Ontario Auditor General Report Captive To Conventional Thinking

I have always admired the work of offices of auditor generals for bringing objective thinking to issues, and exposing weaknesses in government programs. Former Federal Auditor General Sheila Fraser set the gold standard, especially on First Nations issues. Yesterday’s wide ranging report from Ontario’s Auditor General included a large section on renewable energy. Sadly, it is way wide of the mark, and looks like a simple regurgitation of conventional “utility think”.

Conventional thinking says you need large centralized power plants. The plants need to be dispatchable. You need baseload plants to handle minimum loads (which sort of contradicts point 2, but it is a key part of utility think). New wires need to be built to accommodate any new generation.

New thinking says a large diverse portfolio of sources is less vulnerable, and cleaner than centralized plants. Dispatchable plants are useful, but dispatchable, or shiftable load accomplishes the same thing. Baseload can be met by a variety of means. And existing wires should be fully utilized, and not reserved, or access reduced by arbitrary rules. The new thinking acknowledges that things in the future will change, and it prepares for it. For example, electric cars are showing up in the market – what potential do they offer for load shifting, or even generation? How much will smart meters shift demand? Will there be a price on carbon? If so, and even most business leaders see this as inevitable, a decarbonized grid is important.

But the Auditor General’s report reflects only Utility Thinking. Who did they interview? Ministry and OPA staff, representatives from the IESO, the Ontario Energy Board, and Hydro One. Apart from some at the Ministry, and a few junior people at the OPA working on the renewables side, these entities are a bastion of utility think. The report reflects their thinking, rather than critical objective thought that should be expected from the office.

“Ontario‚Äôs electricity transmission and distribution systems already operate at or near capacity.” The source of this statement is not attributed. And is it true? At the distribution level, Hydro One’s arbitrary rules ensure that existing capacity can’t be used. At the transmission level, capacity is reserved for nuclear that takes years before coming on line. The statement of “fact” was simply accepted by our Auditor General.

“The IESO informed us that increasing the proportion of renewable energy in the supply mix has exacerbated a challenge called surplus base-load generation (SBG), a power oversupply that occurs when the quantity of electricity from base-load generators is greater than demand for electricity.” Utility Think IESO style. Actually, the surplus base load generation has another major contributor. It’s called baseload generation itself, aka nuclear plants. Ontario’s demand for electricity has fallen every 2005 from a peak of 155 TWh to 142 TWh. But we continue to do nuclear refurbishments, with two more units due to come on next year, adding 14 TWh of new baseload supply. But no, it is more fashionable to blame renewable energy in utility think world.

“A study in September 2009 also noted that Denmark, which relies heavily on wind power, has been faced with a similar situation (surplus power from time to time) and exported large amounts of surplus power to Norway and Sweden in order to
balance domestic supply with demand.” There is no reference to the study, only allusion to it. But of course exporting power to Norway in particular is a very good use of surplus power. It allows the Hydro based system in Norway to store its energy behind the dam, and release it for use when winds are less. What is wrong with that?

“In 2010, 86% of wind power was produced on days when Ontario was already in a net export position.” This may be one of the stupidest statements in the report. What percentage of days was Ontario in a net export position? If it is 86%, then this statement is meaningless. Was Ontario also burning coal on those days (we usually do). Why? Is the same true of nuclear power (I am guessing that yes it is).

“A 2009 study conducted in Spain found that for each job created through renewable energy programs, about two jobs were lost in other sectors of the economy.” This is no doubt referencing a widely discredited study done by a libertarian think tank tied to the American Enterprise Institute, which receives funding from Exxon and Koch. The study was discredited by the even the Wall Street Journal. And the study is considered core in the Utility Think world.

Unfortunately, the biases evident in the report colour some of the good points the Auditor made about transparency, and process. We deserve better from our Auditor General.

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