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Surplus wind power could cost Ontario ratepayers up to $200 million: IESO  

Credit:  By: John Spears Business reporter, Published on Tue Feb 26 2013 | Toronto Star | www.thestar.com ~~

Coping with surplus wind power will cost Ontario electricity ratepayers up to $200 million a year if market rules don’t change, says the power system operator.

Moreover, it says, if it can’t control the flow of wind and solar power onto the Ontario grid, then “reliable and economic operation of the power system is, at best, highly compromised and likely not feasible.”

The Independent Electricity System Operator (IESO) makes the statements in a filing with the Ontario Energy Board.

It is responding to complaints from big wind power companies that the IESO’s proposals to impose new market rules on wind and solar power will cost them millions in lost revenue.

The dispute comes as more and more renewable power is about to flow onto the province’s power grid.

About 2,700 megawatts of wind and solar power are currently feeding electricity into Ontario’s system, three-quarters of it wind. That amount is set to more than triple by January, 2016.

Solar power generally flows into the system when it’s most needed, when demand for power is high.

But wind often blows at the wrong time – overnight when demand, or “load” on the system is low – and dies when demand is high.

“It is not unusual for the wind to fall off in the morning at the same time as the morning load picks up,” says the IESO.

At present, the IESO can’t control the flow of wind and solar onto the system in the same way it can control the output of other generators. It all flows onto the grid, and is paid a fixed price.

When there’s more power than the system can handle, the IESO sells it to neighbouring provinces and states – sometimes at a loss, and sometimes actually paying them to take it.

Those losses are absorbed by ratepayers, and added to the electricity bill as the “global adjustment,” which now often exceeds the price of energy by a wide margin.

So far this month, for example, the market price for power has averaged 2.96 cents a kilowatt hour. The global adjustment has been 5.73 cents a kwh. Consumers pay delivery and debt.

Another strategy is to close down a nuclear unit. But nuclear units can’t be re-started in a hurry; it takes a couple of days. During that time, demand can rebound, forcing the IESO to buy more power from gas-fired plants.

Bruce Power has developed techniques for reducing the output from some of its units without closing them outright. But there’s a cost to that as well: Bruce Power still gets paid for its lost output. And the reduced output doesn’t always soak up the entire surplus.

Without being able to control the renewable output, the IESO says, “by 2018, reliable and economic operation of the power system is, at best, highly compromised and likely not feasible.”

Terry Young, vice president of the IESO, says that doesn’t mean the power system will become physically unreliable if the rules don’t change:

“We wouldn’t put ourselves in a position where reliability is compromised, but in order to do that it’s going to become more expensive to maintain it,” he said.

The IESO has drawn up new rules that will allow it to shut output from wind and solar operators off the system when there’s surplus power.

The renewable power generators are fighting the new rules vigorously.

Most have 20-year contracts with the Ontario Power Authority giving them unrestricted access to the power grid.

That, they say, was part of the deal when the Ontario government launched its campaign to encourage renewable energy in 2009.

“It is nothing less than a reversal of government policy with respect to encouraging the use of renewable power,” the power companies have told the energy board.

They have asked the board to force the IESO to review its new rules.

Source:  By: John Spears Business reporter, Published on Tue Feb 26 2013 | Toronto Star | www.thestar.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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