Is the Independent Electricity System Operator (IESO) really forecasting power needs in Ontario? Or, simply “paying up”?
The IESO manages the electricity grid in Ontario. That job has become much more complex since Ontario started adding intermittentrenewable energy (wind and solar) to the grid. Complicating matters further is the stipulation, via the Green Energy Act, that both those sources of generation get “first to the grid” rights.*
Part of this management responsibility is to forecast generation. IESO in their forecasting efforts for Surplus Baseload Generation (SBG) look forward for 10 days with revisions/updates made daily to those forecasts; the tenth day is added as the forecast period becomes reality. IESO issues forecasts and often now even issue an “Alert”, two to four days out, which is defined as: “Forecast SBG will exceed the forecast of expected exports for four or more contiguous hours.”
To explore their “forecasts” let’s take a look at their forecast for August 25, 2013. IESO's outlook for that particular Sunday, made on August 23, 2013, predicted an SBG of 38,786 megawatts (MWh) and an “Alert.” For six of the 24 hours, the anticipated SBG was in excess of the forecasted “exports” which were projected as 2,700 MW per hour.
The August 24, 2013 forecast, however, for August 25, 2013 noted zero hours when the SBG would exceed those export forecasts (the same 2,700 MW) and the SBG for the full day had dropped to 19,485 MW—the “Alert” disappeared.
So the question becomes, exactly what happened in the 24 hours that changed the SBG so dramatically? Did the weather forecast change that much, or did several of the large industrial users suddenly decide that they would run their plants on the weekend to suck up all of that SBG?
The short answer is, neither of the above!
What appears to have happened is that IESO arranged to have Bruce Power steam off a huge chunk of their nuclear generation (as much as 1,600 MW), perhaps get the Ontario Power Generation to spill off clean hydro, and get those NUG-contracted generators to also shut down another 600 MW of gas generation.
Despite the foregoing Ontario still exported 51,528 MWh(according to IESO's Market Summary of August 25, 2013) at an “average weighted price” of $20.58 per MWh (2.06 cents per kWh) while wind produced 14,304 MWh. That earned wind developers almost $2 million, with $1.6 million (the difference between earnings from the exports and what we paid the wind developers) therefore allocated to the Global Adjustment (GA) along with the monies paid to Bruce; perhaps as much as $2.5 million, the NUGs; perhaps another $1 million and a loss of revenue to OPG.
We are unable to determine the costs of the latter three or the monies paid to the solar generators as IESO don't provide any details on who they asked to curtail production or what we ratepayers paid them to curtail their production.
Any efforts to obtain the latter information under the Freedom of Information and Protection of Privacy Act would be declined as I have learned from past efforts. The foregoing are simply the writer's efforts to reasonably calculate what that recent Sunday cost the ratepayers of Ontario.
Based on the suppositions noted above, we would estimate that the additional costs associated with those payments to not produce power and what was lost by exporting the surplus power added a minimum of 1.4 cents per kWh (double the stranded debt charges) to the average Ontario ratepayer's bill for that one day in late August 2013.
We should all hope for fewer days like this as IESO's apparent efforts at forecasting are simply meant to determine who should be paid for the follies of the energy policies put in place by the Liberal government and its energy ministers.
It is time that the Ontario ratepayers demand that we stop “paying up” for the mess that the Liberals have created, and for the IESO to stop claiming that what they do is “forecasting”!
Parker Gallant,
August 27, 2013
*(similar to nuclear, must-run hydro, and the obligation to take the NUG/non-utility generators output. The latter consist principally of older contracted gas plants whose contracts have been recently renewed by the Ontario Power Authority/OPA)
The views expressed here are those of the author and not necessarily those of Wind Concerns Ontario.
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