Friday, January 23, 2015

Sometimes enough power means too much power

Supplying electricity to a province as large and diverse as Ontario is a complex undertaking, enough that one can always find some detail to “prove” a predetermined attitude, or so it seems. A case in point is the electricity oversupply we had on Christmas.
This is where J. J. Abrams gets his power
That day, as trumpeted by some anti-wind bloggers, saw so little demand for electricity in Ontario (due to mild weather, and most people not being at work) that we had more than we needed, had to give it away to other jurisdictions, even pay them to take it from us. Which means we (Ontario power customers) paid for wind energy we just gave away. Shocking!
We actually had too much power of all sorts: wind, nuclear, gas and hydro, so we bought power from all of those sources, and paid each to forgo producing more, to keep the system in balance. Yes, even worse than buying electricity we didn’t need, we even paid for some that wasn’t made! Scandalous! Or is it…
Context is key. On the lowest-demand day of the year, we had more electricity than we needed. Our power system was built to ensure we don’t run out on the days when we have our highest demand. To have enough power available to keep the A/C on for hot summer afternoons, we need to have far more available than can be used on mild winter holidays.
Sure, it would be nice if we just paid for exactly the power we needed, when we needed it, but that’s not realistic. Power plants cost big bucks to build. Heck, they can cost a half billion dollars NOT to build, as the cancelled gas plant scandal has shown! For builders to take on projects of that scale, they require guaranteed minimum contracts to cover fixed costs and make loan payments so they don’t go belly-up in a season of low demand.
Without it, firms simply wouldn’t be willing to lay out the funds to build power generation. That would leave us without enough domestic generation to meet our needs, and we’d have import more expensive power, which would make electric bills higher.
Of course, if all power generation were publicly owned, we would not have to make such payments. Yet we’d still pay, because the public would be on the hook for the full construction and operating costs, regardless how much power we did or didn’t need. Our bills would reflect that.
Another option would be some kind of storage capacity, so we could “bank” unused power and use it later when we needed it, instead of having to dump it. This could work, but the cost to build that storage would also be massive, and again go against your power bill.
So in the end, there is no avoiding it, and you can’t put all the blame on wind, or nuclear, or any other mode of generation. There have been many signs of mismanagement of the power system by the government, but paying for some wind we didn’t need on a low-demand holiday isn’t one. The simple fact is that if we want to have enough power ready when we need it most, then we must overpay a bit when we need it least. It’s all part of the complex trade-offs of providing reliable power service to Canada’s largest economy.  
Published as my Root Issues column in the Barrie Examiner as "Planning needed to keep Ontario powered up"
Erich Jacoby-Hawkins is a director of Living Green and the Robert Schalkenbach Foundation.

Here's an email I received in response to my column:
Dear Erich,

I read your piece in the Barrie Examiner on the complexity of the electricity system.  I agree that the system is complex, but our over reliance on nuclear energy is a big factor in the current large power surpluses we are experiencing.  These plants have to operate at a steady level 24/7 and provide little system flexibility.  

A far better approach would be to reduce our dependence on nuclear energy and continue to increase our development of renewable energy in combination with water power imports from Quebec.  Quebec has massive capacity to store energy by holding water in reservoirs. Ontario's recent deal to exchange up to 500 MW of power with Quebec can be used to essentially transform Ontario wind and solar power into firm baseload power.  We send power to Quebec when we have a surplus; they send it back when demand peaks in Ontario.  

Of course, one of the key advantages of solar energy is that it produces most of its power "on peak" -- hot sunny days when power demand is highest.  Another reason we have a power glut is that the Ontario energy bureaucracy has consistently over estimated future demand for power and underestimated the potential of energy efficiency.  We need a more flexible and responsive electricity system, and that means one built around distributed generation sources like wind and solar.

Thanks for your time, 

Federation of Community Power Co-operatives  |  (416)977-5093 ext 2380

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