The Independent Electricity System Operator (IESO) just released their “2nd Estimate” of the Global Adjustment (GA) for the month of June and it was a new record; topping out at $719.9 million or $79.12 per megawatt hour (MWh). Equivalent to 7.9 cents per kWh and added to the Hourly Ontario Energy Price (HOEP) of 2.4 cents per kWh means the cost of generating a kWh of electricity in Ontario for June averaged 10.3 cents a kWh or 2.1 cents per kWh over the current average time-of use (TOU) electricity rate of 8.2 cents. That 2.1 cent jump, if carried through to the fall when the Ontario Energy Board announce their next TOU prices (effective November 1, 2013) will mean Ontario's ratepayers will see the price per kWh jump by 25.6% and add $288 annually to the average ratepayers bill to accommodate the increased GA. Ratepayers should also expect their delivery rates to increase but that forecast will be left for another day.
To put the June 2013 GA total of $719.9 million in perspective it topped out at $135.1 million (23.1%) higher than June 2012 and the GA per MWh of $79.12 came in at $15.01 per MWh (23.4%) higher than IESO had forecast only 30 days earlier at the start of June 2013. The GA for June 2013 was 45.9% higher then the June 2012 GA of $54.22.
IESO's forecasting is assumed to be based on; history of demand patterns coupled with generator capability (most power in Ontario is contracted for at set prices) and weather forecasts from Environment Canada and others. For the past year IESO's estimates also include their own weather forecasting; as it relates to wind generation.
The latter was the subject of what IESO refer to as SE-91 (Renewable Integration) a “stakeholder” engagement that looked at the vagaries of intermittent renewable energy and how best to integrate it into the grid to ensure stability. The concept was; if IESO could forecast production from those sources (wind and solar) which are weather dependent then they could better schedule peak generators such as; coal, hydro or gas or could curtail, dispatch off or constrain production from wind generators and Bruce Nuclear. The initial focus on wind production and the concept presented was that wind developers would be required to erect meteorological towers at their cost. These “stations” would allow IESO to electronically tap into the data to determine just how much power might have been generated and pay the developers for the constrained power. Read more »
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