Renewables advocates have been claiming that solar and wind generation are now the least costly form of generation, and therefore, should replace all fossil fuel generation as quickly as possible. Is this correct? A number of energy analysts have reminded us that weather-dependent wind and solar generation are necessarily intermittent, requiring costly backup when the wind isn’t blowing and the sun isn’t shining. However, few commentators have examined actual operating experience in as much detail as Parker Gallant, a retired international banker. A large part of this blog post is based on Mr. Gallant’s analysis, for which I thank him.
Using Ontario statistics, he has demonstrated in recent blog posts (such as this one) that these forms of generation, and particularly wind turbines, are extremely costly to both consumers and taxpayers, often inconveniently providing high output when not needed and providing next to none when needed. This results in:
- paying these generators high prices even when their energy it isn’t needed;
- exporting surplus generation to neighbouring US states or Canadian provinces at low or zero prices; and
- importing electricity from neighbours at higher prices at peak times, when wind and solar often generate almost nothing.
Ontario’s Independent Electricity System Operator (IESO), which operates the electricity grid, provides daily statistics, for each hour of the day, e.g., on:
- how much electricity the province generated to meet hourly demand;
- by what methods it was generated;
- how much was imported or exported;
- at what prices.
This permits us to examine the efficiency and cost to Ontario electricity customers and taxpayers of each method of generation, including wind and solar. Although all Canadian provinces and territories will have different mixes of generation methods, all are committed to increasing the percent of wind and solar generation in their generation mix. This is to try to reduce their CO2 emissions to net zero. Therefore, the Ontario data can provide a useful base for examining the costs and benefits of renewables elsewhere, with necessary adjustments for the generation mix and the output of renewables in different geographic areas.
November 28, 2022, a Typical Late Fall Day in Ontario
As Ontario approaches its winter season its peak electricity demand will often be over 20,000 megawatts (MW). On November 28th, 2022, Ontario’s peak demand for electricity was 19,360 MW at Hour 18 (the hour ending at 6 PM). But wind turbines generated almost nothing at that hour. At Hour 18, when the wind wasn’t blowing, wind turbines were able to deliver only 1% (200 MW) of that peak demand. That is only 4% of the wind turbines’ total rated capacity! (The rated capacity is the theoretical maximum output if the wind was blowing hard.)
On the other hand, during the early morning hours from 1 AM to 7 AM, when demand was as low as 12,990 MW, they generated 13,524 MW, more than was needed, on top of all the other generation that was then available.
For the remaining 17 hours of the day, as demand was rising to the peak, wind turbines generated only 6,862 MW, an average of only 8.2% of their rated capacity. As we can see, they generated twice as much electricity at the off-peak hours when it wasn’t needed and half as much when it was, as the system approached peak.
This is Not a Low Cost Way to Generate Electricity
Ontario charges electricity rates that vary considerably at different times of the day, to encourage off-peak use. Ontario consumers paid 15.1 cents per kilowatt hour (kWh) at peak (when the wind generators were barely working) and 7.4 cents/kWh at off-peak times (when they generated more than necessary). As Ontario’s nuclear generation cannot simply be switched off and on quickly like gas generators, whenever the total system generation would become higher than demand, the excess has to be either exported or curtailed. When the IESO curtails wind and solar generation the owners of the wind generators are still paid for generating nothing under the take-or-pay contracts that the Ontario government has given them. (Such contracts are common, by no means unique to Ontario. As well, renewables are given preferential rights to generate into the grid, ahead of fossil fuels.)
For those first seven hours of the day the IESO had to sell the surplus power to Michigan, New York, and Quebec for as low as $5.84/MWh. For the 17 hours following, however, IESO purchased power from New York and Quebec for prices that reached $86.31/MWh at Hour 18. This huge $80.47 spread shows how volatile prices can often be when unpredictable, weather-dependent supply is far above or far below demand.
The wind generators connected to the IESO grid were paid $135 per MWh for those first 7 hours and almost all of the 13,524 MW they generated were sold to our neighbours for an average price of 0.27 cents per MWh – about ¼ of a cent. Yes, you read that right, buying wind generation at $135 and selling it for ¼ of a cent — almost giving it away. The result? Ontario’s electricity system lost approximately $1.8 million in just those 7 hours of that one day. And there are many similar (or worse) hours and days throughout the year. Again, Ontario is not unique, this is the result of the typical wind energy contracts in many provinces and in other countries.
In addition to generators connected to the IESO grid Ontario also has 600 MW of wind generation and 2,200 MW of solar that is not connected to this grid, but connected within local distribution systems, many of which are municipally owned. Most rooftop solar generators are paid an astonishing $800/MWh and ground mounted solar receives $400/MWh. But there is no disclosure of how much these non-IESO generators actually generate, at what time of the day, or what ratepayers pay for that annually.
What Is the Benefit of All This High Cost?
Canada’s electricity generation already includes a high level of hydroelectric and nuclear generation that have zero CO2 emissions. In total, for 2019, 80% of Canada’s electricity generation was non-emitting, of which solar and wind together represented only 5%. (See Canada’s statistics.) Increasing that 5% to 100% is not going to happen by 2030 or 2050.
In Ontario, electricity generation is already over 92% emissions free, a mere 8% from net zero. Very few other jurisdictions in North America or Europe can match that. When Ontario has to import electricity from Michigan or New York their levels of CO2 emissions at most times of day will be higher than Ontario’s, making Ontario’s net contribution to global emissions higher than it would be without such imports. Ontario is spending – or you might say wasting – billions of dollars annually to nudge itself ever so slightly closer to eliminating that last 8% of emissions.
As I have explained in in a previous post, all that glitters isn’t green, or renewable.
Categories: Electricity, Energy, Environment
Andrew's Views 
Excellent Work.
As an aside, I cringe every time I see someone use the zombie term “renewable” as a positive attribute. The term was coined back in the old days 40 years ago when “all the experts” were convinced that the world was running out of oil. This led to the invention of “biofuels” like ethanol (which uses tens of thousands of acres in the USA) and wood pellets (which Canada still ships to Europe).
But now “all the same experts” have switched to the focus on demon CO2. Yet people still seem to think that “renewables” that emit CO2 are somehow good.
CO2 is a much more effective demon because “it’s all our fault”.
Meanwhile all these experts are the same incompetents who don’t begin to understand energy systems as well as Andrew Roman who is only a retired lawyer!
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Were you able to find any statistics about the cost of solar and wind to the environment? Each is made up of 100% non-renewable resources coming from strip mining in Canada and other countries. It’s the same with electric vehicles that create massive amounts of pollution for all the non-renewable resources used to build and maintain them including the 1000s of recharge stations Canada wide.
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For more excellent commentary on these fantasies I recommend Mark Mills.
For example, his Commentary on California’s fantasies is on YouTube:
“Is California’s Mission to Reach Zero-Emissions Possible? | Mark Mills”
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The financial incentives offered to wind generators at our expense are a scandal.
Two comments:
1) CO2 removal is necessary for the Net-Zero fever dream but we aren’t doing it. (Net-Zero is just a marketing slogan dreamed up by Boris Johnson’s wife.)
Nothing we are doing today, or are likely to do for many years, can get us to Net-Zero emissions. By definition, Net means the balance of emissions minus removal. Emissions can reach Net-Zero only when we deploy technology at scale that can remove CO2 (and other greenhouse gases) from the global atmosphere at a rate that balances what we are emitting globally, about 40 billion tons a year currently. Without CO2 removal strategies, all we can do is be compelled to reach Gross-Zero, which is an enormously different (and impossible) commitment: it would require the elimination of all fossil fuel combustion, as well as ending the use of fertilizer and cement (which emit CO2 in their production no matter what source of energy powers the process.) Even building the weather-dependent generators requires mines and factories that emit CO2. So Gross-Zero really puts us back before the industrial age, say 1750 or so. No electricity at all.
If the advocates are trying to force us to Gross-Zero while pretending the goal is just Net-Zero, the blood on their hands will be from people who die of energy poverty. Even if we were to make our entire electricity grid non-emitting with windmills — an impossibility because the damn things have to be built — they aren’t removing CO2 from the atmosphere, just emitting less than burning natural gas. We should stop all breezy talk of “working toward a Net-Zero world, etc.”
An overview of carbon capture from the International Energy Agency, an enthusiastic booster of the Net-Zero effort:
https://www.iea.org/fuels-and-technologies/carbon-capture-utilisation-and-storage
The energy to power the steeply “uphill” process of concentrating billions of tons of a trace gas every year and squirreling it away somewhere will need to come from low-emitting generators, else we are just chasing our tail. Put it on the tab or pretend that an infinite number of windmills can be built and installed for free.
2) There is no credible weather-dependent generation that doesn’t rely on either fossil fuel backup for all its capacity — in which case why bother with windmills in the first place? — OR uses storage systems that have not been demonstrated to work at scale yet. Much promotional material on storage confuses power with energy and therefore vastly underestimates the number (and expense) of batteries that would have to be built. It is meaningless to say that a battery farm “can store 400 megawatts, the equivalent of a good-sized natural-gas peaker plant”. If you start drawing a power of 400 MW out of the battery, how long can it deliver that power? A minute? An hour? Four hours (the practical time limit for Li-ion batteries)? What happens if the wind is still not blowing after four hours and the gas plant has been demolished?
Frances Menton has just released a report on the daunting problem of storage for weather-dependent generators. This is his blog site; there is a link there to the full pdf of 32 pages.
https://www.manhattancontrarian.com/blog/2022-12-1-the-manhattan-contrarian-energy-storage-paper-has-arrived
It is not technically complex. The only math you have to remember is Energy = Power x time. Since a kilowatt drawn for 5 days is 120 kilowatt-hours (which is what your electricity bill reports), you can see how storage for any useful time is going to involve energy numbers at least 100 times the instantaneous power they can deliver. Like so much in life, it’s time that gets you.
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You 2 Gents should form an army.
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Sorry to be late to the party here, but the second and third paragraphs under the heading “This is Not a Low Cost Way to Generate Electricity” begin with:
“For those first seven hours of the day the IESO had to sell the surplus power to Michigan, New York, and Quebec for as low as $5.84/MWh…” and then
“The wind generators connected to the IESO grid were paid $135 per MWh for those first 7 hours and almost all of the 13,524 MW they generated were sold to our neighbours for an average price of 0.27 cents per MWh…”
Are you referring to the same point in time? The first selling price, of $5.84/MWh is about three orders of magnitude higher than the second, of 0.27¢/MWh.
I don’t mean to nitpick – this is an important issue, and I think you are correct that “renewables” are a net economic drain.
Two comments:
1) switching the units used (between $/MWh and ¢/kWh) can be confusing, and disorients the reader.
2) you can tell what side of the industry someone comes from by the units they use: retail guys talk about ¢/kWh, while wholesalers and developers talk about $/MWh. I’m a $/MWh guys, for what it’s worth
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Yes, I was referring to the same point in time. I tried to make this clear in the sentence following the ones you mentioned, by saying:
“Yes, you read that right, buying wind generation at $135 and selling it for ¼ of a cent — almost giving it away. The result? Ontario’s electricity system lost approximately $1.8 million in just those 7 hours of that one day.”
And you are right, the first selling price, of $5.84/MWh is, indeed, about three orders of magnitude higher than the second, of 0.27¢/MWh. That was not an isolated event, it happens quite often in Ontario.
I was intentionally keeping a unit difference between what you and I, as retail consumers, are charged, which is in ¢/kWh and wholesale transactions between utilities in $/MWh. As most of my readers would be retail consumers with little or no knowledge of the wholesale market I wanted to identify the retail price in terms they are familiar with from their electricity bills.
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Thanks for the reply, Andrew – I still don’t see how “as low as $5.84/MWh…” squares with “an average price of 0.27 cents per MWh…”
If these are over the same 7 hour period, then the selling price was “as low as 0.27¢/MWh” (or lower, since that’s an average).
Nothing turns on it.
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I am going to suggest that you go to the real source of the information for this blog post, Parker Gallant. Today he has published another post. It is for a different day, with different numbers, but the result is the same: Wind and solar generate too much when we don’t need it and almost nothing when we do need it. The result is paying these generators not to provide supply when their generation is unnecessary, while selling off the surplus at a loss.
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Thanks Andrew – I’ll go have a look at Parker’s work.
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