With testing availability altered/restricted at the end of hospital statistics should be best, but only since January 10th do we have data to distinguish hospitalized due to COVID from hospitalized and incidentally…

Jan. 10^th, 2022 is the highest recorded number of deaths in COVID cases since the pandemic’s initial months, using the “accurate episode date”. The previous year the peak was January 8^th.

Hospitalizations peaked 1-2 weeks later

Easter fell on April 4^th, 2021: that wave’s deaths peak was the 6th (by case accurate episode date), and hospitalizations 2 weeks later.

We contract COVID by breathing in air others exhaled, so our holidays are super-spreader events.

Weekly deaths usually peak in January. The initial COVID surge provided an exception in 2020, and the ‘3^rd wave’ produced a notable uptick in 2021 at roughly the same time – late April/early May.

So, there’s reason for caution.

OTOH…

Many countries are experiencing less impacts on care systems for the sick from high COVID cases. Natural immunity from prior infection adds to vaccinations. ON Hospitalizations have been rising for 3 weeks ICU/ventilated numbers haven’t.

I tracked down this information after reading a ridiculous sentence in a report from the mainstream media:

“If strong measures stay in place, the daily total could drop to below 1,000 at the beginning of June and a high of 2,000 by mid-July.”

Why would cases start to rise after June begins “if strong measures stay in place.” The linked report includes an embedded video which shows only the graph section of the above slide, but it’s text of the slide that explains the bizarre forecast.

A nod to the power of credentials: note the graphic the last forecast from the same body was immediately demonstrably poor, with subsequent new daily positive COVID-19 cases falling below the best-case scenario, and yet questions such as this from John Michael McGrath of TVO persist:

is the current policy status quo compatible with the assumptions of the best case scenario?

are answered with a very confident:

 No.

The assumptions behind this forecast are what drives the curve. The model predicts a, “Stay-at-home order 6 weeks starting Apr 8,” but that length is a function of regulation and not only can be extended, in my opinion it’s unlikely that it won’t be in remaining hotspots given that it would terminate the lockdown order immediately before the May two-four long weekend. 

The Table’s other prediction for the model is, “Vaccinating 100,000/day” – a level Ontario has been exceeding, on average, for over a week. Recently Moderna as well as Johnson and Johnson vaccines have arrived and as those are added to the current outlook the expectation should be for an average of approximately 140,000 doses arriving per day during May, and increasing beyond that in June.

Aside from those two stated baseless “predictions”  – which are very poor assumptions to feed into a model – the slide notes 4 “best case assumptions” – which strike me as mostly lovely positions: “Effective sick pay, Short list of essential workplaces, Lower mobility, Continued focus on vaccinating high risk communities.” These obviously make some intuitive sense, but they’re presented unconvincingly for people expecting some numeric support in a model. The “R naught” is currently below 1, and both the vaccination rate and share of the population who’ve been infected are rising, so just maintaining the status quo would be enough to reduce cases even in the absence of warmer weather which allows for more time spent outdoors and opening windows when indoors.

One problem I see in wanting a “short list of essential workplaces” is proud people believe they’re essential – no matter how lousy their confidently delivered forecasts are – while humble people don’t realize they are.

It seems likely these projections of the “Science Advisory and Modelling Consensus Tables” will be even further above the actual outcomes than their previous report’s forecasts –  which their own graphic shows to have been overly negative. There’s a good reason for all this: the hospitals in the greater Toronto area (GTA) are not only struggling to cope with the now waning influx of COVID patients, but pushing their sick population out to hospitals beyond their hotspot. Maybe a plan for where the big problem is would be a more manageable, and meaningful, endeavor.

Parker Gallant has called for the Ontario government to “shutdown the intertie line with Michigan” – in an article that notes some of my work. I feel I should offer some support as Michigan is being a lousy neighbour and it would feel therapeutic, if nothing else, to respond.

I’ll try to stick to data.

The system operator in Ontario (IESO) data indicates the Michigan intertie is the most lucrative for exports – but that’s not saying much: exports at that intertie were bought in Ontario for an average of just 1.2 cents/kWh ($12/MWh) in 2020 – but were in such high demand another 0.9 cents/kWh of congestion rent was paid. Over the past 5 years congestion rents comprise 46% of the revenue on the Michigan intertie. The IESO’s insiders’ committees are considering sharing this revenue with exporters, whereas in the past its only benefitted internal Ontario consumers.

Action #1: hell no. Issue a ministerial directive that congestion rents will only benefit consumers in Ontario.

Ontario does not export to Michigan: traders purchase electricity in Ontario and sell it to purchasers in the United States – needing to arrange that it gets there. According to the Canadian Energy Regulator (formerly the NEB) the top 4 exporters of Ontario electricity into the United States in 2020 were MAG Energy Solutions (Quebec), TEC Energy Inc. (Quebec), Mercuria Commodities Canada (Alberta) and Plant-E Corp. (Quebec). These 4 traders handled 60% of all US bound electrons purchased in Ontario. It is likely these exports include wheel through transactions where Quebec power is sold to customers on the other side of Ontario. I have been told within U.S. regional electricity markets such transactions could pay multiple congestion charges as those much more sophisticated markets feature locational marginal pricing.

Action #2: the IESO should move as soon as possible to locational marginal pricing for the purpose of ensuring wheel through transactions pay appropriately for congestion they may cause within Ontario’s borders.

Canada has a price on emissions – for some things: for Ontario electricity generation it essentially does not. The logic goes something like it would be an onerous cost on Ontarians which would be unfair as most competitors of Ontario’s businesses don’t have a meaningful price on their greenhouse gas emissions. Any generator under a certain emissions intensity (my recollection is 385 kg CO2e/MWh) avoids the carbon price entirely – and most Ontario natural gas-fired generators are at above this level of emissions. It’s a noble sounding excuse but it is entirely bullshit: in 2020 the IESO’s so-called market recovered less than $2 billion to cover the cost of supply, which their global adjustment adder recovered almost $14 billion more. As I wrote in 2014’s “A Carbon Tax for Ontario, today” the entire receipts of carbon pricing in Ontario’s comparatively trivial emission electricity sector should be used to reduce the global adjustment. Germany has just altered its system to do exactly this: use revenues from pricing emissions to control its renewables surcharge. That it did so 6 years after my article could indicate they’re a little slow – yet they’re probably light years ahead of our government. The market rate is murdered here on purpose, to rip off the consumers least likely to notice for the benefit of the larges insiders. The Industrial Conservation Initiative (ICI) is the weapon designed to transfer global adjustment costs from big entities to little ones. Problems with the punching down ICI policy includes subsidizing exports fueled by natural gas -as those too escape paying for emissions. The $30/t CO2e in 2020 would have meant another 1.2 cents/kWh on gas bidding into the IESO market, and by 2022 that would climb to 2 cents/kWh – essentially the average price paid by exporters to Michigan this year.

Here’s the hourly export to Michigan along with hourly gas generation for the highest demand workweek of 2020 – note at no point do Michigan exports exceed gas’ output, so at all times during Ontario’s highest demand week gas-fueled generation could be considered what was exported.

Action #3: Apply Canada’s greenhouse gas price to all emissions from generators to reflect these deemed environmental costs in the HOEP, and use revenues from the pricing to reduce the global adjustment.

There are other actions the government could direct the IESO to take to avoid sending Michigan subsidized electricity, but it would be self-harming to cut our grid connection altogether as we do get some benefit from dumping supply when we have excess and a broader grid has benefitted us when extraordinary circumstances have occurred. The point I have tried to make in this post is there is one thing above all others this government, and its system operator, could do to control unnecessary feeding of cheap electricity across the border to our ill-behaved neighbours: their job

The May 19th announcement of the Task Force for a Resilient Recovery (TFRR) ended with, “The work of the Task force will conclude in July with the release of a final report,” but by August only a “Preliminary Report” had been shared, and that document is more of a mind mapping exercise than a reporting one. The mapping listed, as Funders, the Ivey, McConnell, Schad and Echo Foundations. The appearance of Ivey wasn’t unexpected as the task force included Bruce Lourie, who is the President of the Ivey Foundation and a key player in previous “green” campaigns including ending coal-fired electricity generation in Ontario and the Green Energy Act.

The Ivey Foundation is built on very old money: “The raw material for the Ivey family’s prosperity lay in the tin-mining industry that enhanced the value of their Cornish lands in the late 1700s.”. The Foundation was created 73 years ago, in 1947 (although the younger Ivey co-founder lived until last year). Until researching this work I was most familiar with the Ivey as a co-founder of the Green Energy Act Alliance, and its relationship with Bruce Lourie. 

I’ve estimated the cost of the procurement inspired by the Ivey-supported Green Energy Act at $4 billion a year, for 20 years. Ivey associated damage could have gone well beyond that as the Financial Accountability Office Of Ontario estimated “a net cost to Ontarians of $21 billion” due to a Fair Hydro Plan defended by, and probably developed at, the Ivey Energy Policy and Management Centre.

I have a different view of Ontario’s eventually completed coal phase-out than Mr. Lourie, but I do agree with a statement from another person involved with the phase-out campaign, Jack Gibbons, on the message that propelled its success: “We demonized coal.” 

Mr. Lourie’s description of a pivotal element in the campaign to rid the province describes how to make the devil of a sedimentary rock:

“We focused the campaign on health issues… The turning point for me in the campaign was really when the Ontario Medical Association came out with the numbers on how many people in Ontario die prematurely because of air quality problems and, I forget, it was about 1600 or 1800 was the number, but I do remember almost every newspaper in Ontario had that number in big bold numbers on the front page. We sort of had this idea if we talked about health it would be more successful but it wasn’t until we saw how tremendously effective the OMA’s work on this was and in particularly identifying very specifically, first of all how many people are being harmed by coal, and the second thing was when they started to put a cost number on what the cost to the health care system, basically what the cost to the taxpayer was, of the health effects of coal.

Within weeks of the announced formation of the TFRR this year a report was released by Environmental Defence and the Ontario Public Health Association (OPHA), containing “new evidence that cleaner vehicles like electric cars and buses will improve health in the Greater Toronto and Hamilton Area by reducing air pollution.” Environmental Defence, an organization with a history of producing zombie docs, has received over $1.2 million in grants from the Ivey and McConnell Foundations, and just last year Ivey granted the OPHA $150,000 for “Implementing a communication strategy for health-focused climate messaging.” The report finds 872 annual deaths, for the base, business-as-usual (BAU) case.

The importance of specificity, such as “872 annual deaths” from needlessly dirty transportation, was learned during the coal phase-out campaign. The use of coal in electricity generation had surged during the latter half of the 1990’s as, unsurprisingly, air quality declined as 8 nuclear reactors were mothballed. By 2000 the Ontario Medical Association (OMA) had developed software indicating 1,925 deaths due to air quality.  By 2002 all parties in the Ontario legislature had agreed to phase-out coal (by 2015) and 2003’s election was won by the party that promised to do it quickest (by 2007). Then action to replace coal in Ontario’s electricity system stalled – until in 2005 a report was created, by DSS Management Consultants, with “big bold numbers”: 668 premature deaths, 1100 Emergency room visits, 928 hospital admissions and 333,660 minor illnesses – not from air quality in general, but specifically from the continued operation of the province’s coal-fired power plants.  The numbers in that 2005 report were, at best, hand-wavy stuff, but they played their role in vilifying coal, regardless of how the report withstood scrutiny. It did not hurt that soon after the OMA would update its software and therefore figures on damages, and deaths, from poor air quality – all pushed much higher than the quite specific numbers it had provided 5 years earlier: 1,925 annual deaths had become 5,829 and was headed much higher in their forecast. The OMA’s 2005 report references DSS Management Consultants’ as preparing the OMA’s earlier (2000) report, so it’s not surprising DSS and OMA reports supported each other.

The very same month the OMA reported increased harm from coal the McGuinty Government [Unveiled a] Bold Plan To Clean Up Ontario’s Air, and that plan was the one that led to the end of coal in generating electricity in the province.

Collecting the hand-wavy numbers from respectably named organizations is an important step to take towards claiming, “the science tells us…” I now refer to such reports as zombie reports – they live on, regardless of whether or not they’ve been discredited, as support for new policies and to support future zombie reports  . Today we have one report putting a number of deaths on internal combustion engines (ICE) in vehicles, and we also receive a “Healthy Recovery Plan” from the Canadian Association of Physicians for the Environment with 25 “The federal government should” recommendations. And because it’s from a group with “Physicians” in the name you know it’s solid – like advice from America’s Frontline Doctors.

Bruce Lourie is, “an honorary director of the Canadian Association of Physicians for the Environment.”

The second key Lourie contribution to a TFRR campaign is his experience in taking advantage of a crisis. The Green Energy Act Alliance featured quickly collecting allies in the campaign. Parker Gallant once referred to Lourie as El Hefe as he attempted to trace the many connections made with other “Green” personalities/entities. Whatever else this says about the man, it is a testament to his alliance building skill.

The Green Energy Act Alliance (GEAA) formed 3 years after supply was contracted to replace coal. Unlike the ending-coal campaign’s half-decade effort, this campaign built a politically attractive base to quickly take advantage of an economic crisis. The goal of the GEAA: “to make Ontario a global leader in green energy development through the use of renewable energy, distributed energy and conservation.” A packaged product for advancing what was essentially Amory Lovins’ soft energy path was available in Germany, and the architect of Germany’s Renewable Energy Sources Act, Hermann Scheer, was active in promoting the transfer of his policies to Ontario. With the financial crisis providing the incentive for the political power in Ontario to seek candidates for powering a recovery, and a product to push, the campaign featured building a broad enough alliance to convince the government to turn away from the existing electricity system planning infrastructure already in place (the Ontario Power Authority).

Leah Stokes described the support gathered by the GEAA in a 2013 paper on the politics of Ontario’s feed in tariffs as “a broad coalition composed of renewable energy NGOs, environmental NGOs, farmers, First Nations, consultants, and, indirectly, organized labor.” The coalition was strong enough to win passage of the legislation and a brief period followed of heavily contracting industrial wind generation, but by August of 2011 that procurement party was over (a little longer period for solar). There had been no real studies to back the claims of the GEAA on job creation and costs, and there was no capability to withstand the scrutiny on those issues from critics and auditors.

While the GEA should be seen as failing to fulfill the vision of the Alliance that lobbied for it (Ontario is not a leader in green energy development), there are revenues to the contract holders of about $4 billion a year. For 20 years. For the participants, that must seem like success.

The mind mapping exercise that is the TFRR’s Preliminary Report lists “5 bold moves for a resilient recovery”, along with co-conspirators to gather for each and the size of the potential pot of government money to entice them along:

1. Invest in climate resilient and energy efficient buildings ($27.25 billion: Home building, First Nations, Insurance, financial, MUSH, efficiency, utility and real estate sector lobbies);
2. Jumpstart Canada’s production and adoption of zero-emission vehicles ($7 billion: automotive OEMs including parts manufactures and the consulting/innovating NGO industries);
3. Go big on growing Canada’s clean energy sectors ($11.5 billion: consulting NGO’s working the innovation angle, MUSH, financial sectors);
4. Invest in the nature that protects and sustains us ($3.15B: ENGOs, First nations, government, consultants);
5. Grow clean competitiveness and jobs across the Canadian economy ($1 billion experts, institutes, financial, government, First Nations).

The task force notes “Canada will need to invest [approximately] $50 billion to be competitive with its G7 peers,” with a nice graphic of “new green recovery investments announced to date are $280 per capita in the UK, $714 in Germany, $988 in France, $1840 in the EU and the US Presidential candidate Biden has promised $8,288 per capita.”  The broad variance doesn’t impede the TFRR concluding about $1330 per capita in Canada just makes sense, and now they’ve got $50 billion of public funds to plan the disbursement of in a final report which will doubtlessly maximize benefits for their civil society.

I ought not taint all who received funding from McConnell and Ivey foundations with the same broad brush. The Ecofiscal Commission received over $2.5 million in funding from Ivey and McConnell foundations. While I questioned the premise of Ecofiscal – that carbon pricing was THE solution to climate change – it was composed of economists promoting an economic tool as a solution, and it was formed with an end date. I credit the integrity of the head of the now defunct Commission with co-writing the op-ed “Engineering a ‘green recovery’ is a terrible idea.” 

The funding that had flowed to Ecofiscal now appears to flow to Clean Energy Canada (CEC), which describes itself as “an energy think tank at SFU” (Simon Fraser University). Originally associated with Tides Canada (which has received at least ~$2 million in support from the Foundations supporting the TFRR), CEC has received at least $1.8 million from those Foundations. While Ecofiscal was, in my opinion, guilty of interpreting everything through the lens of their carbon-pricing-can-avoid-climate-catasprophe perspective, I’ve described the messaging of Clean Energy Canada as deliberately deceptive. 

The mission of CEC is “to accelerate the transition to a renewable powered economy”, and the first strategy they claim to have developed is “getting the story out.” Where economics had previously been funded with Foundations’ green, creative storytelling now is. 

Merram Smith, CEC’s Executive Director, is a member of the TFRR.

to be continued…

2020 is throwing a lot at us. 

The pandemic is the feature event for most, but there’s no shortage of other issues long discussed on my blog re-emerging. I started writing in 2010, not long after the passage of the Green Energy Act (GEA) in my province of Ontario. The GEA was the cornerstone of a “building back better” recovery plan the last large economic downturn, and should therefore be a warning signal this crisis around. And yet… today many of the same people that lobbied for that failed experiment provincially have regrouped to push for a “resilient recovery” policy portfolio at the federal level. These weren’t good policies in 2010, and they haven’t got any better, but this work will be more interested in how bad policy is built, and who is behind its construction.

The novel coronavirus COVID-19 has sucked much of the oxygen away from other topics, particularly since March (when I wrote on it and developed a report which continues to update daily). I’ll note that I hope people try the app, wear a mask indoors in public places, get outdoors, wash your hands when possible, use hand sanitizer when not and try to stay fit physically and mentally, – so you can continue to live your life having tried to protect yourself and others while recognizing all life should not be paused. Aside from that, I mention the pandemic as it’s the crisis featured in today’s “Never Let A Good Crisis Go to Waste” machinations.

As Canada comes out of the COVID-19 crisis, governments and the private sector will turn their attention to building a long-term economic recovery. Let’s make that recovery … Task Force for a Resilient Recovery

2020 hasn’t just thrown the pandemic at us. In Canada, bystanders like me are currently enjoying the WE charity[?] scandal. In a summer where Black Lives Matter movement has re-emerged I’ve, coincidentally, half-joked WE could stand for White Entitled. I’ll leave the non-joke half as a sub-text for what follows about the communications campaign, and related politics, powering the “Task Force for a Resilient Recovery” (TFRR) vehicle. It could be seen as part 3 in my ‘Carbon Con” series (parts 1 and 2),  or as a case study in how to develop experts to create the appearance of consensus among apparent experts  for the purpose or exercising power in setting government policy that is likely to work against the broader welfare of the public.

The TFRR was promoted by a news release from the Smart Prosperity Institute on May 19, 2020. From that same day on the National public broadcaster’s website:

Civil society… is not waiting to push the Liberal government to focus any recovery plan on emissions-reducing and sustainable projects — a push that now includes a group of environmental, financial and political figures who are hoping to draft a set of recommendations over the next two months.

Civil society that is – not civil engineering society. There’s no engineering expertise evident in any of the people associated with the TFRR, except in that they engineer opinion to influence policy for the benefit of “civil society.”

Fourteen members with an additional 8 “expert” advisors – with all the ethnic diversity I’ve come to expect of such groups since preparing Green is the Old White years ago. Maybe they meant elite society. From the TFRR backgrounder:

Funding for the initiative is provided by: The Jarislowsky Foundation, Ivey Foundation, The McConnell Foundation, The Schad Foundation, The Echo Foundation.

May’s news release referenced The Resilient Recovery Framework “submitted” to the TFRR at its inception by the Smart Prosperity Institute (SPI – formerly the Sustainable Prosperity Institute), and promised the, “work of the Task Force will conclude in July with the release of a final report.” It has not completed its work yet, at least not publicly, but the panel has released something preliminary, which we’ll review in due course.

SPI’s funders, listed on their website, also include the Jarislowsky, McConnell, and Echo Foundations. It is headed by Stewart Elgie.

From Elgie’s organization’s report towards a “Green Economic Stimulus Package for Canada.”:

we conclude by discussing four types of stimulus measures that stand out as having the potential, in the short term, to create significant numbers of new “green” jobs across the country while also enhancing our long term economic and environmental prosperity. 

1. Building Retrofits…

2. Green Infrastructure:

3. Clean-up of Toxic Sites…

4. Investments in Clean Energy…

I hope I haven’t confused anybody by quoting from 2009’s Smart Prosperity Institute Report which too was created with the generous support of the J.W. McConnell Family Foundation. I wanted to communicate that foundations in 2020 know what they’re buying as they’ve long used their funding to sustain their “experts”. 

I have not been impressed by Stewart Elgie. His support for the Ontario’s Green Energy Act, back in 2009 was shallow and unintelligent:

“I am struck by the irony that some short-sighted groups are criticizing the [GEA] for adding new costs in an economic downturn…”

I recently demonstrated the cost of the GEA spending is about $4 billion a year, and will be for 20 years. This year the cost of subsidizing electricity will be over $5 billions a year to the provincial government. Lasting harm is not generally considered a goal of stimulus spending. Steve Paikin noted Elgie’s bona fides as a fundraiser with foundations on The Agenda the day following the announcement of the TFRR: his father was somebody, and so was his grandfather.

J.W. McConnell was a man. 

He was wealthy man. 

One of his financial interests was Brazilian Tractor, which later became simply Brascan. His foundation was established 83 years ago, in 1937, 26 years before he died over a half-century ago.

Brascan was an early buyer of Ontario hydroelectric generating stations as the province dismantled it’s public “power at cost” utility, Ontario Hydro. If J.W. McConnell’s heirs, or his foundation, retained an interest in Brascan’s successor, Brookfield, they were richly rewarded for their early $725,000 donation to GEA defender Elgie’s SPI. From Brookfield’s 2009 Annual Report:

The most significant milestone during 2009 was the restructuring of our power sales in Ontario with the signing of a 20-year contract with the Ontario Power Authority. We expect that in the first year of this contract, the combination of the contracted energy price and peaking premiums, together with ancillary revenues that we will continue to earn in the market, will provide us with pricing of approximately C$80 per megawatt hour. The contract covers the significant portion of the power generated by us in Ontario, that was previously uncontracted, and contains inflation provisions that will increase the price annually over the contract life. As a result, cash flows from this contract, based on long-term average generation, should be in the range of $180 million in 2010 and grow steadily over time

Since 2009 the average market value has been C$23.5 per megawatt hour: those contracts gifted during the last economic crisis have hugely benefited the owners of existing infrastructure built by public hands. I cannot say if the Foundation, or its board members, directly benefited from the GEA actions blessed by those they fund, but I can say they continue to invest in renewable power with entities including MaRS, Cycle Capital, and BlackRock.

continue to part 2…

This is a 2012 post from Barry Brook’s Brave New Climate, which was a tremendous blog but one that is no longer maintained – and was left with a presentation scheme that is illegible.

I’m currently in Dubai at the 2012 World Energy Forum, as part of a delegation from the Science Council for Global Initiatives. Tomorrow (24 Oct) we will run symposium on “New Nuclear”, which will be chaired by Tom Blees and feature talks from Dr Eric Loewen (GE), Dr Alexander Bychkov (IAEA), Dr Evgeny Velikhov (Kurchatov Institute) and me (Dr Barry Brook, University of Adelaide). I will also chair a session later in the afternoon on “Vision for a Sustainable Future”, just before the closing address.

Tom and Nicole Blees of SCGI stand in front of the World Trade Centre in Dubai, during the World Energy Forum, Oct 2012. The sign behind them makes for some interesting reading…

In preparation for this meeting and as a result of a focussed conference at University of California Berkeley in early October, a white paper on the Integral Fast Reactor was prepared by Tom and me, on behalf of SCGI, and has garnered signatories from 8 key countries, including prominent people not attending the Berkeley meeting, such as climatologist  Jim Hansen. The white paper is given below.

——————–

The Case for Near-term Commercial Demonstration of the Integral Fast Reactor

Demonstrating a credible and acceptable way to safely recycle used nuclear fuel will clear a socially acceptable pathway for nuclear fission to be a major low-carbon energy source for this century. We advocate a hastened timetable for commercial demonstration of Generation IV nuclear technology, via construction of a prototype reactor (the PRISM design, based on the Integral Fast Reactor project) and a 100t/year pyroprocessing facility to convert and recycle fuel.

1. Synopsis

We propose an accelerated timeframe for realizing the sustainable nuclear energy goals of the Generation IV reactor systems. A whole–system evaluation by an international group of nuclear and energy experts, assembled by The Science Council for Global Initiatives, reached a consensus on the synergistic design choices: (a) a well-proven pool-type sodium-cooled fast reactor; (b) metal fuel, and (c) recycling using pyroprocessing, enabling the transmutation of actinides. Alternative technology options for the coolant, fuel type and recycling system, while sometimes possessing individually attractive features, are hard-pressed to be combined into a sufficiently competitive overall system. A reactor design that embodies these key features, the General Electric-Hitachi 311 MWe PRISM [1] (based on the Integral Fast Reactor [IFR] concept developed by Argonne National Laboratory [2]), is ready for a commercial-prototype demonstration. We advocate a two-pronged approach for completion by 2020 or earlier: (i) a detailed design and demonstration of a 100 t/year pyroprocessing facility for conversion of spent oxide fuel from light-water reactors [3] into metal fuel for fast reactors; and (ii) construction of a PRISM fast reactor as a commercial-scale demonstration plant. Ideally, this could be achieved via an international collaboration. Once demonstrated, this prototype would provide an international test facility for any concept improvements. It is expected to achieve significant advances in reactor safety, reliability, fuel resource sustainability, management of long-term waste, improved proliferation resistance, and economics.

2. Context

When contemplating the daunting energy challenges facing humanity in the twenty-first century in a world beyond fossil fuels, there are generally two schools of thought [4].

One is to take a scattergun approach, which emphasizes energy efficiency, a gamut of actual and potential clean, low-carbon energy systems, and a hope of future technological advances to solve currently intractable problems like large-scale energy storage. Those who espouse such a view sometimes grudgingly admit that a large component of natural gas will be needed to ‘fill the gaps’ and often support the view that the majority of humanity will have to learn to be content with consuming much less energy than the customary level common in developed countries.

The other perspective sees a way out of the climate/energy/population dilemma in the development and deployment of environmentally benign, fit-for-service technologies that can provide the vast amounts of energy that will be (and are being) demanded, over many millennia into the future [5]. This view not only recognizes that people who are accustomed to energy wealth (or aspire to it) will be loath to give it up, but that there will be no reason to do so. In fact, vast amounts of energy will be required in order to rectify the damage already done to the environment, and to avoid further damage and resource depletion in the future.

The latter viewpoint—sometimes derisively referred to by proponents of the former as the ‘techno-fix’ mindset—is the general outlook of an international think tank called The Science Council for Global Initiatives (SCGI). On October 2-3, 2012, SCGI assembled key scientists and policymakers at the University of California Berkeley to discuss the most pivotal technology in the SCGI spectrum: the Integral Fast Reactor (IFR).

Participants at the conference came from nine countries: Australia, Canada, China, Japan, Russia, South Korea, Sweden, United Kingdom and the USA. (Since the UK government is currently weighing an offer from GE-Hitachi regarding a proposal to construct PRISM reactors in Britain, our UK guests participated as observers and are understandably constrained from taking a position on fast reactor deployment.) Most of these had deep knowledge of fast nuclear reactor systems and global energy policy. Several of the countries represented have fast reactor research projects ongoing, have had them in the past, or are considering them for the future. The goal of this conference was to share the current state of fast reactor development in each country, reach a consensus on design attributes of a system that could be feasibly deployed within this decade, and explore ways in which international cooperation can be mustered to move as quickly as possible from the experimental to the commercial phase.

The Emiratis are serious about nuclear for low-carbon energy, as attested to by these banners in their main convention centre a the World Energy Forum in Dubai.

3. Partner Nations Preparing Today for Tomorrow’s Energy Needs

At the turn of the twenty-first century a group of nine nations agreed to collaborate in the development of advanced nuclear power systems capable of meeting the energy needs and aspirations of the new millennium. These nine nations were soon joined by several other countries to form the Generation IV International Forum, GIF [6]. (Generation IV refers to the next-generation nuclear power systems in the incremental technical evolution—Generation I through III—since the dawn of the nuclear age. [7])

The goals of GIF involve four categories: sustainability, economics, safety and reliability, and proliferation resistance and physical protection. Six promising nuclear technology concepts were selected after an initial evaluation of a wide variety of systems, with an aspiration for ongoing development to 2030 and beyond. (In an evaluation of 19 reactor systems by the Gen IV Roadmap Integration Team in 2002, the IFR ranked number one overall. [8]) The purpose of the Berkeley SCGI conference was to promote international cooperation in hastening the move from R&D to a near-term demonstration of a commercial-scale Gen IV system. The pressing nature of climate change, burgeoning population growth, and the socio-political imperative to demonstrate solutions to the perceived problems of current-generation nuclear energy systems, demand an end to interminable delays.

Until very recently, deployment of fast reactor systems was characterised as plausible only decades into the future. Then late last year, in November of 2011, GE-Hitachi Nuclear made a paradigm-shifting offer to the United Kingdom, which was seeking a solution to disposition of that nation’s plutonium inventory [9] (at 112 tons, the largest such stockpile in the world). GEH submitted an offer to build a pair of PRISM reactors in the UK to solve their plutonium quandary in about five years, with the recouping of costs coming via a set fee for each kilo of plutonium that was successfully processed by the PRISMs [10] and from the electric power generated in the process.

4. The Integral Fast Reactor System Design

The Integral Fast Reactor (IFR) is a Gen IV system that meets the goals of GIF, backed by decades of engineering-scale R&D at Argonne National Laboratory and elsewhere. The IFR is ready for commercial demonstration. It has the following essential features: (i) liquid sodium coolant, (ii) pool configuration, (iii) metallic fuel, and (iv) fuel recycling using pyroprocessing [11].

Liquid sodium coolant has by far the most operational experience in experimental fast reactors, and offers a number of advantages: it transfers heat from the fuel efficiently; it can absorb significant heat without excessive temperature rise; its boiling point is far above operating temperatures, yet it melts at a fairly low temperature; it does not react chemically with either the reactor structural materials or the metallic fuel; it is stable both chemically and under irradiation; its activation products are short-lived; and finally, it is cheap and commonly available. These attributes allow operation of the fast neutron reactor at atmospheric pressure, a characteristic that has many obvious safety and structural advantages. The main disadvantages of sodium are its opacity and its high chemical reactivity with oxygen in water or air. These disadvantages are overcome by design.

The reactor pool has both primary and secondary guard vessels with no penetrations below the sodium surface level, to minimize the possibility of leakage, and is surrounded by inert argon gas. This configuration makes it simple to isolate the radioactive primary coolant from the steam generator. A non-radioactive secondary sodium circuit gives up its heat to the steam generators in a separate structure away from the reactor core, and if leakage does occur, it is blanketed by an inert argon atmosphere and would leak slowly out of any pipe break because the circuit is not pressurized. The reactor pool contains enough sodium to absorb the transient heat under accident conditions, to allow safe reactor regulation, and to permit passive circulation and heat removal.

The metal fuel, a ternary alloy of U-Pu-Zr, is a crucial choice for the IFR. The long-standing problem of fuel swelling that plagued early use of metal fuel and severely limited fuel burnup was solved by allowing the fuel slugs to fit loosely within the stainless steel cladding, with the necessary thermal bond provided by a sodium layer between fuel and cladding. Fission product gases are collected in a plenum above the fuel. This simple innovation allows for long irradiation times and high burnup (once fuel swells to the cladding’s inner surface, fission-gas pores interconnect and the gas is released to the plenum without further swelling). The metal fuel not only allows for high breeding ratios and a simple yet proliferation-resistant method of recycling and recasting (see below); it also confers significant safety features. Little heat energy is stored in the fuel and is rapidly transferred to the sodium coolant; furthermore, negative reactivity feedbacks occur as core temperature rises, quickly reducing reactivity due to increased neutron leakage.

The pyroprocess for fuel recycling uses an electrochemical system to separate actinides from the fission product waste within a hot molten-salt bath, yet it cannot yield a purified plutonium stream (the pyroprocessing heavy-metal product is inevitably mixed with minor actinides and highly radioactive trace lanthanides, providing substantial proliferation resistance). The fission products and cladding hulls are immobilized in zeolite and vitrified, whilst the actinides can be readily re-formed into metal fuel pins using a simple injection-casting method that can be done remotely. The pyroprocess lends itself to a compact plant design without aqueous byproducts, thereby offering significant potential cost savings and environmental benefits.

The reason for recommending these design choices in preference to potential fast reactor alternatives (e.g., oxide fuel, lead coolant or loop configuration), are detailed in the 2011 book by Till & Chang, Plentiful Energy [12].

In summary, the key design elements of the IFR – metallic fuel, sodium coolant and pool vessel configuration, work together as a complementary system to bring out the best in the fast reactor and yield many desirable, synergistic characteristics. These component choices, along with the associated proliferation-resistant and relatively inexpensive process for recycling the used fuel and the technology for disposal of the residual waste, define an advanced nuclear system that can truly be called revolutionary in its possibilities. In the words of the Nobel laureate physicist Hans Bethe, “All the pieces fit together.”

Next-generation nuclear energy, as exemplified by the IFR design, offers a means to produce vast quantities of zero-carbon and reliable electricity and process heat. By taking advantage of the superior physical properties of plutonium in a fast neutron spectrum for converting essentially all of the mined uranium into useful fissile material, the IFR can change in a fundamental way the outlook for global energy on the necessary massive scale [13]. These resource extension properties multiply the amount of usable fuel by a factor of over a hundred, allowing demand to be met for many centuries with fuel already at hand, by a technology that is known today, and whose properties are largely established. All that is required now is to complete the final steps in a prototype demonstration to give confidence for a large-scale deployment.

Below: Mass flow diagram for off-line stand-alone pyroprocessing facility using light-water reactor (LWR) waste to provide fuel for a gigawatt-sized integral fast reactor (IFR) plant operating in closed-cycle mode.

5. Alternative Technology Choices and Implications

The GIF selected six promising next-generation nuclear technologies on which to focus for research, development and deployment. Some of them have the benefit of actual experimental experience, while others are as yet theoretical. The Berkeley conferees discussed a variety of reactor types and components, albeit not an exhaustive list since exploring all those options would require a discussion of a complexity and depth beyond the scope of a two-day conference. Our intention was rather to explore technologies that readily meet the overall goals and can be demonstrated at a commercial scale now, since climate change, population growth and other critical issues for 21st century sustainability will not wait for long-term research and development. Replacement of fossil fuels is urgently needed to sustain our world’s well-being.

It should be noted here that virtually all of the conference participants were in agreement that construction of advanced water reactor designs is imperative to meet the near-term electricity demand growth. Light-water reactors (LWR) of any stripe, however, produce only a tiny fraction of the potential energy in uranium, less than 1%. Fast reactors, in contrast, unlock nearly all of it. The IFR, with its metal-fuel system and pyroprocessing, is able to utilize the actinides to such an extent as to essentially solve the waste problem by reducing the radiological toxicity of the waste products from hundreds of thousands of years to a mere few hundred years. Even if the “million-year problem” of LWR spent fuel is more a political than a technical challenge (given the small volume of the waste stream), nevertheless the issue of public perception of that issue is the one that guides nuclear policy in many countries [14]. As such, the transition to fast reactors and a closed nuclear fuel cycle is both a technical advancement and a political enabler for nuclear power of all kinds.

The Berkeley group looked at other fast reactor systems besides the IFR/PRISM that are in the R&D phase in various countries today, in order to weigh the pros and cons vis-à-vis IFRs. This included discussion of alternative coolants, such as lead, and fuel forms such as uranium nitride or oxide. On balance the arguments presented by the conferees favored the use of sodium coolant and metal fuel, within an IFR-like system. It was suggested that perhaps the oxide-fueled Monju experimental fast reactor in Japan might get a new lease on life if it could be converted to metal fuel. Given the politically sensitive situation of nuclear power in Japan after Fukushima that makes the development of super-safe nuclear design more urgent than ever, the controversial Monju could well become a model of future nuclear power in Japan.

GEH S-PRISM modular fast reactor.

One of the issues most often mentioned when discussing sodium-cooled fast reactors—by far the type with the most reactor-years of experience worldwide—is the chemical reactivity of sodium, which burns upon contact with air (though with a very cool flame) and reacts quite dramatically upon contact with water. Yet sodium has several compelling advantages in fast-reactor operation: superior heat-exchange properties, virtually no corrosive effect on reactor components even after decades of operation, short half-life of sodium isotopes that form in the reactor vessel, etc. (see previous section). Some advocates of other systems characterize sodium’s volatility as a deal-breaker. But the intermediate loop that transfers heat from the reactor vessel to the steam generator contains only non-radioactive sodium, with the steam generator isolated in a separate structure, assuring that in the highly unlikely event of a sodium-water reaction there will be no danger to the primary system and no chance of radioactive material being involved. This design means that the unfairly characterized sodium problem is nothing more than an engineering design issue, involving a common element that has been used in industrial processes for well over a century. With over 300 reactor-years of experience with sodium-cooled fast reactors around the world, not a single instance of sodium-water interaction resulting in radioactive release has been recorded [15].

The conferees also touched on other fast reactor and thermal reactor systems being considered today, in varying degrees of development: molten fluoride salt thorium reactors (LFTRs), liquid-salt-cooled pebble fuel systems, etc. [16] While some of these hold promise, none are near the level of readiness for near-term commercial-prototype deployment as the PRISM reactor and its metal-fuel technology. In addition, none of the immediate prospects can match the IFR concept in meeting all the goals of the Gen IV initiative.

6. The Way Forward

There is a pressing need to: (a) displace our heavy dependence on fossil fuels with sustainable, low-carbon alternative energy sources over the coming decades to mitigate the environmental damage of energy production and underpin global energy security [17], and (b) demonstrate a credible and acceptable way to safely deal with used nuclear fuel in order to clear a socially acceptable pathway for nuclear fission to be a major low-carbon energy source for this century. Given the enormous technical, logistical and economic challenges of adding carbon capture and storage to coal and gas power plants, we are faced with the necessity of a nearly complete transformation of the world’s energy systems. Objective analyses of the inherent constraints on wind, solar, and other less-mature renewable energy technologies inevitably show that they will fall short of meeting future low-emissions demands. A ‘go slow, do little’ approach to energy policy is not defensible given the urgency of the problems society must address, and the time required for an orderly transition of energy systems at a global scale. As such, SCGI advocates a near-term deployment of the Integral Fast Reactor.

What is needed now is a two-pronged approach, for completion by 2020 or earlier, that involves: (i) demonstration of the pyroprocessing of LWR spent oxide fuel, and (ii) construction of a PRISM fast reactor as a prototype demonstration plant, to establish the basis for licensing and the cost and schedule for subsequent fully commercial IFR plants. Once demonstrated, this commercial IFR will be expected to show very significant advances in nuclear safety, reliability, nuclear fuel sustainability, management of long-term waste, proliferation resistance, and economics. The time has come to capitalize on this exceptional energy technology, with the benefits of this development extending throughout the global energy economy in the 21^st century.

7. Follow Up

For further information on the IFR and related technology options, visit The Science Council for Global Initiatives website: http://thesciencecouncil.com (This resource includes a list of members from science, engineering and policy backgrounds, contact details, and various technical publications and popular articles).

SCGI is an international nonprofit organization dedicated to informing the public and policymakers about technologies and strategies that can lead to an energy-rich world. SCGI provides a forum for many of the world’s prominent scientists, authors and activists to collaborate and share their knowledge regarding solutions to the world’s energy, resource and environmental problems.

SCGI’s ambitious aims are to advocate near-term deployment of cutting-edge technologies, such as integral fast reactors, zero-emission vehicles and plasma recyclers. Such technologies can realistically eliminate most air pollution, recycle spent nuclear fuel, bring the fossil fuel era to an end, prevent resource wars (including potential water wars), effortlessly recycle virtually all of our waste products, power our vehicles with zero-emission energy systems, provide abundant energy and fresh water to every nation, reduce human-caused greenhouse gas emissions to a trickle, diminish the world’s nuclear arsenals, turn old nuclear weapons into energy, and promote other technologies that, once commercialized and deployed on a large scale, can lead us to a sustainable post-scarcity era.

#ELECTRICITY RATES: WHERE DO WE GO FROM HERE?

Join us as Vince Brescia presents findings by the #OEA & @IFSD_IFPD on how to reduce rates by 12%. This research will be useful for Ontarians to consider as we grapple with this challenge ahead.

More info: https://t.co/G9wNyYL0UI pic.twitter.com/PqpmWR08aK

— Ontario Energy Association (OEA) (@energyontario) April 23, 2020

Turns out it was a lot less interesting than I thought.

My quick scan of the OEA’s “Help those who need help” paper finds little I agree with presented from a perspective that is foreign to me – and yet I agree with the action option they steer people to agree with:

OPTION 3: PHASE OUT ELECTRICITY COST REFINANCING SUBSIDIES
This option is the lowest cost option for provincial taxpayers. It would see bills remain stable, increasing by about 1.5% more than inflation each year until such time as electricity bills cover system costs. This option would result in electricity bills for Ontarians that are, on average, 13% below the cost plan inherited by the government, exceeding the government’s commitment.

I’m pretty sure the current Premier campaigned on actual cost controls, and not more interesting accounting –  not that accounting is useless.

The industry perspective that sees cost savings as raising consumer rates above inflation deserves to, at least, have it’s historical presentation challenged.

Since the OEA’s paper goes back to Bob Rae’s rate freeze – after some big rate hikes once Darlington’s reactors entered service early in the 1990’s – lets quickly review how much of today’s so-called “electricity price mitigation programs” are actual costs to the government due to electricity.

Before Bob Rae’s NDP government killed the “Power at Cost” principle that guided Ontario during the heyday of its public provider (Ontario Hydro), Ontario’s electricity wasn’t meant to make government’s a profit, and it wasn’t subject to taxes.

It seems impossible a paper would cite rebating the provincial portion of the HST as a subsidy one year while ignoring it had only been subject to that tax for a single year (when the Provincial Sales Tax was merged with the federal GST).

Similarly, Ontario Power Generation (OPG) – the generator remnant of Ontario Hydro – has been driving rate increases in Ontario in the past 18 months, and reaping great profits doing so: $1.1 billion in 2019. Hydro One (the transmission and distribution remnant) had traditionally been the greater revenue generator – but trailed behind in 2019.

About $3 billion of that $5.5 billion wouldn’t have been costs in days gone by.

Is electricity itself the reason for costly programs to help poor people, rural and remote people, industries in the struggling north, and the first numbered nations?

I don’t think so. Programs were instigated through electricity rates instead of being rightly paid for with taxes – and now get counted as electricity subsidies!

That’s another half a billion dollars – and there’s more areas where electricity sector revenues are used as taxation: like the Industrial Conservation Initiative where public sector entities can transfer their costs onto small consumers (who in turn get subsidized by government).

Anyway… none of this is what I try to write about. My most recent post at my main Cold Air blog  is intended to avoid unnecessary costs being added to the system – and many posts I write count up the unnecessary costs that have already been added.

OccasionallyI’ve offered thoughts on how to reduce costs.

I can see why the OEA, which claims to “represent Ontario’s energy leaders that span the full diversity of the energy industry,” would suggest money could be saved by raising the rates on small consumers, but – despite agreeing with their “Option 3” – can’t see why anybody would treat a report that ignores actual costs as credible.

“Over the 11- month period in question, the estimated impact on the HOEP and transmission loss uplift combined could have ranged as high as between $450 million to $560 million, although a simulation accounting for additional potential variables could yield lower estimates.”

Some big numbers, but upon investigating I initially generated a thread on Twitter which concluded, “the impact of this mostly-grey money forensic investigation is an imperceptible lessening of the cost shift from class B to class A consumers.” My position was supported when the system operator (IESO) responded to the MSP report:” IESO analysis shows a net market impact across all customer groups of less than $10 million.”

And that’s sort of the end of that hysteria, but since I looked I can’t shake the feeling something is very wrong with the analysis – from the OEB report to the IESO response and the reporting on what occurred.

The MSP report connects exaggerating demand with price spikes. They need to explain that connection.

This is the technical explanation of how demand was inflated:

The unintended consequence began after the introduction of the first Demand Response (DR) auction in May 2016. At that time, the IESO’s scheduling algorithm had a mechanism to account for dispatchable loads – active participants in the wholesale market, capable of adjusting load in response to 5-minute prices – who may be consuming when not bidding into the market. However, the addition of DR resources that are embedded at the distribution level resulted in the IESO double-counting their demand in hours when they were not bidding: once as part of the IESO forecast generally and again by including them in a separate scheduling calculation akin to the mechanism applied to dispatchable loads.

There is an IESO-controlled grid (ICG), which I usually describe as transmission-connected (Tx) consumption or generation. One consumer group on the ICG is local distribution companies (LDCs), within which there are also consumers and generators which are referred to in multiple ways including embedded and distributed (Dx). The issue discussed in the MSP report involved embedded consumers bidding into the capacity auction.

Embedded consumers have won 75% of the capacity awarded in the four auctions subsequent to the first auction, which is alleged to have triggered the error discussed in the MSP report.

…as of July 2019, none of the hourly DR resources (embedded loads not directly connected to the IESO-controlled grid) – which account for the majority of DR capacity – have been activated.

So we’re about $150 million into demand response capacity payments to embedded consumers (via aggregators who dominate the demand response auctions), and we’ve never activated the response.

Huh. How ’bout that?

Supply from distributed generators is something the IESO reports on very little, relative to how often they contract it and fantasize about its role in the future. The number they report as “Ontario Demand” demonstrates how their operation was structured, with silos including direct wholesale consumers and LDCs comprising Energy/Ontario Demand along with generator consumption and (line) losses.

Not included in the calculation, directly, is generation within the LDC networks. The IESO does include a monthly number for “Reported Embedded Generation (GWh)” in the workbook accompanying its reliability outlook (in Table 3.3.2), but the numbers are not known on an hourly basis.

Confused?

Me too – and perhaps also

the writers of the report. They claim two impacts of overestimating demand:

• The estimated average increase in HOEP during the relevant period was as much as $4.50/MWh…
• …the addition of fictitious demand often had a dramatic inflationary impact on the HOEP. To illustrate this impact, consider HE 20 on June 9, 2016. This hour had an HOEP of $1,619/MWh, the fourth highest in the history of the Ontario wholesale electricity market.

I think over-estimating demand should dull the Hourly Ontario Energy Price (HOEP) and lower the likelihood of price spikes. I respect the work of the Market Surveillance panel, but as far as I know overestimating demand would cause additional resources to be committed in the IESO’s murky day ahead commitment process (DACP) which would drop the HOEP when excess supply must be adjusted to match supply in real time. I’ve queried the periods from May 17 to April 24 for not only the period in question, but all similar periods since 2010. While the HOEP was higher for the 2016-17 period in question than the same period in the prior, and subsequent, years, the cost of natural gas was too (particularly in the winter), and demand was higher too – so HOEP should be higher in the absence of any impact from the error.

A more meaningful comparison would be to see how the IESO HOEP (rate) compared to adjacent systems compared to how it usually does. It performed poorly – but it always does.

Somebody could try to quantify the degree of poorness, and the Market Surveillance Panel (MSP) does track those prices on a monthly basis in Table A-3 of their regular reporting. If they did they’d find that the period’s increase in Ontario’s HOEP was lower than the increase in the Michigan price zone (MISO) or the relevant New York price zones (NYISO). I don’t see any evidence the changes in HOEP were out of character.

Price Spikes also occurred, but the connection here also escapes me: if too much supply is scheduled because additional demand is forecast it should follow that the possibility of price spikes should be lessened.  Comparing the 11 months to the comparable periods in other years there is a jump in prices above $200 per megawatt-hour ($/MWh) in 2016-17, but upon examination the jump occurred due to low-demand hours experiencing price spikes. I suspect this is due to the IESO struggling to forecast two more general things: supply and demand.

Alastair Sharp’s reporting on the MSP report indicated the demand response consumption was not the only embedded consumer/supplier change occurring at the time:

This involved the integration of small-scale embedded generation (largely made up of solar) into its wholesale model for the first time.

The timing is surprising, because by 2016 it would have been impossible to forecast  hourly demand without forecasting embedded generation. Embedded generation reduces demand from the transmission-connected generators on the ICG – which is what the IESO reports as “Ontario Demand.” The impact is clearer in pictures – on the left is what the IESO would need to schedule generators to meet, while on the right is the estimated actual consumption across the province. The addition of solar greatly distorted what the IESO considers “Ontario Demand” over the past decade.

The average hourly figures over two months display this, but realize some days have little solar, and some have an abundance. The point is that it’s impossible to schedule the demand generators on the IESO-controlled grid will need to meet without forecasting embedded generators. This is a challenge the IESO was dealing with during the price spikes of 2016-17.

The highest HOEP of the period occurred in hour 20 of Saturday March 11th (7 – 8 pm), when demand response contracts wouldn’t be relevant. The next highest, in hour 8 of April 12th, 2017  occurred when demand was a relatively paltry 15,591 MW. The issue – it seems to me – was no natural gas was online to provide flexibility: the IESO had curtailed overnight to find the flexibility for the morning ramp but something didn’t work and the price spiked. This is similar to the hours noted in the MSP report, 20 and 21 on June 9th 2016: little flexible gas generation was operating in hour 19. It was a similar situation on hour 10 of April 6, 2017, the 5th highest HOEP spike: no flexible gas generators online. Not only was supply not tight on thees 4 days with price spikes, contracted supply was heavily curtailed for much of two of the them.

It’s far more likely the price spikes on 2016-17 occurred due to limitations of the IESO’s ability to forecast spasmodic generation (more politely known as variable renewable energy systems – or vRES), which is exactly what the MSP was attributing price spikes to during 2016 (without recognizing issues appearing as under-forecasting demand were more likely over-forecasts of embedded solar generation):

The High HOEPs were primarily caused by under-forecasts of demand and short-notice losses of supply (curtailing of imports and under-generation of wind facilities relative to their forecast production).

So those are my two problems with the two claims of higher HOEP and price spikes from over-forecasting demand due to an error integrating embedded demand “capacity resources”: it’s not only unlikely it did either, it obfuscates what we know is actually problematic.

if the report were correct, what would the impact be on consumer segment pricing?

If HOEP could be raised by $4.50 without impacting exports, one impact would be lower losses on exports – at least in terms of the global adjustment totals. Those would have been $88 million less if the rate was $4.50 higher, which would lower the global adjustment charges by $88 million.

Actual pricing for exports would not actually change. This is because there were significant congestion charges from May 2016 thru April 2017 (and beyond), adding about $8.75/MWh to the average price of exports. If the Ontario rate were lower presumable the price paid for congestion rents would have been higher. This would benefit Ontario ratepayers roughly equally as a (larger) credit would occur outside of the commodity price (in Wholesale Market Service Charges).

Class A and B consumers in Ontario would have seen opposite impacts if the HOEP had been $4.50/MWh lower. This is because more costs of supply would be recovered through the global adjustment mechanism which transfers costs from large Class A consumers to small Class B ones. Including an adjustment for exports receiving lower revenues at HOEP, I estimate Class A consumers would have paid $1.53/MWh more from May 2016-April 2017 ($42 million dollars in total), and Class B consumers $1.17/MWh less. If the IESO’s claim that the total impact was approximately $225 million those figures would be reduced by about 60%. As the lower energy revenues would likely be accompanied by lower wholesale market service charges (due to higher congestion rents) it’s likely the IESO would be nearer the truth in assessing the the total negative impact on consumers at around $10 million.

but…

I don’t think the HOEP would be impacted from overestimating demand in the way the Ontario Energy Board’s Market Surveillance Panel suggested.