Surplus Wind Generation

By Trevor Falk, Owen Sound Sun Times
I have followed the exchanges about wind energy on these pages for some time, but until now have avoided the temptation to jump into the fray. On Sunday August 28, however, I became aware of an important aspect of wind generation that to my knowledge has not been widely reported, and about which the Ministry of Energy and wind farm proponents seem to have been virtually silent.

I am using data from the Independent Electricity System Operator (IESO) website. I have experience in aspects of power system operations from a number of years ago that I am relying on to understand the IESO data and write this letter.

Surplus Baseload Generation (“SBG” on the IESO website) is electricity produced in excess of Ontario’s requirements that must be exported, sometimes at a negative price. For example, on August 28, Ontario was paying almost 13 cents per kilowatt hour (kWh) to neighbouring utilities in Michigan and New York to take this surplus energy off our hands. Just to be clear: this was in addition to the costs associated with the production of the SBG in the first place.

Ontarians should be asking a lot questions about this. The first and most basic question is: Why would we produce more electricity than we need unless it can be sold at a profit?

The answer follows from the requirement for electricity consumption and production to always be in exact balance (taking into account the net of any imports and exports). On Sunday August 28, the demand for electricity was relatively low in Ontario, and all of our hydraulic, nuclear and fossil-fired generators were backed off to the greatest extent possible. It was very windy, however, so the windmills were running full tilt even though their electricity production was not needed and had to be sold.

The export price of SBG may be positive, but it is always less than the price we pay for wind energy in Ontario. If we pay 17 cents per kWh for wind energy and then recover 7 cents from the surplus exported, the net loss is “only” 10 cents per kWh. But sometimes the price of SBG is negative, like it was on August 28 when we were paying 17 cents for electricity produced by windmills plus another 13 cents to get rid of it. On that particular windy day, Ontarians were essentially throwing away 30 cents per kWh generated by windmills.

According to the IESO website, SBG is a frequent and growing problem. In the 16 days beginning August 13 and ending August 28, a total of 255,761,000 kWh of SBG was expected. Since an average household uses about 900 kWh per month (10,800 kWh per year), this means that the surplus wind generation that was disposed of over the last half of August would have powered about 24,000 average households for an entire year. Again, this is electricity that was paid for and then effectively thrown away.

To integrate wind generation into an electricity system, sources of generation are needed that can be backed off when the wind blows but that can and will be available to keep the lights on when there is no wind. For example, Germany has more than 75,000 MW of coal and gas-fired generation (about twice as much as all sources of generation in Ontario). When the wind blows in Germany, coal units are backed down. This is one of the main reasons why Germany has been at the forefront of wind generation initiatives.

We have far less flexibility in Ontario, as evidenced by the fact that SBG is being created. Promoting and installing more wind generation here in the absence of this flexibility will result in more and more SBG being produced. To my way of thinking, this simply does not make sense.

In addition to costs associated with SBG, there is an environmental aspect. When the wind blows in Germany, the production from coal-fired units is reduced and there are corresponding reductions in carbon dioxide emissions. This does not happen when SBG is being created in Ontario.

14 thoughts on “Surplus Wind Generation

  1. I doubt the Germans would back down a coal plant if they have gas plants as well. What are the increments for the IESO contracts ? If it’s 15 min or less, they shouldn’t have too much difficulty to back off hydro or natgas if the wind is blowing hard and demand is low.

    • Derek,

      The first point is that the Germans have lots of dispatchable sources of generation (for them it is coal and gas) to absorb wind energy when it is produced but be available when it isn’t windy. But Ontario doesn’t.

      When there is Surplus Baseload Generation on the Ontario system, all of the hydro stations and gas-fired units are backed off as far as possible already, by definition. If you check the IESO website, you’ll see that some gas units always remain on-line even when there is SBG, however. The reasons for this include: so they can be ramped up very quickly in the event of contingencies such as generator or transmission outages; so they are available on relatively short notice as the wind is dying down; and for reasons having to do with the distribution of electricity on the high voltage transmission system.

  2. Derek if the wind is blowing and demand is low the easiest thing to do is shut off the d^mm wind turbines, but we’re stuck, thanks to liberal cronyism. Greed energy

    • Brenda, I agree about the solution — simply shut them down when the wind energy isn’t required on the system, but it’s probably not permitted by the contracts. Shutting windmills down whenever there is surplus on the system would drive down the 25% – 30% figure substantially, probably in the 15% – 20% range in Ontario these days. Somebody could do the calculation based on IESO data — it would be far more honest.

      Of course shutting them down would cause the windfarm operators to howl (even if it were allowed by the contracts). It would make for interesting press if the press were interested (but they don’t seem to be). I for one would be interested in hearing arguments by a windfarm operator why he should get 14+ cents for electricity that has no value (or even a negative value) on the system and that doesn’t replace even one ounce of coal!

      • Trevor:

        If you have any facility with numbers maybe you put together an article. Click on my name it will take you to an analysis blog (Ontario Wind Performance) — contact Richard Wakefield if you think you have something worth publishing.

        Your comments hit the nail on the head. A lot of this analysis has been done and the conclusions proven — but it seems that the points have to be re-proven daily so that non-believers will read the articles and think.

        A fresh perspective is always welcome.


  3. Hydro is not a great back up for wind as run of the river or reservoir capacity usually means water normally used to generate power is spilt without producing power. Costs of keeping wind on line is not just the 17 cents per kw but needs to include the additional cost associated with maintaining the transmission linkage. Wind is a lot more costly than simple math.

    • I agree with your point about wind being more costly than McGuinty and the windfarm operators claim.

      As for hydraulic energy combined with wind, it depends. Manitoba Hydro is quite well positioned to incorporate wind on their system, because they have HUGE reservoirs including Lake Winnipeg and Cedar Lake (far bigger than anything here in Ontario). Hydraulic is usually better than nuclear in terms of flexibility, but not nearly as good a fossil-fired units.

  4. Good article
    But to complain about too much power works in Wind favour.
    Move to electric cars and the shutting of coal plants
    When too much power is pointed out you inadvertantly tell the people wind is working when in fact it does not.
    Liberals want to shut down coal , so the public doesn’t see excess power as a negative.
    While the article is right and well done , it backs up the Liberal agenda unintentionally.

    • With respect, I don’t agree that the issue of Surplus Baseload Generation “backs up the Liberal agenda unintentionally.” Quite the contrary — I think it has the potential to add substantially to the arguments that wind power in Ontario is far more costly and far less beneficial regarding CO2 emissions than McGuinty and the wind advocates claim.

      Sure, the Province has said they intend to shut down coal, but they cannot replace coal with just wind. That’s why they are building new gas-fired generators. Wind (and solar) simply do not work without a companion source of generation that can be dispatched. They are being dishonest by leaving this out of the cost and environmental equations.

      Trevor Falk

  5. I sometimes see the MW value for coal as low as 4 megawatts – that doesn’t make sense to me. I thought coal plants are too difficult to ramp up and down so if they’re running, why not use all the power?
    Where does the power go, if no-one is buying?

    • Derek:

      As D.R. said, coal units are actually quite flexible, AS LONG AS THEY ARE HOT AND ALREADY SYNCHRONIZED TO THE SYSTEM. So what you are seeing is a coal-fired unit that is already hooked to the system and “ready to go” in the event of a contingency (for example, to make up for a sudden unplanned outage of a unit that is already running), or that will be required to meet the load tomorrow, or in case the wind stops blowing (hahaha).

      It takes more than a full day for a stone-cold coal unit to be brought up to full load, but when they are hot, the can be ramped up or down quite quickly. This is called “load following.” Gas-fired units are better at this, but the best resource for this purpose is hydraulic units that can be changed almost instantaneously. Nuclear units are manoeuverable but only to a limited extent.

      There always MUST be a balance on the system between the load and the generation, including exports and imports. When you plug in your tea kettle in the morning, most likely a hydraulic unit will increase its output by exactly that amount. As lots of people plug their kettles in, the 4 MW coal unit will be ramped up as quickly as possible (to several hundred MW) and hydraulic units will then be backed off by the corresponding net amount so that the balance between load and generation is always maintained. This is done by computer, of course. [The variable that is controlled is actually the frequency (maintained as close to 60.0000 cycles per second as possible), not the actual number of MW, but that is another story.]

      Ontario is part of an interconnected grid (most of North America except Quebec and Newfoundland). Ontario’s interconnections with New York and Michigan (mainly) and the others provide opportunities for economic exchanges of energy, and provide support one way or the other in emergencies. Usually, when Ontario has surplus energy, there is a fossil-fired unit somewhere in the nearby states which can be backed off, so the surplus can be sold to displace that unit. But if that unit is expected to be needed by the US utility on the next day, they will obviously be reluctant to take it right off line. However, they can be convinced to do so with enough money (that will pay for things like any costs associated with possible replacement purchases for that unit the next day, plus their profit for the trouble, of course).

      Paying neighbouring utilities to take surplus generation is a relatively new phenomenon. However, it is going to become increasingly common as a direct result of Ontario’s willy-nilly approach to new wind farms that does not discriminate between on-peak and off-peak production. Sometimes wind generation displaces coal or gas, but sometimes it is entirely worthless, and in fact we sometimes even have to pay somebody else to take it which isn’t actually as easy as D. R. implies in his response. The fact that Ontario had to pay as much as an extra 13 cents per kWh to get rid of the surplus at the end of last month indicates to me that it was a HUGE problem.

  6. Derek, we already have the plant, at times we need it – which means we already have the people to run the plant.
    And we don’t recover those costs, but if they can get 4 cents/kWh they’ll make a little something and burn through some inventory (in 2009 we paid, if I recall correctly, close to $30 million to cancel coal orders – itj’s in the 2009 OPG annual report). It’s the incremental cost of generation that is below 4 cents.

    Trevor, I’m sure you don’t need these links but … shows how we pay generators to curtail production (this past weekend the NUGs where curtailed)
    My latest starts estimating the future costs

    • Thanks for these links, Scott. I made a comment there.

      I’ve been watching from the sidelines intermittently and didn’t realize until after I wrote the letter to the Owen Sound Sun Times a couple of weeks ago how much good information is available. As David Robinson said yesterday: “A lot of this analysis has been done and the conclusions proven — but it seems that the points have to be re-proven daily so that non-believers will read the articles and think.”

      I think the last half of his sentence is correct, but it’s not so much that the points have to be “re-proven” but rather that they need to be made more widely and more frequently. David Suzuki doesn’t just talk about something once — he has a column every week in the Sun Times to make his points again and again but in different ways from different angles so that the points eventually become “common knowledge” (in his case, even though they may be wrong).

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