Tag Archives: IESO

Nanticoke, once North America’s largest coal plant, to host 40MW solar farm

Okay, it’s ridiculous to compare a 40-megawatt solar PV park to a coal-fired power plant that could crank out 4,000 megawatts at peak capacity, but the fact Ontario Power Generation (OPG) got a contract today to build such a solar project at the old Nanticoke Generating Station is, at the very least, symbolically significant.

Ontario’s Independent Electricity System Operator announced the results Thursday of its Large Renewable Procurement (LRP), which, for good reason, replaces the previous feed-in-tariff (FIT) program. The FIT program just couldn’t keep up with the pace of technological change and learning in the industry, and since the solar and wind industry in Ontario is now well established, it was time to abandon the rich premiums that came with the FIT and make the big boys of renewable energy compete for Ontario’s business.

In total, 455 megawatt of wind, solar and hydro was contracted out as part of the LRP:

  • Five wind contracts totalling 299.5 MW, with a weighted average price of 8.59 cents per kWh;
  • seven solar contracts totalling 139.885 MW, with a weighted average price of 15.67 cents; and
  • four hydroelectric contracts totalling 15.5 MW, with a weighted average price of 17.59 cents.

See list of projects here.

The lowest price Ontario got for wind was 6.45 cents, which is half of what it initially paid under its feed-in-tariff program. As Ontario’s Clean Air Alliance pointed out, that’s lower than what a re-built Darlington Nuclear Station is expected to cost, assuming it doesn’t go over budget (and history says it likely will). Now, nuclear is baseload, wind isn’t. But keep in mind that the purchased wind power comes risk-free to Ontario ratepayers. Can’t say that for nuclear deals in the province, no matter how much lipstick you put on a pig.

With solar, the lowest price locked in was 14.15 cents, which is remarkably close to what Ontario was paying for large-scale wind under its FIT program. It’s also significantly lower than rates for large-scale solar under the FIT program, which back in 2013 started at 34 cents and climbed from there.

These power purchase agreements (PPAs) show just how much solar costs have fallen — and will continue to fall. Now, you may be tempted to point to super-low cost solar contracts announced in places like California, Texas and New Mexico. Toronto-based Skypower has even bid 8 cents (U.S.) for projects in India. But keep in mind the solar regime isn’t as favourable in Ontario, the dollar is lower, and projects were tied to some social goals. For example, 13 of 16 projects include participation from one or more Aboriginal communities, including five projects with more than 50 per cent Aboriginal participation. I wonder, however, if the province could have secured even lower bids if it agreed to backstop loans on winning projects — perhaps from a green bond issue?

Still, the price is heading in the right direction. As the Canadian Solar Industries Association said,

“It is also the first time that a utility scale solar project has been contracted at a price that is lower than the retail rate of electricity in Ontario.”

That’s a milestone we should all remember.

But back to the OPG contract. Its significance wasn’t lost on Dan Woynillowicz, policy director at Clean Energy Canada.

“It’s both a powerful symbol and great progress to see a contract offered for a solar farm that will be built on the land once occupied by the Nanticoke coal-fired power plant, once Canada’s top greenhouse gas polluter.”

I wrote about OPG’s planned bid for solar projects last May in Corporate Knights. At the time, OPG was hoping to win up to 120 megawatts worth of projects, which would be spread across its shut down Nanticoke and Lambton generation sites, as well as its still-operating Lennox station near Kingston.

Here’s what I said:

OPG, a publicly owned crown corporation, has historically been held back from bidding on renewable energy projects, given that its sheer size and influence were seen as unfair advantages in a competitive, open market procurement process. The company supplies roughly half of the province’s power, mostly through nuclear and large hydroelectric facilities.

In June 2013, however, the Ontario government restructured its feed-in-tariff program such that only smaller renewable-energy projects could participate. Larger project proposals, those generally more than 500 kilowatts in size, would need to compete through a request-for-proposal (RFP) process.

And in a controversial twist, Energy Minister Bob Chiarelli directed the Ontario Power Authority to allow OPG to participate in all renewable energy procurement rounds.

I think it’s smart to let OPG enter this game. Sure, it’s a large publicly owned incumbent, but the solar market has matured and can hold its own. OPG also has unique experience (and recent success) partnering with aboriginal communities.

One potential hitch is that SunEdison is OPG’s development partner. The company is going through some tough times right now (the existential kind), and it’s unclear whether that will have an impact on OPG’s plans.

Solar is booming in Ontario, but you’d never know it from the data

Screen Shot 2016-01-13 at 12.43.29 PMOntario’s Independent Electricity System Operator released its annual “Electricity Data” report on Tuesday, and it breaks down the supply mix in 2015, 2014 and 2013. On the surface there hasn’t been a big shift over the past three years. We see that nuclear and hydro output has been fairly consistent. Natural gas generation was up slightly in 2015 compared to 2014, but was still lower than 2013 levels. Coal has been completely phased out, but at only 2 per cent of the mix in 2013 it wasn’t a dramatic change.

Wind as a share of the electricity mix has doubled to 6 per cent since 2013. Electricity from biofuels more than doubled, but still represents less than 1 per cent of the mix.

Then there’s solar. Looking at 2013 data, you might be confused to see Ontario didn’t have any solar on the grid. A teeny weeny bit appeared in 2014 and that increased 14-fold in 2015, but still represented a measly .25 terawatt-hours of electricity in a system that generates 154 terawatt-hours a year. In other words, a rounding error.

It’s a misleading figure, and it makes solar look like an insignificant contributor to Ontario’s electricity system, which couldn’t be further from the truth.

So what’s the deal? The above figures are for transmission-connected generation, meaning only the biggest solar projects connected directly to the transmission system are recognized. Those projects total 140 megawatts on a grid with 27,000 megawatts of capacity.

But look under the hood and you see something quite different. When accounting for solar that is connected to the local distribution system, the figure is an impressive 1,766 megawatts.

“So over 90 per cent of solar in Ontario isn’t being included in their annual figures,” points out Keith Stewart from Greenpeace Canada. “If we did include it all, solar would be about 2 per cent of total generation. It’s a clear example of how conventional power-sector thinking is blinded to the role of renewables and the evolution towards a more decentralized grid.”

In other words, this so-called “embedded” solar generation is making a big difference, especially during times of summer peak demand when the sun is shining strong and air conditioning loads put stress on the grid.

 

Provincial first: Ontario’s independent electricity operator embraces new storage methods as effective grid balancer

Calling it an “important milestone” in the evolution of Ontario’s electricity system, Paul Murphy, the president and chief executive of Ontario’s Independent Electricity System Operator, announced Thursday that energy and process storage technologies would be added to the mix of options available to provide regulation services to the province’s grid — that is, keeping supply and demand on the grid in constant balance, second-by-second. To start, the IESO has contracted to add 10 megawatts of regulation services to the mix via a combination of flywheel energy storage, battery storage and “process storage” — the latter being the by-the-second control of many industrial loads as a way to rapidly reduce and ramp up grid demand. It’s sometimes called aggregated demand-response.

It’s a first for Ontario, which until now has relied largely on electricity generation assets, such as natural gas-fired power plants, to provide grid-balancing services. The gradual integration of fast-reacting storage technologies will help reduce our reliance on fossil fuel generation. According to the IESO, “This quick response is becoming increasingly important to facilitate more renewable resources like wind and solar, whose output is variable in nature.”

Through competitive tender, three firms have been contracted to supply this first round of alternative regulation services. Toronto-based Enbala Power Networks will provide 4 megawatts of process storage, which will come from water plants, cold storage facilities, universities, hospitals, and any other industrial, commercial or institutional facilities that have large power loads that can be flexibly used and easily controlled — such as pumps, fans and refrigeration units. For more than a year, Enbala has been supplying its service to PJM Interconnection, which is the regional system operator for 13 U.S. states and one district in the U.S. northeast.

Another 2 megawatts will come through NRStor, which through a partnership with flywheel developer Temporal Power and Ontario Power Generation will integrated flywheel technology into the Ontario grid for the first time. The balance will come from RES Canada, part of renewable energy developer RES Group, which will construct a battery-based storage system in southwestern Ontario (home to many wind farms).

While the numbers are small — 10 megawatts is just a pimple on a elephant’s butt — it finally puts non-hydro storage on the map in Ontario, opening the door for more technologies and approaches, and ultimately many more megawatts and fewer emissions.

Ontario making strong progress on smart grid development

The Ontario Smart Grid Forum, a group led by the province’s Independent Electricity System Operator, released today its latest report on smart grid development. The report, titled “Modernizing Ontario’s Electricity System: Next Steps,” documents progress that has been made since the Forum’s first report two years ago and the many smart grid-related activities currently underway. It also makes several recommendations that will help build on the current momentum of development.

The report touches on electric vehicles and related infrastructure, emergence of the smart home, importance of privacy protection, integration of energy storage, challenges of managing an expected deluge of what I like to call “gridformation”, and the overall importance of industry standards. It also attempts to quantify the expected annual investment in smart grid technologies, systems and training over the next five years.

Disclosure: I was contracted by the IESO to prepare this report so am reserving comment. That said, for anyone interested in Ontario’s smart grid activities this report offers a great sense of where the province is coming from, where it’s at, and where it is going on all things related to the smart grid.

Ontario heat wave gave demand-response programs first real test

I was in Vancouver last week, where the weather was perfect, so I dodged most of the hot, humid heatwave stuff that kept air conditioners blasting in the northeast. But I was watching Ontario’s power demand from afar and was happy to see that the electricity system handled the hot weather quite well. It was, in fact, the first time we got a sense of how well Ontario’s demand-response programs work. Last summer just wasn’t hot enough to give it a proper test run, but we found out last week that demand-response has an important role to play in the province. According to figures from the Independent Electricity System Operator, DR programs were able to reduce electricity use during the four-day heat wave by 3,000 megawatt-hours. Since we’re talking roughly 100 hours, that averages out to about 30 megawatts of capacity spared during the entire period. That’s a misleading figure, however, because the programs would only kick in during peak times. For example, at the height of the heat wave last Tuesday as much as 350 megawatts of load were reduced — the equivalent of a small coal-fired power plant. About 150 megawatts of that came from our Peaksaver program, which allows utilities to slightly reduce air conditioning load from participating customers. Another 200 megawatts came from the DR 3 program, which consists of industrial/commercial electricity users and aggregators that have agreed to reduce load when asked.

The cleanest megawatt is the one not used, and not using it is a hell of a lot cheaper than paying a natural gas peaker plant for peak supply.