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Why wind power does not work in Ontario

Donald Jones — Canadian Energy Issues — June 4, 2012

I haven’t noticed the price of Ontario’s electricity dropping despite an over supply of generation and a ten year low in north American natural gas prices. Blame the Ontario government’s misguided policy of promoting more and more wind generation on the grid under the protection of the Green Energy Act. Large amounts of intermittent wind skew the market leading to take-or-pay contracts (necessary to ensure capacity is built and always available, in part to cover for the vagaries of wind) with the gas-fired generators and the need to export electricity at subsidized give away prices. No one would build merchant gas-fired generators in Ontario at present since they would be operating at low capacity factors and would price themselves out of the market.

Nuclear electricity provides around 60 percent of Ontario demand and hydro about 20 percent leaving 20 percent or so for the rest, that is, mostly natural gas and some unreliable wind under Ontario government authority contracts, with flexible coal coming in at times of peak demand. Without wind on the grid gas would have a better chance of supplying all the intermediate and peaking load and see an increasing amount of steady operating hours with lower generation costs. More and more wind being added to the grid in times of low demand result in very low market prices, and frequent periods of surplus baseload generation (SBG) that is indicative of a poorly designed grid.

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