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.