Two cars, and a daily decision: an Ontario parable

You own two cars. One is reliable, starts every time you turn the key and gives excellent performance. The other is a bit problematic. About five times each month, there’s trouble. Either it doesn’t start, or it loses power during the drive, or stalls in the middle of a trip.

Now, you understand car ownership. You understand that when you own a car, you need somewhere to put it: a car weighs usually around three or four tons, and would just barely fit into a large-ish living room. So you need a parking space for it, and anybody who owns a car in the city knows this is not a trivial thing. If you don’t have a parking spot, owning a car can be a serious pain in the neck.

Not only is that pain related to endless effort in moving the car from spot to spot and thinking about where you’ll move it next, it’s also very expensive. Every time you move the car you lose money: you pay for the fuel that moves the car, and you pay for whichever parking spot you move it to, and all that takes time and time is money.

So to save yourself a huge amount of bother, you have a separate parking spot for your junker car. You pay handsomely for that spot, just as you do for the one in which you keep your reliable car.

Also, there are other expenses that go along with car ownership. I’ve already mentioned fuel. But there’s also insurance, plates, and maintenance. Maintenance costs are, of course, much higher with your unreliable car. They include visits to the garage to fix whatever is currently wrong, plus they include the cost of getting your car to the garage, since you are not able to drive it because it has died on you. So add tow truck expenses to the total.

Anyway, you get the point. Owning an unreliable car is a pure pain in the neck.

Now, answer this question. When you are heading out the door to go to work, or anywhere else, which one of these two cars is your go-to car? The unreliable one, with a probability of one-sixth (16.66 percent) that your trip will involve some sort of car trouble, or the reliable one?

It sounds like a silly question. Nobody in his right mind is choosing the unreliable car. In fact, nobody in his right mind is even keeping the unreliable car. Everybody is either getting rid of it, together with the unneeded parking space and plate and insurance and extra fuel expense, or replacing it with a reliable car.

In fact it’s a perfectly reasonable question. We make decisions like that every single day, in Ontario electricity. We consciously and deliberately built exactly this kind of decision into the way we run our electricity grid.

In 45 of the 744 hours of January 2016, the Ontario grid-connected wind turbine fleet produced less than 6 percent of the electrical energy it is rated to produce. Those 45 less-than-six-percent hours occurred on seven separate days; six of these seven days were weekdays. A fleet that produces less than 6 percent of its rated power—that is like a car that doesn’t start.

Have a look at the table below; feel free to sort columns by clicking on their headers.

As you can see in the table, in 448 of the 744 hours of January 2016, the Ontario wind fleet produced less than 50 percent of its rated capacity. That is like a car that doesn’t have power when you really need it, like when you are merging onto a divided highway or passing or going up a hill.

Imagine you know someone whose modus operandi is to choose, consciously and deliberately, the unreliable car. You are constantly bailing this guy out of car-trouble-related jams.

It’s not much of a stretch to imagine your patience with this guy’s deliberate policy of choosing the junker as his go-to car wearing a bit thin after you’ve bailed him out four or five times—knowing he has a perfectly operational and reliable car at home, in his other parking spot.

Well, that is exactly how we deal with wind in Ontario. Wind is a must-take energy source. If the wind is blowing and there is enough power to meet demand, and the other non-wind generators are reliably providing power, then they have to come off. Wind stays on, in spite of its awful reliability record. It gets priority. It is our go-to energy source.

Just like your imaginary friend with the imaginary, and apparently insane, policy of getting into the known junker that is very likely to give him car trouble when he could easily save himself (and you) a heap of expense and inconvenience by just using the reliable car.

How much money could we Ontarians save on our electricity bills if we were not running our electricity system in a way that gives preference to low-quality, unreliable, high priced wind power?

Explore that table. You will find a number of instances where when wind kicked up, hydro was reduced. Wind costs 12 cents a kilowatt-hour in our system; hydro costs 4 cents. Wind is owned by private sector companies, and the profits they are guaranteed by the 12 cent rate are taxed at 15 percent.

Hydro is almost all owned by us, the citizens of the province. The company that runs the hydro system, when it makes a profit, turns 100 percent of the dividend over to the province, where it goes into general revenue.

But it has to make a profit for us to benefit from it. It’s kind of hard to make a profit when preference is given to producers of expensive, low quality wind power, over cheap, high quality hydro.

It wonders me.

7 comments for “Two cars, and a daily decision: an Ontario parable

  1. Ike Bottema
    February 22, 2016 at 07:03

    Not that it’s any consolation however the same situation is being faced in Europe.

  2. Kyle
    February 29, 2016 at 00:44

    Imagine a world where energy sources earn based on their reliability. $0.10/kWh for anything with a 100% capacity factor. A nuclear plant would make about 9 cents per kWh. Hydro produces energy whenever we need it so that would complicate the price. Wind is completely unpredictable and useless if we have variable hydro at our disposal and plenty of baseload nuclear.

    • Kyle
      February 29, 2016 at 17:12

      Meant 9 cents. It’s a typo I’m sure and I can’t edit it.

  3. robert budd
    March 13, 2016 at 19:46

    We should all be praying for windless days in Ontario now. The system works best and is cheapest then. Just looking at the Sygration numbers, this weekend has been another brutal one for ratepayers. Electricity generation is worthless on the market most of both days. Right now (Mar. 13 ) ~half the wind fleet is being paid not to produce, six reactors are being paid to be maneuvered and we are spilling more hydro than the remaining “operating” wind fleet is producing.
    And if the current situation isn’t painful enough the IESO just awarded contracts for 299mw more “junk generation” from wind. If you wanted to intentionally trash the public interest in On. electricity generation, you’d have a hard time improving on what Energy Minister Chiarelli is doing. It makes me wonder too.
    Here is a link to Greenpeace and the natural gas pusher Jack Gibbons applauding the new “cheaper” wind contract approvals. They are using the new lower bid price for the wind to argue against Darlington refurbs, but totally fail to mention that the real value of wind generation to On. is virtually worthless at any price now. It’s sooo much easier for wind developers to bid low when they know they will be paid to curtail turbines with no wear and tear for 25% of their so called generation.

    • March 14, 2016 at 11:01

      We are entering what will be a prolonged shoulder spring, during which wind will knock the extra hydro out. Because an electrical kWh is, by design, so much so much more expensive than a gas-fired or wood fired one (though many times cleaner), there will be many millions of tons more CO2 dumped into our pristine Ontario air. That’s because we’ll still use artificial heat in the shoulder season. So, thanks OCAA and Greenpeace.

      • robert budd
        March 16, 2016 at 22:01

        I’d like to know how much of On. electricity demand reduction is just the movement to NG or propane for heating. You can buy a used electric water heater real cheap in On. now. Good luck selling geo-thermal.
        NG demand must be growing significantly in On. with both purveyors and rural interests like the OFA clamouring for extension of the distribution system.
        20 years ago we heated chicken barns with cheap, clean, safe Ontario generated electricity. Now its going to be NG from outfits like EPCOR hoping to get on the bandwagon while their K2 wind turbines get paid to be curtailed 25% of the time. I don’t think this is just happy coincidence for them and its not emissions progress.

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