Much ado about Ontario’s new export charge on electricity

Ontario’s Ford government directed the electricity system operation (IESO) to begin levying a $10/MWh ‘surcharge’ on electricity exports to the United States. The official news release states that, “At this level, the surcharge will generate revenue of $300,000 to $400,000 per day, which will be used to support Ontario workers, families and businesses.” All other factors holding unhanged, that would be true, but the other factors involved in Ontario’s electricity pricing make it extremely unlikely that the move will generate any revenue.

Ontario’s electricity exports have relatively recently become dominated by supply from natural gas generators, unlike the exports over the previous decade which were driven by an excess of committed, trivial-emission, supply from nuclear, hydro, wind and solar. One way the switch is visible is in the increased average cost of exports. The simplest measure of costs is the Hourly Ontario Energy Price (HOEP). The average HOEP for exports to the US over the past 3 years isn’t quite $40/MWh, but it’s close enough that the government can excused for using a $10/MWh surcharge to carry out a threat of a 25% increase.

simple rubbish told around the world: an anti-nuclear data story

Australian energy policy personality Simon Holmes à Court posted to X, “the simple fact is *every* new nuclear power project in ontario’s history went way over budget.” I think ‘fact’ needs to be examined. The facts in his post are a distortion of what was, for the most part, delivered much more truthfully 37 years ago.

In Ontario this month the Canadian Nuclear Safety Commission (CNSC) is holding public hearings on an application by Ontario Power Generation (OPG, the public generator), “for a licence to construct one BWRX-300 reactor at the Darlington New Nuclear Project Site (DNNP).” Regulator hearings are an income opportunity for groups permitted to act as intervenors. The anti-nuclear Ontario Clean Air Alliance (OCAA) is one such intervenor, and it is from their presentation at the hearing relayed to Australia as “simple fact.”

Many online quickly observed an issue with this table in its disregard of real values in adjusting currency values for time. I will explore that after checking the data sources noted in footnotes.

on building nuclear to create hydrogen

The head of the IESO, the operator of Ontario’s electricity system, recently delivered a speech at an event organized by both the Ontario Energy Association and the Association of power Producers of Ontario (APPrO). I read the notes as it’s always interesting when the contractor speaks to the potentially contracted. Being a nuclear advocate this jumped out at me:

“We continue to work with Bruce Power and Ontario Power Generation to assess the feasibility for 17,800 MW of new nuclear in the province – consistent with our Pathways to Decarbonization report”

As a nuclear advocate, and a consumer advocate, and as a commentator whose supply mix suggestions following a procurement orgy from 2009-2011 closely match where we ended up today, I felt obliged to follow up. It’s not feasible, but it is fashionably ridiculous.

The Pathways to Decarbonization is a report delivered by the IESO to the Ministry of Energy, at the request of the Minister, intended to, “evaluate a moratorium on new natural gas generation in Ontario and to develop a pathway to zero emissions in the electricity sector.” I didn’t pay much attention because I think those are facile topics, but seeing it cited as a reason for 2-3 times more nuclear, it was now worth ctrl f’ing the document.

There’s some lovely bar charts, with related data tables, displaying capacity that exists and is planned to still be operating in 2050, along with new capacity needed and the totals for both. The figure for capacity includes the 17,800 MW “New Capacity Online by 2050.” What slowed my enthusiasm was the energy number expected from this 17,800 MW: 63 TWh.

That’s very low. Upon checking, the only years of nuclear output below that level, since 1985, came when we’d deliberately idled the 5,000 MW of capacity a Pickering A and Bruce A (1998-2003), which would have put active capacity around 8,200 MW , so getting that same level of output out of 17,800 MW seemed a mistake. Unfortunately, it’s a little worse than that.

This presentation of the data lacks context for those not aware of today’s actual supply, but compared to now this is roughly doubling solar, imports and nuclear (not adjusted for the decreased real capacity due to refurbishment), and nearly tripling wind. Gas is disposed of and replaced, in its capacity role, largely with hydrogen.

Where, oh where, will we get the hydrogen? 

Will the new version of Ontario Energy Minister prove to be Smitherman 2.0?

"Minister Lecce needs to step back and gain knowledge on the existing costs to us Ontarians of our electricity needs instead of charging ahead..." -Parker Gallant

Parker and I have been communicating on Ontario’s electricity sector for over 13 years. We both started due to the wreckage of a brash new minister casting aside the policy of a professional planners to boldly undertake a new direction intended to make Ontario a leader in wind and solar energy. Back in 2009 an Integrated Power System Plan (IPSP) was cast aside and a directive from a freshman Energy Minister, and trusted Deputy Premier, signed an enormous 2,500 MW deal with a Korean consortium that was supposed to kick off the rush to 10,700 MW of non-hydro renewables. There is not, anything certain I wish to communicate today, but I have collected and formatted data throughout, so I thought I’d collect a number of the graphics and data sources I’ve been using on social media to communicate the concerns I have about returning to a GEA-era procurement debacle.

“With energy demand growing rapidly, our government is stepping up by advancing our largest energy procurement in our history.” -Stephen Lecce, Minister of Energy and Electrification  [emphasis added]

I don’t generally focus on semantics, but “energy” is used very poorly in Lecce’s communication. Let’s look for “growing rapidly” in annual electricity supply in Ontario over the past 88 years.

Ford Channels McGuinty in directives to new Energy Minister

Ontario recently swapped Energy and Education Ministers. Early comments from the new Minister of Energy (and Electrification), Stephen Lecce, indicate a type of student we see far too often in the fields of environment and energy; one willing to take direction without putting much thought, or study, into them. Of particular concern are comments on exporting power. In a recent interview[1] Lecce describes ‘three key priorities” in his “marching orders” from the Premier. Presumably the current Premier, Doug Ford, but maybe not.

First, we are absolutely committed to ensuring an affordable electricity system for families, seniors and small businesses.
Second is the expansion of clean-energy generation for the people of Ontario. We already have one of the cleanest grids on the continent. The vision is to continue to generate more as our population increases, our industry expands and our manufacturing electrifies.
Third is to help build out Ontario as a clean-energy superpower, able to export our energy – as we already do. We’re already a net exporter to New York and other places. We want to strengthen our clean-energy advantage and export technology and electricity around the world, particularly in the United States. [emphasis added]

I have long-standing concerns about exports.My first blog post to garner significant attention, and spur mainstream stories bringing comments from then Premier Dalton McGuinty, reported on the high exports and negative pricing of January 1st, 2011. “A full decade later I was still writing estimates on losses incurred on exporting electricity, which grew rapidly along with the growth in supply spurred by McGuinty’s Green Energy Act. This post is going to build off of another discussion on losses on exports in the context of “affordable electricity for families”, using a presentation I’ve added to reporting built on basic data shared from the system operator (IESO)..

screen capture from Power BI reporting

Anti-Nuclear by necessity

On January 30th the government of Ontario, currently headed by Doug Ford, announced it was advancing the refurbishment of the four “B” reactors at the Pickering Nuclear Generation Station (PNGS), Initial media response has been largely positive, with Ontario’s public broadcaster (TVO) noting, “ it’s hard to see a future government changing course”. Apparently TVO, and other news outlets, felt compelled to offer their readers articles opposed to the refurbishment for balance. At TVO the negative response came shortly after the news broke in an article by Taylor C. Noakes. Rebutting that work is one goal of this one, but it may be more important to explore the emerging tools for producing an article to counter a narrative in another.

There is a commendable aspect of TVO attaining the work by Noakes, who I believe to be ‘stringer’ - which is an independent producer of content: Noakes has produced multiple articles for, at least, TVO and Desmog, on a wide variety of topics. If you wanted an article with a perspective, Noakes is exactly the type of person you’d go to - particularly, if you’re familiar with Desmog and want an anti-nuclear position. The most obvious alternative approach, and the one taken by The Globe and Mail, is to publish an op-ed from a career antinuclear personality. Mark Winfield’s The folly of Ontario’s nuclear power play (subscription) is exactly what you’d expect from a person with a career based on opposing nuclear - I’ve previously highlighted his mid-2000’s publication at Pembina that planned for a nuclear-free Ontario by 2020 that would have had electricity-sector emissions 400% higher, and will simply emphasize that his status as an expert relies not on the the wisdom in his past work, but simply in his opposition to nuclear power.

Noakes’ stringer work may be enhanced with the emergence of Artificial Intelligence (AI) tools. Given a topic a writer can simply use an AI tool such as that embedded with the Bing browser, or OpenAI’s tools (I tested only the free version), and get the skeleton of an article. Bing’s Co-pilot, responding to my prompting, “argument to oppose refurbishment of Pickering nuclear generating station”, produced bullet points supporting 5 themes: Environmental Concerns, Cost and Overruns, Safety and Aging Infrastructure, Changing Energy Landscape, and Public Consultation and Transparency. ChatGPT gave paragraphs supporting 7 possibilities for opposing: Cost, Safety Concerns, Environmental Impact, Technological Obsolescence, Public health, Opportunity cost and Community opposition. These themes do emerge with every announcement of continued nuclear operations.

To acquire an article opposing nuclear power in 2024 a polymath isn’t required, but mostly somebody who can wrap readily attainable content in a story. Noakes’ TVO story is titled:

The Ford government’s decision on nuclear will set Ontario back 30 years
OPINION: Our politicians keep subsidizing old technologies and industries — and putting opportunity and ideology ahead of basic economics

That sets the stage: a villain is presented (Ford, who heads what is actually Ontario’s government - but Ontario can’t be the villain), driven by ideology instead of rationality (a.k.a. ‘Basic economics’). You can almost hear a pantomime’s audience booing the modern “not following the science” villain..

Opportunities and Obstacles for nuclear in Alberta

The prospects for new nuclear reactors has been a hot topic this summer, particularly following Ontario’s announcements exploring new builds of large reactors and additional consideration of smaller (modular) reactors (SMRs). Ontario had been exploring SMR’s with other provinces, initially with New Brunswick and Saskatchewan, and more recently Alberta joined the group. Alberta’s electricity mix last week became a second hot topic. The current Canadian government is also a topic as it threatens to force, "a net-zero electricity system by 2035."

This seems an appropriate time for me to revisit Alberta’s electricity system in search of a route to nuclear power in that province.

Alberta’s electricity system underwent radical changes since I wrote on a former government’s activities in 2017’s Alberta.Bound. In this post I’ll concentrate on data from the Alberta Electricity System Operator (AESO) in this post, mostly from their Annual Market Statistics data visualization which currently contains data from 2015 thru to June 2023. The AESO's data indicates rapidly declining potential for nuclear in the AESO’s market in recent years.

Alberta’s coal generators saw the wish for them to disappear grow for over a decade. In 2012 I wrote on the rapid opposition to federal regulations that would see emissions from new coal-power plants limited to something impossible with any operational technology, and a maximum lifespan of 50-years mandated, then, through emissions regulation, the goalpost essentially moved to 40 years within Alberta, and then a 2030 death data was mandated, and other generation sources incented. Alberta's Climate Leadership Plan (CLP) of 2017 noted the, "drive toward the development of 30 per cent of electricity generation capacity from renewable sources connected to the grid by 2030." [emphasis added] While the CLP itself spoke of efforts to remove, "policy barriers of the conversion of coal units to natural gas," many of the people that set policy had already created an understanding that ,"Two-thirds of the coal-generating capacity (4200 MW) will be replaced by renewable energy, and one-third (2100 MW) by natural gas."

Summarizing the changes in generation capacity since 2016 by grouping fossil fueled generators together (gas, coal, dual fuel), “green” together (wind, solar and storage), displaying co-generation alone and lumping everything else in under “other” (including hydro), the decline in generating capacity of firm generators fueled by coal and/or gas is apparent, as is the, related, meteoric rise of “green” ones.

on the risk of power shortages in Ontario this summer

A regulatory body with a mission “to assure the effective and efficient reduction of risks to the reliability and security of the grid,” delivered its “Summer Reliability Assessment” for North American jurisdictions last month. The brief news release for the document:

warns that two-thirds of North America is at risk of energy shortfalls this summer during periods of extreme demand. While there are no high-risk areas in this year’s assessment, the number of areas identified as being at elevated risk has increased. The assessment finds that, while resources are adequate for normal summer peak demand, if summer temperatures spike, seven areas — the U.S. West, SPP and MISO, ERCOT, SERC Central, New England and Ontario — may face supply shortages during higher demand levels.

Toronto Centre MPP, the NDP’s Peter Tabuns, used that document to launch an attack on the government’s management of the electricity system in the Ontario legislature on June 1st:

“…the body that oversees electricity grids in North America reported that Ontario risks power outages this summer. In fact, Ontario is the only province in Canada that is rated with elevated risk that it can’t meet peak demand. After five years, this government’s policies of cutting funding for efficiency and conservation, of demolishing wind farms and cancelling other renewable projects have led to this.”

This has gotten the rabble roused - if the media is any indication. The Toronto Star and CTV news both reported on topic. CTV’s reporting included comments from an expert, who advised, “There really is not any cause to be alarmed”, but also commentary from the opposite sort - politicians Tabuns and the leader of Ontario’s Green party.

Since this topic doesn’t seem to be going away I’ll explain some of the structure and content of reporting on reliability, and address the substance, or lack thereof, in the criticism of the government as reducing reliability through canceling plans for additional ‘green’ energy.