Don’t blame renewables for hydro prices, study says

Don’t blame renewables for hydro prices, study says

Ontario electricity prices are heading higher with or without controversial renewable energy contracts, says a study by the green-leaning Pembina Institute.

The study, released Wednesday, says that the relatively high prices paid to wind, solar and biogas power producers under Ontario’s feed-in tariff program, or FIT, are being blamed unfairly for rising power prices.

Even if no more FIT contracts are signed, the study says, the outlook for rising prices doesn’t change much — because the alternatives are no cheaper.

“Prices are going up, and in some ways people need to know that’s inevitable, whichever path one chooses,” says Tim Weis of the Pembina Institute. “There’s no silver bullet to bringing prices down.”

The difference in prices, with or without the FIT program, is never more than 1.5 per cent, or about $2 a month on a typical consumer hydro bill, the study contends.

Curbing renewables produces lower bills until about 2025, the study says; after that, prices are likely to be cheaper with more renewable power in the system.

The issue is likely to be a hot one in this October’s provincial election. The Conservatives have vowed to end the FIT program, calling it “unsustainable.” The Liberals are firmly committed to pushing for more green power.

FIT contracts pay 13.5 cents a kilowatt hour for onshore wind power; an average 52.5 cents a kilowatt hour for solar power, and 13 cents for hydro.

The key questions if the FIT program is halted in its tracks, says Weis, are: What will replace it? And at what cost?

The Pembina study maintains that natural gas generation will pick up the slack if renewables are curbed.

That seems like a good idea, since gas prices have tumbled since 2009 with the discovery of massive shale gas deposits in North America.

But the study warns that won’t last. Resistance to the environmental damage wreaked by shale gas extraction may limit production.

Meanwhile, demand for gas could spiral as the United States shuts down more coal-burning plants and replaces them with gas-fired units. Electric cars will also spur demand for gas-fuelled generation.

The study also assumes that some form of carbon tax or carbon pricing regime will come into play in the medium term.

It notes that emissions regulations are already being introduced on U.S. gas generators, and Canada will probably follow suit. .

While natural gas prices rise, the study says the price of renewables will fall. The price of solar panels, for example, is declining steadily as more manufacturers flock to the sector.

Ontario also plans to review the price of new FIT contracts, with an eye to reducing them, later this year (assuming the Liberals are still in power.)

Meanwhile, whether or not the FIT program is shut down, other factors are at play in driving prices higher.

Nuclear reactors at the Darlington and Bruce B generating stations will have to undergo expensive mid-life overhauls in the coming decade, while the Pickering B station will need work to prolong its life for an extra 10 years.

The province also figures it will need two or more new reactors at Darlington, at a cost still to be determined.

As well, the wires that carry the power to customers are aging. Hydro One says it will need to spend billions to modernize its transmission grid. Local utilities such as Toronto Hydro have also said they face expensive upgrades.

Those costs are coming, no matter what kind of power is being produced.

“If it’s going to cost us roughly the same price, it seems to make a lot more sense to be investing money in cleaner renewable energy going forward than placing our bets on a volatile price of gas,” says Weis.

TheSpec - Don’t blame renewables for hydro prices, study says

Hydroelectric Energy Advantages and Disadvantages « Green World Investor

Hydro Power is one of the largest sources of energy accounting for roughly 20% of the worldwide demand of electricity and for well resourced countries it accounts for majority of the energy.For Paraguay 100% of the electricity comes from hydro power and lot of it is exported as well.Compared to other sources of Energy, Hydroelectric Power is one of the cheapest,non Carbon Emitting,non Polluting,Mature Energy Sources.Hydro Power plants have been developed to almost full potential in developed countries because of their superior characteristics and many more are being constructed by developing countries like China and India.However Hydro Power like all other thins in life suffers from disadvantages as well.The failure of a Hydro Dam can result in massive losses of human life and cause widespread devastation.Large Dams have always been controversial leading to displacement of people and ecology.They have also been cited as the reason for earthquakes due to large land changes.Here is a list of the advantages and disadvantages of Hydro Power

Hydroelectric Energy Advantages

No Fuel Cost - Hydro Energy does not require any fuel like most other sources of energy.This is a huge advantage over other fossil fuels whose costs are increasing at a drastic rate every year.Electricity prices are increasingly rapidly in most parts of the world much faster than general inflation.Price shocks due to high fuel costs are a big risk with fossil fuel energy these days
Low Operating Costs and little Maintenance - Operating labor cost is also usually low, as plants are automated and have few personnel on site during normal operation.
Low Electricity Cost – The Electricity produced from Hydro Power is quite low making it very attractive to construct hydro plants.The payback period is estimated to be between 5-8 years for a normal hydro power plant.Hydro Plants also have long lives of between 50-100 years which means that they are extremely profitable
No Greenhouse Gas Emissions/Air Pollution – Hydroelectricity does not produce any GHG emissions or cause air pollution from the combustion of fossil fuels unlike coal,oil or gas.This makes them very attractive as a source of cheap,non carbon dioxide producing electricity.
Energy Storage – Pumped Hydro Storage is possible with most of the hydro power plants.This makes them ideal storage for wind and solar power which are intermittent in nature.Hydro Dams can be modified at low costs to allow pumped storage.
Small Size Possible - Hydroelectricity can be produced in almost any size from 1 MW to 10000 MW which makes it very versatile.Small Hydro Plants are being encouraged by government as they cause less ecological affects than large hydro plants.Even micro hydro plants are possible
Reliability - Hydro Power is much more reliable than wind and solar power though less than coal and nuclear as a baseload source of power.Hydroelectricity is more or less predictable much in advance though it can decrease in summer months when the water is low in the catchment areas.
High Load Factor - The Load Factor for Solar and Wind Energy ranges from 15-40% which is quite low compared to Fossil Fuel Energy.Hydroelectricity on the other hand has a load factor of almost 40-60% .
Long Life - Hydro Plants has a very long life of around 50- 100 years which is much longer than that of even Nuclear Power Plants.The long life implies that the lifecycle cost of a Hydel Power Plant becomes very low in the long term
Hydroelectric Energy DisAdvantages

1) Environmental, Dislocation and Tribal Rights - Large Dam construction especially in populated areas leads to massive Tribal Displacement,Loss of Livelihood and Religious Infringement as potentially sacred Land is occupied by the Government.

2) Wildlife and Fishes get Affected - The Fishes are the most affected species from Dam Construction as the normal flow of the river is completely changed form its river character to a lake one.Submergence of land also leads to ecological destruction of the habitat of land based wildlife.

3) Earthquake Vulnerability – Large Dam Construction has been linked to increased propensity of Earthquakes.Massive Earthquakes in China and Uttarakhand in India were linked to the building of Massive Dams in these countries

4) Siltation When water flows it has the ability to transport particles heavier than itself downstream. This has a negative effect on dams and subsequently their power stations, particularly those on rivers or within catchment areas with high siltation

5) Tail Risk,Dam Failure - Because large conventional dammed-hydro facilities hold back large volumes of water, a failure due to poor construction, terrorism, or other cause can be catastrophic to downriver settlements and infrastructure. Dam failures have been some of the largest man-made disasters in history.The Banqiao Dam Failure in Southern China directly resulted in the deaths of 26,000 people, and another 145,000 from epidemics.

6) Cannot be Built Anywhere - This disadvantage of Hdyro Energy is present with other forms of Energy as well.Some forms of Energy are just better suited to some places.For example you can’t build a nuclear plant on top of an earthquake prone region,you can’t build a wind farm near the Dead Sea etc.Hydro Energy can only be built in particular places though enough of those places exist globally

7) Long Gestation Time - The time to construct a large hydro power project can take between 5-10 years which leads to time and cost overruns.

Kelly McParland: Ontario quietly reverses field on wind, solar energy | Full Comment | National Post

Kelly McParland: Ontario quietly reverses field on wind, solar energy | Full Comment | National Post

Times of international turmoil are great moments for domestic governments to make important announcements they don’t want to be noticed. Especially if the announcement involves a sudden reversal in policy that could seriously embarrass the government.

So Friday afternoon was an ideal time for Ontario’s Liberal government to take a big chunk of its alternative energy program and chuck it overboard. Attention was riveted on Egypt, where spectacular events were unfolding.  The perfect opportunity for Premier Dalton McGuinty to engineer yet another major reversal, while paying a minimal price among voters.

After years of touting wind projects as a critical piece of the alternative energy puzzle, the government let slip — very quietly — that offshore wind projects are no longer part of the game plan. Turns out there just isn’t enough scientific evidence that offshore wind projects do a lick of good, said Brad Duguid, the energy minister.

“It’s simply a case of recognizing we need to take a closer look at the science on freshwater offshore wind projects,” said Duguid. “Right now there’s only one in the world we’re aware of, in Sweden. There’s a number of issues that need to be looked at before anything could ever be considered for approval.”

Gee, now wouldn’t you think the government would have checked out the sciencebefore insisting wind power was the way of the future? Evidently not. The McGuinty people have been pushing ahead vigorously on the wind front ever since they concluded they could squeeze more votes from trendy enviro-enthusiasts, who are in favour of anything that sounds remotely Greenish, whether it makes sense or not.

They’ve been running into a spot of bother, though, as rural residents grow increasingly agitated at the monster wind towers being slapped up wherever the government sees fit to put them. Turns out the government may have been a bit rash in dismissing complaints that the low-level noise from the turbines can cause health problems. A court challenge launched late in January claims that the 550-metre minimum setback is far too close for comfort, and argues the government didn’t do adequate homework into the potential health hazards when it declared the towers to be free of any danger.

Added to McGuinty’s problems with wind are similar signs of trouble on the solar front. After strongly encouraging individual solar projects, and offering outrageously generous pricing on solar-generated power, the province unexpectedly announced last summer it was slashing the rate it would pay  on some projects.  On Friday, hundreds more Ontarians were told that installations they’d erected at the behest of the government can’t be connected to the provincial grid because of technical problems. Rural residents, some of whom have invested large amounts in solar generating operations, will be left high and dry. The Toronto Star reports:

“I’ve got $70,000 sitting right out in my backyard,” said Brian Wilson, who lives near Belleville, of his 10-kilowatt solar array. “I can go two doors down and they’ve got $70,000 invested, too.”

But they’ve both been told that they can’t connect to the electrical grid because of technical issues.

“It’s a mess,” says Kim Doherty of Farmed Energy Inc., who supplies solar equipment. He started getting calls from clients this week, saying they’d been told no connections are available for their projects.

One of his clients, a father-and-son team near Strathroy, made a $170,000 down payment on solar equipment, and built four concrete support platforms at a cost of $20,000 each, Doherty said

Angering rural voters, and battering your credibility with the environmental crowd,  aren’t great ideas if you run a government that faces an election in eight months. So it’s no wonder that Ontario’s Liberals sought to hide the bad news by releasing it when (they hoped) no one was watching. But the excitement in Egypt won’t last forever, and eventually people will notice that Ontario’s government, once again, has been forced into a humiliating retreat at considerable trouble and cost to individual Ontarians.

Ontario’s new dilemma: Too much power

John SpearsBusiness Reporter
Ontario residents were bemused to discover that on New Year’s Day 2011, on average, they were paid to use electricity.

If that seemed unusual – and it is – it’s only the start.

Within the next two years, the conditions that produced the bonus New Year’s power could crop up about one day in every seven, according to an analysis by the agency that runs Ontario’s power market.

A big reason: about 5,000 megawatts of wind powered generation is due to be connected to the Ontario grid in the next few years, producing surges of power that are more than the province needs.

The power surplus may be a head-scratcher for consumers, who saw blackouts and power shortages only a few years ago.

But energy bureaucrats are now hard at work trying to head off the impending surpluses, which force the province to give away power not just to customers in Ontario, but also to the U.S.

The focus of their efforts is a report prepared by the Independent Electricity System Operator(IESO), which operates the provincial power grid.

The report notes that 5,000 megawatts of wind generation capacity will come on stream by 2013. (This is roughly the amount of power Toronto uses on a hot day.)

That flood of new wind power changes the balance of energy, says the report.

“The IESO would experience surplus conditions roughly 14.5% of the time based on average wind output,” it predicts.

Under normal market conditions that would cause the price to fall to zero or below and some generators would shut down.

But the new wind farms, operating under current contracts that pay the operator 13.5 cents a kilowatt hour, would see all of their power flow onto the grid at the contract price.

Customers shouldn’t start anticipating lower bills. Although the market price might show up as zero, customers are still on the hook for the contractual prices awarded to wind producers. That’s collected through the “provincial benefit” payment that shows up as a separate line on the bills of customers who buy from retailers. Other customers also pay, but it’s buried in their energy charge.

Most generators don’t suffer, despite the zero price. The majority sell their power at prices fixed by the Ontario Energy Board, or contracts through the Ontario Power Authority, all of which are funded through the provincial benefit payments.

There’s one other, counter-intuitive problem with increased wind generation. At the moment, more wind power means more gas-fired power.

Because wind power is variable, it has to be backed up by natural gas-fired generators, kept idling to be switched in if the wind dips.

The reserve generators also have to be paid for, and they boost carbon emissions that wind power is supposed to prevent.

Bruce Campbell, vice president of the IESO, is working on the issues raised by the wind power increase.

Part of the solution: Start treating wind like other generators and shut them out of the system if their power isn’t needed, and call them in when it is.

Energy bureaucrats, who never use a straightforward word when they can invent a technical term, call that “dispatching” power.

At the moment, all wind power automatically flows into the system. Rules may be needed to limit the flow when there’s too much.

“We need to integrate the wind generation,” says Campbell. “We want to be able to dispatch wind just as we do other generation.”

Potentially, that means having to tell a wind farm operator that we only need two-thirds of the power it is likely to produce today or tomorrow.

One of the issues Campbell is now discussing with the power industry is how to do that. If someone gets shut out, who is it to be, and what, if anything, should they get paid?

That’s a crucial question for wind farms, says Robert Hornung, president of the Canadian Wind Energy Association (CanWEA).

Hornung acknowledges that as wind power increases, the rules will change.

“There’s always been a strong desire among system operators to ensure that wind ultimately will be treated like other forms of generation.”

But he says his members have to know what the new rules are if their output is put on hold.

“Is there any compensation? If there is, what formula is that based on? Those details really matter,” he said.

Better weather forecasting is also essential to better wind management, says Campbell. The more lead time the system has to anticipate wind quantities, the better, and the IESO is looking for ways to get precise forecasting.

When wind is going to be strong, it may be a good time for a nuclear plant to schedule some short-term maintenance work, or for water-powered generators to collect water behind dams for use when the wind slackens, he says.

In addition, power users can be invited to take advantage of markets when demand is slack. Some industries can plan a short-term production speed-up if they know there’s going to be lots of power and low prices the next day.

Better forecasting should also decrease the need for keeping back-up generation running, says Campbell.

But the details of who gets to produce, and how much they’ll be paid, when there’s a power surplus, remain to be decided. The IESO is now gathering opinions.

Hornung says CanWEA has yet to make its submission, but will do so.

“It’s a discussion we all need to have.”

Ontario’s new dilemma: Too much power - thestar.com

Plutonic Power, GE Energy agree to buy 50MW Canadian portfolio

Plutonic Power and GE Energy Financial Services have agreed to buy three of First Solar’s power plants in Ontario, Canada. Permitting for the projects, which have a combined capacity of 50MW, is expected to take place this spring and construction scheduled to start in June.

Despite selling the portfolio, First Solar has agreed to long-term contracts to supply engineering, procurement, construction and operation services for the 10MW Amherstburg, 20MW Belmont and 20MW Walpole facilities. The electricity generated by the three sites will be will be sold to the Ontario Power Authority under a 20-year energy-purchase agreement and connected to the province's distribution grid at five points.

"Expanding into both a new market and a new technology represents significant growth for Plutonic," said Donald McInnes, vice chairman and CEO of Plutonic Power. "Our solid relationship with GE Energy Financial Services enabled this expansion into our third joint near-term operating asset."

"This transaction is GE Energy Financial Services' first solar investment in Canada, broadening our US$6 billion renewable energy portfolio and supporting our strong partnership with Plutonic," said Mark Tonner, GE’s managing director. "We see significant growth potential for solar power worldwide, which continues to improve on technology costs and efficiencies."

Plutonic Power is expected to make an equity contribution of around CAN$6 million towards the project and will also take on the role of senior partner in the agreement; debt financing will be coordinated by First Solar and is expected to be in place at financial close.

http://international.pv-tech.org/news/plutonic_power_ge_energy_agree_to_buy_50mw_canadian_portfolio