By: Tiffany Richmond
Ontario is at the forefront of wind power in Canada with almost 1,200 megawatts of installed capacity on the transmission system. With eight large-scaled wind farms spread out across Ontario, and many projects currently under development, Ontario is well positioned to double its capacity by 2012 and again by 2015 as forecasted.
However, some skeptics may say otherwise. Unlike some other generation resources, wind farms cannot be called upon to generate specific amounts of megawatts on demand. Wind power generation is dependent on weather conditions, temperature and even the season. This unpredictable behavior in generation is concerning and may not be useful for Ontario’s electricity system.
During Ontario’s record breaking summer, wind generation did not keep up with demand when needed and produced power when it was least required. To further explain, on August 30th – one of the hottest days of the year – demand surged, however winds did not. Wind turbines only produced about 100 megawatts of power or about 0.4% of total demand that day. On August 28th, wind generators powered an average of 1,000 megawatts onto the grid, amounting to 7% of total demand that day. However August 28th was a cool day with demand levels low.
The latter example means that a surplus of electricity was produced that day. When a surplus is produced, Ontario either has to pay to sell it to neighbouring jurisdictions or the end consumer will have to pay for the excess supply.
Ontario is currently paying on-shore wind producers that have access to transmission lines 13.5 cents a kilowatt hour and off-shore producers 19 cents a kilowatt hour. To put this into perspective, our friends south of border, Texas to be specific, pay wind producer 7.4 cents (US) a kilowatt hour. With more wind capacity than any other jurisdiction in North America Texas producers get paid a little more than half of the Ontario price.
Wind turbines also aren’t the cheapest. The average cost of installing one megawatt of wind capacity on land is $2.5 million. If Ontario plans to quadruple its capacity by 2015 it’s going to cost up to $14 billion. These numbers are significant when considering the patchy performance of wind generators.
It’s known that ‘green power’ will costs end consumer more money than conventional power producers. With transmission constraints and an aging electricity infrastructure any new form of generation isn’t going to come cheap.
The question the Province of Ontario has to ask itself is its infrastructure ready to handle off-peak supply demands from wind generation? And is it ready to pay more than the contract price for the power?
If wind performances continue to be unpredictable, like in August, then off-peak supply and the cost to handle wind power will both increase.
Tiffany Richmond is an enthusiastic marketing guru and is responsible for online marketing strategies at Energy Advantage Inc.