(Written for Root Issues in the Barrie Examiner: http://thebarrieexaminer.com/ArticleDisplay.aspx?e=1766456)
I am about to take a big step into the sunlight. Put another way, the sun's about to become my silent financial partner.
I'm going to be (probably) the first person in Barrie to plug into Ontario's new solar feed-in tariff.
What does that mean? Basically, it means I'll have solar panels installed at my house, the power they generate will be fed directly into the grid (not into my house), and I'll get paid 80.2 cents for every kilowatt-hour (kWh) they produce as a monthly cheque, made out to me. It will add up to around $4,000 per year, which means they'll be paid off in no time (I'm financing them, so I don't even have to pay anything up front). The rate is guaranteed for 20 years.
I'm just about dancing with joy. I get to help green-up the grid with clean solar power, and instead of paying a penalty, I'll be getting paid to do it. Paid handsomely, I might add.
Let me roll the calendar back a bit. The Ontario government realized a while ago that adding solar power would be a good thing, for many reasons. But they weren't willing to do much to make it happen, and local utilities were another big hurdle.
First there was "net metering." That meant that when your solar (or wind) generator made electricity and put it into the grid, it ran your meter back, and you were "un-billed" for the same amount.
When it was sunny (or windy), your meter ran backwards, and when it was dark (or still), it ran forwards. If you were lucky, you could net your bill to zero, but that was the best you could hope for -- there were no refunds. At this rate, a panel (or turbine) might never earn back the cost of buying it. You were greening the grid, but paying a price to do it.
This wasn't getting much interest, so Ontario upped the stakes with the "standard offer contract". Recognizing that solar power comes at the time of peak demand -- and peak price -- the province offered a premium, paying 42 cents per kWh of solar electricity (11 cents for wind). But this was also too meagre, as it meant you might break even after 20 years -- or you might not. Too much depended on the fees charged by your local utility, and there were bureaucratic hurdles.
Uptake was ... underwhelming.
Finally Ontario looked around the world to see what actually worked, and has adopted a successful system from Europe. To jump-start the benefits of local renewable generation, the price has been almost doubled, to a proposed 80.2 cents.
Local utility obstacles were swept away. On top of that, the federal government lets you write off half the purchase price in the first year, and half what's left each year thereafter -- potentially saving you thousands in taxes. It's called an accelerated capital cost allowance.
You can also write off some of your home maintenance costs each year. Combined, that means you can pay the system off in as few as four to five years. You are then getting pure profit (and still some write-offs) for the rest of your 20-year contract. Even if you borrow money to get started, the net expected profit over 20 years could be over $50,000. That's a lot of green for going green.
What happens when the contract expires after 20 years? Then the system switches to net-metering, which means that for every kWh I put into the grid, I get a free one back when I need it. Nowadays, that's not much of a deal, but the projected electricity cost 20 years from now is about $1 per kWh, so it will be similar to what the feed-in tariff was paying.
Through pioneering approaches like this, Germany created hundreds of thousands of jobs in renewable energy. Ontario is now poised to do the same -- with my (and your) help.
I'll be hosting an open house once the panels go up, so watch for news of that in this paper. I'd be thrilled if you came out to see how it works, and perhaps you'll leave with plans for your own solar income.
Erich Jacoby-Hawkins is a teacher, father, volunteer, and politician.
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ReplyDeleteOK, I'll try again.
ReplyDeleteThe marginal rate for HydroOne residential consumers in Ontario 12.6 cents per kw-h (this is the flat rate, not Time of Use rates, and includes all of the rate based tariffs you see on your bill). So, since you are being paid 80.2 cents per kw-h, other ratepayers are subsidizing you to the tune of 67.6 cents per kw-h.
I don't have any problem with this policy, per se. But by accepting the program, you have foregone your opportunity in your columns or speaking on behalf of the Green Party to criticize nuclear energy on the basis of financial costs. Other nuclear issues are fair game. But nuclear energy does not come even close to costing 80.2 cents per kw-h. So, any criticism over cost would be hypocritical.
So, good luck with your installation. I'm sure over the course of 20 years you might have some maintenace issues (what do you do when it's time to reshingle for example?) And hopefully some kid doesn't toss a chunk of ice at them - perhaps your home insurance would cover that.
SIR, if I follow your financial logic correctly is it "more fair" to the taxpayer to go the non-subsidized route of net-metering? Erich, this is where I lose you a bit. If the utility bill stands to be netted to zero more often than not, how could that monthly savings over time not eventually pay off the system? Also, the "non-green" ratepayer is being penalized, as SIR points out, to the tune of 67.6 cents per kwh. I can appreciate the built-in incentive to switch over, but have a very difficult time with the "unfairness" of the plan. Is this some weird tanget of cap-and-trade logic?
ReplyDeleteThis is just my bias showing. I have a problem with subsidized anything.
Sebastian,
ReplyDeleteYes, net metering is more fair to other ratepayers, as you are only compensated for the net difference. This assumes you are paid the same amount per kw-h as what you would be charged (and not subsidized).
The current system that Erich is embracing is different. It's like his solar panel installation is a separate entity. He gets 80.2 cents for every per kw-h that he delivers to the grid.
At the same time, whatever he uses in his house is charged at 12.6 cents per kw-h.
Say he uses and generates 1000 kw-hr per month. Under the net metering system, he would neither recieve nor pay money.
Under the new rates, he will receive $802 and pay $126.
Re "Under the new rates, he will receive $802 and pay $126."
ReplyDeleteExcuse me for being so bold, but this strikes me as being ludicrous! Under net-meter, the $126 saved per month would go towards the investment of the system, paying it down by $1512 per year...at no charge to the taxpayer. There is something terribly wrong here.
A policy endorsed, in fact advocated I'm sure by the GPO. Ask Erich.
ReplyDeleteRe "A policy endorsed, in fact advocated I'm sure by the GPO. Ask Erich."
ReplyDeleteYou just did. We both, and anyone lurking over this post, await an answer.
Don't hold your breath.
ReplyDeleteSorry for delay in responding, didn't receive notice that there were comments and I don't obsessively re-read my own blog posts. Maybe there's a setting somewhere...
ReplyDeleteSIR, your analysis is flawed (or deliberately misleading?). What is charged to Ontario consumers is a fixed rate based on the average paid for all supply. Some supply is bought at long-term fixed-rate contracts, some is bought at the spot market rate (especially imports). That rate fluctuates, but can be as high as 40 cents or more per kw/h, and that high is usually at peak times like summer afternoons when my panels will be producing.
ReplyDeleteThe 12.6 you pay is an average of when power is cheap (at night) and when it is expensive (day). Since night-time power is rather cheap these days (has even gone below zero this year), daytime cost could easily reach double or more the average fixed rate on a regular basis. Smart metering demonstrates this - even under our crude introductory SM rates the offset for solar time is 1.5 - 3 cents more than you listed. (Smart metering - heard of it?) I have no doubt that these rates are still nowhere near the real time-of-day one would get from the spot market.
Standard (non-household-solar) supply is also transported a fair distance - there is no appreciable electric production anywhere near Barrie - so there are various line losses, especially when extra power is being imported from afar on sunny summer afternoons. (Not to mention costs of maintaining long-distance transmission lines). So the real value of my offsets is much higher than you state.
What it all comes down to is the electricity fed into the grid from my panels will offset costs to other consumers well in excess of the average 12.6 cents, although the precise amount will fluctuate. (The difference in supply curve is one reason the rate for wind is lower than for solar).
Another thing you fail to consider is that the 80.2 cent rate is not indexed. Thus, as I noted in my article, over time it will approach the average price of long-term predictions. (In other words, the subsidy drops to zero). In fact, my understanding is that the GEA set this rate largely based on that consideration, as well as a payback period sufficiently short to generate public interest and participation. In their wisdom, the Ontario government has decided that this is a fair cost for spurring a domestic solar industry, with all of the spinoff benefits. (Until end of 2010 an installation must be 40% made-in-Ontario to qualify for FIT; after that, 60%. Right now installers are struggling to meet the lower threshold, so this will spur much local economic development). Clearly they see solar as a future major industry worth a bit of a jump-start. However, it would take more solar panels than I can even imagine for those subsidies to match the ones that have been poured into nuclear over the years.
I certainly have not forgone the right to criticize nuclear costs. You and I disagree on what they are, of course. Have you factored in the value of the free unlimited liability insurance nuclear plants get from our federal government yet? It's high enough to be essentially incalculable - no insurance company has expressed willingness to offer such insurance at any price. There isn't much potential for my panels (or any part of their supply chain) to poison Ontario (or Ukraine) for generations.
Another huge difference is that the gov't can choose how many FIT contracts to accept, and they only pay for kw/h as they are produced. With nukes, there is no small increment - go big or don't go nuke - and most of the costs are up-front, pouring $ in for a decade or more before you get even one kw/h out. Nothing whatsoever is paid for solar until the juice starts running, and then only as it comes in. There's much more to it than (estimated) cost per kw/h - there are other aspects like scale, locality, and resiliency which haven't yet been costed, certainly not in your comparison. Each of those favours small, local generation over yet more mega-projects.
(Damn these character limits - on my own blog!)
ReplyDeleteJust FYI, I have permanent recycled-rubber roofing (good for the next 50+ years) and a kid would have to be a major-league pitcher to hit my panels with a snowball (and yes, insurance would cover if they did). But your schadenfreude is appreciated, if for no other reason than I get to use a bit of my German.
Yes, Erich, I do know what smart metering is. Notice I mentioned time of use rates in my original blog post? You need "smart meters" in order to have TOU rates.
ReplyDeleteSo, let's review how the 80.2 cents per kw-h came about. It is strictly based on economics (not on what the cost avoidance of OPG would be for comparable technologies). Here's how it is done. You calculate the capital cost of an investment, determine what the average output of the solar unit would be annually (taking into consideration weather etc), and then determine what rate would be required in order for an investor to make a reasonable return over time.
Now, your solar unit, no matter how you care to spin it, is not 100% available all of the time. So, it needs a backup supply when the sun don't shine to meet peak demand periods. In Ontario, realistically, this can only be gas fired generation (ability to start-up/shut down on short notice). So, for every kw of solar energy hooked up, you'll need a kw of gas fired generation capacity sitting idle nearby.
The fairest cost comparison (subsidizing your installation) would be gas fired generation. Now, we know that gas has recently become more commercially abundant due to improved technology (shale gas, coal bed gas, deep tight foothills gas). So, gas supply is no longer an issue in North America.
If you look on page 24 of the handbook Power Generation in Canada by the Canadian Electricity Association http://www.canelect.ca/en/Pdfs/HandBook.pdf it shows gas generation (wholesale cost to the utility) at 6 - 8 cents per kw-hr, whereas solar - Rooftop PV modules retrofit at 29 to 79 cents per kw-h.
So, the subsidy you are receiving is actually 80.2 - 8 (not 12.6) or 72.2 cents per kw-h. I was being generous with the 12.6 as it also includes other charges.
There is nothing economic to other ratepayers about your subsidy. Bottom line: It is a pure subsidy, and there are cheaper ways to generate electricity.
So no, you can't argue about economics and subsidies of other technologies - yours is a huge subsidy.
Absolutely wrong. The savings to OPG of each kw/h from my panel is not that of backup generation avoided (or not built). It's the marginal cost of supply not purchased - the spot market rate - plus the savings of not having to deliver it over a distance.
ReplyDeleteDo you really think OPG is going to build a wee gas turbine for each of my panels? Of course not, what a fantasy. We have a broad power supply mix - coal & gas, hydro and nuclear. Added to that we import from the US and Quebec as needed (at a premium). None of these sources is 100% reliable, but we don't have an extra backup for each one. Instead, our mix serves as its own backup since each element has its own supply curve. (Solar & wind over a wide area, thus varying weather, provide a flatter supply curve than components alone). Note that we didn’t build 100% coal backup for when nukes were offline, and when they’ve gone down unexpectedly, we’ve managed with reduced supply or imported to make up the shortage. The same would be true if solar or wind were a huge part of our supply mix – although even under FIT, they still won’t be for quite a long time.
Now, just when do you think I’ve “spun” that my solar panels produce 100% all of the time? You’re making up silly straw men to knock down, a sure sign that your arguments are weak.
You are working off an old paradigm of providing redundant supply to meet maximum peak demand. The new paradigm is demand-side management (DSM) to help demand meet supply. A simple example is my Peaksaver thermostat, but there are industrial and commercial applications, too. You dial back when power is low or expensive, and scale up when it is cheap & plentiful. On top of that, we will have a growing fleet of plug-in cars (electric or hybrid) providing distributed storage, drawing power when it’s cheap and selling it back at higher price when demand is high.
You are also in an old paradigm talking about “cheaper ways to generate electricity”. All your “cheap” ways – gas, coal, nuclear – create significant health and environmental costs. The provincial taxpayer is already paying the former, and our kids will be on the hook for the latter. Coal alone puts thousands in the grave and many thousands more in hospital each year. Gas is cleaner to burn, but still a significant GHG source. Do you think that emitting carbon will remain free forever, or that sequestering it will be cheap? (Even the US is legislating carbon pricing now).
Your “cheap” supply can only be described as such because you externalize, thus ignore, any costs you don’t want to include. I’m sorry, but green economics – real economics – doesn’t allow externalization. Full cost accounting is the only fair way, and the full cost of your “cheap” sources is far more than you acknowledge. You are also ignoring the economic benefit to the province of developing a domestic renewable energy industry. But if you don’t want to discuss full costs and benefits, instead would rather externalize away whatever you find inconvenient, then this is a pointless conversation.
My panels are indeed subsidized, as has been pretty much every new electric generation source we’ve ever brought online. Nuclear has huge subsidies, coal and gas are allowed to pollute for free. It would be rather odd to suddenly decide that our cleanest form of energy generation should be the one we won’t subsidize. But the cost of gradually greening our grid is being spread evenly over all ratepayers, so is negligible. Certainly my panels won’t create a $20 billion stranded debt. (You remember that debt retirement charge on all our electric bills? It’s still there, adding 10% to your supply cost.)
p.s. I’m not sure if it’s even worth mentioning, but your supposed “fairest cost comparison” of backup gas power is based on generation actually being used at capacity, not sitting idle waiting for peak demand on cloudy days. Idle generation is infinitely more expensive – you pay the capital costs yet get no return. Yet another piece of spin from you, unless you truly just don’t understand this.
I also hadn't mentioned that I'm buying electricity from Bullfrog Power, so I'm already paying a double premium above that of other ratepayers: the Bullfrog charge, and the "Provincial Benefit", which is even more. Either of these is far in excess of the slight cost increase that Ontario's pricing may eventualy see under the FIT program.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteI had written a far more pointed response, but after sleeping on it, I decided to delete it. Nevertheless, some of my points were made, coincidently, in today's (Thurs) press.
ReplyDeleteTerence Corcoran of the Financial Post writes an op-ed Ontario's iron-fisted energy model
http://www.financialpost.com/opinion/columnists/story.html?id=12163f96-073a-473b-b2c2-a5a7ac79fc88
which makes many of the same arguments about the cost of renewables.
While the going price of electricity at the wholesale level in Ontario is currently around 4 or 5 cents a kilowatt hour, the OPA is offering feed-in tariff contracts at between 45 and 80 cents to companies building new solar power generating facilities, 13.5 cents on land-based wind farms, 19 cents on off-shore wind farms, and between 10.4 and 19.5 cents on biogas projects.
OPA calls these feed-in subsidies "the first comprehensive guaranteed pricing structure for renewable electricity production." Being first doesn't make new taxes any more appealing. The added cost of these subsidies will be borne by electricity consumers, who will see their electricity prices rise to fund the operations.
Secondly, an article in the G&M ROB on a new gas fired generation plant planned for Oakville.
The OPA, one of several agencies that oversee the province's system for generating and distributing electricity, had been looking for proposals to provide a dependable source of power.
The reliability of the Oakville facility will help support the province's efforts to add more renewable sources, like wind and solar, to its electricity diet, TransCanada said.
http://www.theglobeandmail.com/globe-investor/transcanada-to-build-ont-power-plant/article1306699/
(Sorry I missed your earlier response)
ReplyDeleteThe fact that Corcoran asserts something in an op-ed does not make it true, and the fact that he agrees with you does not make you right. I don't know if I've ever agreed with him on anything. His reference to "a range of other command-and-control initiatives" betrays that he sees FIT as command-and-control, even though it is clearly a market-based initiative (set an attractive price to create supply in the market). The province is essentially tendering a contract open for anyone to sign on. Corcoran's an extreme tiny-government neo-con ideologue and it shows. (He also sees carbon taxes as a ridiculous government interventionism rather than what they are, market cost correction).
Your second article sets off the cherry-picking alarm. Anyone actually reading the whole article will see that the main purpose of the new gas generation is to replace retiring coal. More reliable gas can backstop renewable as well as coal can (better, even) but we didn't build the coal to backstop renewables and we're not building gas for it, either. Note in your quote the key phrase "help support" - this function is an added benefit, not the primary purpose. And note that it's TransCanada, not the province, who is making this claim. You don't think that maybe they want to combat public opposition by tying their smog-creating plant to the push for clean renewables, do you? Nah, that would be too cynical.
Plus, a plant due for completion in 2013 won't do much about my "unreliable" panels which will begin churning out the watts later this month.
A big thing that critics of the FIT-as-subsidy fail to acknowledge is the total lack of capital outlay. FIT only pays for the kw/h actually received, and only as they are. Gas turbines have to be paid for up front - design & construction - before they generate one kw/h. At taxpayer cost - in this case, of $1.2 billon. The taxpayer-funded cost of buying & installing my solar panels? Zero.
The fact that Corcoran asserts something in an op-ed does not make it true, and the fact that he agrees with you does not make you right. I don't know if I've ever agreed with him on anything.
ReplyDeleteA comment by E J-H a few mere hours earlier on the Green Party blogsite:
Of course, the automakers always get the gold-plated subsidies. But even compared to the "standard" cost of government-created jobs, it's a deal. Terence Corcoran calculated the cost per job created of Flathearty's stimulus at $273,000, and the Cato institute says double or more for Obama's package.
Talk about cherry picking and convenient memory loss! I'm just sayin'...
Now, wrt to your claim that the gas fired generation is not required to back up unreliable solar energy, you'll not find many engineers (the ones who know about these types of things) agreeing with you. True, your single small installation won't affect the stability of the system to any significant degree. It's when you hit a critical mass that it needs t be addressed- that is why they are planning NOW for more reliable back up. Note that the gas facility is only planned to operate 40% of the time (coal fired operates full out and is used for baseload- it doesn't have a great deal of what engineers call turn down. You can't start up or shut it down, ramp up or ramp down like you can with gas). Not sure if that was in the G&M story, or another I read in the FP. Partly why TransCanada has negotiated a regulated return on their investment with OPA. So, the ratepayers of this province will be paying to have capacity idle. This is a hidden cost of renewables.
Say, do you remember the economist and author, Peter Tertzakian, who wrote the book A thousand barrels a second. He was the one who appeared on the Agenda a couple of days after you a couple of years ago telling Steve Paikin that your claims of replacing baseload nuclear with renewables and conservation was just pie in the sky dreaming? Well, he's written another book - The End of Energy Obesity: Breaking Todays Energy Addiction for a Prosperous and Secure Tomorrow. I briefly flipped through it in the bookstore. He does talk about the combination of renewables plus gas generation back-up. Go read it. You might actually learn something. That is, if you have an open and objective mind.
Now you're just getting silly - to lop off the strong disclaimer I put on Corcoran's qoute: "Neither of those is my preferred source for analysis, of course." If I need my cherry tree picked in a hurry, I'll be calling you!
ReplyDelete(Of course, I'd have been disappointed if you hadn't tracked down my two Corcoran mentions in the same day. If you can judge a man by the quality of his stalkers, then I'm feeling pretty special today.)
I don't dispute that we need a mutually-reinforcing mix to help us handle renewables - at least until we get our demand down. (Hydro is both renewable and able to turn down quickly, so once total demand is low enough, it can backstop us with no need for fossil fuels at all. Plus other ways of storing renewable which are coming down the pike.) I've known about pairing gas with renewables for many years, even support it. I learned about it years ago from Ralph Torrie who has put together plans to get Ontario totally off coal and nuclear using renewables and gas. Of course, his plan was charted before a lot of other potential storage technologies had been invented or developed, ones that may vastly reduce our need for burning gas.
I still dispute the level of subsidy you attribute to FIT, especially microFIT. Gas backup will be aimed at the larger solar and wind projects - the ones of the big FIT program, not <10kw microFITs like mine. Therein lies your "critical mass". The total uptake on microFIT, plus its location within service areas (rather than outside feeding in, like mega-project renewable or gas) will minimize any need to back it up. I'm also confused by the both-ways line of your argument - the cheaper the gas generation is, the higher the subsidy to solar (you argued at first) but now you are attributing higher gas cost (idle time) as increasing the subsidy. Which is it? To me they seem opposite. Nevertheless, I don't dispute that FIT is a form of subsidy, just how much of it is truly subsidy. You have failed to address, for example, any of the externalities of coal or (cleaner, but not truly clean) gas. Even if you ignore those costs, we taxpayers must still deal with them.
But this exchange is getting tiresome to my readers (now I flatter myself that I have some besides you and the 'bastion of ... well, I'll not go there).
Do you approve of adding more renewables to our mix? If so, what's your preferred way of getting there? Clearly simply wishing for it or hoping the market will provide hasn't been working, nor has it worked anywhere else. All the countries with significant renewable generation have gotten there through various subsidies or promotions. Ontario is copying a system which was successful in several countries at many levels - getting solar installed, getting many actors (individuals, communities, businesses) involved, and creating a whole industry and the concomitant employment. Have you seen a more successful system we should copy instead? Do you dispute that we must eventually transition to a fully renewable supply, with no coal, oil, or gas (or nuclear)? Or do you have an endless supply of fossil fuels in your back pocket? If you agree that eventually all must be renewable, what's your preferred path, and what's the first step? Or would you rather just do what's cheapest now and let our children & grandchildren deal with it later? I'm having trouble reading where you're coming from on this. Put something out there for open & objective minds to examine.
(p.s. I didn't catch Tertzakian's show, so I'll not accept your characterization of it. A fully-renewable supply is not only not pie-in-the-sky, it's inevitable. And we've had them in the past, it can be done again if we really try. Humans lived & thrived, even in industrial societies, long before nuclear power was invented.)
If you refer to my original post, Erich, where the discussion started, I stated: "I don't have any problem with this policy, per se. But by accepting the program, you have foregone your opportunity in your columns or speaking on behalf of the Green Party to criticize nuclear energy on the basis of financial costs."
ReplyDeleteThat was my main point- you are being heavily subsidized. But as always, you try to cloud the issue with numbers you pull out of thin air, and arguments you make up on the go. You have neither an economics nor engineering background. Try to keep that in mind. As should your readers.
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ReplyDeleteExcuse me, but what numbers am I pulling out of thin air? I'm either using numbers quoted from sources, or if on TV, numbers from memory, because I don't carry Stephen Harper's little cheat cards with me. Neither is from "thin air".
ReplyDeleteBy taking advantage of a program the Liberals have set up, I am in no way forgoing the opportunity to criticize the bad finances of Ontario's nuclear ambitions. The GPO policy was different from what McGuinty brought in - you can still see it at http://www.gpo.ca/node/289. You'll note that our FIT rate was 50 cents, not 80. But since we weren't elected, I have to go by his plan, not ours. It's not perfect, but what is? The microFIT exists and is open to all homeowners - why would I not take part? Why woudn't you? Does the fact that I sometimes drive a car mean I can't criticize our overblown highway budgets?
For some reason you still haven't shown why the subsidy of microFIT shouldn't be calculated as the cost savings of the marginal supply purchase avoided at the spot market price during time of supply. Nor have you addressed any of the externalities which are avoided by solar energy.
The financial characteristics of a nuclear investment are vastly different from those of FIT. For one thing, the FIT contract rate is set; it won't get more expensive, and payment is only made for electricity actually delivered, when it arrives. Plus, the province can invest in tiny increments and turn off the tap (stop offering contracts) whenver it wishes. With nuclear, we buy a pig in a poke. No nuclear project in Ontario has ever come in on budget or on time, none have produced as much electricity as promised reliably, and none have lasted as many years as promised. Each of these 4 points of failure means extra cost to Ontario ratepayers and taxpayers. Pay much stranded debt lately? You did, if you paid an electric bill in Ontario. The only reason they don't call this the "nuclear debt" is because they want to go through the process all over again and are happy if we forget what happened last time. (Okay, I exaggerate - only $15 billion of the $20 billion debt is due to nuclear cost overruns).
"Peter Tertzakian ... appeared on the Agenda a couple of days after you a couple of years ago telling Steve Paikin that your claims of replacing baseload nuclear with renewables and conservation was just pie in the sky dreaming?"
Now who's pulling things out of thin air? When I was on The Agenda I DIDN'T propose replacing baseload nuclear with renewables, but with conservation and efficiency alone. Both of those measures reduce baseload demand, and spending $40 billion on them ($3000 per Ontarian) could lead to a heck of a lot of reduction. We already use double the power to do things that Europeans or Japanese do - do you think it would be impossible for us to copy their methods?
The basic point is still that nuclear energy is very expensive (for a list of numbers, both Ontario historical and world current, see www.livinggreen.info/unaffordablenuclear.html - it's by a professor teaching energy courses at Laurentian University and quotes authorities like Moody's) and creates several waste streams of uknown future cost and real detriment to human and environmental health. Until these costs are included, the true cost of nuclear can't even be calculated. Even someone without "an economics or engineering background" can grasp that. (Although I did actually study economics and mathematics in university).
Erich,
ReplyDeleteThe numbers out of thin air are the 40 cents per kw-h that you quote. Show me (raw data)that those numbers are continuous (daily - not just one-offs that happened under extreme conditions), and occur during your peak production periods for your installation. Then I might be more willing to accept your argument.
You'll note that our FIT rate was 50 cents, I thought his originally was 40, but since no one subscribed to it (including you apparently) he bumped it to 80.
Externalities? Was just focusing on costs. I like nuclear because of no GHG emissions, a far more pressing problem, in my opinion, that future disposal issues. We differ here. Apart from disposal, solar also has no GHG emissions. But, it's a replacement for gas. So, what is the cost per tonne avoided of 80 cents/kw-h solar? You do the calcs. I bet it's way above $50/tonne.
Stranded costs of nuclear energy etc are reflected in your bill. Yes, that's part of what makes up the 12.6 cents. Compared to what they pay in Europe for energy (40 cents/kw-h) it still seems quite cheap.
When you were on the Agenda, you were critiquing the McGuinty plan. Of the $80-$85 billion plan, a good chunk of money was already set aside for conservation and renewables. The portion of $40-$45 billion set aside for nuclear (while eliminating coal) was the portion you took issue with. As I have argued elsewhere, the low hanging fruit has already been addressed, somewhat, by the McGuinty plan. You can't conserve and become more efficient down to zero demand. You still need baseload generation.
Now, with the fallout from the severe recession, Ontario's economy may restructure significantly (loss of manufacturing etc) so the baseload demand may be reduced - delaying the need for as many nukes, but baseload generation needs to be made up somehow, at sometime. It remains to be seen when.
Yes, it's useful to compare energy consumption patterns of other countries, I saw some prof touting Denmark the other night, but there is a difference between theoretical, and practical. That's where politics comes in.
Erich,
ReplyDeleteThis is the best I can find so far for spot prices for electricity (that rate charged to LDCs - local distribution companies) for Ontario:
http://www.ieso.com/imoweb/marketdata/hoep.asp
You can look at the hourly rate per day for the past month. Today. Oct 6th, the price peaked at between 6 am and 7 am when it went up to 29.3 cents per kw-h, then dropped back down to 3.7 cents by 8 am.
Yesterday, the price never exceeded 3 cents per kw-h for the whole day, after peaking at 4.1 cents at 7 am.
So, where do you get the 40 cents from?
Sunrise today in Barrie was 7:23 am. Your solar units wouldn't have even been able to generate electricity to offset the peak morning shower demand, the reason for the spike at 7 am., assuming they were pointed directly at the sun, and it wasn't a cloudy day.
I stand by my original comments. I think you need to retract yours.
"our FIT rate was 50 cents" referred to the GPO platform. Current rate (42) wasn't working well enough. Ours was also indexed.
ReplyDeleteExternalities are very real costs, they just aren't paid on the elec bill. Ignoring them is bad economics and bad math, a shell game.
40 cents was not out of thin air. Spot rates HAVE been that high in past (I’ve seen charts); I believe it was in the summer afternoon. I don't have a handy link to a chart showing spot rates going years back, I'm afraid, and the current one is misleading due to low demand this year (as you note). You can take it on faith or disbelieve me, but I'm not lying or making it up. We certainly had some rather high rates back when the big blackout occurred a few years ago, and once the current recession ends and we continue phasing out coal with new nukes far down the road and the current ones wearing out, rates will spike again. I never said "continuous", I said "as high as"; I'm not going to prove a higher standard than my original statement just to please you. I'm not retracting but neither am I going to spend a huge amount of time digging up more old numbers.
On the Agenda I was specifically critiquing the nuclear aspect of the plan. There is far more low-hanging fruit than you (and they) realize - it depends on how incentives are set up. Many of today’s require considerable initial homeowner investment up front, a real deterrent.
I know stranded nuke debt is in my 12.6 bill, that's why I don't want to add more. The set payment often hasn't been enough to pay it down, though.
We can't conserve to zero baseload - for a decade yet, anyhow (storage) - but we could conserve down to the baseload provided by hydro, the original foundation of ON's electric system. We only need nuclear because current baseload demand exceeds what hydro provides. (Although this year our baseload demand is actually LESS than supply, so we've had negative spot prices overnight and the "provincial benefit" is ridiculously high).
You again state that solar is a replacement for gas. That's not always the case, especially right now when we don't have as much gas generation set up. And current short-term pricing ignores long-term factors of gas supply and oil prices.
As you state: "there is a difference between theoretical and practical. That's where politics comes in" and that's MY angle - the politics of making the theoretical practical. It takes many changes, but the fact that other countries can manufacture the same goods or provide the same value of services for a fraction of the energy proves the practicality is there. The challenge is mainly in overcoming inertia and making the transition. Power authorities inevitably come forward with rather conservative plans which it takes concerted political pressure to overcome. We've already seen it here in several instances - OPA gives an estimate of potential for renewables, the government demands more, and then even that level is exceeded once the program opens up. An example is the previous SOC where the planned amount for 10 years was met in the first. And no, this doesn't contradict my earlier point - most of it was larger-scale industrial projects. The various hookup costs put a damper on smaller, home-scale installations although some brave souls toughed it out. There have also been many conservation programs whose uptake has well exceeded the expected amount. This happened in Barrie last month when a sale on low-flow toilets at Home Depot doubled the year's quota of city rebates in a single weekend. Of course, there are also conservation programs which have underwhelming response, like EnerGuide for Houses which preceded the current ecoENERGY refit program. This just shows that program design is critical. Luckily, there have been enough different approaches around the world that we can copy and adapt the most successful (as ON did with FIT) and avoid most of the pitfalls.
For example, ON can do better than Danish wind or German solar because we have more of both and a very mixed existing supply to plug it in to.
Once again Erich, it's just all bluster.
ReplyDeleteI have suggested that your actual subsidy is in the order of 72 cents per kWh. That is how much other ratepayers will be subsidizing you when your solar panel goes online in the foreseeable future. This is the situation today. Not when blackouts occured. Not when Ontario relied solely on hydroelectric. Not for just a very short portion of the year. When your panels are generating electricity.
As soon as you start taxing carbon, the level of stranded debt for nuclear goes down. It is determined largely on competitive technologies. So, if you can produce electricity from gas at 6 cents per kwh, that becomes the baseline for determining what level of stranded debt to place in the accounting entry. If you tax carbon such that the price of gas fired generation goes up to say 10 cents, then the amount of stranded debt goes down.
If you base it on solar (40 to 80 cents), then there definitely would be no stranded debt. And let's not forget why the costs of Darlington got so high. It was stopped and started a number of times due to changing gov'ts, and reduced demand due to economic changes and a reorganization of Ontario's economy(and FTA). Having private companies like SNC Lavalin partnering with nuclear suppliers is an effective means of controlling costs. It's like comparing the management of the Montreal Olympics with that of Los Angeles.
I asked you for facts to back up your claims. You provided none - just more rhetoric.
This is why none of the media and few voters believe the GPO energy policies are realistic.
I rest my case.
Some fodder for your open house.
ReplyDeleteQ: What is the cost per tonne of CO2 avoidance of installing solar panels on your house?
A: Refer to the third page of this publication:
http://www.iaea.org/Publications/Magazines/Bulletin/Bull422/article4.pdf
Natural gas fired generation (2005-2020) = 106 gCeq/kWh (90 + 16) - full life cycle.
Solar 8.2 gCeq/kWh (0 + 8.2)
So, the Carbon equivalent avoided (solar vs gas) is 106-8.2 = 97.8 gms per kWh.
For arguments sake, let's assume you are subsidized to the tune of 48.9 cents per kWh (to make the math easy)
So, ratepayers are paying you 0.5 cents per g (97.8/48.9). That is $5 /kg, or $5,000 /tonne CO2!!!
Ah, the Darlington apologist arguments return.
ReplyDelete“Ooh, it's not fair to use that cost, it was stopped and started, governments changed, the economy changed, electricity demand didn't quite go as predicted.”
Precisely. That's the kind of risk inherent in a project which will take more than a decade from initiation to completion. It's also a risk inherent in a non-incremental project that costs tens of billions of dollars. That's precisely why the upper end costs of nuclear cannot be limited. How can you promise there won't be a change in government, there won't be economic or other factors changing the demand for electricity a decade or more hence? You can't. That's why a program like FIT involves far less risk and liability. Both of those are real costs that you should attach to nuclear development.
On the other hand, the "foreseeable future" for my microFIT solar is the 20-year contract. If you really think that today's electricity glut and low prices are not a blip, but indicate the trend for the next two decades, then you are the king of contrarians for energy forecasting. (Since gas costs tend to track oil prices over time, our current cheap gas situation is also only temporary - not expected to last as long as a 20-year FIT contract).
You are using artificially narrow time horizons to create spurious objections. "This is the situation today." Well, no, it's not - FIT is the situation for 20 years. Assessing the subsidy level based on tomorrow afternoon's electric spot market misses the point by ignoring the longer term trends. Plus, you have now created your own double standard in setting my current FIT subsidy based on the avoided cost of burning gas - since the relevant gas generation doesn't exist yet! (Recall the plant you cited, due for completion in 2013). You can't insist on today's situation on one hand, then base your numbers on a future situation on the other, and still consider your "case" a fair criticism. As currently installed, microFIT will offset spot market electricity, not best-case gas production. I’ve pointed this out before but you continue to ignore it.
Your contrast of "facts" vs. "bluster" relies on the tendency for your argument to shift to cover whichever time frame or technology you choose to quote (although you're quick to dismiss inconvenient facts, like the costs of Darlington, with irrelevant excuses),
while I am presenting long-term overall policy goals. You complain that "today" we don't have 100% hydro baseline, but I'm proposing that within 20 years, we could. In that we can both be right.
Your citation of CO2 avoidance is flawed because it rests on the assumption that Ontario's main path is to replace 100% coal with 100% gas, then replace some of that gas with solar. If that were the plan, then why even bother with the solar? The reality is that the province is seeking to replace coal with a blend of solar, wind, run-of-river and gas-fired. To separate out one element of this mix and assign it the burden of costs is to ignore the public and government desire for a mix. The "costs" (hence subsidies) of this plan must be averaged between what is most desirable but most expensive and that which is least and least. That's part of why your insistence on relying on cheap gas as the solar subsidy benchmark misses the target.
Of course, if the carbon cost you have put forward ($5,000 per tonne CO2) offends you, then perhaps you should have supported the GPO platform, which set solar FIT at a mere 50 cents/kwh alongside a carbon tax closer to $20 per tonne! Not only would that be a far cheaper carbon price, but our plan returned the full cost with tax cuts. McGuinty's FIT does not.
Ah, yes, the brave "few voters" who believed in our 2007 energy plan; a mere 350,000, or about 20% as many as voted for the governing Liberals. In at least 10 ridings (including Barrie), they outnumbered the NDP voters. I'm quite happy with that 300% growth over our 2003 result, and confident it will rise in 2011.
ReplyDeleteI will be sure to mention your $5,000 per tonne at my open house as something for people to think about – something they can even take advantage of, being paid that amount to reduce other people’s emissions. Nice work if you can get it, eh?
Meanwhile, since you insist on seeing references for the higher afternoon spot prices I've mentioned, here's a source you missed:
http://www.solarbuildings.ca/c/sbn/file_db/Market%20prices%20for%20solar%20electricity%20in%20ontario.pdf
Note such things as an explicit link between times of peak solar production and peak demand/price, and afternoon spot prices of around 25 cents at both noon and 6 pm on the day studied.
This link:
http://www.entrepreneur.com/tradejournals/article/126388414.html
shows the all-time peak (as of 2005) was $1.03 per kw/h at 1 pm on Sept 3, 2002. I would actually be subsidizing the other ratepayers in that instance.
Anyhow, since you've rested your case, I presume you will head off and harass someone else now. At least we both agree that FIT is indeed a subsidy to spur growth in solar installation & industry even though we differ on how to best calculate the amount of that subsidy. And hopefully you can see that my signing the contract offered by McGuinty instead of that of the GPO platform was the choice of the Ontario voters, not the Greens. Who am I to say they were wrong? They picked the government who is putting a HIGHER subsidy on solar than the Greens proposed, in effect creating a far higher carbon tax than we suggested. If I insisted on signing up to the Green Party version instead of the FIT we actually have you'd be dismissing me as deluded.
Maybe you'll even realize that my criticism of nuclear costs (what set you on this jag years ago, apparently) is set within the context of the Green platform, and is still consistent within that context.
Erich, Erich, Erich
ReplyDeleteYou must have a bumper cherry crop this year, the picking never stops.
You can't cherry pick costs from ages ago when Ontario Hydro was a completely different monopoly, and the market had not been opened to competition. Transition periods are not representative of what will happen in the future.
Take Alberta's example. When they deregulated their electricity market, prices shot up for a few years, and then settled back down. There is a lag period from between when supply is tight (and hence spot prices go up) and when investments are made and new generating capacity comes online, driving prices back down. Same with the studies you cite.
One was from 2004 (Waterloo study), it only covers one year, and the data is 5 years old. It's not apparent to me that they are using average spot prices per hour for the whole month, or just peak, or some weighted average.
The other was a SINGLE data point from 2002.
I won't bother referring to the rest of your bluster. I doubt you fully understand or have used discounted cash flow, net present value, and understand the time value of money. But suffice it so say, what happens in the short term has a far greater impact on the bottom line (that other ratepayers are paying) than what happens 20 yrs out.
The McGuinty plan for these tariffs is welfare - bottom line.
I thought you had rested your case? I guess you're retracting that?
ReplyDeleteYou asked for figures to back up the numbers I clearly mentioned AS EXAMPLES and I did. It isn't my job to do a full economic analysis of McGuinty's solar subsidy program. (It's not even my portfolio in the GPO). I presented our platform in 2007, and I stand by that (not his) today. You wanted proof that I wasn't pulling numbers out of air, I have provided that. Case closed. If you don't think those numbers are representative or "current" enough - well that doesn't matter. That's not what you demanded. I'm sorry that I can only source past numbers, not future ones. My web-search for 2010 or 2020 data is still in beta testing.
I understand all the economic concepts you mentioned, but that's beside the point. Your original criticism was:
"by accepting the program, you have foregone your opportunity in your columns or speaking on behalf of the Green Party to criticize nuclear energy on the basis of financial costs... So, any criticism over cost would be hypocritical"
Signing on to an existing program because that is the program offered does not forbid me from criticizing other programs, or even this one. There isn't a menu, this is what the province offers. I believe the GPO proposal was and remains superior. If the government offered a free car to everyone whose name started with "E" I'd accept that, too. (Hey, free car.) I would still be able to criticize a car-centric transportation policy. I don't have to beggar myself or wear a hair shirt to have valid critical views.
I agree that it's a subsidy. I would not characterize it as "welfare". I also believe that buying nuclear would be a hugely expensive mistake, and more and more real-world data and independent fiscal analyses are proving me right, even prescient, since they have come after fall of 2007.
If my "hypocritical bluster" bothers you so greatly, then I'm quite happy to bid you adieu and end the discussion. Your insistence on focusing on the short term and devaluing long-term concerns shows that you don't grasp the most basic foundations of green economics, preferring the thought patterns which have created many of our current problems. I've had enough dancing to your tune and providing refutations you ignore and sources which you disparage for your unfalsifiable accusations, and I find your anonymous name-calling rude and tiresome.
Good day, SIR.
You wanted proof that I wasn't pulling numbers out of air, I have provided that. Case closed.
ReplyDeleteYou have provided data for one day in the past 5 years, two days in the past 7 years.
Anyone with a basic understanding of how subsidies are calculated for solar would know that you take the average spot price during peak demand periods.
Here are the average spot prices for one of your best months (demand is highest)
August 2009: 3.5 cents per kWh
August 2008: 6.1 cents per kWh
August 2007: 7.0
August 2006: 6.5
August 2005: 11.8 (the month picked in the report you supplied)
August 2004: 5.3
August 2003: 6.6
August 2002: 8.3
You can find all of the historical spot prices in these links:
http://www.ieso.com/imoweb/marketdata/marketSummary_archived.asp
http://www.ieso.com/imoweb/marketdata/marketSummary.asp
So, again in summary, the average subsidy you will be receiving is not 80.2 - 40 , but rather 80.2 - 3.5 to 11.8 based upon historical data for August 2002-2009.
Get it Erich? To claim otherwise is just plain b.s. So stop it.
Good day.
I said GOOD DAY, SIR! (Apparently you missed the meaning).
ReplyDeleteAt least you agree that actual spot market rates are a more useful comparison than putative gas-fired costs. However, avoided distribution costs and line loss have been left out of your careful calculations this time. (microFIT solar, due to location, will be supplying local/neighbouring demand rather than needing to be transported great distances.) There is also no allowance for likely electricity cost increases due to carbon pricing, which is just the most obvious externality you've left out.
If you were to go back to your cost estimate based on avoided gas generation, then you would reach a rather different number if you use the actual peak level costs for gas-fired “peaker” plants, which are found here:
http://www.powerauthority.on.ca/Storage/43/3908_OPA_Settlement_Issue_1,_Item_1.6_2007-03-16.pdf which shows the per kwh costs as being from over $1.10 to $1.50. At that rate, it is solar subidizing peak gas, rather than vice versa.
http://www.powerauthority.on.ca/Storage/43/3908_OPA_Settlement_Issue_1,_Item_1.6_2007-03-16.pdf
But when did I "claim otherwise" with "just plain b.s."? You have been the only one trying to calculate the exact subsidy rate here. I checked back all the 30-odd posts carefully and I've never put a number to it. I have only stated, and still hold, that your calculation is incorrect (in this instance, because of not accounting for reduced distribution and line-loss costs, and ignoring carbon costs or externalities). I have never denied that there is a significant subsidy inherent in FIT, in fact I agreed that there is. (Go back and read my posts if you don't believe me - I don’t yet know how to edit them post-facto, or even if I can).
The only time I mentioned the 40 cents which seems to have gotten stuck in your craw was in the sentence "That rate fluctuates, but can be as high as 40 cents or more per kwh" which I showed is true, not BS. I never stated that it was always or even usually that high. Do you understand basic English phrasing such as "can be as high as"? I would think an engineering degree or an MBA would cover that. (Especially engineering, where you must design to withstand maximum load, not average load, even if the maximum load is very rarely or briefly experienced).
You are complaining that the numbers I mentioned weren't average numbers. Correct, but I never said they were. So no BS, plain or otherwise. You can’t make up something, claim I said it, then claim I’m a BSer because you can disprove it. It’s called straw man and although scarecrows are seasonal, that doesn’t make it okay. Rather, it’s your own form of BS.
Thanks for the IESO links, by the way. I had missed that resource in my searching.
Wow, I just discovered what happens when I trust your figures without checking them.
ReplyDeleteYour calculation for GHG emissions from natural gas-fired electricity is completely wrong. It seemed off to me, so I started checking for GHG emissions from gas-fired electric. Your number was totally out of line with every other reference I could find. You stated 106 g per kwh as CO2 reductions and calculated a per-tonne carbon cost from that. Yet every other source has a range 3-6 times that:
356-485 - http://lightbucket.wordpress.com/2008/02/20/carbon-emissions-from-electricity-generation-the-numbers/
480 - http://www.euronuclear.org/e-news/e-news-21/greenhouse-gas-emissions.htm
400 - http://www.recgroup.com/en/sustainability/Carbon-footprint/
443 - http://www.nirs.org/climate/background/sovacool_nuclear_ghg.pdf
540 - http://www.ceri.ca/Publications/documents/ExecutiveSummaryCERILCAJune2009.pdf
388 – 991 - http://www.lotuslive.org/energy/comparison.php
490 – 679 - http://www.isa.org.usyd.edu.au/publications/documents/Solar-thermal_LCA.pdf
I finally realized the problem was that you took a source listing the amount of carbon (C), not carbon dioxide (CO2). All of the other emissions charts and carbon tax discussions above are based on CO2 – which is a GHG – not carbon, which is an element. CO2 weighs almost 4 times as much as C. So your estimate was 4 times too high. It should be $1250 per tonne, not $5000. (Perhaps that goes to show why adopting an actual Green Party-approved carbon tax makes more sense than creating a de facto one through subsidies).
You either somehow accidentally picked one of very few charts measuring C instead of CO2 (of the more than dozen I located, only 2 were like this) or you deliberately chose it to be misleading. (Oddly, this was an older chart - Either way – misleading or incompetent – doesn’t look so good on you. In fact, since I haven’t actually said anything false nor patently misleading, while you have, then the award for just plain BS goes to you.
You also seem to be spreading BS with your reference to discounted cash flow, net present value, and the time value of money. If applied to the future stream of FIT revenue or cost, they represent a lower present value because of discounting off a future stream of cash flows. None of them apply to current cash flows – they could only apply to capital investment, which is irrelevant here because FIT is a cash flow subsidy, not a capital subsidy. What it all comes down to, then, is most of this subsidy is worth more in the future, not the present. If you equate it to present value (for some reason), then it is discounted. So I don’t quite see why you even brought it up.
OK Erich, back to point counterpoint.
ReplyDeleteI'll address the points as you raised them.
At least you agree that actual spot market rates are a more useful comparison than putative gas-fired costs.
As I understand how the hourly (or 5 minute) spot prices are determined, everyone who bids gets the same price, the highest marginal rate accepted. So, if you were hydro and you bid 5 cents per kw-hr, and the last bidder in (to make up forecast demand) was gas bidding at 8 cents per kWh, everyone gets 8 cents including the hydro guys. So, gas and spot are essentially the same, assuming gas is the highest price of the winning bids. It probably goes something like this in terms of production costs(coal-nuclear-hydro-gas-wind-solar).
However, avoided distribution costs and line loss have been left out of your careful calculations this time.
Yeah, add in 10-11 percent, for argument's sake. So, based on August 2002-2009, spot price for subsidy calculations is 80.2 - 3.89(3.5)to 13.1 (11.8). Note in my original comment, I used 12.6 which includes a transmission tariff.
There is also no allowance for likely electricity cost increases due to carbon pricing, which is just the most obvious externality you've left out.
OK, carbon tax. Use Green Party's $50/tonne. So, I will use your revised numbers, assuming I read the graph wrong, of 106 x (12+32)/12 = 389 g CO2/kWh. 389 g = .000389 tonnes. So, $50/tonne x .000389 tonne/kWh = $0.01945 /kWh.
I'll add that now to my ballpark (peak season) numbers. Annual will be lower.
80.2 - 5.84 (3.89 + 1.95) to 15.05 (13.1 + 1.95).
Still, not even close to 40 cents. And if I was to average the 8 yrs, I'd get 80.2 - 9.53 ((6.89 x 1.1) + 1.95) - still nowhwere near 40 cents, and less than the 12.6 I originally used.
If you were to go back to your cost estimate based on avoided gas generation, then you would reach a rather different number if you use the actual peak level costs for gas-fired “peaker” plants, which are found here:
True, but completely irrelevant. Your contract is not for supplying electricity only when OPA needs it for "supplying electricity during super peak hours", it is for whenever you produce it, whether the OPA needs it or not. Different analysis.
I have only stated, and still hold, that your calculation is incorrect
This is what you stated in your first response to me:
Since night-time power is rather cheap these days (has even gone below zero this year), daytime cost could easily reach double or more the average fixed rate on a regular basis.
I used ON PEAK daytime costs (not average daily) in the numbers above for August 2002-2009. Still well below the 12.6 originally used.
What it all comes down to is the electricity fed into the grid from my panels will offset costs to other consumers well in excess of the average 12.6 cents, although the precise amount will fluctuate.
Not at all. I does not offset costs at all - IT ADDS TO THEM BECAUSE IT IS A SUBSIDY!
OK, I withdraw the b.s. statement. I think you just don't understand what you are saying, or haven't taken the time to look into the sources more closely.
Now, to your second comment.
ReplyDeleteYou either somehow accidentally picked one of very few charts measuring C instead of CO2 (of the more than dozen I located, only 2 were like this) or you deliberately chose it to be misleading. (Oddly, this was an older chart - Either way – misleading or incompetent – doesn’t look so good on you. In fact, since I haven’t actually said anything false nor patently misleading, while you have, then the award for just plain BS goes to you.
Yes, it appears that I did interpret the graphs incorrectly. This is the benefit of making a statement and providing sources to back them up to show where the numbers came from.
Now, here's how I found the source. I googled "ghg emissions gas fired generation" and it was the first source I found. The title of the article was "GREENHOUSE GAS EMISSIONS OF ELECTRICITY GENERATION CHAINS - ASSESSING THE DIFFERENCE".
In the narrative, it states:
EMISSION FACTORS FOR GREENHOUSE GASES
The range of GHG emission factors for different types of fuel have been analyzed through various studies. The results are expressed in grams of carbon-equivalent including CO2, CH4, N2O, etc.) per kilowatt-hour of electricity (gCeq/kWh).
I assumed that they took 1 gm of CO2 (aw 12 + 32) and report it as 12/44 gm of C. Silly me, afterall the title of the graph was "RANGE OF TOTAL GREENHOUSE GAS EMISSIONS FROM ELECTRICITY PRODUCTION CHAINS".
However, the first source that you provided, lightbucket did use data from the IAEA, though it appears they were using a different convention in the source cited. So, I admit I interpreted their graph incorrectly. But it doesn't matter.
The reason I did the calculation was to get a ballpark number. The purpose was to demonstrate that the cost of your subsidy is orders of magnitude higher than the GPC $50 carbon tax (which should more correctly be called a Carbon dioxide tax to be consistent, n'est ce pas?)
So, let's redo the calculations using the CO2 equivalent.
My original difference was 106 gm Ceq x 44/12 = 387 g CO2 eq/kWh.
Now, originally, for a quick and dirty calculation, I used a subsidy of 48.9 cents per kWh. Let's use the better numbers above. 80.2 - 9.5 = 70.7 cents per kWh.
.707/.000387 = $1,827 /tonne CO2. Still, a ridiculous cost, in the grand scheme of things, and same order of magnitude as the rough $5k.
You also seem to be spreading BS with your reference to discounted cash flow, net present value, and the time value of money.
I was going to raise the matter as it applies to the subsidy you are receiving, and the relevance to the oversupply of electricity right now (resulting in lower prices and shut in generating capacity).
From the ratepayers perspective - it makes more sense to start your fixed contract when there isn't an oversupply - some years out. It has nothing to do with capital costs, and if you were to do a npv of the two cases (enter into a contract today vs some years from now) the results would be quite different. No b.s.
Of course, you would use lower rates today (say 4 cents - higher subsidy) and higher rates in the future (say 9 cents - lower subsidy) when the economy rebounds. The time value of money makes the difference in the npv due to discounting.
HOW THE WHOLESALE PRICE IS DETERMINED
ReplyDeletehttp://www.ieso.ca/imoweb/siteShared/wholesale_price.asp
I don't know how often I have to repeat this, but I've agreed all along that there is a subsidy involved. I've even shown that it's higher than the one proposed by the GPO in 2007. And any time I've referred to offset costs by number, I've qualified that with "as high as" or "could easily reach double". Those are all true statements about intermittent rates, whereas you are applying an average (historical) rate. Apples and oranges, so I'm glad you are no longer accusing me of dissembling.
ReplyDeleteThere are certainly other subsidy models, and I prefer those which put the cost on polluting methods of electricity creation rather than a subsidy on clean methods. But this is the program we have from the government Ontarians elected, so that's the one we'll be using (or not). If you don't like the subsidy rate, talk to George Smitherman (before he takes off to run for TO mayor).
Anyhow, I SAID GOOD DAY, SIR!
http://www.youtube.com/watch?v=M5QGkOGZubQ
http://www.youtube.com/watch?v=E5BmT5xV9b4
ReplyDeletehttp://www.youtube.com/watch?v=7AdvVEvTaNI
ReplyDeleteOil (gasoline) and natural gas are largely now decoupled in North America. You don't know Jack...
ReplyDeletehttp://www.youtube.com/watch?v=gAqtsNWkpUk
Not to discount this classic:
ReplyDeletehttp://www.youtube.com/watch?v=H0ttJBFxKdE
I guess Coiln is not a GPO supporter for the obvious reasons. From a published letter to the international Economist Magazine. Ever heard of it?
ReplyDeleteCool on solar
* SIR – Your article on Germany’s energy debate (“Nuclear power? Yes, maybe”, September 12th) reported that the solar-power plant at Lieberose, the world’s second largest solar array, produces enough electricity for a town of 15,000, which, as with many statements on alternative energy, is misleading. The figure you use is the maximum output for solar power, which can only be achieved within an hour or two of high noon, on an absolutely crystal clear day and when the system is new. At any other time and after a few short years of service, this peak output will be diminished as the sun sets and the panels age.
In fact, these dreadfully uneconomic and unreliable power sources produce a small fraction of their peak power when measured over any reasonable period of time and are often not producing anything at all. This means that a complete conventional power system has to be installed in addition to the renewable source to provide power 24 hours a day. Thus, the cost of solar systems is additional to the cost of the conventional power system.
Your exaggerated claims about solar power only serve to encourage the forces supporting some economically absurd developments. It is unlikely that solar- or wind-energy will ever be more than an expensive footnote to our energy history.
Colin Billowes
Kanata, Canada
Why are you re-posting this ill-argued and factually incorrect letter? Is it just to prove that there are solar-skeptics even less concerned with the truth than you?
ReplyDeleteThe fact that the output from solar varies over 24 hours in a rather predictable fashion does not make it "unreliable". The sun has been rising and setting on a precise schedule (measurable to the second) for eons longer than humans have been around to observe or care.
The implication is that solar is somehow less reliable than nuclear - yet the same article in the Economist (yes, I've heard of it) mentions a German nuclear plant shut down for the 2nd time in two years by unexpected accidents. Who calls that "reliable"? I don't recall the sun ever being shut down. Even cloudy weather is fairly predictable, and limited to portions of a nation. (Has there ever been a day when the sun didn't shine anywhere in Canada?)
Mr. Billowes' reliability criticisms are based on assumptions either that electricity must be available at full name-plate capacity 24 hours a day, or that it must be able to spin up (or down) at any time to whatever the current demand might be. The first ignores the fact that demand follows a peak-and-valley curve, while the second ignores demand management and storage possibilities which couple well with renewables, and that a "reliable" source like nuclear (or coal) can't easily be spun up or down to meet fluctuating demand. (The absolute best for that is another renewable - hydro). He's creating artificial, unstated constraints upon which to rest his definition of "reliable". (He's also ignoring that solar isn't the only power source to produce less output as it ages - nuclear is the same, and others would also be if not maintained. Solar does quite well considering that it needs no real maintenance once installed.)
Billowes didn't even do his research, while the Economist did: the electricity for 15,000 homes is the correspondence between their annual demand and the actual annual output (in kwh) of Lieberose, not the solar faceplate capacity. (The latter would indeed be silly, as it would leave that town on brown-out much of the day and blackout all night).
You can see this spelled out here: http://www.juwi.com/fileadmin/user_upload/juwi.com/Lieberose_EZ_EN_20090520.pdf
The only thing "dreadful" here are the mis-statements in Mr. Billowes letter. I'm surprised the Economist prints them without correction. Anyhow, I note that you spend far less effort fact-checking anti-solar references than you do mine. Bias, perhaps?
No, I caught the incorrect calculations of the 15,000 homes. An example of publishing something where one does not know what one is talking about. I was more interested in the suggestion that he claimed there needed to be backup power. Still, nukes are back on the table, it seems, for Germany. I guess they are having difficulty finding alternate sources of baseload generation.
ReplyDeleteBtw, Jeffrey Simpson in today's G&M complains of the high cost of carbon sequestration, stating: "Such a reduction would mean a per-tonne carbon-reduction cost of about $761 – staggeringly, wildly, mind-blowingly higher than any other conceivable measure designed to cut greenhouse-gas emissions."
I guess he hasn't heard of McGuinty's subsidy of micro solar. My quick and dirty calculations above were $1827 per tonne, but I did not include the 10-11% transmission/dist'n losses in that specific calculation. Surprised you didn't catch that. So, the number is more like $1627 per tonne, more than double the shocking number Simpson had calculated.
http://www.theglobeandmail.com/news/opinions/on-a-cost-basis-carbon-capture-projects-are-madness/article1329825/
Say, speaking of corrections, here's a personal reply from an e-mail to Jeffrey Simpson:
ReplyDeleteA correction is indeed in order and will be printed tomorrow and repeated by me in a subsequent column.
Background in comments here:
http://sudburysteve.blogspot.com/2009/10/conservative-carbon-capture-good-value.html
Cheers
If you spotted Mr. Billowes' basic error, then why are you so eager to attach yourself to his other arguments, which are essentially the same as yours expressed earlier? Are you trying to strengthen your argument or weaken it?
ReplyDeleteAnd your comment "An example of publishing something where one does not know what one is talking about" is clearly a dig at me - although if you look at what I actually published (the blog post at the top, what ran in 50,000 copies of the Barrie Examiner) I don't think you can find a single error or statement that even you would consider BS. So you're being baselessly insulting. No surprise, sadly.
I had already called you out on overlooking transmission and distribution factors so many times before that I didn't bother when you did it yet again. (Something about Einstein, insanity, and expecting different results from the same action).
You seem to refuse to acknowledge that I didn't set this subsidy rate, nor is it what the GPO proposed. If it bothers you so much, why don't you go pester someone who can do something about it, like Smitherman, or McGuinty, or a therapist?
This comment has been removed by the author.
ReplyDeleteActually Erich, I had posted a reply to your claim that your story was published in 50,000 newspapers, but deleted it after I found new info.
ReplyDeleteEven though your blog posting here is dated Thursday Sept 24th, your twitter from Barrie Greens is also dated the same day, and the actual story shows it was posted 28 days ago (a Thursday) I will assume it was actually published in paper form on Friday - your blog apparently scooped the print edition by one day.
Why the quibble? Here's the circulation figures from Osprey, the owner of the Barrie Examiner:
Thursdays: 8,482
Friday: 61,598
It's all a matter of fact checking, and credibility.
http://ospreymedialp.com/corporate/Default.asp?section=publications_sales&paper=Barrie+Examiner&adv=c
So now your quibble is that I unintentionally under-exaggerated my growing number of readers? Man, get a life. I mean, really.
ReplyDeleteThe story was printed in a Thursday morning edition, not a Friday. I don't post to this blog until after my column goes to print, to avoid "scooping" the paper, out of courtesy to my publisher. (http://www.merriam-webster.com/dictionary/courtesy) If you don't believe me, by all means drop in at their office and check the archives, or maybe just believe the date on the newspaper's own website. (Odd that you think they'd scoop their own print edition via their free online edition).
Also, maybe you should have a little less faith in your own fact checking and credibility. For instance, the full-circulation free edition is now Thursdays, not Fridays, and has been for several months. The site you found is very out of date. (I'm also told by their staff that their circulation is now close to 65,000). We pay to advertise in the Examiner during elections, so I was going by the numbers they promoted to me a year ago. This recent 20% bump in circulation seems to be due to them having recently expanded their delivery area outside of Barrie's borders to the "greater Barrie area", as we don't even have that many households in the city (according to Canada Post and Stats Canada, anyhow - we have ~50,000 households and ~5,000 businesses, for a total of 55,000 addresses). And of course, an upstanding Canadian paper would never exaggerate their circulation numbers like American ones commonly do: http://slate.msn.com/id/2105344/
So they increased my readership but didn't pass that along. More power to me, I guess.
Well, if Thursday was the free day, readers got just about what they paid for. Not a very credible publication if I can't even rely upon their own stats.
ReplyDeleteLike Sebastian, I personally think this micro solar subsidy is not public money well spent. If you were able to divorce your personal situation as a subscriber of the program who will benefit financially from it, from the more macro green allocation of scarce resources to fight climate change, you may see the issue differently.
Unfortunately, I don't think you can.
Osprey Media group of papers was bought out by Sun Media a while ago, so that website might be a non-updated legacy.
ReplyDeleteIn any case, I wouldn't be so bold as to conflate the competence (or lack thereof) of a media chain's central business office with the editorial ability of a specific local paper.
Readers got a factual article describing the microFIT program, and even SIR Nit-Picky has yet to point out an error in it. So denigrating that just shows unbecoming spite on your part.
I have already pointed out that the Green Party of Ontario platform dows not support this high of a subsidy level. But as to money well spent, your comparisons to the lifetime carbon footprint of various mega-projects completely overlooks that the intent of programs like microFIT is to get an industry started so that future economies of scale can bring down the costs and subsidies. This has been the experience in other jurisdictions. Most pioneering, pilot, or ground-breaking projects have a higher per-unit cost if you ignore the later lower per-unit costs which come as the industry matures. Solar is still a rapidly evolving technology, and one with little to no domestic production, so the subsidy isn't purely about the specific carbon abatement of the first set of panels, but about the overal potential for a full-scale solar industry - on which has not yet taken off under "pure" market conditions (if such can even be said to exist against a long history of subsidies to nuclear and fossil industries). There is no allowance whatsoever for these key factors in your calculations.
Also, your reference and Sebastion's to "public money well spent" ignores that FIT isn't a government subsidy, but a government-set rate passed through OPA to electricity consumers. They aren't the same thing, any more than the price level set by the LCBO (which is often more than a brewer/vintner might charge in an open market) is a gov't subsidy - ditto for municipally-set cab fare rates. I'm actually surprised that you would overlook this critical difference.
One thing to keep in mind is that no-one realistically expects the solution to GHG reduction to come from a single measure. Therefore, there is limited value in a simplistic comparison of two strategies (installing solar PV vs. fuel-switching coal to natural gas). Major studies show that both of these - plus countless other measures - need to be undertaken.
ReplyDeleteFor example, the IEA suggests that new renewables (including solar PV) provide 21% of reductions, fuel-switching only 7%. (And I'll note right now to save you time that they also suggest nuclear for 6%). http://www.iea.org/techno/etp/ETP_2008_Exec_Sum_English.pdf - Figure ES.2, page 7.
The question then becomes how to get each of these wedges implemented to their maximum relative potential? The cost of one aspect of one wedge may well be more than that of another, but presumably they've already addressed the full potential and cost-benefit of each wedge to reach their final proposed mix. I'm not going to gainsay it by suggesting we leave solar in the dust and put all our eggs in the natgas basket. (Although you'll point out that I am gainsaying them by eschewing nuclear. Which I am, so enjoy that little inconsistency if you like. It could be the meat of a whole other conversation. Suffice to say for now that the crowding-out effect of a few mircoFIT contracts is nothing like the monster effect of $30 billion or more on new nukes.)
what a great idea! really like this post and your blog!
ReplyDeletecanadian solar