron), and another has a history with the nuclear industry (Blind River, Elliot Lake and area), and is near Lake Huron. If social criteria is important - as it would be in a sustainability assessment - OPG's logical concentration should be on its Bruce property.</div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8BBVMw5E94tOuqj1UAKgRjEHYAKcRH7hu3HzaeNjP58SRzUMvgySlOaj--F-buK5XPCVdJfLWRftfmAlJbClhMFsxkhrLD8EYRcgE_Vmq5LUZm6_PXH8NBleBxN75SmTbhwYA1ubfCSJItlhMYetyQcPhwX14h8JAMaHdK5zNDaiiIb6JRQQbcMMLgA/s480/favourable%20to%20nuclear%20energy.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="286" data-original-width="480" height="382" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8BBVMw5E94tOuqj1UAKgRjEHYAKcRH7hu3HzaeNjP58SRzUMvgySlOaj--F-buK5XPCVdJfLWRftfmAlJbClhMFsxkhrLD8EYRcgE_Vmq5LUZm6_PXH8NBleBxN75SmTbhwYA1ubfCSJItlhMYetyQcPhwX14h8JAMaHdK5zNDaiiIb6JRQQbcMMLgA/w640-h382/favourable%20to%20nuclear%20energy.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;">image from <a href="https://web.archive.org/web/20170919100451/http://thebulletin.org:80/public-opinion-nuclear-energy-what-influences-it9379" target="_blank">Public opinion on nuclear energy: what influences it</a> | Bulletin of the Atomic Scientists</span></td></tr></tbody></table><br /><div>The four other areas still under consideration by NWMO are all in Ontario further north (Ignace, White River, Manitouwadge, and Hornepayne). All do require much more transport than the locations where much of the populace is familiar with the industry.<br />
<br />
The 4-decade long process to site a DGR for highly radioactive waste is ignored by the current minister - and all the noise about sustainability assessment served only to sabotage the existing search for both DGR's. Where public support is viewed as a sustainability criteria the Minister of the Environment just produced a weak that signals her disinterest in winning that support.<br />
<br />
To be clear, if the CEEA is the most trusted precisely because it dithers and solely acts to criticize and delay pretending a shortage of data is responsible for its irresponsibility, how is changing EA to IA going to be meaningful?<br />
<br />
It won't.<br />
<br />
OPG has one path forward, if it is going to protect ratepayers from wasting money on lawyers and studies to be ignored by the current minister. The first is to by toyed with indefinitely while feigning studying other locations already being examined by the NWMO. The second is to abandon a DGR altogether. With the current political situation preventing social acceptance, the obvious response is to deny there's any need for such a thing.<br />
From David Jackson's <a href="https://reactorscanada.com/2017/03/" target="_blank">The Bruce DGR: unnecessary and harmful to Canada’s nuclear industry</a>:<br />
<blockquote class="tr_bq">
The Bruce DGR plan represents an abrupt departure ... in proposing that Low Level reactor operational wastes be treated in the same manner as High Level used nuclear fuel i.e. burial in a DGR. This is not only an unnecessary and uneconomic plan but it also sets a new and unrealistic standard for Low Level Waste disposal ultimately harmful to Canada’s nuclear industry.</blockquote>
<blockquote class="tr_bq">
<b>There is no operational need for the Bruce DGR.</b></blockquote>
Since there's no possibility of this government approving one, lets assume that's true.<br />
<br />
<div style="text-align: center;">
_____ </div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: left;">
Some other recent news/studies I'll mention because the above discussion could lead people to think nuclear simply isn't a possibility within any sustainability assessment - and in fact <a href="http://ac.els-cdn.com/S1470160X11000240/1-s2.0-S1470160X11000240-main.pdf?_tid=6a1da142-1d34-11e7-b119-00000aacb361&acdnat=1491749841_377a588ee435faa214a30655489961e6" target="_blank">the paper noted above</a> references assessments that would eliminate any institution invested in nuclear power from being considered sustainable.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Two recent papers by personalities readers of this blog would likely be familiar with are discussed in a <a href="http://www.vox.com/energy-and-environment/2017/4/7/15159034/100-renewable-energy-studies" target="_blank">recent post by Vox's David Roberts</a> - along with a third new paper. I'll allow Roberts to cite the works:</div>
<blockquote class="tr_bq">
One is a <a href="http://innovationreform.org/wp-content/uploads/2017/03/EIRP-Deep-Decarb-Lit-Review-Jenkins-Thernstrom-March-2017.pdf">literature review on the subject</a>, self-published by the <a href="http://innovationreform.org/">Energy Innovation Reform Project</a> (EIRP), authored by Jesse Jenkins and Samuel Thernstrom. It looks at a range of studies on deep decarbonization in the electricity sector and tries to extract some lessons. </blockquote>
<blockquote class="tr_bq">
The other is a <a href="https://t.co/88tmn0gmtM">new paper</a> in the journal Renewable and Sustainable Energy Reviews that boasts “a comprehensive review of the feasibility of 100% renewable-electricity systems.” It is by B.P. Heard, B.W. Brook, T.M.L. Wigley, and C.J.A. Bradshaw, who, it should be noted, are advocates for nuclear power.</blockquote>
The first paper (Jenkins and Thernstrom) concludes:<br />
<blockquote class="tr_bq">
...low-carbon dispatchable baseload resources
such as nuclear, biomass, hydropower, or CCS, are an
indispensible part of any least-cost pathway to deep decarbonization. </blockquote>
The second paper (Heard, Brook, Wigley, Bradshaw) concludes:<br />
<blockquote class="tr_bq">
Our assessment of studies proposing 100% renewable-electricity systems reveals that in all individual cases and across the aggregated evidence, the case for feasibility is inadequate for the formation of responsible policy directed at responding to climate change. </blockquote>
<div style="text-align: left;">
These two studies are by authors known to be, at the very least, tolerant of nuclear power - and some are strong advocates of it. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
The third paper noted by Roberts's is not:</div>
<blockquote class="tr_bq">
The third paper worth mentioning is the <a href="http://www.ren21.net/future-of-renewables/global-futures-report/">Renewables Global Futures Report</a> (GFR) from global renewable-energy group REN21. In it, they interviewed “114 renowned energy experts from around the world, on the feasibility and challenges of achieving a 100% renewable energy future.”<br />There’s a ton of interesting stuff in the report, but this jumps out:</blockquote>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://cdn0.vox-cdn.com/thumbor/8dmeWvXT4EdPCoJOPs1HroW0YDg=/800x0/filters:no_upscale()/cdn0.vox-cdn.com/uploads/chorus_asset/file/8291373/ren21_gfr_100re_feasible.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="282" src="https://cdn0.vox-cdn.com/thumbor/8dmeWvXT4EdPCoJOPs1HroW0YDg=/800x0/filters:no_upscale()/cdn0.vox-cdn.com/uploads/chorus_asset/file/8291373/ren21_gfr_100re_feasible.jpg" width="400" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
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<div class="separator" style="clear: both;">
What jumped out at me is <a href="http://www.ren21.net/wp-content/uploads/2017/03/GFR-Full-Report-2017.pdf" target="_blank">this paper</a> is based on a questionnaire and 1 hour (on average) interviews with "114 experts" in a field. There is no explanation of the selection precedure, and the results are analysed and interpreted by Dr. Sven Teske. <a href="https://passiiviidentiteetti.wordpress.com/2017/04/07/renewables-poll-finds-inadequate-faith/" target="_blank">Another site notes </a>Teske " used to write similar reports together with the industry lobby groups for Greenpeace (some content has been copied from there).</div>
<div class="separator" style="clear: both;">
<br /></div>
<div class="separator" style="clear: both;">
Science-ishness</div>
<br />
In Ontario, I'll opine the growth in renewable has been due to a partnership between dreamers and confidence men. I have no idea why a survey of a select few of this group's beliefs would accompany legitimate studies - but many I follow, including Jenkins, seem impressed with<a href="http://www.vox.com/energy-and-environment/2017/4/7/15159034/100-renewable-energy-studies" target="_blank"> the Roberts post </a>- so judge it for yourself. 6 points it concludes with:<br />
<ol>
<li>Take variability seriously.</li>
<li>Full steam ahead on renewable energy.</li>
<li>Beware natural gas lock-in.</li>
<li>Keep nuclear power plants open as long as possible.</li>
<li>Do relentless RD&D on carbon-free dispatchable resources, including nuclear.</li>
<li>Stay woke.</li>
</ol>
I'll finish with a word for those in Canada's Ministry of the Environment: woke means awake.<br />
<br />
Don't sleep though another two decades.</div>
<div>
<div>
</div>
</div>
Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-24155448642837052072017-03-31T04:45:00.003-07:002017-03-31T04:45:50.786-07:00Accounting for $50 billions dollars - and more<div class="tr_bq">
On March 2nd, in announcing a plan to push electricity costs off into the distant future, the 63.8 year-old <a href="https://news.ontario.ca/opo/en/2017/03/premiers-statement-on-ontarios-fair-hydro-plan.html" target="_blank">Premier of Ontario stated</a>:</div>
<blockquote class="tr_bq">
<i>In the past few years <b><u>we've invested more than $50 billion</u></b> in electricity infrastructure -- new dams in the south, new towers in the north, $13 billion to refurbish nuclear power plants alone and billions more to ensure new transmission and distribution lines everywhere. These are enormously important assets that meet the demand for cleaner and reliable power everywhere in the province. These are <b><u>assets that belong to all the people of Ontario</u></b> and that will serve us for many decades to come.</i></blockquote>
Since that time a lot has been written on the Premier's plans. This post will note works I found substantial, particularly those that try to account for the $50 billion "we've" invested. One other aspect that has to be mentioned in discussing the Premier's "Fair Hydro Plan":<br />
<blockquote class="tr_bq">
We needed to rebuild the system and so we went to the bank for that money. But the terms that were set weren't fair -- particularly the amortization. Instead of paying off the mortgage over 30 years, we agreed to a term of 20.<br />
In effect, this generation has been subsidizing not just those who came before, but those who will come next. That's not right -- and it has been notably unfair on today's hydro users. So we're fixing that. We're refinancing the mortgage and setting a new term that stretches over a longer period. Over time, it will cost a bit more. And it will take longer to pay off. But it is fairer</blockquote>
To ground the information on some fact, I'll start with slide 7 of <a href="http://www.ieso.ca/-/media/files/ieso/document-library/planning-forecasts/ontario-planning-outlook/module-4-supply-outlook-20160901-pdf.pdf?la=en" target="_blank">an IESO presentation </a>accompanying the <a href="http://www.ieso.ca/sector-participants/planning-and-forecasting/ontario-planning-outlook" target="_blank">Ontario Planning Outlook </a>delivered in September 2016.<br />
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<a href="https://4.bp.blogspot.com/-NQT-kPtZ5wY/WNv7d8ceKfI/AAAAAAAAGCA/q7m4z1qQ7pcsO_oU_BMCPrn-hKp-IjW-gCLcB/s1600/Module%2B4%2BSlide%2B7.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="474" src="https://4.bp.blogspot.com/-NQT-kPtZ5wY/WNv7d8ceKfI/AAAAAAAAGCA/q7m4z1qQ7pcsO_oU_BMCPrn-hKp-IjW-gCLcB/s640/Module%2B4%2BSlide%2B7.png" width="640" /></a></div>
The chart shows currently operating capacity (likely as of the end of 2015) still anticipated to be "under contract" in 2035: most is hydro, and most of that is publicly owned OPG's generators. Adding recently re-contracted Mattagami sites to OPG's 100% public generators explains 94% of the waterpower shown for 2035. The nuclear showing in 2035 is Bruce Power's refurbished units 1 and 2.<br />
I've now explained 93% of all the generating assets that were in service (likely at the end of 2015) that will remain "under contract" by 2035.<br />
<br />
Of the contracted sites, Bruce nuclear reactors are contracted for an expected 31 year life, and the Mattagami waterpower sites have 50 year contracts. Of the generation assets that will still be under contract or owned in 20 years, most were built by generations that preceded the Premier's, and those that don't already have longer payment periods factored into existing contracts.<br />
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<a name='more'></a><br />
Perhaps because my work is largely on the costs of electricity generation in Ontario, most of which is contracted, I was particularly struck by Jay Shepherd's blog post dealing with spending by local distribution companies (LDC's).<br />
<br />
<a href="https://jayshepherdwriting.wordpress.com/2017/03/18/energy-16-the-big-build/" target="_blank">Energy #16 – The Big Build</a><br />
<blockquote class="tr_bq">
From 2005 to 2015, <b><u>$17.8 billion</u></b> in capital spending has resulted in $8.8 billion in assets (net of depreciation) being added to the distribution grid.<br />
...<br />
The neat thing about capital spending, you see, is that the company doesn’t have to pay for it right away. They pay for it over the life of the asset, like a mortgage. (It’s a mortgage with an interest rate of about 7%, but it’s still like a mortgage. Just an expensive one.)<br />
Oh, wait. Did I say “they”. My mistake. That should be “you”.</blockquote>
I do strongly suggest reading the entire post, particularly if you are unclear about this:<br />
<blockquote class="tr_bq">
By 2015, capital spending was up to $2.23 billion per year, 258% of depreciation. Even that wasn’t the whole story. Hydro One was still trundling along, and it was still at 226% of depreciation. The rest of the industry had increased its spending to 281% of depreciation. To put that in perspective, at that rate you can replace all of your assets – assets that have an average 40 year life or more – in less than 15 years, and still have money for growth as well.</blockquote>
The post on distribution spending motivated me to check the data for Hydro One's transmission business. In the most recent 10 years consolidated financial statements show <b><u>$8.2 billion </u></b>of capital expenditures, and $3.1 billion of Depreciation and Amortization. This is worse than the distribution, both because capital spending has been 265% of depreciation and amortization for a decade, and because the average service life of transmission assets (56 years) is longer than that of distribution assets.<br />
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<a href="https://4.bp.blogspot.com/-1SRK5TC-NOk/WNwiKY04mtI/AAAAAAAAGCQ/-mCpQDHs0mkJDPGokGKRzv1Pd-1pRlNeACLcB/s1600/Hydro%2BOne%2BTx%2Bmetrics.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="394" src="https://4.bp.blogspot.com/-1SRK5TC-NOk/WNwiKY04mtI/AAAAAAAAGCQ/-mCpQDHs0mkJDPGokGKRzv1Pd-1pRlNeACLcB/s640/Hydro%2BOne%2BTx%2Bmetrics.png" width="640" /></a></div>
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<br />
Not surprisingly Hydro One valued transmission assets in 2016 $6 billion higher than it did in 2006.<br />
<br />
Will the $26 billion spent on distribution and transmission benefit consumers after 20 years?<br />
Maybe, but if capital spending has indicated assets are replaced every 15 years, maybe not.<br />
<br />
Utilities spend what regulators allow, because regulators then allow them to profit on their increased investment. George Veigh noted the role of the regulatory structure in <a href="http://www.canadianenergylawblog.com/2017/03/21/ending-the-cycle-of-electricity-price-interventions-in-ontario/" target="_blank">Ending the Cycle of Electricity Price Interventions in Ontario</a>:<br />
<blockquote class="tr_bq">
Why is Ontario prone to these cycles and what can be done to stop repeating them?<br />
The best explanation for this is the weakness in the governance structure of our electricity system. The government of the day faces virtually no restrictions on its ability to develop ambitious and costly experiments. The costs of these initiatives are outside of the tax base and are realized years after the plans are launched. So the government is virtually always in the position of developing ambitious plans with costs for which they are unaccountable.<br />
In most North American jurisdictions there are constraints on governments’ ability to do this....<br />
In Ontario, there is no such oversight.</blockquote>
The greatest rise in rates is not due to transmission and distribution cost increases, but to the cost of purchasing electricity from generators.<br />
<br />
My friend Parker Gallant tallied up some spending in <a href="https://parkergallantenergyperspectivesblog.wordpress.com/2017/03/26/found-where-the-wynne-government-spent-36-billion/" target="_blank">Found! Where the Wynne government spent $36 billion!</a> His listing of costs include those already accounted for here as simply distribution or transmission. He also lists:<br />
<blockquote class="tr_bq">
<ul>
<li>“Conservation” spending, $3-4 million/year [<b><u>$2.5 B]</u></b></li>
<li>Wind generation as at March 31, 2017 will be approximately 4,650 MW and at a capital cost of $2.2 million per MW had a cost of <b><u>[$10.2 B]</u></b></li>
<li>Solar generation as at March 31, 2017 will be approximately 2,389 MW and at a capital cost of $2.6 million per MW had a cost of <b><u>[$5.2 B]</u></b></li>
<li>1.“Big Becky” which went $600 million over budget in an effort to squeeze 150 MWs of capacity from Niagara Falls at a cost of <b><u>[$1.5 billion]</u></b></li>
<li>2.“Mattagami” originally a $1.6 billion dollar project to increase the rated capacity by 438 MW (NB) it went over budget by $1 billion reaching a cost of <b><u>[$ 2.6 billion]</u></b></li>
<li>The <a href="https://www.thestar.com/business/2010/11/04/bruce_nuclear_refit_2_billion_over_budget.html">Bruce Nuclear refurbishment </a>(NBB) of two units came at a cost of $4.8 billion but according to Ben Chin, former VP of the OPA, the cost to ratepayers was limited to … <b><u>[$3.4B]</u></b></li>
</ul>
</blockquote>
This list is not comprehensive (it misses natural gas-fire power plants), but by estimating capital costs on contracting capacity it introduces the methodology for estimating capital spending, and completes the listing in this post that pushes capital spending beyond $50 billion.<br />
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<div>
If somebody was curious how the Premier might justify the figure, they might now be impressed.</div>
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<br /></div>
<div>
However, the Premier stated "<i>we've invested more than $50 billion.</i>" The reason she should explain the figure is not simply to demonstrate that much has been spent in Ontario's electricity sector, but so that we understand who she is referencing as "We."</div>
<div>
<br /></div>
<div>
I don't think it's us - bringing to the fore that famous Pete Townsend question, "Who are you?" </div>
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<br /></div>
<div>
While most distribution and transmission has some variety of public ownership, only "Big Becky" is a fully public generation project. </div>
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<br /></div>
<div>
Mattagami is a partnership, and that contract is for 50 years already, so even that doesn't justify the Premier's false "amortization" justification for delaying costs.</div>
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<br /></div>
<div>
Private Bruce Power's refurbishment of units 1 and 2 was carried out over the 10 year period over which <a href="http://coldair.luftonline.net/2017/03/on-electricity-pricing-2-ugly-other.html" target="_blank">I found it went from a typically prices supplier of electricity to the province's low-cost provider.</a> Investing hasn't the problem - the problem has been spending poorly.</div>
<div>
<br /></div>
<div>
Whereas Parker estimates the capital spending of the private companies on wind and solar generation, <a href="http://coldair.luftonline.net/2017/02/the-failure-of-global-adjustment.html" target="_blank">I have tallied up the cost of those contracts, and the value to consumers</a>.</div>
<blockquote>
The $13.6 billion net liability of wind, added to the $24.4 billion net liability of solar contracts, produces a $38 billion net liability, which equals all of Ontario Hydro's gross liabilty, before valuation of its/our assets.</blockquote>
Does the Premier place herself in with the wind and solar generators when claiming "We've invested..."<br />
<br />
There are some big questions it would be nice to see economists address - instead of yelping yet again on carbon pricing. Much of the expense incurred in Ontario, it seems to me, is specifically because "we" did not invest. A major point of expensive feed-in tariff (FIT) contracts is to attract private capital. But in the recession when most of these contracts were signed, money was cheap. My limited understanding of Keynesian economics urges recession spending, but preferably capital spending on projects that will provide a benefit in the future - allowing the government to recoup the costs. Additionally, low capital costs are particularly important in spending on electricity sources where the vast majority of the expense is capital costs (hydro, wind, solar and nuclear are some of these).<br />
<br />
Ontario's tariff deficit, which I've estimated at $38 billion was predictable. Some analysis and reporting by honest academics would help to avoid it re-occurring elsewhere.<br />
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<br /></div>
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__________________</div>
<div>
<br />
<b><u>conservation / "getting trash off the books"</u></b><br />
<b><u><br /></u></b>
The big news from the weekly free local paper is often the Canadian Tire Flyer, and this week was exceptional - promising 3 packs of LED bulbs for $1 due to the coupon program of the IESO.<br />
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<a href="https://2.bp.blogspot.com/-hhUtPrc7tLQ/WN4y_LEDdaI/AAAAAAAAGDI/UvuQ8E9eQWo6Rz0cV0HNs7sFHapjjnZMwCLcB/s1600/coupons.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="167" src="https://2.bp.blogspot.com/-hhUtPrc7tLQ/WN4y_LEDdaI/AAAAAAAAGDI/UvuQ8E9eQWo6Rz0cV0HNs7sFHapjjnZMwCLcB/s400/coupons.PNG" width="400" /></a></div>
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This irks me for a number of reasons. Earlier in the week I'd found<a href="http://coldairings.luftonline.net/post/158961909006/after-viewing-a-tweet-from-canadas-minister-of" target="_blank"> electricity exports to the states were greater in 2016 than ever before, and the real rate received for those exports was the lowest ever.</a> Ontario also curtailed what is surely a record amount of electricity in 2016: <a href="http://www.opg.com/about/finance/Documents/170310CombinedNewsReleaseMDAOPGQ42016FINAL.pdf" target="_blank">OPG reported</a> 4.7 TWh of potential generation lost due to surplus supply conditions. The IESO had reported curtailed wind and nuclear by this time in 2014 and 2015, but hasn't got around to admitting the numbers for 2016. Whey the do, adding up curtailed supply and the exports to the United States, sold nearer to zero than the rates paid to producers, in 2016 Ontario could have supplied another 3.1 million typical Ontario homes - for only a slight percentage more of the same overall system costs.</div>
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It's understandable that the IESO couldn't yet produce curtailment (dispatch down) figures for 2016 - it would have distracted from the focus on producing coupons. </div>
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I was inspired to do math on this by Severin Borenstein's <a href="https://energyathaas.wordpress.com/2016/10/03/trash-those-incandescent-bulbs-today/" target="_blank">Trash those incandescent bulbs today!</a> Assuming 3 hours a day usage, 50-watts less consumption (the standard bulb in the ad is 10 Watts and advertised as a 60 Watt bulb replacement), and 10 cents/kWh (Ontario costs are presently much higher than this, but most service (aka delivery) charges are moving to fixed rates, and future ratepayers will be picking up a big chunk of electricity costs after July 1st).</div>
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At 33 and 1/3rd cents per bulb, the investment pays for itself in under 23 days.</div>
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At $3 per bulb (the price) the investment pays for itself in 200 days.</div>
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At the IESO people are pulling 6 figure salaries to get payback time on bulbs down to 23 days by supplying coupons. The coupon value, and the salaries of the people orchestrating this, are paid for by everybody else - now and, due to the Premier's awfulness, in the future.</div>
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I'll end with a section of a work by Jim Clarkson. The period in the quote follows the Three Mile Island event. In the 1970's Amory Lovins had hit the scene with a "soft path" vision, which at the time competed with a vision of plentiful supply for which coal and nuclear competed. With public opinion turned on nuclear...<br />
<b><u><br /></u></b>
<a href="https://www.masterresource.org/electricity-policy/politics-electricity/" target="_blank">On the Politicization of Electricity (intervention breeding intervention)</a><br />
<blockquote class="tr_bq">
...the concept of having a public policy on energy use came to the fore among utility regulators. The idea was that if the utilities invested in energy efficiency, then they would not need to build so many power plants. In regulatory circles the new buzz words were “least-cost planning” and “demand-side management.”<br />
The utilities had the good sense to be suspicious of the grandiose claim that efficiency improvements would slow the overall demand for energy. But they were soon bought off with promises of guaranteed profits on approved but expensive efficiency programs. During the late 1980s and early 1990s, a number of sound economists pointed out the flaws of asking a provider of services to reduce his own sales. Further, with amazing accuracy, these economists predicted failure.<br />
Billions of dollars were spent by the nation’s utilities on demand-side programs with little to show for it but inflated claims. The money, of course, came from utility customers. <b>Those who had already invested in energy efficiencies were taxed to pay for the same improvements in their competitors’ facilities.</b> According to economist Franz Wirl <b>both the utilities and customers gamed the system of giveaways for efficiency measures.</b><br />
Then a wave of rationality struck the electricity industry. Competition for end users was instituted in many states and planned in still more. Customer choice akin to that in telecommunications was seen as the wave of the future. The regulated<b> utilities began the wholesale dumping of their wasteful customer efficiency programs. In the industry this was known as “getting trash off the books.”</b></blockquote>
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Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-22198194564969734572017-03-06T07:21:00.000-08:002017-03-06T07:21:09.520-08:00China bans wind due to Ontario-like curtailment levelsA report from China contains data on industrial wind that should be compared to similar Ontario data, so...<br />
<br />
<a href="http://china.org.cn/business/2017-02/23/content_40346584.htm" target="_blank">New wind power projects banned in 6 regions | China.org.cn</a><br />
<blockquote class="tr_bq">
The National Energy Administration (NEA) has issued red alerts, or the highest warning, in six provincial regions where new wind power projects will be prohibited this year...<br />The six restricted regions include Heilongjiang, Jilin and Gansu provinces, as well as Inner Mongolia, Ningxia Hui and Xinjiang Uygur autonomous regions...<br />Large amounts of wind power were wasted in these regions last year...<br />According to official data, last year the waste proportion of these regions were Gansu (43 percent), Xinjiang (38 percent), Jilin (30 percent), Inner Mongolia (21 percent), Heilongjiang (19 percent).<br /><br />Wind power facilities generated 241 billion kilowatt hours of electricity in 2016...<br />However, close to 50 billion kilowatt hours of wind power was wasted, up from 33.9 billion kilowatt hours a year earlier, due to distribution of wind resources and an imperfect grid system.</blockquote>
In Ontario, the IESO doesn't seem as advanced as the Chinese NEA so is yet to release an official curtailment figure, but I've got estimates!<br />
<br />
<a name='more'></a><br /><br />
I estimate in 2016 Ontario curtailed approximately 2.3 TWh (billions of kilowatt-hours), up 300% from the 0.734 TWh the IESO (system operator) <a href="http://ieso.ca/Pages/Power-Data/2015-Electricity-Production-Consumption-Price-and-Dispatch-Data.aspx" target="_blank">reported for 2015</a>.<br />
<br />
None of the IESO's zones showed curtailment levels as high as Gansu and Xinjiang, but <a href="https://docs.google.com/spreadsheets/d/1XGuv745WRjJN_Le2IHpdyGWqxGuVhTBP1EReH6HFAqc/pubhtml?gid=74091058&single=true" target="_blank">I estimate </a>4 zones has curtailment rates similar to the other regions China has now banned projects from: Bruce (28%), Northwest (23.5%), Southwest (20.6%) and West (19%).<br />
<br />
Overall estimation of a total percentage is confused by the fact some industrial wind facilities are embedded in distribution networks - their output is not reported by the IESO, and the IESO is unlikely to be capable of curtailing that supply. For transmission system connected generators, I estimate curtailment in 2016 at 20%, but including estimated embedded generation the figure drops to 18% - still higher than China's 17%.<br />
<br />
In the fall of 2016 unit 2 (878 MWe) of the Darlington nuclear power plant was removed from service for 3 years as it undergoes refurbishment. An additional 700 MW of natural gas-fired capacity that ran as baseload supply one year ago has been <a href="http://coldaircurrents.luftonline.net/2017/01/ontarios-ieso-steps-off-gas.html" target="_blank">removed from service or re-contracted on a capacity basis </a>(DESTEC 120, Kapuskasing GS 60, Nipigon GS 40, North Bay 60, Iroquois Falls 120, TransAlta Windsor 72, TransAlta Mississauga/Douglas 108, and West Windsor 127). As expected, the initial months of 2017 do show a drop in curtailments, but the highest curtailment periods of a year are still to come.<br />
<a href="http://2.bp.blogspot.com/-Q1d83gPtnxQ/WL16AU35m8I/AAAAAAAAF-k/JImvm7oE9MgMeKe4W2k_YtpJvZ074D1swCK4B/s1600/windCurtailment.png" imageanchor="1"><img border="0" height="394" src="https://2.bp.blogspot.com/-Q1d83gPtnxQ/WL16AU35m8I/AAAAAAAAF-k/JImvm7oE9MgMeKe4W2k_YtpJvZ074D1swCK4B/s640/windCurtailment.png" width="640" /></a>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-59232782714518414682017-03-02T10:57:00.001-08:002017-03-02T13:19:27.175-08:00Extend and pretend: Ontario government acts to lower electricity bills<div class="tr_bq">
The Premier of Ontario, and its Minister of Energy, held a news conference today in which they promised to<a href="https://news.ontario.ca/opo/en/2017/03/ontario-cutting-electricity-bills-by-25-per-cent.html" target="_blank"> cut electricity bills by 25 per cent</a> - on average, inclusive of an 8% sales tax rebate already introduced. A <a href="https://www.ontario.ca/page/ontarios-fair-hydro-plan" target="_blank">Fair Hydro Plan</a> is touted as offering these "new" things:</div>
<blockquote class="tr_bq">
<b>Starting this summer, electricity bills will be reduced by 25% on average for households across Ontario. Many small businesses and farms will also benefit from this cut.</b><br />
And bills won’t increase beyond the rate of inflation for at least four years.<br />
People who live in eligible rural communities and those with low incomes will see even more reductions to their electricity bills.<br />
Taken together, these changes will deliver the single-largest reduction to electricity rates in Ontario’s history.</blockquote>
I found none of the government's posted material informative.<br />
<br />
Ontario consumers, particularly those of Hydro One, are advised to skip government explanations and go to <a href="http://www.hydroone.com/Affordability/Pages/AffordabilityAnnouncement.aspx" target="_blank">Hydro One's examples of cost impacts for different customers</a>. Hydro One summarizes changes:<br />
<ul>
<li>Reducing the Global Adjustment charge by 20 per cent,</li>
<li>Lowering the delivery charge for low-density customers,</li>
<li><b>Accelerating the move to more fixed delivery charges,</b></li>
<li>Introducing an affordability fund to help those customers in need, and</li>
<li>Introducing a First Nations electricity rate.</li>
</ul>
<div>
The move to fixed delivery charges is one I approve of, but it may be of limited interest as it impacts individual consumers (the higher consumption user, including farms, benefit at the expense of low consumption residences).</div>
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<br /></div>
<div>
In the remainder of this post I'll pull some evidence together to speculate on how the government intends to reduce the global adjustment charge by 20 per cent, and the implications of doing so.</div>
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<a name='more'></a><br /></div>
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An extremely quick review of the global adjustment: Essentially all Ontario generators are guaranteed payments, but there is a market operated. The market, such as it is, does not recover enough to pay the generators contracted, or regulated rates - and the difference is the global adjustment. </div>
<div>
If X is the contracted rate, and Y is the price the market recovers, Z is the global adjustment:</div>
<blockquote class="tr_bq" style="text-align: center;">
<b><i>X - Y = Z</i></b></blockquote>
I tried to get confirmation as to whether contracts (X) would be renegotiated, and the best information I received, <a href="https://twitter.com/smccarthy55/status/837328604312788992" target="_blank">from the Globe and Mail's Shawn McCarthy</a>, was this was not being looked at. So... where Z is a calculated figure, the government is promising to reduce it without addressing the variables that produce Z.<br />
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Smell a con?<br />
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<a href="https://beta.theglobeandmail.com/news/national/ontario-wynne-slashes-hydro-rates/article34183180/?ref=http://www.theglobeandmail.com&service=mobile" target="_blank">McCarthy reported</a>:<br />
<blockquote>
"We're refinancing the mortgage and setting a new term that stretches over a longer period," Ms. Wynne said.<br />
"Over time, it will cost a bit more. And it will take longer to pay off. But it is fairer – because it doesn't ask this generation of hydro customers alone to pay the freight for everyone before and after. The burden will now be shared more evenly and more appropriately."</blockquote>
A significant problem with this explanation is that Ontario hasn't built much debt in building public generation since 1993. The bulk of the costs recently are from contracts. Since 2008 the vast majority (over 90%) of new-build generation is based on the German model of feed-in-tariff (FIT) contracts, mostly for a duration of 20-years. The following chart, of global adjustment components, shows how small the share of publicly owned, and financed, generation (OPG) is compared to contracted supply including OEFC (older), and more recent contracts signed by the OPA (IESO).<br />
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<a href="https://3.bp.blogspot.com/-cEpxe2JnfnM/WLhhoiSWRwI/AAAAAAAAF-E/0A4H_Q1bF70w0dOxIrwBvMjWBzrGfdPVACLcB/s1600/GAcomponents.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="394" src="https://3.bp.blogspot.com/-cEpxe2JnfnM/WLhhoiSWRwI/AAAAAAAAF-E/0A4H_Q1bF70w0dOxIrwBvMjWBzrGfdPVACLcB/s640/GAcomponents.png" width="640" /></a></div>
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It seems the current Ontario government intends on paying out the contracts, as signed, but financing the payments with debt replacing 20% of the global adjustment mechanism.<br />
<br />
I don't know if this is in keeping with any level of accounting standard. The Office of the Auditor General of Ontario has provided great insight into the electricity debacle (significantly in both 2011 and 2015 annual reports), and hopefully they'll delve into the implications of intending to collect payment from ratepayers years after the contracts have ended.<br />
<br />
The Premier justifies stringing out the payments by explaining that although the contracts are for 20-years, the generators will last longer than that. Perhaps she's been convinced these generators will continue to operate after 20 years for just the market rate, but that's staggeringly ignorant thinking in 2017 as:<br />
<br />
<ul>
<li> in the free-market U.S., even in Texas which is closest to a pure energy market, major generators consider the <a href="http://www.utilitydive.com/news/nrg-ceo-independent-power-producer-model-obsolete/437150/" target="_blank">independent power producer model 'obsolete'</a> -</li>
<li>Ontario not only<a href="http://coldaircurrents.luftonline.net/2017/01/ontarios-ieso-steps-off-gas.html" target="_blank"> just bought out non-utility generator (NUG) contracts</a>; along with expired NUG contracts the province has seen 8 natural gas-fired power plants mothballed despite historically low fuel costs for these entirely depreciated generators.</li>
<li>Germany, the jurisdiction Ontario copied feed-in tariffs from, <a href="http://analysis.windenergyupdate.com/operations-maintenance/german-wind-auctions-hike-power-market-risk-repowering-projects" target="_blank">may lose up to 13 gigawatts of industrial wind turbine capacity by 2023</a> as their contracts expire and market rates can't cover the operation costs.</li>
</ul>
<br />
The Ontario government is <a href="https://twitter.com/smccarthy55/status/837364303741267969" target="_blank">expecting to run up to $25 billion of debt</a> to cover the 20% discount in the global adjustment. By the time it anticipates recovering those funds, there will be no asset (the contracts) left!<br />
<br />
Another early feed-in tariff jurisdiction, Spain, didn't allow consumer rates to rise while madly writing contracts, and ended up with an "electricity tariff deficit."<br />
<br />
An electricity tariff deficit seems to be exactly what Ontario announced today, and that may be a good thing.<br />
A first step is recognizing the problem.<br />
<br />
Spain addressed it's electricity tariff deficit a few years ago by unilaterally cutting rates on the feed-in-tariff contracts.<br />
<br />
It's doing well.<br />
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Notes:<br />
<br />
"Extend and Pretend" is <a href="https://twitter.com/ScottLuft/status/836998619278544896" target="_blank">a twitter poll result</a>!<br />
<br />
looking at a history of electricity demand in Ontario, it's hard to consider any decade where procuring new supply could have been more of a challenge than it's been over the past 10 years of first declining, then stagnant demand:<br />
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<br />Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-937539592111692432017-02-27T16:37:00.002-08:002017-02-28T04:51:03.731-08:00Ontario electricity campaign positions take shape<div class="tr_bq">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Today the leader of Ontario's NDP <a href="http://act.ontariondp.ca/hydro" target="_blank">unveiled</a> a <a href="https://d3n8a8pro7vhmx.cloudfront.net/ontariondp/pages/1645/attachments/original/1488201638/FINAL_NDP_Hydro_Announcement_(14).pdf?1488201638" target="_blank">plan</a> to "cut hydro prices." With the NDP position tabled, it's probably fair to speculate on the </span><span style="font-family: "arial" , "helvetica" , sans-serif;">electricity policies</span><span style="font-family: "arial" , "helvetica" , sans-serif;"> the </span><span style="font-family: "arial" , "helvetica" , sans-serif;">3 main parties will campaign on in 2018's election.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The PC Party of Ontario has indicated they have 3 focuses: cancel the Green Energy Act, stop the privatization of Hydro One, and control public sector electricity salaries. While I agree the GEA is the single largest driver of high costs in the province, the other 2 pillars are populism - pure and simple.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">The NDP's new paper indicates their priority is reversing the share sales of Hydro One.</span><br />
<blockquote class="tr_bq">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The first bill tabled by an NDP government would return Hydro One to provincial
ownership and control.</span></blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;">The paper implies a return to public power.</span><br />
<blockquote class="tr_bq">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Direct the hydro system to provide reliable low-cost, environmentally responsible
power for all Ontarians instead of profits for private companies</span></blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;">I felt the paper avoided the anti-nuclear rhetoric that can push people like me away from the NDP, but others find it in the sub-text.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Regardless, this strikes me as a basic socialist document that believes in public power.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The government/Liberal position is likely to be as able managers of a very clean system - and the PC's populist stance leaves them open to being the champion of market solutions.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The government's position will be based on polling, and<a href="http://coldair.luftonline.net/2016/09/communication-politics-money-wynnes.html" target="_blank"> strategy from David Hearle.</a> Green energy won't be blamed (because people want to believe it is practical), but the elimination of coal will - it's been gone over 3 years, but blaming it's replacement as a cost driver persists as a convenient diversion - as will poorly supported claims of spending improving reliability (credible only due to one memorable black-out event in 2003).</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">From a numbers perspective, things may improve for the government prior to the next election.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">I don't see great cost pressures in the next 16 months. There are far fewer expensive wind and solar projects due to come online. The Ontario Energy Board (OEB) allowed payments to OPG for nuclear production to drop for the start of 2017, and used those lower rates in setting the current regulated price plan while they hear OPG's rate application. It will be hard for the OEB to push back the rate riders that will have to be added (to compensate for the rate-setting period) to beyond the next election - but easy to push significantly higher rates for OPG's output beyond summer 2018.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Emissions from electricity generation will be spectacularly low - in part due to<a href="http://coldaircurrents.luftonline.net/2017/01/ontarios-ieso-steps-off-gas.html" target="_blank"> contract buy-outs that provide highly questionable value</a>. The Liberals will enter the election campaign with one of the lowest emitting electricity sectors on the planet.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">In general the political theory is public anger is not sustainable, which bodes well for the government, but the public seems to have moved beyond anger - and for good reason.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">The industry people that have profited during the decade of cost increases are trying to dispel the perception/knowledge that price increases have been extreme.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">If the NDP is socialism and the PC's populism, the Liberal party is corporatism.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Jake Brooks, Executive Director at the Association of Power Producers of Ontario (APPrO) has a d<a href="https://www.linkedin.com/pulse/towards-better-understanding-electricity-prices-jake-brooks" target="_blank">isappointing post on Linkedin</a> that's probably indicative of the propaganda Ontarians will hear repeatedly over the next 16 months.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Mr. Brooks asks rhetorically, "How do Ontario electricity rates truly compare with other provinces, with other regions of North America and with other countries?" and then references a newspaper article that compares residential rates with U.S. dollar conversion. I don't believe that's a useful comparison - as currency moves do little to change local residential electricity pricing. A particularly useful metric would be costs as a percentage of household income - such as Edgardo Sepulveda provided in a recent article - one it's appropriate to cite as the NDP takes a stand for a return to public power; <a href="http://www.progressive-economics.ca/2017/01/29/ontarios-electricity-sector-privatization-and-deregulation/" target="_blank">Ontario’s Electricity Sector: Privatization and deregulation</a>. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">People have not been imagining their costs increasing in relation to how much disposable income they have, and they probably aren't interested in knowing how costs have changed in relation to costs in Arkansas once currency values are accounted for. They might be interested in whether their lives are being impacted while others' are not.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">I think people need one set of data to counter statements such as Jake Brooks':</span><br />
<blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;">There have been wild statements made to the effect that Ontario’s electricity prices are the highest in North America or that they have hit some other kind of stratospheric record. First of all, the public needs a dependable and credible base of information about prices on which to build their views. The <a href="http://www.ontarioenergyreport.ca/">Ontario Energy Report</a> and the <a href="http://www.ontarioenergyboard.ca/oeb/_Documents/EB-2004-0205/RPP_Price_Report_Nov2016.pdf">OEB’s Regulated Price Plan Report</a> are reasonable places to start. These and other sources demonstrate that Ontario electricity prices may be relatively high compared to other provinces in Canada, but they are nowhere near the top in North America.</span></blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Neither of the reports have anything pertinent to comparing residential electricity costs. The cited Ontario Energy Report includes comparisons of pricing for large industrial consumers, whose prices were kept lower in 2016 through a one billion dollar transfer of costs to "class B" consumers via the Industrial Conservation Initiatives. Mr. Brooks seems to citing a number partly responsible for rising residential ,farm and small business rates as an example of how the rates aren't high!</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Te data set of U.S. utilities that have an average residential rate of over 20 cents per metered kilowatt-hour inclusive of all charges, even taxes:</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Jake Brooks' Ontario industry has been uniquely bad at delivering consumer value over the past decade, and pretending Ontario rates have not gotten very expensive doesn't bode well for the future.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">I've updated this presentation with the utility's ranking when data is sorted from lowest monthly average consumption to greatest after noticing much of that list corresponded. 12 utilities have an average residential rate over 20 cents/kWh, of which 6 are in Hawaii or Alaska and others may have high seasonal residences (Bear Valley and Upper Peninsula).</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Ontarians perceive rates as high because they are.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">The greatest contributor to high rates is the rush of wind and solar generation contracted AFTER demand collapsed.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">In <a href="http://coldair.luftonline.net/2017/02/the-failure-of-global-adjustment.html" target="_blank">a recent post</a> I wrote:</span><br />
<blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;">The<a href="http://ieso.ca/Documents/Supply/IESO-Active-Contracted-Generation-List-20160930.xlsx"> IESO's listing of contacts</a> contains renewed contracts, and contracts for renovated power plants (such as coal-to-biomass conversions), but through filtering the list to include only new-build power plants it's clear the vast majority of contracted capacity since 2009 is solar (31%) or wind (65%). To be clear, the 6,430 megawatts of these sources contracted after 2009 is irrelevant in the replacement of coal-fired generation as all<a href="http://coldair.luftonline.net/2016/03/the-cost-of-ending-coal-fired.html"> the capacity to accomplish that was previously procured</a>.</span></blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Mr Brooks' listing of the "causes of price increases" with ones that are wrong, since demand collapsed in 2008-09, stuck out:</span><br />
<blockquote class="tr_bq">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strike>1. Ontario’s less than ideal natural resource profile</strike><br />2. Political intervention<br /><strike>3. Phasing out coal<br />4. Yesterday’s artificially low rates and deficit financing</strike><br />5. Green Power<br />6. Market inefficiency, often arising from inconsistencies between contract terms and shifting market dynamics<br /><strike>7. Unexpected drop in demand<br />8. Catching up with grid upgrades that had been postponed in past years</strike><br />9. Social policy<br /> <strike>10. Innovation – building a smarter more flexible grid</strike></span></blockquote>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">It's encouraging to see the NDP present a meaningful document on electricity policy - and honest discussion of meaningful policies would be a welcome motivator for voting.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Perhaps unfortunately, the traditional throw the bums out is also a valid motivator.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">As is draining the swamp. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: inherit; font-size: xx-small;"><a href="https://docs.google.com/spreadsheets/d/1tekbc1jB1ZPMdSftk1o_LKpLhJt7Y2V5YaxKuEFDBjU/edit?usp=sharing" target="_blank"><i>EIA rate summary spreadsheet</i></a></span>Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0tag:blogger.com,1999:blog-446210048006827157.post-28860615908733976632017-02-22T15:18:00.000-08:002017-02-22T15:37:30.769-08:00Can Wind and Solar be significant contributors to a low emission electricity system?<blockquote class="tr_bq">
<i>...there is a substantial body of evidence that variable renewable integration costs are hugely dependent on the flexibility of the system to which they are being added.</i></blockquote>
So claims a new report from a <a href="http://www.ukerc.ac.uk/" target="_blank">UK Energy Research Centre</a>, which lists many studies after opining on them in <a href="http://www.ukerc.ac.uk/asset/A090E0B7-13B5-45E0-96B18A6E8AC8ED74/" target="_blank">The costs and impacts of intermittency – 2016 update</a>. Integration costs are important and I'll write on some of the content of the UK paper in paragraphs below, but first I want to discuss the bias of the work, and a great accomplishment in Ontario.<br />
<div>
<blockquote class="tr_bq">
<i>Taken together, the full range of impacts add weight to the message that electricity systems and markets need to adapt and be reorganised to incorporate large proportions of variable renewable generation most efficiently. </i></blockquote>
systems and markets may not be what "need" to adapt.<br />
<blockquote class="tr_bq">
<i>The key challenge facing policymakers, regulators and markets is how to ensure delivery of a flexible, low carbon system that makes maximum use of variable renewable generation whilst minimising overall cost and enhancing security and reliability. </i></blockquote>
It is wrong to state a low carbon system maximizes "use of variable renewable generation."<br />
<br />
My estimates indicate in January - usually one of the highest demand months of a year - Ontario generated less electricity with fossil fuels than in any month since at least 1973. Probably the least of any month in my life (I was born the day Dylan shocked Newport with an electric performance).<br />
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<a name='more'></a><br />
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The Ontario system operator's senior management talk a lot about points the government desires them to focus on, but I suspect the accomplishments of the operators at the IESO are far more related to altered handling of renewables within the system - <i>"changes to system operation, regulatory frameworks and the design of electricity markets."</i><br />
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When I started writing on energy in 2010, the joke was people wanted cheap, green and plentiful, but they could only have 2 of 3. For real environmentalist, I think the joke is people still thinking the world will decarbonize without all 3 together. This study could be seen as U.K. apologists for wind and solar explaining they aren't necessarily expensive.<br />
<blockquote>
Estimates of additional costs based on assumptions of flexible systems can be several times lower than estimates of additional costs based on assumptions of inflexible systems. Linked to this is the very strong finding that additional costs will be minimised if electricity systems are optimised to facilitate the integration of variable renewable generation. This optimisation includes changes to both the technical and economic characteristics of electricity generating plant, potential contributions from flexible demand, storage and increased interconnection capacity, as well as <i>changes to system operation, regulatory frameworks and the design of electricity markets.</i></blockquote>
The review summarizes categories impacting costs:<br />
<blockquote class="tr_bq">
<b>Capacity credit and costs</b>...a peak of less than £15/MWh even if the capacity credit of the variable renewable plant is assumed to be zero.<b>Reserve requirements and costs </b>...most analyses conclude that the additional cost of these reserves remain relatively modest...<br />
<b>Curtailment</b>...the point at which curtailment becomes significant can vary dramatically, with some analyses finding the inflection point to be as low as a 15% penetration and others finding the inflection point not being reached until there is over a 75% penetration of variable renewable generation<br />
<b>Transmission and network costs.</b>..these costs do not appear to rise sharply as penetration increases ...Very little data was found for penetration levels above 30%.<br />
<b>Thermal plant efficiency and emissions</b> ...efficiency and emission impacts are particularly dependent on the assumptions over the mix and operating characteristics of the thermal (and/or hydro) plant whose output is being varied to accommodate intermittent renewable generation...<br />
<b>System inertia</b>...Of those studies that do address this issue, the typical conclusion is that it is likely to only become significant at high penetrations of variable renewables</blockquote>
I moved capacity credit to the top of the list because the cost of everything else depends on this factor. The study states:<br />
<blockquote class="tr_bq">
...capacity credit is often expressed in terms of the conventional thermal capacity that an intermittent generator can replace while still delivering the same reliability of supply to energy users, so for example, if 100MW of notional wind farm capacity is calculated to have a capacity credit of 25%, then it can notionally replace 25MW of conventional capacity on the system without reducing that system’s ability to meet demand.</blockquote>
It's a UK paper and it does cite studies claiming that 25% capacity credit estimate for that environment, but I'm skeptical. In general the paper does display most studies it examined show variable Renewable Energy Systems (vRES) in northern climates have capacity values near zero - and declining with market penetration (in Figure 3.5). The paper hedges on declaring the decline in capacity credit with market penetration because there's little data of high vRES market penetration systems. Another recent article, <a href="http://www.sciencedirect.com/science/article/pii/S1364032116310371" target="_blank">Limits to growth in the renewable energy sector</a>, indicates that may remain the case. I won't dwell on this point beyond noting/recommending K.M. Korhonen's <a href="https://jmkorhonen.net/2017/02/21/stall-warning-for-renewable-energy/" target="_blank">Stall warning for renewable energy</a> post.<br />
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An example of near nil capacity credit is found in Germany's expansion of renewables - largely wind and solar. From 2006 to 2015, according to data from <a href="https://www.entsoe.eu/" target="_blank">ENTSOE</a>, Germany added almost 65,000 megawatts of renewable capacity to its electricity system between, and in both years book-ending the period annual consumption peaked at just under 78,000. Despite adding capacity equivalent to 83% of demand, Germany retained essentially the same capacity from traditional source (hydro, gas, coal and nuclear). That system has certainly behaved like the capacity credit of wind and solar is zero.<br />
<br />
Another example in a much different climate: California. The L.A. Times recently ran <a href="http://www.latimes.com/projects/la-fi-electricity-capacity/" target="_blank">an article </a>attributing high electricity bills in that state to a bias towards building new power plants - and James Bushnell responded to the article with an excellent, mostly alternate, explanation in a <a href="https://energyathaas.wordpress.com/2017/02/21/breaking-news-california-electricity-prices-are-high/" target="_blank">blog post at the Energy Institute at Haas site.</a> I went to the <a href="https://www.eia.gov/electricity/data/state/existcapacity_annual.xls" target="_blank">data, from the U.S. EIA</a>, and we see the same situation as Germany - since 2006 demand is unchanged, non-vRES generation capacity is up slightly, and all the new wind and solar is therefore implied to have near-nil capacity credit.<br />
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Having established there is no capacity credit for vRES (wind and solar) in many locations, it's only fair to say they require neither additional generation capacity, nor less. They are simply additional capacity and all transmission and network costs incurred due to them are entirely due to them (the U.K. paper provides a range of £5-£20/MWh for this cost). Costs due to reductions of thermal plant efficiency and emissions the study notes as being very small, but these costs are not so much small as intertwined with curtailment costs.<br />
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Near-nil capacity credit values of vRES imply a simple way to estimate the value of vRES generation as the fuel cost of a thermal plant generation displaced when the sun, and/or wind, allow. To demonstrate this, consider a situation where a 100 megawatt natural gas-fired power plant is operating at 50% capacity factor as an intermediate generator, with a fixed cost of $15 million a year and fuel cost of $40/MWh. The math works out to an average unit cost of $74/MWh over a year. Now add a 100 megawatt wind facility guaranteed the same rate, $74/MWh, for each megawatt it can generate - assume a 35% capacity factor but remember only 50% of the time can its output displace gas. The math shows 153,000 megawatts of wind generation wasted (either curtailed or, often in the real world, dumped on neighbouring grids); the reduced usage of the gas generator raises it's average price to $93/MWh, and the curtailed wind makes the effective price of a useful megawatt from the turbines $148/MWh.<br />
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This simple model indicates cost increase by $16.6 million dollars, which equals the $22.7 million cost of wind less the fuel cost of displaced gas generation (153,300 MWh at $40/MWh = $6.132 M). While the U.K. study shrugs of LUEC's decreasing utility, this simple scenario shows adding $75/MWh wind to $75/MWh gas increases costs by $38/MWh. This is a result of the near-nil capacity credit of wind and solar (in may environments) - whether the increased costs are attributed to decreased usage of the gas generator or curtailment is not relevant. On a positive note, assuming an emissions intensity from the gas-fired power plant of 420 kilograms CO2equivant per megawatt-hour (kg CO2e/MWh), 64,386 tonnes of CO2 equivalent (tCO2e) are avoided - unfortunately with $16.6 million of added cost implying a carbon cost of $258/tCO2e.<br />
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Other scenarios, as the study notes, make the addition of wind more financially attractive. Using the same assumptions as the preceding example, assume the replacement of a 100 MW nuclear power plant with both the 100 MW gas power plant, and a 100 MW wind facility. This time we assume 85% capacity factor for the nuclear, and 85% of wind's output capable of replacing needed generation - with the remainder of the removed nuclear output to come from the natural gas power plant.<br />
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Replacing 100 megawatts of nuclear capacity with both 100 MW of wind and 100 MW of gas hardly costs anything in this scenario, where wind and nuclear are both prices at $75/MWh for all they could produce, and natural gas-fired output would be to if it operated at a 50% capacity factor - but it operates above that in meeting demand. Wind appears to provide much better value when displacing baseload nuclear - along with gas. However, emissions rise 203,276 tCO2e, and the emission intensity of generation rises from near nothing to 273 kgCO2e/MWh.<br />
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This is not an unexpected result. Neither California nor Germany have reduced emissions notably while adding renewables, and removing nuclear - nor has/will Japan. It is possible that environments wealthy in reservoir hydro generators could find great utility in increasing renewables, but it is highly unlikely variable renewable energy systems will contribute to significantly lower emissions elsewhere.<br />
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Ontario hasn't seen 273 kg CO2e/MWh emissions intensities in many years. Based on the January gas-fired generation of 572,341 MWh I calculated from IESO Generator and Output Capability reporting, at 420 kg/MWh the emissions of the IESO system's generation of 13.27 TWh in January had an emissions intensity of about 18 kgCO2e/MWh. There's a lot of actions Ontario could take to get that up to 273 kgCO2e/MWh, but maybe the zealots who believe the future has revealed itself to them in the shapes of solar panels and industrial wind turbines should shop for new churches.<br />
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It must be noted that many commentators, many quoted by me, have been skeptical about the ability to operate the grid with little of the gas generation (and previously coal) online, and ready for ramping. I believe Ontario's actual operators of the system - the ones who do it on a daily basis - have a story to tell. That story would likely include improved forecasting, revised wind turbine (and perhaps solar panel) regulation to provide a programmed reactive power element, and rationalized market bid rules forcing the curtailment of wind and solar output prior to impacting nuclear units.<br />
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It is variable renewable energy systems that need to be flexible.<br />
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<span style="font-size: xx-small;"><a href="https://1drv.ms/x/s!Ao012Fem8UCvjzKAUzacTnFyBP3B" target="_blank">worksheets on monthly/annual generation</a></span><br />
<a href="https://1drv.ms/x/s!Ao012Fem8UCvjzZfZ7NdnjhFdfCU" target="_blank"><span style="font-size: xx-small;">worksheet with supply mix scenarios</span></a></div>
Scott Lufthttp://www.blogger.com/profile/09219859339423144673noreply@blogger.com0