Perspective on Ontario’s Electric System Operator 18-Month Outlook

by Scott Luft, Cold Air
On our American neighbour’s Day of Thanksgiving, the Ontario’s Independent Electric System Operator (IESO) released it’s latest 18-Month Outlook, to May 2013. The headline summary from the press release was that “Over the next 18 months Ontario will continue to have an adequate supply of electricity to meet consumers’ needs.”

That hasn’t been an issue for years, and the present’s premier problem was emphasized as the calendar changed over to the US Black Friday, the day American retailers allegedly move from the losses of the previous portion of the year to the profits of the holiday season. Ontario was paying $31.80/MWh to any market that would accept our exports, and, finding limited takers, Bruce Power was being forced to reduce output from it’s nuclear units. Between the 1100MW we found export markets for, and the 300MW we would pay Bruce to prevent the production of, the IESO managed to compensate for the inconveniently high wind output of 1413MW.The report notes that 2 nuclear units at Bruce Power will be ready to provide power to the grid within the first 2 quarters of 2012, while the grid will be ready for Bruce Power to supply more power, maybe by the end of the fourth quarter of 2012.

The report notes concerns in the ‘southwestern GTA.’ The southwestern GTA has shown to be totally unconcerned about that in driving away contracted supply – twice. The IESO might be able to alleviate their concerns about supply in the southwestern GTA simply by moving their office out of the southwestern GTA.

Nobody outside of that area could care less.

Screen Capture from IESO 18-Month Outlook, Page 5

The supply changes for the next 18 months, shown in Table 4.2, are simply idiotic. 1000MW of generation capacity that can be varied to meet demand will be removed, and 1500MW of production that is most economical producing all the time will come online (although it is questionable when due to transmission issues), as will 450MW of wind generation that puts out for money, but only when it’s in the mood to.
To be clear, the IESO doesn’t plan the generation mix. Politicians do.

Screen Capture from IESO 18-Month Outlook, Page 7

Table 4.4 shows the impact of wind on planning, as summer wind capacity factors (the percentage of capacity expected during the peak hours of the day), is around 13%, and in the winter its 33%. Under the long-term energy plan’s whimsical 7-8000MW of wind capacity, this equates to adding about 910MW of capacity for summer peaking, and 2310MW of winter capacity. We are, of course, a summer peaking jurisdiction.

A couple of quick queries of data from 2009 on indicates to me that 25% of the time wind is under a 10% capacity factor during the peak demand hour of a January day, and 42% of the time during the peak demand hour of a July day. I’m skeptical of the wisdom of planning on any wind capacity to be there when needed – unless you are planning on a cull during a cold spell. Regardless… the plan is to add far more capacity in winter.

There is some concern about the impact, on the grid, of dropping demand in some sections. For instance:

“The reduction in the load in the Northeast, and in particular at the Kidd Creek Metsite, has resulted in higher than acceptable voltages in the Timmins area. While the new SVC at Porcupine TS will help, additional reactive compensation is required to reduce the increasing dependence on the generating facilities in the Northeast to maintain voltages within acceptable ranges.”

More money being spent due to the Xstrata’s fleeing of Ontario’s rising costs, on electricity and compliance with ‘environmental’ regulations, for the more business-friendly confines of Quebec.

Screen Capture from IESO 18-Month Outlook, Page 16

Figure 7.2.1 shows the contribution of wind generation at peak.
Oh look …
It was almost always contributing more than the forecast planned.
The exceptions being the coldest period (peak winter demand came on January 24th) and hottest (peak on July 21st) periods of the year.

Not that it isn’t doing precisely what it was intended to do. The very last paragraph of the IESO outlook includes:

The other large variation seen from the previous year was the frequency by which a nuclear unit had to be either maneuvered or shut down. So far in 2011, nuclear units have been maneuvered 113 times for a total of 364 hours. Compared to 2010 which had nuclear units maneuvered 14 times for a total duration of 64 hours, this represents a significant increase. This rise in manual action is a result of a lower minimum demands as well as a growing portfolio of inflexible generation. The ability to dispatch renewable resources may help to mitigate the need for these actions moving forward,

The only thing wind can do is dislodge baseload supply: the 10-fold increase in hours of bypassing supply from nuclear is precisely the intent.

8 thoughts on “Perspective on Ontario’s Electric System Operator 18-Month Outlook

  1. The renewables scheme was always about producing energy scarcity, not energy capacity. Dalton McGuinty insists that we must continue to pour money into wind and solar so that Ontario can be a leader in green technology and isn’t left behind. Well, it isn’t working out so well for China:

    “Chinese Solar Industry Goes Belly Up
    One of the big arguments proponents of the ‘green jobs’ scam often bring out is that the argument that China, thanks to its support of green tech companies, will own the future while the United States is left behind.

    Think again. According to a report on Bloomberg, the Chinese solar power industry is on the ropes; ”

  2. What? Does not compute.
    [excerpt] ‘The report notes concerns in the ‘southwestern GTA.’ The southwestern GTA has shown to be totally unconcerned about that in driving away contracted supply – twice. The IESO might be able to alleviate their concerns about supply in the southwestern GTA simply by moving their office out of the southwestern GTA.’

    The evidence has shown – both privately owned gas plants ( Oakville/Mississauga – were not needed.

    Note: The evidence – there is a provincial transmission solution – much less costly
    and Ontario citizens own the ‘transmission route’……to Nanticoke – and save the jobs –
    (ex Hallimand Mayor – Marie Trainer’s argument).

    Problem: Hallimand signed on to ‘private wind’, and a ‘vibrancy fund’. What will support their wind now; support system of gas plants not moving forward? (Got questions?)

    The Deal with the Devil in Hallimand.
    by Bill Jackson, The Regional News This Week
    Some might call it sucking and blowing, but Mayor Ken Hewitt believes that county council is making the best of a situation that it’s been dealt. He said he’d rather not have 176 turbines erected in Haldimand, but because municipality has no veto power, it only makes sense to get the best deal possible. “I’m not on board with wind turbines per se”, Hewitt told reporters during a special session with the local media. “What I am is I’m a pragmatic person”

    Questions? Call the mayor!

    • If intermediate supply plants (Oakville), and peaking plants (Etobicoke) aren’t needed, what would be the harm of having them?
      The IESO noted coal has run at about 13% this year – they also implied, and it is true, that it ran near 100% capcacity at the hottest and the coldest periods.

      By the way, the plants had no ‘free market’ value to begin with. The last 5 CCGT plants are built by contracting guarantees of net revenue requirements (NRR’s). The cancellation fees will pay the NRR’s regardless. You just won’t have the capability of having supply at peak.

  3. Hey Scott Luft,
    You Say,
    [excerpt] ‘If intermediate supply plants (Oakville), and peaking plants (Etobicoke) aren’t needed, what would be the harm of having them?’

    Firstly, both gas plants Oakville/Etobicoke are – privately owned ‘peaker’ gas plants.
    ‘Intermediate’ and ‘peaker’ virtually mean the same thing.
    You must have some insider news – that differentiates (by term) – gas plants.

    You said,
    “……….what would be the harm of having them?”
    By saying that – obviously, your mindset is traveling in the wrong direction.

    Yup – a mind cramp for sure.

    p.s. Hey – you don’t have to agree with me – but offer up something (arguments)
    that makes sense.

  4. Free Thinker, there is absolutely no indication sense is of any use in argument these days.
    Intermediate power is needed every day – we know demand is lower at 3 am than 5 pm , we know the equipment that meets it, and we used to know engineers knew how to keep plants hot enough to maintain their value and be ready to meed the intermediate demand
    Peaker plants – they used to be needed primarily for hot and cold times. A big issue with wind is they turn intermediate CCGT into, essentially, less efficient OCGT operations.
    Privately owned is nice – it’s basically nonsensical though. The five recent CCGT builds are guaranteed net revenue requirements – don’t ignore me on it though, ignore the report that sets your prices: pages 16-17 of
    So for the two plants cancelled, to buy the votes of people it’s easy to buy the votes of, the net revenue requirements are what would give the asset value – no new generation could enter Ontario’s market, so that’s true of everybody. In these cases the guaranteed revenues were probably around $36 and $85 million a year, and I suspect we will pay most of that anyway, probably about 10 times over to reimburse for a lost decade.

    Another little FYI – most estimates have it cheaper to build a new gas plant than to “refurbish” a coal plant to run on gas. Nanticoke is irrelevant regardless.

  5. Scott’s analysis is spot on. If you check all the OPA’s transmission load flow analysis on the GTA, particularly the analysis that predated the more recent heavy politicization of electricity planning, you will see the analysis saying loud and clear than southwest GTA has a big reliability problem and that local generation is a key part of the overall solution. There is are 18 pages of explanation at IPSP 1 Ex. E-5-3. One key change since IPSP 1 in 2007, is the loss of Greenfield South, the gas plant in south Mississauga.

    The IESO has also been making the same basic points as the OPA regarding south west GTA at every opportunity for several years.

    If we had a complete update of E-5-3, I believe that we would understand that the reliability problem in the southwest GTA may be more serious than previously understood. I understand that the directional capacity of the new John TS x Esplanade TS circuit is not as capable as expected, with the deficiency bearing on the south west side of the city.

    • Free Thinker, I challenge you to write something that even approximates normal, cogent prose.

      I agree with Tom, Scott’s bang-on. It seems some people just want to disagree with everything. Black really is black and white really is white.

      The local supply is clearly needed. If the southwest GTA runs into supply issues, the two Libbie ridings should have their electricity taps turned off. Let them call for Kevin Flynn’s and Charles Souza’s heads on sticks.

  6. Isn’t the whole purpose of using Demand-side Management to reduce the supply of electric power in Ontario? It now appears that this plan will work just fine. Install renewable energy projects that won’t work and the result is very little electric power will be produced that can be used. No need to be concerned that people will have an adequate supply of electricity. Problem solved. Planet earth is saved. Just need to crash the whole power system to accomplish this.

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