WHAT’S ONE MORE ELECTRICITY SCANDAL?

Contributed by Robert Lyman @ Sept. 2016

By now, the Ontario public may have become numb to the shock effects of yet another story about how the McGuinty and Wynne governments have so mismanaged the electricity generation and sales system in the province that it has cost consumers billions of dollars per year in extra costs for little if any benefits. Perhaps one more example may be like water off a duck’s back.

However, the Liberals’ conversion of the former Thunder Bay and Atikokan coal-burning power plants to biomass-burning plants resembles a Keystone-cops tale of colossal errors that would be comedies if the results were not so tragic for Ontario electricity ratepayers.

Here are the highlights:

  • In August, 2010, the Minister of Energy directed that the Ontario Power Authority negotiate with Ontario Power Generation (two electricity Crown corporations that no longer exist) to convert the Atikokan coal-burning power plant to a peaking plant (i.e. a power plant that supplies energy only when adequate supplies are not available from other plants) burning biomass fuel. No one evaluated the cost-effectiveness of this conversion in advance.
  • The conversion proceeded. The plant is expected to operate the equivalent of 29 full-capacity days per year, while employing 64 full-time staff. At best, it will generate 140,000 megawatt hours (MWh) for $74 million per year, putting the cost of electricity at this facility at $528/MWh – about eight times higher that the cost of producing electricity from existing biomass plants in Ontario, and ten times more than the cost of power from natural gas peaking plants.
  • In December 2013, the Minister of Energy directed the Ontario Power Authority (OPA) to convert a coal-burning power plant at Thunder Bay to a biomass peaking plant, in spite of an OPA study that found this would not be cost-effective. This was justified as a way to “facilitate growth and job creation in the Ontario forest industry and in the Thunder Bay region”.
  • The conversion proceeded. The plant is expected to operate the equivalent of five full-capacity days in a year while employing 60 full-time staff. At best, it will generate about 15,000 MWh a year at a cost of $40 million per year. This puts the cost of the electricity of this plant, at best, at around $1,600 per MWh – 25 times higher than the average cost of existing biomass energy from other facilities in Ontario.
  • Wet biomass catches on fire. Or explodes. So, Ontario Power Generation decided to use “advanced biomass pellets” treated to withstand exposure to rain at the Thunder Bay plant. OPG has to buy the wood pellets from Norway. As the Ontario Auditor General drily observed in her 2015 report, “we are concerned this might not be able to facilitate the volume of job growth in Ontario’s forestry industry as the Ministry intends”.
  • Parker Gallant, the retired banker who monitors and comments on the financial performance of Ontario’s electricity-related Crown Corporations, has commented that “collectively, both of these conversions will produce almost no power but will add approximately $65 million annually (i.e. $650 million per decade) to ratepayers’ bills.”
  • Wait. It gets worse. It turns out that the total carbon dioxide emissions resulting from the production, transportation to the power plant and combustion of coal average 295 pounds per million BTUs of output, but the comparable figure for advanced biomass pellets moved from Norway to Canada is 1,010 pounds, more than three times as much.

So try to figure out the logic of killing Norwegian forests and then shipping the wood pellets by vessel and train to Ontario to burn in a resurrected coal power plant at 25 times the cost of alternative sources.

Only in Ontario!

***

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