Huff – Po - The Liberals’ Ho – whistle whistle whistle...

Google led me to a Huffpost Canada stupidity the other day, “Wind Power:  A Quiet Solution to Climate Change”

Following the title comes; “We asked a tough question today: Is the fear and anxiety being spread about the sound of wind power justified?”

A horse’s ass has reason to hope the cart goes before the horse, but it really doesn’t.  The correct first question should address the title;  “Is wind power a solution to climate change? 

It isn’t. 

I let that one go but today America’s worst new export stoops to a new low with Vision vs. Populism …, which includes some gems from an imbecile with a title –seriously – ‘President, AIR MILES for Social Change’:

“Instead of recognizing our serious long term competitive vulnerability, as one of the world's most carbon-intensive, automobile-dependent economies, they're simply encouraging Ontarians to keep up the old habits and risk turning this province into tomorrow's rust belt.

Is this any different than offering more affordable cocaine to a population of unemployed and hungry addicts in order to "ease their pain"?”

Might be no different at all, from the perspective of a green shirted eco fascists that treats burning jet fuel like a peyote-fueled enlightenment ceremony.

It is curious that the Huffington Post shares the same commenting guidelines as the Toronto Star – specifically they don’t post comments until they have been approved.  In fairness to the The Star, over the past year they have moved from rejecting comments based on philosophy to rejecting them based on vitriol and unsubstantiated claims.

Ms. Huffington brought along some propaganda instincts from her birth continent, and has a ministry of truth to get rid of substantial comments to refute nonsensical crap like the Wind Power spin from the Ontario Liberal government linked Environmental Defense, and the Air Miles for Nirvana crowd.

That isn’t to say comments shouldn’t be monitored and removed on sites.  The great blog of Australian professor Barry Brooks, Brave New Climate, frequently admonishes to “play the ball and not the player” but also frequently removes unsubstantiated claims, and therein lies the ugly in the Huffington Post.  There is no ball.  There is no game outside of sell, sell, sell the Soros way.  There is only propaganda.

Having said that, wind turbines don’t address climate change because they don’t reduce emissions, and I state that in part due to:

• my review of US EIA data indicating states with significant wind capacity trail the country, as a whole, in reducing emissions (here)
• the Inhaber work recently published (and refuted, and supported, on this thread at Brave New climate) indicating that, in general, there is a law of declining returns that rapidly kicks in as wind capacity is added
• This paper, out of the Netherlands, has a striking graphics on Denmark’s experience illustrating how the CO2/kWh declined concurrent with declines in the CO2/GJ (fuel unit) until 2003, and since then the emissions per fuel unit continued their decline while the emission/kWh did not.

The statistical evidence that wind output is not reducing emissions is growing almost daily.   Worse news is the devaluing of sources that do as they are demoted to balancing wind loads, including most recently concerns from the US Pacific northwest’s BPA of “Possible increased wear and tear on balancing units, especially hydro.” 

The latest article at hugging ho is worse yet – but there are far better articles than I can offer which already note far more effective ways to reduce emissions from automobiles than regressive taxation at the pump.  Aldyen Donnelly’s included this:

“The older textbooks ... suggest that for a tax/price increase to effectively and efficiently impact consumer demand, the tax/price impact has to be revealed to/experienced by the consumer at a point of a “primary” consumption decision, not a “secondary” or derived consumption decision.  Most fuel/energy purchases by non-industrial consumers are secondary or derived from their decisions to locate their home and the vehicles they buy.  So even the traditional general economic theorists told us, so many years ago, that if we want to change energy demand in as economically efficient a fashion as possible, we likely would need to tax (to the extent this is the policy mechanism of choice) home and car purchases (primary capital expenditure decisions) and not energy/fuel purchases (secondary, variable, operating costs).”

That’s good stuff – Huffington wouldn’t know it though.

It’s not junk – like cocaine for hungry addicts

May 2011 Ontario Electricity Rate Soars

The Independent Electricity System Operator (IESO) has released the Monthly Market Report for May 2011, and it confirms the message of rapid price inflation for Ontario's business sector.

The Commodity Charge for the businesses/industries subject to the wholesale rate soared to $75.94/MWh, driven primarily by a Global Adjustment charge of $50.05/MWh. That is a 17% increase over May 2010's $64.73.

The total rate of $98.90, including delivery and all other charges, was only 14% higher than one year earlier. That's as close as businesses can expect to get to good news as a glutenous Ontario Power Authority continues to contract additional, and extraordinarily expensive, supply - despite the oversupply we so clearly have.

May 2011 Ontario consumption dropped 5% from the same period in 2010.

All I Want for Global Wind Day Is A Moratorium

June 15^th is apparently Global Wind Day.

I put some thought, and study, into what to wish for, and not just for myself. From the first entry of this blog I've been examining Ontario electricity system issues, particularly supply and demand metrics.

The IESO site now shows the May global adjustment finalized at an enormous $50.05/MWh, while the average HOEP rate averaged $25.89/MWh. The combined rate, $75.94/MWh, is 17% higher than the rate for May 2010. Nothing I did not know on June 1^st, when I wrote about it, and estimated how much the various generation sources contributed to this escalation in rates that accompanies demand drops.

That is disconcerting in itself. What is more disconcerting is that the Ontario Power Authority has been developing an Intergrated Power System Plan (IPSP), and the stakeholder sessions have indicated absolutely zero interest in dealing with any of the structural issue that continue to hammer Ontario's industrial electricity consumers, as well as the consumers in Ontario. The Mr. Andersen that heads that organization not only has no grasp of the matrix, for supply, when he phoned into the stakeholder sessions it was only to lament the rain in Vancouver. The lesser member of the OPA's million dollar pair,¹ Amir Shalaby, was left to handle the script for the sessions. The man sure knows a lot of numbers. He played the role of our very own Rainman.

I wish them everything the Scarecrow got.

But that's a little unfair, as they have to work with a Supply Mix Directive, and Long Term Electricity Plan (LTEP), from the ministry of energy. The ministry is the one that put out a press release on how great May went. The global adjustment added $498.2 million dollars to Ontario's May electricity bills - a monthly record. But that didn't stop the Ontario government from continuing their ostrich routine as they ignored the devastating price impacts of steadily increasing supply without regard for demand ,by issuing yet another press release ridiculously claiming we benefit from producing far too much power.

It didn't stop the OPA from recently releasing transmission capacity and it is unlikely to stop them from gutting Ontario by contracting more supply nobody needs and few want - nor will it stop them from obfuscating about the negative impacts of wind on nearby residents.

In May 2011, wind production did not exceed export volumes for a single hour.

In May 2011, coal was used to generate about 50,000MWh, which, given 4484MW of coal capacity, is operating at about a 1.6% capacity factor - if we just went by the 4 units with advanced pollution controls, it goes up to 3.7%. As of the end of May the year-to-date figures would be around 5.8% and 13.7%.

As costs continue to skyrocket because an enormous bureaucracy lacks the decency to note we cannot replace a source we seldom use with one we have no idea how to use, I've determined the appropriate Global Wind Day gift for everybody involved in this scheme.

Coal.

1  Page 30 of the OPA's 2010 Annual Report

Parkinson's Law and the Innumerate Mr. Miller

Elements of Parkinson's Law:

• Work Expands so as to fill the time available for its completion
• An official wants to multiply subordinates, not rivals
• Officials make work for each other.

Gord Miller was in the press yesterday, a lot, following the release of Managing a Complex Energy System: Annual Energy conservation Progress Report -2010 (Volume One), with most of the attention going to his description of the Ontario Clean Energy Benefit (OCEB) as “a perverse incentive that undermines conservation efforts.” Mr. Miller's report continued “One estimate of its effect is to increase overall electricity consumption by more than one per cent. This would negate about one-third of the savings that conservation programs are expected to provide between 2011 and 2014.” I'll return to Mr. Miller's interesting use of statistics shortly, but first ...

The report contains a number of simple truths, such as, “the LTEP is an energy plan in name but is an electricity plan in reality. Ontario needs an energy plan and, as the ECO recommended in 2009, the province needs a multi-fuel conservation strategy that addresses all energy sources.” In 2009 Ontario GHG emissions from electricity generation were reported as 15 Mt CO2eq, while total emissions were at 165 Mt CO2eq¹ The first 5 months of 2011 likely have emissions, from electricity, down about 25% from 2009 levels, so when we are talking about emissions, electricity is now around 7% of the total². This is great in comparison to the vast majority of jurisdictions on the planet, so it is refreshing to see the obvious stated. An electricity policy is a poor substitute for an energy policy.

The price reduction Mr. Miller implies will harm conservation targets is based on a 2008 report by the Electric Power Research Institute (EPRI) which concluded the elasticity of demand from residential usage at -0.3 and -0.2 for smaller commercial/farms.³  That study (of studies) didn't agree with my research on demand elasticity, and in fact the same EPRI has another estimate, late in 2010 which concluded, “The findings reflect reasonably consistent patterns of price response. At the national level, electricity price elasticity of -0.13 in the short run and -0.42 in the long run have been estimated.” So, to be clear, Mr. Miller's stating, whether or not it is a restatement, isn't based on best estimates or commonly agreed upon figures. Similarly, it's important to note the EPRI's definition of 'short run' is 1-5 years, and there have been indications the relationship is the opposite, within a regulatory cycle; demand falls so the utility applies for, and is granted, a price hike. It isn't certain the drop in demand does not precede the price hike.

Regardless, if Mr. Miller believed the statistic he cited, the massive machinery of Conservation and Demand Response that has been built at the OPA and is now spreading, like a cancer, to the LDC's have, mathematically, accomplished less than nothing.

The price hikes, with his quoted elasticities of demand, would have reduced demand more than demand has been reduced!

Aldyen Donnelly recently wrote; “The older textbooks (from back when I was young and Jesus was a baby too!), suggest that for a tax/price increase to effectively and efficiently impact consumer demand, the tax/price impact has to be revealed to/experienced by the consumer at a point of a “primary” consumption decision, not a “secondary” or derived consumption decision.” That struck a chord with me for a couple of reasons, one of which was Vaclav Smil's recent lecture at the Equinox Summit where he noted two very simple actions we could take to greatly reduce emissions within 10 years (furnace standards, and car purchase programs to encourage more fuel efficient car purchase choices). If you view the first 7 minutes of that lecture you'll catch a comment describing Toronto's airport transportation options as 'medievil.”  The recent consultation sessions for the IPSP were recently held at a hotel just outside of that airport. The traffic congestion was noted - the misallocation of resources, in emphasizing electricity usage reduction beyond the simple, and affordable, “point of a primary consumption decision”, was not.

The OCEB doesn't apply to Ontario's largest electricity customers, who pay the Wholesale rate which contains the HOEP (market price) plus the global adjustment (the difference between the cost of the contracted rate, and the market price). The Wholesale rate for electricity will be announced shortly for May 2011, and it will be in the area of $75.83/MWh, up from May 2010's $64.73/MWh. 

Reduced demand (over 9% down), drove up the price (17%).⁴

A 17% year-over-year increases for our businesses - as demand is declining.

Is that great?

1 Canada—National Inventory Report 1990–2009—Part 3.

2 My estimates from daily figures and transposition of past monthly graphing from the IESO - Coal usage reduced to 1.2     TWh from 5.6, and natural gas increased to 9.4 from 6.7 (est. at .85MT/MWh for coal, and .5 for gas)

3 The end note in Miller's report references this document, which in turn references this one.

4 I explored how this relationship is working here

Searching For Value in Ontario's Electricity System

I'm constantly amazed how difficult it is to underestimate the value of generation from industrial wind turbines.

I have queried hourly generation data by source 'fuels' to demonstrate the 'value' of the various sources. I was inspired to do so while writing my previous post, which calculated average hourly rates of imports/exports for different jurisdictions. Quebec was much more expensive power to import, but that was because we imported from Quebec at more expensive times. I concluded that was because Quebec could run off cheap imports at night to run as little water through the hydro turbines as possible, and run their hydro turbines during more expensive daytime periods for . Using the same process, with another data set, wind is demonstratively the least valuable source in Ontario.

I've collected hourly generation data for recent months, and combined it with the Hourly Ontario Energy Price (HOEP) to find the average price paid on the market over periods of one month. Some background on these figures is helpful.¹ I'd expect nuclear to be average, because it runs most efficiently with consistent output², I'd expect hydro to be above average by a bit, because it has a large component that runs constantly but also a significant load matching capacity. I would expect gas to receive more than hydro, because while it does have some generators running 24X7, it has far more capacity that should run to match demand (in Ontario or for export), and the expectation would be for coal to be the most valuable because it is used sparingly, and presumably solely to meet demand. Wind I expected to be around where nuclear is. It isn't though:

I can think of two explanations for pricing indicating wind is the least valuable of these generation sources. Wind is almost always simply treated as 'extra' supply in Ontario, so when it is windy the price is depressed (more supply for the same demand). Wind may also be more productive at times when demand is lower. Regardless of the reasons, wind is the least valuable production, in the market pricing sense of value.

I've previously estimated the costs of each generation source, as $57.50/MWh for nuclear, $37.50 for hydro, $100/MWh for gas, $135/MWh for wind, $35 for coal, and around $64 on average.³ Subtracting the realized HOEP prices from these, we see the most heavily subsidized generation sources, per MWh, are wind and gas.

I believe the data indicates a number of issues that the Ontario Power Authority (OPA) seem determined to ignore as they go through the procedural motions to produce an Integrated Power System Plan that has little chance of being useful. That process has noted the IPSP is intended to be a living document, with this one building on 2007's effort (despite that effort never going to the Ontario Energy Board for approval as the provincial blueprint).   I doubt that is so.  Clearly the actions of the past 5 years have constantly lessened the value of Ontario's hydro legacy assets, and that has primarily been done to subsidize the wind/gas machine.  

Many Ontarians genuinely hope for wind, and solar, to succeed.  But there are no Ontarians that would approve of the rapid subsidization increases to the natural gas industry.  Wind and gas accounted for about 17% of Ontario's generation since February 1st, 2011, but my estimates are that they comprise closer to 40% of the difference between the contracted charges, and the market recoveries.  Gas alone is likely contributes about 31% of the total 'subsidy' while providing only about 14% of the generation (I previously commented on gas here).  This isn't good for Ontario.  Perhaps if the government, and the OPA, had the common sense to remove the 'stakeholder' soapbox for Calgary-based organizations we could get back to Ontario policies that benefit Ontario.

In Ontario, there are professionals suggesting ways to increase the value of our nuclear assets.  Let's hope they are taken seriously.  If the IPSP is to be of any value, it must address concerns raised by Donald Jones here, and by the Ontario Society of Professional Engineers at the IPSP Stakeholder sessions, in ensuring refurbishments of nuclear units account for maneuverability concerns, notably demonstrated by the repeated use of steam bypass at Bruce B units, in the requirements specified for the refurbishment projects.  They should consider further maneuverability abilities, including load following, in any new build concerns.  While nuclear is a cheaper source per MWh, we can make it more valuable by making it more responsive, despite the cost increase that may cause.  

The OPA should also get serious about replacing coal with sources that could actually replace coal - including innovative storage projects and utilizing biomass in existing generation assets.  The value analysis shows a source which can be geared to peak demand is far more valuable than the intermittent sources we have been emphasizing.

1I have omitted the “other” category as it contains some 24X7 generation that had rates which behaved, as expected, as nuclear did - and it contains Lennox, which is essentially our emergency reserve, and it would behave as coal does. Solar has no particular data and my past attempts to estimate it have not been very helpful.

2 Donald Jones has contributed excellent material to coldaircurrents.blogspot.com on common sense actions the OPA should be taking to ensure this statement becomes less true as nuclear becomes more adaptable in the future

3Taken from this post. I will justify those if requested in the comments. I have omitted some calculations on “other”, and the $64 looks low compared to an average rate charged, which averages around $72, due to the impact of exporting heavily being subsidized through the global adjustment.

A Valuable Lesson From Ontario-Quebec Electricity Trade

During the first 10 days of June the data shows Ontario has been a net exporter of electricity to Quebec, of approximately 27,565 MWh. Combine the hourly intertie data with hourly price data, and you get a net payment to Quebec of about $3,685,811, which works out to paying Quebec about $134/MWh - just using the net figures. Out of context it isn't a meaningful statistic, but put in context it communicates a lot about value in electricity generation sources. (updated June 12 - see end note 2)

Net Exports Divided by Net Revenue ($/MWh):

	Quebec	Not Quebec	Total
April	$6.11	$27.22	$22.12
May	$10.85	$25.20	$21.89
June	-$133.71	$32.47	$19.88

It's been a busy month for electricity policy both provincially, and globally. The Ontario Power Authority (OPA) held 'Stakeholder' Consultation sessions. I've been meaning to get around to addressing this because they should infuriate most residents of Ontario, both because there was little discussion of ratepayers' interest, and because there seemed to be no concept of value, but only of cost. Tackling the shortcoming of the LUEC (levelized unit electricity cost) models is a daunting task, but one a serious attempt at a long-term plan would address, and while it was rolling around my head, along came a number of reports from the wind machine. Most notably to me was a study prepared for CANWEA by Clearsky Advisors Inc., which I flipped through to see all the calculations, including some rather bizarre metrics on person-years of employment per GWh (wind was 2^nd highest, only to PV), and conversely cost per person-year by technology, where wind was second lowest (only to PV). Despite trying to trick folks away from the inadequate LUEC models, this still completely misses the idea of value.

The study was yet another take on the economic argument that spending is good - in fact the green subsidies in Ontario, via the FIT mechanism, are backed by primarily the same economic philosophy that declares war is good, because it creates jobs. Hurricanes and earthquakes, tsunamis and tornadoes are all good too. My personal favourite is just collectively going into debt to give people money to spend is good for the economy. Again, too big a topic for me to fully grasp or communicate, but there is something wrong about calculating the benefit of something without reference to the value of it, and the value displaced for it.

During the past week there was also an Equinox Summit; Energy 2030, hosted in Ontario as an initiative of the Waterloo Global Science intiative. It has lectures, and other sessions, available for viewing online and I would invite readers to do so. I mention it because the 2030 date hosted by this conference, full of debate and intelligence, is roughly the same as the OPA's IPSP sessions, which are full on nonsense - mostly based on the nonsensical starting points of the supply mix and LTEP ... but those are subjects I've already covered.

Let's return to a concrete example of a more valuable generation source.

Value is simple to define in the market sense. It is the price a willing buyer would pay a willing seller. Our electricity markets are far from perfect, but they are not totally dysfunctional.

Exports from Ontario behave rationally. There are lots of facts impacting intertie volume, but overall we see that the volume isn't unrelated to price¹:

Aside from April, where there is significant intertie activity generally we export more to the jurisdictions where the price looked to be higher. But that correlation isn't correct, as we see from the same charting of the importing into Ontario data:

We are importing by far the most electricity from the most expensive jurisdiction to import from. This isn't nearly as irrational as it appears, nor is the shock statistic I began this entry with.  The reason Quebec buys cheap and sells expensive is related to when they buy and when they sell. The following graphs show the average figures for the months, by hour of day. It is easy to see Quebec is importing when it is cheapest and exporting as the price is higher.

This is a clear demonstration of the value of Quebec's reservoir hydro, which isn't determined by the LUEC, it is determined by Quebec's participation in markets, with a product that has the ability to meet demand when willing buyers will pay more.

So the story is informative, in a positive way, about how to properly value sourcing in a broader context of markets and supply mix.

I'd caution people in Ontario about simply shrugging at this point. The OPA hearings for the Integrated Power System Plan don't seriously refer to value propositions.. The very concept of 'stakeholders' is somewhat repugnant, because the word only means lobbyist. The question from these import/export statistics remains why does Ontario import the Quebec output during the day - and presumably it is to avoid the emissions from running sources like coal and gas. However, in a broad market context inclusive of interties, they may do no such thing. Instead of more power being exported to the New England states from Quebec, those states likely burn more gas and coal to compensate for Ontario's purchases. Idling the cleaner coal units at Lambton and Nanticoke may be a feel good measure too, but that also prevents them from replacing dirtier sources in Michigan, Indiana, Ohio, etc. In fact Ontario measures it's emission reduction success against 1990, without accounting for dirty imports in 1990 - a year we imported a lot of electricity.

1  data is from daily IESO tables (by hour) for HOEP and intertie, complete for April and May and for first 10 days of June
2  I failed to note a data input error, on my part, for June 10th, and the original post noted, incorrectly, a net export rate of -$833.26, a net payment of $3,798,242 and a net export volume of 4,555MWh. While the difference in rate is dramatic, the dollars are actually little changed, only the export volume.

Smile, And Say "Goebbels" - A note from the government

This release, Electricity Exports Help Keep Ontario's Supply Strong,  is remarkably dishonest


"This revenue helps Ontario:

• Keep costs down for families"

No, this revenue set against the costs of producing the power does not keep costs down for families.  This figure is meaningless by itself, and put together with the purchasing costs adds, by my calculations, $50 million to the costs of Ontario's consumers in the month of May only.  Net Exports (exports less imports) of over 1,300,000 MWh sold for only $3,100,000.



"Since 2006, the electricity market has generated $1.5 billion through net exports, which is in stark contrast to 2002 and 2003 when Ontario paid $900 million to import power."

 ... and we generated that $1.5 billion by sending away about 39,600,000 MWh.  Since 2006 that puts the average export price at around $35.80/MWh, which is at least 50% less than Ontario residents, and, perhaps more importantly, Ontario's gutted industry, has paid over that time.

    
Between 1995 and 2003, Ontario's electricity system lost 1,800 megawatts of power, the equivalent of Niagara Falls running dry.

I don't know what these figures are, but in 1995 Ontario had opened Darlington to find no increased demand had materialized, and hard decisions were made to shutter the least productive generators to control escalating costs, in part from subsidized exports.  The net exports in 1994 and 1995 were at levels, 10,000,000MWh annually, not seen again until 2008, since which time the Global Adjustment has soared as the full incompetence of the Ministry of Energy, and the Ontario Power Authority, revealed itself.


A ClearSky Advisors study recently done for CANWEA, on the genius and job creation potential of the  government's energy policies, shows that by 2018 we will be net exporters of electricity once again.
That's based on their supportive interpretation of the McGuinty government's plan.

Here's the graph of my estimations on how overproduction is causing the dumping on export markets that drives up the price for Ontario's families and businesses.  The orange bars are running 12-month totals showing how much more Ontario's businesses would pay for the same amount of power as that exported at depressed rates.  This difference I have termed the 'Export Subsidy.' as domestic prices fund the sales of exports. The government has lost control of procurement, while demand remains stagnant following the hot summer of 2010.

Mayday, Mayday! Global Adjustment Still Soaring to Monthly Records

The operator of Ontario's electricity system, the IESO has posted it's 2^nd estimate of the global adjustment for May 2011, and the estimated rate of $49.94/MWh is a record high, as is the $496.1 million dollars. I've been on the themes driving the increased pricing in Ontario for some time, and May serves as the starkest reminder of the remarkable callousness of Ontario's electricity policy in disregarding Ontario's residents, and it's businesses.

Preliminary numbers I've compiled, from various sources^1, estimate May's relevant figures for the expense of electricity produced at the estimated price of each source. 

Update June 2nd:  With further research I believe the solar figure is far too high - probably by a factor of 4! - current capacity is likely around 250MW (220 + 27 in 2011), but the figure in the calculations is likely in 1 year ¹).  It is unclear what the unaccounted for generation is.

If we purchase those volumes of electricity at those prices, our expenses would be approximately $768 million dollars. Total system revenues for this generation, prior to the application of the global adjustment, would be around $300 million dollars. 

There is $469 million of the approximately $500 million global adjustment total. The remainder would be divided up between other factors including paying suppliers to curtail supply, and customer demand reduction programs,.

I mentioned only a couple of weeks ago the impact natural gas policies were having on electricity pricing. Here's my guess at how the unseen contracts impact the decisions on how much power to generate with natural gas²:

The more we use the cheaper the price. This has had some pretty strange impacts this year. We added natural gas to replace coal, and at our peak production periods in January we were exporting thousands of MW's to drive down the price of the natural gas supply. US CCGT plants are operating at 45% capacity factors - running at half that is clearly far more expensive. I have pointed out that almost all of the time wind production in Ontario is less than the amount we are exporting. In May, the combined total from expensive wind generation and pricey natural gas generation was less than we were exporting almost half of all hours.

That's quite remarkable in a jurisdiction that has dumped it's traditional pricing advantage in electricity for the purpose of ridding itself of coal production, only to shackle itself with expensive natural gas contracts forcing the use of that only slightly less dirty source.

Here's the situation we are now in. Our cheapest supply is hydro, and our second cheapest is nuclear. In May, nuclear and hydro provided 85% of production, and that amounted to around 95% of all consumption in Ontario. This graphic of May shows 2011 with high nuclear and hydro production, but also with record net export levels:

Because of the need to generate with gas, and the inability to utilize any wind output economically, we have developed a bizarre relationship where lowered demand drives up the price, via the global adjustment.

Finally, I'll revisit a graph with updated figures including my estimates for May. This graph shows 12-month moving averages which have supply increasing while demand is now decreasing (May 2011 was near May 2009 levels of consumption), and that has the usual impact of driving the price higher exclusively via the global adjustment.

Low HOEP pricing (without the global adjustment) and high production levels equate to high export levels. As demonstrated in the first chart of this post, the exports we sold at a low price ($23/MWh), we bought at a high price ($64/MWh). In May the external purchases of Ontario electricity paid about $2 million a day less than it would cost Ontario's customers to purchase the same amount of power.

The wholesale rate for electricity to Ontario's businesses will be approximately $75.82/MWh in May 2011, 17% higher than May 2010, and $20/MWh more than the average price for the nuclear and hydro output that equalled 95% of our consumption.

Meanwhile, the Ontario Power Authority is holding 'stakeholder' consultations on an Integrated Power System Plan...

 1 Some are easier to explain than others - solar is particularly problematic.  It is treated as the difference between the IESO hourly generation reporting, and the figures compiled from the IESO historical .csv files (demand + export - import = generation).   The volume is plausible per OPA figures of installed capacity - the price is a guess based on large solar in the $400/MWh, and small as high as $800/MWh

2 There is guaranteed revenue requirement for the 5 CCGT plants contracted since 2007, estimated at $7900/MWmonth on the 4055MW, plus the cost of the fuel when the generators generate.