There is no shortage of controversy surrounding the use of wind energy on our electricity grid. It is a struggle between economics and ideology. The economics aren’t just about the cost of electricity. It’s about making money. The ideology is about minimizing the human impact energy production has on the planet.
Are we going to choose economics or ideology?
How about we try to land somewhere in the middle?
I’ve written a series of articles on wind energy that focus on Ontario but also look at the global situation to provide context. This series is different from other blogs where you just see cost or environmental issues because it also covers broader socioeconomic topics. It’s a one-stop-shop.
The articles are broken down by topic with headings to help readers navigate as some are fairly long and detailed. As always, I’ve included a summary in ‘The takeaway’ section at the end of the longer topics so you can see the condensed version of the subject.
Since my background is engineering, I couldn’t resist throwing in some technical stuff as well.
Why tackle the subject of wind energy?
It’s an opportunity to provide information and context to a subject that is not well understood. My motivation is simple – I dislike the large amount of misinformation that’s circulating on the internet. It leads to false perceptions and negative churn. It’s my choice to do something about it.
I’m not a crusty accountant, frustrated lawyer or environmental crusader. I’m just a retired engineer who knows a bit about the electricity industry and cares about the world we live in.
The subject may seem irrelevant in Ontario since the government repealed the Green Energy Act and cancelled all of the outstanding renewable energy projects in 2018, however we do have over 100 wind farms in service providing almost 10% of our energy needs. They have 20 year contracts to supply energy. It won’t be long until we will be procuring more generation as our older facilities shut down.
Should it include wind? At this time wind energy is the lowest-cost form of new generation we can build but it is still more expensive than our existing publicly owned regulated supply of hydro and nuclear.
If I can provide some clarity or appreciation of the complexity of the topic for the visitors who read my blog, I’m good!
Where’s the beef?
The cost of wind energy is one of the more contentious issues of this technology.
Stating that ‘we pay too much for wind energy’ is an open-ended generalization that will strike a resonant chord with cynics, however it isn’t true from a social perspective that considers how energy production impacts our planet.
“A cynic is someone who knows the price of everything and the value of nothing.”
Oscar Wilde
In Ontario the 2018 average cost of wind energy as estimated by Power Advisory for the Ontario Energy Board is 15.9 cents/kWh. That’s more than double the cost of any publicly owned and regulated energy source. It looks like we pay too much.
Are you surprised that wind is the lowest cost form of new generation in Ontario?
According to the IESO, the January 2019 bottom-line electricity unit-cost is 10.87 cents/kWh for Class B customers
The bottom-line price published by the IESO will change monthly.
The average cost of wind energy is more than the bottom line price. Wind energy drives up the average cost . Unfortunately it’s not obvious how much it impacts the bottom line – but I’ve put some numbers together it in my ‘Economics‘ article here.
There are hidden factors that drive up cost. They are part of the Global Adjustment or delivery charge. Wind energy has some noteworthy economic costs that I describe in the series of articles. Other forms of energy also have hidden costs even greater than wind, however I’m going to focus on wind for now.
What’s good about wind energy?
You have to look beyond the unit-price of wind energy to see the benefits.
It will always be cheaper to choose to pollute our environment and leave a mess for others to clean up.
That is a choice we make and not a ‘fait accompli’.
Wind energy is a very low-cost mechanism for reduction of greenhouse gas. It’s almost zero cost.
The takeaway
We should strive to appreciate the value of what wind energy provides and then assess if we pay more than we need to.
Then ‘we’ can decide how to move forward.
That would be a good start. Especially for a cynic.
We have plenty of time now to prepare for the next round of generation procurement. Learning from our mistakes in the first round will secure better value for ratepayers in the future.
I hope you take the first step toward understanding wind energy by reading the articles starting here.
Derek
