Power Surge: 2013's annual commodity cost increase equals rise from 2006-2012

2013 Ontario Electricity Annual Review: Part 2 

The cost of the electricity commodity surged in 2013. I estimate the total cost for electricity grew from approximately $10.2 billion in 2012 to almost $11.9 billion in 2013; $1.7 billion is also the growth of the commodity cost between 2006 and 2012.

The price paid by most consumers in the province is determined by two things: the costs of purchasing supply, and the distribution of those costs between consumer classes.
  

TABLE 1: costs are increasingly being recoverd via the global adjustment

The simplest method to estimate the total cost of the market is to take the IESO's "Total Market Demand" valued at the Ontario market rate, and add the Global Adjustment (which is the charge for the supply costs not recovered by the market price). 1

Between the IESO's hourly data and the monthly global adjustment values, not only the overall value of the market can be estimated, but the costs per unit for different consumer segments.

GRAPH 1: Note that exports are far below the "Total market", or average rate; making the Class B rate above the average

Estimating the composition of costs that we know must add up to approximately $11.9 billion is not easy.  A comparison of my historical supply cost estimates only partially indicates where the increased costs came from; here I've added estimates for known additional expenses; curtailment, conservation/efficiency programs spending by the Ontario Power Authority (OPA) and partial costs of the Oakville Generating Station debacle.

There are many articles that have, or could, be written, reflected by these numbers.
Generation increases, in 2013, mostly came from the sources with the lowest per unit cost in traditional levelized unit cost accounting (hydro and nuclear);

• generation declined for both gas and coal, which, per unit, were far more expensive that hydro and nuclear in 2012 (and even more so in 2013)
• while solar growth was a fraction of nuclear's, by output, I have estimated it more than doubled in becoming the second largest contributor to the growth in total market costs, and it is entirely possible total payments for solar procurement exceeded payments for wind;
• despite a predictable supply glut driving supply curtailment and dumping on export markets, the OPA spending on conservation likely continued unabated.

.Lessons that should be learned from this are:

• the value of the next kilowatt is determined by the need for it;
• In 2013, more frequently than not, there was no need to conserve. OPA spending was simply a waste;
• In 2013, all new generation simply displaced the fuel cost of natural gas-fired generators procured with net revenue requirement contracts (by the OPA).

In 2013, Ontario's largest annual increase did occur only due to the cost of new supply but largely because the value of any additional supply was going to be essentially nil - as it will be in 2014.

My figures, hopefully, present a plausible estimate, while still being slightly below the figure estimated in Graph 1, providing a second path to the  $75/MWh average cost estimate.

$75 is below the commodity rate paid by most Ontario ratepayers which, according to the IESO's December 2013 report, was $85.68.

The majority of the difference is due to the export of 18.3TWh.  Valued at the hourly Ontario Energy Price (HOEP) [2], exported electricity recovered only about $24/MWh, transferring the remainder of the $75 average supply cost to Ontario's ratepayers.
That added about $6.55 to the per megawatt-hour charge in Ontario in 2013.

There is, since 2011, a second method of allocating global adjustment charges in Ontario that allows large, "Class A", customers the ability to lower their charges based on how little they can take off the grid during a period's 5 daily peak demand hours.  It's difficult to put a figure on the charges to Class A customers (and more difficult to explain it), but it's reasonable to say that the impact on the rest of Ontario's ratepayers is the ~$4/MWh that is the difference between the IESO's  $85.68 and the combination of the $75 average plus the $6.55 impact of dumping exports.


Notes:

Part 1 of this review focussed more on supply components after beginning, "In 2013 Ontario's demand was little changed, while prices for the electricity commodity in Ontario escalated about 16%."  That figure has since been supported by the Independent Electricity System Operator (IESO) news release on its 2013 data, and their December monthly reporting
There are some discrepancies between the figures I've reported (in this post as well as part 1) and figure the IESO has reported on consumption by fuel types.Part of the difference is superior data at the IESO: my "unknown" is a calculated figure for the total generation indicated by the IESO's "Total Market Demand" and the data in the IESO's "Hourly Generator Output and Capability reporting;" that report does not include smaller generators, and I would assume most of my "unknown" would be smaller hydroelectric generation, and the IESO does show higher hydro generation.
Another part of a difference is due to changing definitions, or standards, at the IESO.  This is obscure; "total market demand" was defined to cover everything supplied.  In the past Ontario demand was "Total Market Demand" less exports, but that is no longer the case.
I have been unable to confirm why that changed.
A third problem with both the IESO reporting and my estimates is that there is strong growth in "embedded" generation - which are generators not on the grid.
What the IESO reports as "demand' is supply directly onto their grid, not including supply embedded with local distribution companies (behind the connection points).
What the IESO reports as demand can't be used for allocating costs, due to line loss (a little over 3% is estimated based on OEB annual yearbooks of electricity distributors); this was partially offset by embedded generation I've guessed was equal to about half of the line loss amount prior to the FIT program expanding embedded generation.
In this post it was assumed by the end of 2012 embedded generation was roughly equal to line loss, and that in 2013, and going forward, additional embedded generators will make the IESO's "Ontario Demand" increasingly less than actual demand.
That both exagerates whatever success the Ontario Power Authority's demand reduction programs have, and demonstrates that the OPA's non-existent accounting, and accountability, conveniently serves to hide the damage being done by their, on behalf of their governments, contracting.

Endnotes:

1.  Ontario's Independent Electricity System Operator (IESO) monthly reporting states, in section 2.1, "The IESO calculates Total Market Demand by summing all output from generators registered in the Market plus all scheduled imports to the province."
Hourly .csv files are usually available for both demand (Ontario and "Total Market") and the Hourly Ontario Energy Price (HOEP), so it's possible to estimate the recoveries through market sales (exports need not be sold at the HOEP, but for many reasons, include this report, the methodology is known to be valid).
Currently the IESO has one data file from market inception in 2002 to the end of 2012, and another for the current year (2014).  I'm assuming the data that was posted for 2013 will return at some point.

2.  This values hourly exports at the hourly Ontario energy price (HOEP); support for this method of estimation can be found at Ontario's Electricity Export "Profits" | The Inside Agenda Blog

Wynne winding Ontario down

Today the U.S. Energy Information Administration (EIA) announced "new tables and maps in the Electric Power Monthly provide detailed accounting of generator additions and retirements"
The statistics presented will provide no comfort to Ontario ratepayers smarting from 16-17% electricity price hikes in 2013 as they look to surviving 2014.

The EIA figure for planned capacity editions in next 12 months (as of November) is 2,091.8 megawatts (Table 6.1).

The latest 18-month Outlook from Ontario Independent Electricity System Operator (IESO) indicated 1,884 megawatts of wind capacity due in 2014, but that is simply for generation on the IESO's direct grid.  Additional supply can be embedded within local distribution company grids.  The IESO's outlook notes:

Over the next 18 months, Ontario continues to expand its renewable resource capacity as more than 3,300 MW of wind, solar, hydroelectric and biomass capacity are expected be connected to the transmission grid. By May 2015, the total wind and solar generation connected both to the transmission and distribution networks in Ontario are expected to exceed 7,000 MW.

The EIA's figure for additional "Renewable Sources" to be added in its next 12 months in 5,566 MW.

This week's cold snap, accompanied by large exports to the United States, put an exclamation point on the stupidity statement that is Ontario's green energy waste.

Graphic from CCSAGE: Premier Wynnd's strategy on wind...

Ontario has received possibly the worst value in the world on its own contracting of supply from industrial wind turbines.
It employed the idiotic feed-in tariff mechanism as the best tool to acquire lots of supply that isn't needed, and despite the near universal death of that procurement scheme.

Ontario has failed to heed it's professional engineers correct diagnosis of wind and solar as as "displacement sources."  As demand peaked during this week's cold snap, it's 3000+ megawatts of wind and solar capacity was producing only about 266MW of electricity.  That performance from the wind/solar team, on the 22nd, was up from the output at peak on the 21st, which failed to outperform the province's sole remaining coal-fired generator in Thunder Bay.

The government could attribute this to a past mistake, but the mistakes continue as it refuses to acknowledge past errors while making new mistakes to ensure the full pain of past ones is foisted on the province's ratepayers.  The Wynne government is appealing projects that should never have existed, it is agreeing to pay contracted suppliers for curtailed power regardless of the signed contracts, and it is certifying projects to proceed to construction at a quickening pace.

This apparently due to a belief that doing something expensive and unnecessary will position the province to become exporters of something.

Perhaps it has.

Foolishness.

Exports setting Ontario electricity market price

Parker Gallant and I recently wrote on the previous cold snap and noted that the market price in Ontario is sometimes set by exports.

Today that's the case.

Today I'll show some indicators of the day's pricing in the markets likely to impact pricing in Ontario.

Some quick background: the Ontario price I usually show is the Hourly Ontario Energy Price (HOEP), which is really an average of a market control price that is set every 5 minutes.  The U.S. screen captures (and links) below are locational marginal prices (LMP), which I believe are also 5 minute prices set by zone/location.  However, I believe Ontario only has hourly schedules of imports and exports, so the hourly change in exports can/should reflect what is about to happen to LMP's in the export markets.

MISO (Midwest Independent System Operator)

MISO at 11:30 am Jan. 22, 2014

As of hour 17 (5pm) the highest hourly price in Ontario was in hour 11 ($221.83), and that was the hour of greatest export through the Michigan interties.
In the case of MISO, the price didn't head as high as may have been expected, although at 11:30 it did rise above $200/MWh in the zones adjacent to south-western Ontario.

MISO extends all the way to the Gulf of Mexico and today's peak will be about 5 times the size of Ontario's.
They also have, in my view, the niftiest graphical information system (GIS)for displaying, and playing through the day's, pricing.

PJM

PJM at 6:00 pm Jan. 22, 2014

It used to stand for Pennsylvania, Jersey and Maryland, but now it includes jurisdictions far beyond those 3 states.

PJM is, I think, slightly larger than MISO (MISO has grown recently and I could be wrong).

The screen capture is from around 6 pm - moving into the evening peak, with prices soaring.
However, Ontario has no direct interconnection to PJM.  There is a private proposal to construct one from around Nanticoke on Erie's north shore, across/under the lake, coming out near Cleveland.
For now the pricing impact in Ontario is probably via Michigan and New York (Niagara area) interties.

New York ISO

Captured from NYISO home page

Similar to Ontario in terms of market size, it includes only New York ... and it doesn't have, as far as I can tell, any cool GIS displays for locational market pricing.

On the other hand, they are taking over 1000MW as I write this, and the HOEP is now (~6:30pm) at a new high for the day.

Note that the exports to New York aren't necessarily, or even probably, intended to service New York demand - but demand in MISO, PJM or ...

New England ISO

The New England system is probably smaller than New York's, but likely the most newsworthy this season.

partial screen captured from New England ISO site

Ontario has not direct interconnection to the New England ISO territory, but Ontario is usually exporting to Quebec (it certainly is today), and that is usually not because Quebec requires imports to meet its internal demand; Quebec is usually exporting into this market (as is New Brunswick).

partial screen captured from NE-iso

The New England ISO has seen big growth in generation from natural gas-fired generators, but the gas infrastructure has not grown with it, causing a competition between heating and generating electricity during cold winter periods.

Interesting, to an Ontarian, is that even during the coldest periods coal-fired capacity has been so reduced that it provides only 7% of all generation; the same as "renewables", although in New England the "renewables" are primarily biomass/wood, and garbage.

Essentially all coal-fired generators want to close as they are no longer economical, although the New England ISO is indicating it requires some to stay operational beyond the requested end dates (here).

Platts has some similar information, more focused on connections between the gas market and electricity pricing, in an article today titled Eastern US power prices continue to rise on soaring gas market

___

Ontario's coal-fired generators were kept operating by a "contingent support agreement" that became effective January 1, 2009 (I believe the contract runs through 2014 - some details page 7 of OEFC 2008-09 Annual Report).

Polar Vortex almost generates a profit for electricity exports from Ontario

This post is a "re-blog" of sorts, as it is co-written with Parker Gallant, and has been posted to the Energy Probe site.  There's a couple of edits here, and I've included footnotes to support a number of the statements

The first 7 days of 2014 ended with an average market price higher than it had been in years.[1]  On January 2nd prices were sent upwards as neighbouring Quebec appealed for conservation during bitter cold which sent demand to near record levels.

When “total” demand, which includes exports, peaked at 25,980 MW at 7 pm of the 7th day, Ontario’s system operator indicated generation on it’s grid was greater than it had ever been[2]; strong nuclear, hydro and wind output was supplemented by record output from Ontario’s natural gas generators.[3]

The Hourly Ontario Energy Price (HOEP) was a high $278.93/MWh, but it wasn’t due to Ontario’s demand stressing supply. The key price drivers were coming from the grids connected to Ontario’s.[4]

As demand peaked on the 7th, exports averaged 3,187MW with multiple U.S. jurisdictions hitting winter demand records due to the cold impact of what is being called a polar vortex.[5]   This made January 7th a record day for revenue on net exports, with 62 GWh valued at approximately $7.3 million dollars (~$117/MWh). [6]

How profitable those exports were for Ontario entities is a matter of opinion. The same day saw record production of over 44 GWh from industrial wind turbines in Ontario. That production, even when fetching an average price of $111.41/MWh, wouldn’t make any profit.


However, export customers were buying whatever kilowatts (kWh) were available on the 7th. Those kWh were not coming from the “must take” producers (primarily nuclear, wind and solar), but generators which exist because every month each Ontario ratepayer finances the Net Revenue Requirement (NRR) contracts required to keep their capacity available. The incremental cost of this supply, (the fuel cost) was likely close to $40/MWh on the 7th making exporting profitable. [7]

Profiting on exports is a welcome change for the province, which, by one accounting, lost over $1 billion on exports in 2013:  18.3 million megawatt-hours were exported in 2013 without recovering the $59/MWh global adjustment (Class B) charge that is collected from most Ontario ratepayers.

A couple of million dollars profit on a day of unusual high demand is not significant compared to the capital and operational cost Ontarians pay due to NRR contracts, including OPG’s Lennox Generating Station, Ontario has contracts for approximately 6,700 MW of gas/oilfired generating capacity with a base cost of around $1 billion a year. $7 million of revenue from an exceptional export demand day does not go very far to paying for this capacity.

Ontarians have reason to be concerned about subsidizing gas and oil fueled generation for export.

The day after Ontario had record wind production and revenue on net exports, its government issued yet another news release on ending coalfired generation in the province, promising “a significant reduction in harmful emissions, cleaner air and a healthier environment.” While the goals are noble, treating coal as bad and gas as clean is extraordinarily simplistic. Consecutive Premiers (McGuinty and Wynne) of the province have tacitly acknowledged this in submitting to worries of residents in Mississauga, and Oakville, and cancelling contracted generation in that fragile region of Ontario’s grid at a cost of over $1 billion.

It may perplex residents near the Halton Hills Plant in Milton, Brampton’s Goreway, and Toronto’s Portlands power stations that their local generators run any time a nickel can be made on exports, while the Liberal Premiers were certain Oakville and Mississauga are definitely the wrong place, at any price, for electricity to be generated from burning natural gas, due to real, or imagined, health impacts.

Ratepayers throughout the province should question why, following a day of record generation exported far and wide, Ontario is set to add 3,300MW of intermittent wind and solar generation during the next 18 months [8], all of it contracted at rates higher than we averaged on the most profitable day of exporting in the market’s history.

Ontario can't count on a daily 20-year weather event such as a “polar vortex” to generate profits on exports that might help to mitigate the continuing price increases in their electricity bills.



Scott Luft and Parker Gallant

Endnotes:

1. Week 28 of 2010 is the last of only 3 weeks since 2010 that had weekly average Hourly Ontario Energy Price averaging above 2014 week 1’s $55.56/MWh.

2. The system operator (IESO) reports the sum of all generation + imports, as “Total Market Demand” in its “Hourly Demands” file, and the reporting flowing from that data file. Calculating Ontario supply on the grid simply requires imports to be subtracted from “total market demand”, and at hour 19 of January 7th, that figure is 25,929MW - a new high.

3. This statement is based on production from all “gas” generators in the IESO’s Hourly Generator Output & Capability Report, as well as the oil/gas Lennox Generating Station. Record of 6,962 MW was set in hour 19.

4, A new report by the Ontario Energy Board’s Market Surveillance Panel found imports and exports set the “final pre-dispatch price” 36% of the time, with that percentage growing rapidly in the most recent period.

5. The U.S.A.'s Federal Energy Regulatory Commission produced an initial report, Recent Weather Impacts on the Bulk Power System.  It states; "Many system operators in the Eastern United States broke their winter peak demand records.  MISO, SPP, ERCOT, PJM, and the New York ISO all set winter peak demand records, as did most of the utilities in the Southeast."

6.  Valued as hourly exports less hourly imports, multiplied by the Hourly Ontario Energy Price (HOEP). The second highest revenue day on net exports is now January 8, 2014; valued at HOEP it's a distand $4.85 million - slightly above January 23rd, 2013

7. Net Revenue Requirement (NRR) contacts are reportedly structured so that most of the profits on market sales would benefit Ontario ratepayers; "the contracts stipulate that 95 per cent of the surplus will flow back to ratepayers."

8.  Figure is from IESO 18-Month Outlook: From December 2013 to May 2015

Chiarelli steps it up; finds a $7 billion lie

Very disappointed to hear Ontario's Energy Minister on CBC Ottawa Morning, again just making up numbers that he finds convenient.

Here's what he said on OPG:

...they’ve generated over $7 billion dollars bottom line profit which goes to the gov’t of Ontario to help pay for schools and other necessary services.

Well, I happen to have some figures compiled from actual work I did in preparation for writing on OPG and it shows that Wynne's Chiapetti is once again making a bold statement in error.

Here's OPG's "Net Income" since it's first annual report: annual on the left axis, and the red line is cumulative on the right axis.  From inception to the end of 2012, cumulative net income was just shy of $5 billion.


If you added the taxes indicated in the annual reports, which are actually payments in lieu of taxes (PIL), you get a slightly different picture, that does total close to $7 billion.

But PIL isn't supposed to do anything but pay down the debt deemed stranded when Ontario Hydro was broken up - it doesn't pay for "schools and other necessary services."

The big drop in OPG Net income, from 2002-2004 with the lowest low in 2003, is due to two things; mostly Ernie Eves' freeze of hydro rates which included a clawback of revenues from OPG (ending up at about $4 billion by 2005), and Dalton McGuinty's writing off of the coal plant assets he planned to shutter by 2007.

In hindsight, OPG actually performed reasonably well from 2005 to 2010 - the exception being 2008, but that year's performance was scuttled by an enormous loss on the enormous nuclear decommissioning/waste management fund (all enormous funds lost in 2008).  Even in those good years taxes (or PIL) were very moderate.  Since 2010 OPG's performance has been poor due to the government's actions driving down the market price and gutting OPG's non-regulated hydro business (explained here).

Payments in lieu of taxes go to the OEFC (Ontario Electricity Financial Corporation) to, allegedly, retire the stranded debt.
Profits that exceed those considered a fair return to the shareholder (the Province) for it's equity in OPG (all of it), were also to pay down the stranded debt.

And yet you still have a stranded debt charge applied to your hydro bill.

Not only is Chiarelli wrong, if he was right how would he justify the debt retirement charge still remaining on your bill?

Stranded Debt - Abandoned Responsibility explains all you ever wanted to know about the origin and neglect of the debt retirement charge, and probably more.

When is Tim Hudak not considered another Mike Harris?

Now we know when his constrant critics won't consider Tim Hudak to be another Mike Harris.

The Toronto Star provided opinion space for Tim Hudak to communicate that his PCs have a plan to bring prosperity to Ontario, and concurrently ran an editorial that began:

In order to maintain the prevailing theme of simplicity, let’s cut to the chase on Ontario Progressive Conservative leader Tim Hudak’s proposed “Million Jobs Act”: it’s campaign sloganeering, at best.

The Star's Queen's Park propagandist, Metro Martin Regg Cohn, took a stab at statistics in dismissing Hudak's plan by noting:

...Statistics Canada said Friday there were 588,000 people unemployed in the province. That’s a daunting number, but it’s rather less than the number Hudak claimed. He was off by about 400,000 jobs — that’s plus or minus 70 per cent — from the official tally.

Well, I empathize with communicators, and I will firmly support Hudak's party in 2014, so I was willing to cut him a lot of slack and not check to see if he was definitely rounding way, way up in the potential of any jobs plan.

But Metro Martin had concluded his column with a smug, "we're not stupid," so I figured in checking the possibility of adding 1 million jobs I might confirm 2 things.


I looked at Statistics Canada's data to see if it's plausible that 1,000,000 people in Ontario might prefer to be working, regardless of how unemployment is officially defined, and if it's plausible 1 million jobs could be created in an election cycle.

The answer surprised me: 1 million jobs being added in 4 years would be, adjusting for population growth, not uncommon when Ontario recovers from prolonged downturns.

One period demonstrating this would coincide with Mike Harris' years, from December 1996 to December 2000.  1 million would be a bit of a push compared to this period as Statistics Canada shows higher labour force participation and lower unemployment now than it did in December 2006.

The greater population adjusted growth would have come earlier, in the period from 1983-1987.  The participation rate is lower now than it was in 1983, and the population has grown 59%; the comparable number of jobs for growth would be close to 1.1 million.

History shows that it is plausible that 1 million jobs could be created within an election cycle ; Regg Cohn's "we're not stupid" may not be as well supported.

View spreadsheet as a web page

2013 Ontario Electricity Annual Review: Part 1 - Supply

In 2013 Ontario's demand was little changed, while prices for the electricity commodity in Ontario escalated about 16%.
Analysing data from the year provides illustrations for many topics covered on this blog since inception: supply continues to grow while demand does not; excess generation is dumped on export markets far below the cost of supply to Ontarians, and the global adjustment pricing mechanism continues to become a greater component of the commodity charge even as it becomes clearer it's largely improvised each month.

This post will focus on supply. [1]

Most of the data I collect, and manipulate for reporting, comes from the Independent Electricity System Operator (IESO).  That data reports "demand", but the term is used to mean the sum of supply on the IESO controlled grid; it does not reference actual metered demand.

The IESO does not, and cannot, report supply embedded within the local distribution company (LDC) grids, which likely grew rapidly in 2013.  The IESO is likely to report demand slightly down, but that is likely only true because there is no accounting for the growth in solar power, with all panels currently embedded in LDC areas; adjusting for the impact (which shows as lower demand), my estimates indicate the past 3 years experienced essentially the same demand/supply.

Generation:

The big story for most is the elimination of coal-fired generation in southern Ontario (it will remain briefly in Thunder Bay), but there are other stories that are as important to tell, including the closely related nuclear generation story.
My research indicates coal-fired generation peaked in 2000 - the year of the lowest annual nuclear generation since 1991.
In 2013 total generation on the IESO grid was similar to generation in 2000: coal-fired generation was down 39.3TWh, and nuclear up 30.8 (demand was down ~12TWh, and all of that energy became exports).

Nuclear

I have estimated nuclear generation at 90,651 GWh in 2013 [1] - very close to the 91,066 GWh record from 1994. [2]

All the growth in generation during 2013 was due to the reactors at Bruce A, 2 of which are freshly refurbished.

All other reactor sites saw a decrease in 2013 - some of which is likely due to curtailment.
The IESO's recent 18-month outlook indicated ~1,15 GWh of curtailment (Figure 6.1), and it's unlikely that would include periods where a reactor at Pickering, and possibly Darlington, would be offline because the grid could not accommodate it.

I can't say if there were periods in 1994 where reactors were idled due to demand, so I'll just say 2013 looks to be the second highest production level Ontario's nuclear fleet has delivered - but it may be the best performance ever.

Hydro

The output from Ontario's hydroelectric generators improved in 2013, but probably not by as much as they were capable of.

Ontario Power Generation (OPG) announced a major Niagara tunnel project completed on March 21, but the Niagara plant had growth, in 2013, far below average on a very wet year.
OPG had claimed the project would, "increase the output from the Sir Adam Beck complex by 14%."
It has not - whether that be due to a lack of need for the production, the role of the complex in maintaining the system's balance, poor forecasting, or other reasons is not known.

The only area to perform worse than the Niagara Plant was OPG's Northwest - which may have more to do with over supply and transmission constraints than water levels and operational capacity. [3]

It is notable that non-OPG assets, shown as "Other" in the table (likely contracted on a "must take" basis), hugely outperformed.

Wind

Wind generation ended up producing as expected for 2013 - but due to an enormously windy November catching up for some poorer production months.

In September the IESO implemented procedure changes facilitating the ability to curtail the output of industrial wind turbines when the grid was over-supplied.

The only 3 wind sites producing less in 2013 than 2012 (annual totals) were Greenwich, Prince Farm and Underwood - 3 sites I've noted having been curtailed at times due to transmission constraints.

Ontario is currently moving additional intermittent generation projects along for all 3 areas - projects that, if completed, will frequently necessitate paying suppliers to curtail supply.

Natural Gas

Natural gas-fired generation was down significantly in 2013

Includes both "gas" and "other" supply in IESO reporting

The Graphic to the right shows annual production for gas fueled generators (some are co-fired).

The records highlighted in blue can be grouped together as must-run generators - expected to be Ontario's non-utility generators; these generate approximately 1200MW consistently throughout the year.  I wrote about the group during 2013 in Wynne should right Duguid's wrong NUG directive.

Lennox Generating Station acts like an emergency reserve in Ontario - at least it has as long as coal-fired generation was available.  It is owned by OPG and kept operating through a capacity contract from the OPA.

The generators highlighted in yellow are those with net revenue requirement contracts, which pay for their availability regardless of production.  I've written about these often, including 2013's The Capacity Trap: Ontario's Electricity Costs Soar as Emissions Drop.

It is not possible to understand Ontario's market pricing without addressing these generators - all contracted by Liberal government's since 2003.

Pricing will be the topic of Part 2 of the annual review.

ENDNOTES

[1] Figures in this post are primarily from daily captures of the IESO's Hourly Generator Output & Capability reporting (occasionally there are gaps I fill in as best as possible - and there can be errors in my capture of the data)
[2] I took the 91,066GWh from Canada's National Inventory Report 1990-1994; a second source is the now terminated CANSIM Table 127-0001
[3] I wrote about the constraints in Big Thunder is a Big Mistake, and it's not the only one