Trends vs. snapshots: does Ontario need more or less electricity?

Ontario electricity demand 1994-2009The Saturday Toronto Star carried an interesting report on Ontario’s demand for electricity. A graph at the top of the Star piece shows the demand from 2001 to 2009. In 2001, Ontarians used 147 billion kWh; in 2009, 139. On that basis, the report says, demand is drifting down. Is it really? Because when you back up a little, and look at demand from 1994 to 2009, as in the graphic at the top of this post, you see the “down-drift” is really just a down-blip.

That’s the problem with graphs: they have a way of dramatizing things that look irrelevant when you take a longer view. Sometimes they “show” what their authors want you to see. Why did the Star’s graph start in 2001? Because that trend-line dramatizes how wrong the power system planners were when they predicted in 2007 what demand would be. Had the graph started in 1994, as does the one at the top of this post, you would see why the 2008 projection was for 158 billion kWh instead of the actual 148—power demand in Ontario had been trending up since 1994.

Will the up-trend continue? The City of Toronto predicts that the population of the Greater Toronto Area—the biggest population centre in the province—will have grown by 2031 to 7.45 million from 4.78 million in 1996. That is a population increase of 2.67 million. My guess is those 2.67 million extra people will need electricity, as will all the businesses that serve them.

The Star piece should have explored more fully why demand “drifted down” between 2007 and 2009. There are two main reasons. The worst economic downturn since the Great Depression is one: the recession hit major power users across Ontario. These include the auto industry, pulp and paper, and mineral/metal processing.

The exceptionally mild summers of 2008 and 2009, when hardly anyone in the province of Ontario ran their air conditioners, are the other reason. The coincidence of these two demand factors was the perfect storm for demand projections.

Plus, the strike against Vale-Inco in Sudbury, which I won’t relate to the recession but rather to corporate/union relations, freed up literally hundreds of millions of kilowatt-hours for more than a year.

The Star piece points out that a Greenpeace activist actually predicted back in 2005 that demand in 2010 would have dropped 10 percent. Does that prove that Greenpeace is able to predict both the weather and economic performance? Sadly no. It was a lucky guess. Greenpeace has been predicting hot weather, not cool, ever since they discovered that global warming is a sure-fire fundraiser. As for the economy, they would prefer we all shiver by candlelight. They have been advocating the demise of the western lifestyle since their inception as an organization, and like all misanthropic advocacy theirs is predictive, as in wishful. They say the same thing in boom and bust.

When you consider that Greenpeace, like all anti-nuclear “environmental” groups, constantly reassures people that we really don’t need all that much electricity, you wonder what their game really is. The Star piece gives a hint. It quotes the head of the Association of Major Power Consumers in Ontario as saying that natural gas-fired plants, “which cost hundreds of millions, can be installed relatively quickly to fill gaps in supply.” The upshot?

The risk is less than that of nuclear plants, which cost billions.

In other words, relax. If it turns out we’re wrong and demand does rise back up, we can quickly bring gas-fired plants online. Forget that the cost comparison—hundreds of millions for gas plants, versus billions for nuclear—refers to capital costs, not fuel costs. If fuel costs were compared, more people might realize that the reason off-peak power is cheapest is because most of it comes from nuclear plants. That means nuclear plants are cheaper to run than gas plants. Which in turn means a better long-term plan would be to build more nuclear, not gas.

In spite of this, the greens are advocating, most covertly but some overtly, a natural-gas strategy.

Is this really what the green groups want? Do they really want to expand the market for natural gas, a fossil fuel that produces greenhouse gases in huge quantities, in Ontario?

The answer is yes. By opposing nuclear generation, which produces zero greenhouse gases, the greens are ensuring that Ontario has no alternative but to adopt gas on a massive scale. Major green groups like Environmental Defence aggressively support gas plants, as witness their campaign to build a gas-fired peaker plant on the Holland Marsh. I guess expanding the fossil fuel market is more important to them than protecting sensitive wetland.

And since I led this post off by talking about graphs and trends, check out this source on petroleum and gas prices. By default, the gas price graph shows the price trend over the past month. Put your cursor onto the 1q view, then onto the 1y and 5y views. Notice on the 5y view how the low gas price coincided almost exactly with the two factors I mentioned above: the economic recession and mild summers.

Now, what do you think the gas price will do when the economy picks up again, the weather goes back to normal, and electricity demand resumes its upward trend?

9 comments for “Trends vs. snapshots: does Ontario need more or less electricity?

  1. Sean Holt
    November 2, 2010 at 12:47

    The word is that we have lots of natural gas.

    The new “shale gas” craze.

    I say “craze” because once the “greenies” see how and what gas companies use to hydro-fracture underlying rock shales to free the gas, the greenies will be putting a big-time kybosh on that as well.

    And rightfully so! For once!

    Eventually, they will come to see nuclear in a more favorable light. Either that or we’re all choking to death…

    I wonder which one will happen first?

    I for one am not holding my breath that ANY sensible [read “obvious”] solution to our energy woes will be forthcoming in my lifetime. I am however making every effort to educate my two children as to what this fore stated obviousness is!

    Truthfully…

    Sean Holt.

  2. November 2, 2010 at 13:40

    Sean, I hope you’re right about “green” groups opposing shale gas once they realize how dirty and dangerous fracking is. I am afraid though that most of them are so anti-nuclear that they don’t really care about the environmental and health risks associated with shale gas.

    For example, anti-nukes in Vermont who are going all-out to shut down Vermont Yankee say there is plenty of local gas to replace VY’s output. According to Meredith Angwin, who blogs at Yes Vermont Yankee, they are referring to shale gas. See http://yesvy.blogspot.com/search?q=%22shale+gas%22

    Same thing with the “greens” who want to shut down the Indian Point reactor on the Hudson River; see Rod Adams’s report on it at http://atomicinsights.blogspot.com/2010/04/smoking-gun-alex-matthiessen-president.html

  3. Lynne
    November 2, 2010 at 18:06

    I attended the Picton Symposium on Wind Turbine Noise last weekend and was fortunate enough to see a lecture by Ross McKitrick PhD entitled “Coal Kills: Where Are The Bodies?” Dr. McKitrick really put the cat among the pigeons when he stated that the Ontario government knew early on that shutting the coal plants would not make a significant improvement in the air quality. Despite having this information, they stifled the report and claimed otherwise. This is a must-read presentation. Look carefully at the DSS consulting studies.

    http://windconcernsontario.wordpress.com/2010/11/01/the-case-against-the-case-against-conventional-energy/

  4. November 2, 2010 at 18:57

    Lynne, yes I’m familiar with McKitrick’s argument and he’s right. Death-by-coal is pure bogus statistics that the government borrowed straight from the natural gas–funded Ontario Clean Air Alliance as soon as they took power in 2003. They ran with it until it became just a joke, at which point they switched to attacking coal on the basis of climate change.

    The government also showed early signs of sanity though, when they approved the refurbishment of Pickering 4 and put new nuclear build at Darlington up for tender. However, they have mostly toed the OCAA’s line and adopted the gas strategy, using wind as a PR cover.

  5. Sean Holt
    November 3, 2010 at 11:28

    There is no question. Gas companies sure love wind! They are even building their own
    wind farms, buying existing ones and partnering with other wind companies to get as many
    wind farms built as possible. And why not? Average useful power from wind is somewhere
    between 20 to 30% of nameplate capacity, meaning of course, that gas is doing the heavy lifting 70 to 80% of the time! With the seemingly endless and bottomless subsidies floating around, this wind/gas arrangement is better then gold!

    Boy are we suckers!

    Sean Holt.

  6. November 3, 2010 at 13:01

    Here’s how it boils down. Poor and middle-class urban Ontarians are paying rich environmentalists to install solar panels and wind turbines out in the country, all to benefit rich gas companies. And what do the poor and middle classes get in return? Higher electricity prices.

  7. Lynne
    November 4, 2010 at 14:18

    So, in other words, the distortion of Ontario’s energy supply plan has been based on smoke and mirrors. Just great.

  8. Lynne
    November 9, 2010 at 16:44

    http://windconcernsontario.files.wordpress.com/2010/11/doc1109101-rotate.pd

    “Today, Ontario PC Leader Tim Hudak released a confidential document from Sussex Strategy Group, a Canadian lobbying and public affairs company. Both Chris Benedetti and President, Paul Pellegrini were Aids to senior Liberal ministers.

    It shows Dalton McGuinty’s failed energy experiments are expected to increase Ontario families’ home hydro rates by 36 percent in 2012. Worse still, the same document outlines a plan for a special interest group to publicly defend the McGuinty government’s costly energy agenda by confusing the public and the media on the real cost to families.”

    Some excerpts:

    “In this it will be critical to ‘confuse’ the issue in the political/public/media away from just price.” (p.2)
    “Lack of considerable economic investment (jobs) to yet come online (lots of announcements to-date but few have actually been realized yet).” (p.3)
    “Residential rates will increase another 36 percent in 2012.” (p.14)
    “ Research needs to support this, and should be coordinated with MEI and OPA.” (p.7)
    “In order to talk past the noisy activists and editorial positions, there needs to be a coordinated, paid, earned and social media campaign.” (p.9)
    “Further research is also required post spike in bill fury, including focus groups to colour, wording and emotion to craft effective, targeted messages”. (p.8)
    “Perception that the pro-renewable sector (industry, ENGOs, etc.) have been too quiet and need to be mobilized. This needs to be addressed immediately!” (p.4)
    Goal is to have $300,000 in hand through contributions from developers and manufacturers to seed the campaign. Anonymous contributions to the campaign are possible. (p. 11) ”

    The closer one delves into Ontario’s energy situation, the worse it looks. First Ross McKitrick showed that the McGuinty government knew in 2003 that closing the coal plants would do little to improve air quality, but that they went ahead anyway. Now we see that they are fully aware that their plans will dramatically increase the cost of electricity. Lastly, the Minister of the Environment stated today that plans for a regional cap and trade system are to be accelerated.

    What is your take on all this?

  9. November 10, 2010 at 12:13

    Lynne, no surprise that the GO is trying to sell this strategy to the public, and no surprise they’re hell-bent on luring investors into FIT-subsidized projects. There is exactly one mention of natural gas in the whole Sussex report, which shows how completely wind and solar have been pressed into service as the Trojan Horse for gas.

    And any talk about cap and trade is even purer PR than wind-and-solar. The Regional Greenhouse Gas Initiative (www.rggi.org) has existed for five years, and would be a natural fit for Ontario, since (1) we’re allegedly concerned about greenhouse gases and (2) it covers only power plant emissions and power plant emissions are a political issue here, and (3) it covers states with which we trade power. In the whole five years of RGGI’s existence there has not been a single whiff of interest from Ontario in joining it.

    And why not? Because under RGGI carbon prices are low and when carbon prices are low coal-fired power is actually more competitive than gas! Gas, let’s never forget, is the current government’s preferred fuel.

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