Ontario’s IESO recently released their “2023 Year in Review“ and it confirms some suspicions, including less generation from IWT (industrial wind turbines) and solar despite their contracted “first-to-the-grid” rights.
The biggest surprise is the review revealed a year over year slight drop in Ontario demand from 137.57 TWh in 2022 to 137.1TWh in 2023. The drop happened despite the ongoing efforts to decarbonize our generation with demand reputedly increasing as IESO stated in their recently released; “Annual Planning Outlook” claiming we will see “steady demand growth year over year, with total demand increasing 60 per cent over the next twenty five years.“ Strangely enough, while demand declined by .47 GW (gigawatts) year over year it was reported by Statista that Ontario’s population grew 3% from 16.1 million to 16.6 million in 2023 yet electricity demand fell! Hmm, what do IESO attribute this to?
Well as we have come to expect during these times, IESO blamed it on the weather, stating: “Weather had a significant impact on 2023 demand, as the winter and summer months were milder than normal“and they also blamed it on “economic activity, which was diminished slightly owing to inflationary pressures.“
On the “weather” issue they said nothing about how an El Niño year affects the weather resulting in how “trade winds weaken and the Pacific Ocean tends to release more heat into the atmosphere.“ Despite the foregoing IESO in its recently released “Annual Planning Outlook” prattle on and on about “climate change” and “decarbonization” going as far as to state: “Climate science has demonstrated that the global climate is changing due, in part, to an accumulation of GHG emissions in the atmosphere.“ It seems obvious IESO Staff need to review the recent released Climate the Movie (The Cold Truth) in which prominent scientists debunk the claims of the Church of the Climate Change Cult!
On the “economic activity” issue we should suspect due to many small and medium businesses shuttered (120,000 across Canada) due to the Covid lockdowns that a good percentage of them were Ontario based so that presumably, represented the decline in “economic activity” resulting in diminishing electricity demand in 2023.
Let’s look at a few issues coming out of this “Review”
Peak demand in 2023 reached 23,713 MW on September 5, 2023, and the review gives it a lot of attention but compared to past peaks it pales as the highest summer demand peak hour was back on August 1, 2006, when it reached 27,005 MW. Had they bothered to review their history of the top 20 peak hours they would have noted the September 5, 2023 peak was over 1,600 MW short of number 20 on the “peak” list back on August 12, 2002!
The “Review” also has nuclear capacity showing as 13,144 MW but at no time during the year was it at that level as many of the units were, and still are, shut down for refurbishment. As of today the “grid connected” nuclear capacity is (as of hour 18) shown as 6,561 MW or slightly less than 50% of what IESO claim in their “Review”!
Looking at imports and exports it is interesting to note the former dropped from 7.9 TWh in 2022 to 4.1 TWh in 2023 and interestingly IESO blame it those Quebec wildfires (14 of them were caused by an arsonist now in jail but that’s not mentioned) stating it was one reason Quebec was unable to export hydro. The second reason was apparently “because of hot, dry weather contributing to lower hydroelectric output“. Ontario’s exports were also down by 1 TWh, but no reason is given by IESO.
In respect to the latter perhaps the reason for lower exports was related to those IWT (industrial wind turbines) whose generation fell by 1.6 TW from 2022 as did the grid connected solar which fell by .5 TWh. Ah yes, the vagaries of wind and solar! Despite those drops by wind from 13.8 TWh in 2022 to 12.2 TWh in 2023 and solar, IESO reported exported generation in 2023 was 16 TWh (enough to power 1.8 million average Ontario households) and we sold it for pennies as the average HOEP (the wholesale price) was a miserly 2.99 cents/kWh!
Should one do the math on the foregoing and simply deduct the imports of 4.1 TWh from the exports of 16 TWh it comes to 11.9 TWh or almost exactly what those IWT generated (12.2 TWh) in their unreliable and intermittent way! If we go further and suggest all of those exports were either IWT generation or caused baseload generation to be exported, the cost associated was approximately $1,251 million! The latter is a simple calculation: the 11.9 TWh of net exports caused IESO to manage the grid and they sold it to our neighbours at an average price of $29.9 million/TWh so it would have generated revenue of about $356 million (11.9 TWh X $29.9 million). The cost of that, if it was all IWT generation or caused other generation (baseload) to be exported at $135/MWh, would have been approximately $1,607 million (11.9 TWh X $135/MWh). If one deducts the $356 million earned from the export sale it indicates, we Ontario ratepayers/taxpayers were forced to absorb the above noted $1,251 million in costs representing about $260.00 per Ontario household!
Natural gas plants stepped up
While those IWT and solar panels generated less power in 2023, Ontario’s natural gas plants with their ability to ramp up or down came through when needed and their generation increased from 15.2 TWh in 2022 to 19.1 TWh in 2023 while hydro generation fell slightly by .6 TWh.
Ontario’s Minister of Energy, Todd Smith’s on a Podcast
Interestingly enough, Ontario Energy Minister, Todd Smith was on a podcast February 27, 2024 discussing the Federal CER (Clean Electricity Regulations) created by the Federal Minister of the Environment and Climate Change, Steven Guilbeault and had this to say:
“So when it comes to generating electricity, for the time being, natural gas is going to play a vital role as the insurance policy to keep the lights on. However, as more storage is added to our system and potentially long duration storage, which has the potential ability to dispatch electricity for 10 to 12 hours at a time will be less reliant on our natural gas fleet over time.
For home heating here in Ontario, there’s well over 70% of our homes that rely on natural gas for heat right now. We have several pilot projects that are underway in municipalities across the province to move to a hybrid electric heat pump, which is being well received in certain communities. But if we were to move, let’s say to all electricity for home heating, we would have to build several more Bruce Powers to make sure that we have the electricity that we need. And our system operator told us that in our pathways to decarbonization report that I asked them to produce for us on what it would take to get to net zero by 2050, and they said it would take 18 gigawatts of nuclear alone, but hundreds of billions of dollars in new transmission and new generation of other types as well.“
When asked further about the “transition” demanded by the CER Minister Smith had this to say: “Yeah. So I mean, there are other ways to reduce emissions and this is not the way to do it. By ensuring we have that reliable, affordable system, we’ll be able to reduce emissions where the actual emissions are in our transportation, in our electric arc furnaces, in our home heating potentially.“
In the podcast he goes on to brag about the new EV plants as well as expanding our transmission lines to accommodate increased electricity demand required throughout the province to accommodate the CER but says nothing about the relative costs.
We Ontarians should find it disappointing the province is acting in such a meek and mild way in fighting the CER as the “net-zero” transition will drive up costs tremendously as we are refurbishing nuclear plants, adding short term storage while pushing heat pumps for heating and building new transmission lines at huge costs despite our electricity system currently being 90% emissions free.
Conclusion
It is truly disappointing IESO have seemingly abandoned what was formerly their unbiased disclosure of “facts” and seem to now be endorsing the “climate change” cult and abiding by the dictum of the Federal Government via its Clean Electricity Regulations (CER), released in August 2023! The CER “outline steps to mandate the decarbonization of electricity systems across the country. The IESO has released its formal response to the draft CER, which provides comments aimed at supporting an orderly transformation of the electricity system.“
IESO obviously take their direction from Minister of Energy, Todd Smith, who fails to recognize his positioning in response to the CER is simply an endorsement of it. The minor changes made to the CER will do nothing to change the IESO forecast in its “Pathways to Decarbonization Report” stating it would cost “hundreds of billions of dollars in new transmission and new generation of other types as well.“NB
Refurbish our nuclear plants but ditch the rest!
NB: What the Pathways to Decarbonization Report said: “In terms of both transmission and supply, the Pathways scenario would need $375 billion to $425 billion in new infrastructure investment, and result in an annual total system cost of approximately $60 billion by 2050.“
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Author: parkergallantenergyperspectivesblog
Retired international banker. View all posts by parkergallantenergyperspectivesblog
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