Electricity price differences between countries
Posted by Rembrandt on December 11, 2010 - 10:45am
In this post an overview is given of electricity prices in a large number of countries, mainly members of the OECD. This shows how prices vary between households and industry due to tax differences, and by analyzing the sources of electricity per country, it also leads to a better understanding how different energy sources affect the price of electricity.
The price differences show that industrial electricity users are not or only marginally taxed in nearly all countries, while household taxes on electricity usually range between 10% to 35%. The analysis of energy sources show that: 1) countries with a 35% or higher share of natural gas in the electricity mix have the highest industrial electricity prices, 2) Countries with a diversified electricity mix are in the mid-range of electricity prices, 3) No general price level was found for countries with a high share of nuclear, coal, or both in their electricity mix.
Comparisons between households and industrial electricity prices
The quarterly Energy Prices & Taxes publication of the International Energy Agency is one of the best sources for energy price data. I took a dataset from it of 2009 household and industrial electricity prices including and excluding taxes for 26 countries, mainly member states of the OECD except Kazakhstan, Israel, and Slovenia. Taxes can include value transfer added (VAT), general excise taxes, and renewable energy taxes or feed-in tariffs. An overview of this data is shown in figure 1 and 2 below. Astute readers will notice that Germany is missing in the overview. The IEA does not include electricity price data in its Energy Prices & Taxes publication for Germany. The EU energy portal shows that Germany's electricity price including taxes is in the upper range in Europe, both for industry and households.
The following observations were made for this dataset:
1) The price of electricity for households and industry in this set differs by more than 50% on average. For the 26 countries the average household electricity price was 19 US dollar cents per kWh, while the industrial price was 12 cents per kWh. Many countries therefore have a clear industrial policy to try to keep their industries as competitive as possible, at least regarding energy inputs.
2) In general industry is only marginally taxed for energy ranging from a 0% up to 10% level, except in Italy (27% tax), Netherlands (15% tax), France (12% tax), Turkey (23% tax), and Norway (26% tax).
3) In most countries households have to pay a 10-35% tax rate on top of their energy bill. Exceptions on the upside include Denmark, which has an extremely high household tax on electricity (122%) to support its renewable energy feed-in system, Norway (50% tax), Sweden (60% tax). Exceptions on the downside include Israel (0% tax), Japan (7% tax), and the United States, Taiwan, the United Kingdom, and Portugal (all 5% tax).
4) Only two countries have lower household electricity prices than industry. Industrial electricity users in Mexico pay 8% more than households, and industrial electricity users in Costa Rica pay 1% more than households.
Figure 1 & 2 – Household & industry electricity prices including and excluding taxes in 2009 for a selected number of countries. Prices excluding taxes in blue and taxes added in red. Data obtained from IEA (2010). Click here for a large version.
How the electricity generation mix affects industrial user electricity prices
To look at effects of energy sources on electricity prices I took another dataset of 25 countries from the Energy Prices & Taxes publication, excluding countries which have large shares of hydro power. The countries are mainly member states of the OECD, except Israel, El Salvador, Kazakhstan, South Korea. An overview of the data can be found in figure 3 below.Although many other factors play a role in electricity price formation, include market structure, regulation, and interconnection between countries, I ignored these factors in this analysis due to time constraints. In such a manner only the cost differences between energy sources are analysed, but these already give interesting insights.
The following observations were made regarding industrial electricity prices including taxes:
1)The highest industrial electricity prices, above 13 US dollar cents per kWh, are found in countries that are more than 35% dependent on natural gas for electricity. For example, Italy has the highest industrial electricity costs in Europe and is 50% dependent on natural gas imports for its electricity. The country paid the highest price for natural gas pipeline imports in 2009 at 9.05 dollars per Million Btu and also the highest price for LNG imports in at 7.86 dollars per million Btu. Similar to Italy are Slovak Republic, Ireland, Japan, Turkey, Luxembourg, and Hungary. Doing slightly better are the United Kingdom, and the Netherlands as they are also producers of natural gas.
• El Salvador’s Electricity price is one of the highest in the dataset found because the country relies to a large extent on oil for electricity production. Last estimates found for the energy mix is a 45% oil share in electricity production in 2007.
2)Medium industrial electricity prices, between 9 and 13 US dollar cents per kWh, are found in countries that have a highly diversified energy mix including coal, natural gas, renewable energy and sometimes also nuclear (Portugal, Spain, Finland).
3)The lowest industrial electricity prices, below 9 US dollar cents per kWh, are found in countries that have a diversified mix including nuclear, natural gas, and coal, and are reliant on the North American market for natural gas and (Mexico, USA), and in case of Kazakhstan rely 90% on domestically produced coal and 10% on hydro power.
No pattern of industrial electricity prices, are found in countries dependent mainly on nuclear, coal, or a combination of both for electricity generation.
• High electricity prices, above 13 cents per kWh, are found in Slovenia (59% coal, 32% Nuclear), the Slovak Republic (39% Nuclear, 32% Coal), and Czech republic (59% Coal, 32 Nuclear).
• Medium electricity prices, between 9 and 13 cents per kWh, are found in Greece (52% coal), Poland (90% coal), Israel (63% Nuclear), Denmark (48% coal), and France (77% nuclear).
• Low electricity prices, below 9 cents per kWh, are found in Taiwan (49% coal, 22% nuclear), South Korea (34% nuclear, 38% coal), and Kazakhstan (90% coal).
Especially interesting is the difference in electricity prices of Poland and Kazakhstan (both 90% dependent on domestically produced Coal). Respectively these are 4 US dollar cents per kWh for Kazakhstan and 12 US dollar cents per kWh for Poland. Possible differences would be regulation, differences in quality of mined coal, and efficiency of coal thermal power plants.
Figure 3 – Household electricity prices including taxes in 2009 for a selected number of countries. Industry prices in blue and household prices in red shown as an added price above the industrial level. Data obtained from IEA (2010).
Overview of countries with a large share of hydropower in the electricity mix
The dataset on countries with large hydropower shares in electricity generation includes 9 countries. Costs ranged from a low of 5 to a high of 12 US dollar cents per kWh in respectively Paraguay and Brazil. Difference can probably be explained by difference in infrastructure costs to transport electricity. For example, Norway and Brazil depend nearly entirely on hydro power but prices differ at respectively 6 to 12 US dollar cents per kWh. Norway has a fairly simple electricity transport infrastructure, and Brazil a highly complex one, due to country size and population differences.
Figure 4 – Industry and household electricity prices including taxes in 2009 for countries with a large share of hydro power. Industry prices in blue and household prices in red shown as an added price above the industry level. Data obtained from IEA (2010).
Discussion question
How can differences in electricity price be explained between countries with a large share of coal, nuclear, or both in the energy mix?
References
IEA, 2010. Energy Prices and Taxes: Quarterly Statistics 3rd quarter 2010. IEA Publications: Paris.
Contact
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This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
There is a G7 nation that is a net exporter of oil mainly to the United States that seems to be absent from this list. May I ask why?
That country is also a big exporter of electricity to the United States, too.
Source: ASPO Canada http://aspocanada.ca/eia-country-analysis-briefs-canada.html
@Chrisale, @ Zadok_the_Priest
It is not included because electricity price figures for Canada are only included up to 2007 in:
IEA, 2010. Energy Prices and Taxes: Quarterly Statistics 3rd quarter 2010. IEA Publications: Paris.
Rembrandt
It is something of a gap since Canada is a major electricity exporter to the US. Much of the northeastern US, not to mention California, would have much higher electricity costs without Canadian imports.
I think you can take it as probable that Canadian electricity prices are at the low end of the scale, lower than the US. About 60% of Canada's electricity supply comes from massive hydroelectric projects, and much of the rest comes from low-cost coal and natural gas reserves.
Canada does have a bit of a problem in that its most populous province, Ontario, has run out of hydroelectric potential, has no significant coal or natural gas reserves, and has nuclear reactors that have reached or exceeded their "best before" date. Ontario's electricity prices will probably double in the next 20 years. Its three smallest provinces have similar problems.
However, the rest of Canada's bigger provinces have surpluses of hydro and/or coal and/or natural gas. The solution to the energy problems may be to just move people to where the energy is.
7 cents for my bill, however, we have just been told BC Hydro will receive 10 percent per hear increase for the next 3 years.
We do not need anymore people...there is a reason why high voltage lines exist. Mountains and rain we have, not much arable land. best to stay home.
Mountains and rain we have, not much arable land. best to stay home.
Just move across the mountains to sunny Alberta. You just have to get used to the brisk, invigorating winters. Not nearly as much rain, but we could clearcut all the northern forests, plow the soil, plant crops, and have more agricultural land than France. Greenpeace, of course, would be horrified.
Worth emphasising that electricity is provincial business.
Current rate in Manitoba is $0.065 for residential and $0.045 for small industrial, and $0.028 for large industrial, but it is subzero Fahrenheit as I write and and will get colder later tonight. It is pretty much all Hydro - far from being paid for. Manitoba is building hydro to sell to US.
Ontario just announced that they will keep going with nuclear, hence prices will go up, and together with FIT subsidies, most likely faster, 50% over next 5 years.
Quebec has all hydro it can use and some more, and several thousand Megawatts for pretty much free from one sided deal with Newfoundland. Their price is $0.40 per day + $0.05-$0.07 per kWh
I assume 1 USD = 1CAD, which is pretty close now.
Smallest provinces (Nova Scotia, New Brunswick and perhaps PEI) have just agreed to build underwater line from Labrador to Nova Scotia, just to bypass Quebec, so they will have their hydro, but cost of underwater line is going to be high.
So the only province in trouble is, as RMG said, Ontario
RMG, tongue in cheek, in Canada, the colder the province is, the cheaper electricity.
RMG, tongue in cheek, in Canada, the colder the province is, the cheaper electricity.
That's why I have a Hydro Parka, the perfect coat for temperatures lower than -40. I particularly like the wolf fur fringe on the hood (doesn't ice up like your eyebrows so you can see under severe conditions), and the handy slots for pencils on the left shoulder. People who don't have one probably don't have a clue what I am talking about.
Fur patch on forearm?
No, no fur patch on the forearm. No hair on the palms of my hands either.
Nova Scotia Power's residential rates are increasing 5.7 per cent on January 1st, roughly half of this increase being fuel related and the balance an increase in the energy efficiency surcharge.
Source: http://www.cbc.ca/canada/nova-scotia/story/2010/12/08/ns-power-rate-incr...
Currently, the residential rate is 11.612-cents per kWh and the energy efficiency surcharge is 0.193-cents which, combined, totals 11.805-cents; in the new year, that increases to 12.47-cents. High by Canadian standards although still quite reasonable compared to New England.
If my memory is correct, this is the eighth such increase in the past nine years and the upward pressure on rates will continue as we slowly wean ourselves off imported coal and oil. Over the past ten years provincial electricity rates have increased by a factor of 1.5 whereas fuel oil prices have effectively tripled and, in that context, electricity is holding up pretty well.
Cheers,
Paul
Hi HereInHalifax,
Is it true that Nova Scotia is currently experimenting with tidal power in the Bay of Fundy and that this is realy its "secret weapon" to get cheap electricity in the future?
JB
P.S: It is not likely to the $7 billion deal with Newfoundland for about a mere 800 MW of power through expensive underwater electrical lines (that might not even be technically feasible over such a long distance) that is going to reduce electricity costs in Halifax...
Hi JB,
I dare say there will be no such thing as cheap electricity in the future, certainly not tidal nor the LCF. However, as mentioned, we have to reduce our dependence upon imported coal and oil and, in fact, there will be no other alternative once our coal-fired plants reach retirement, which is not that far off actually. In addition, roughly 80 per cent of all homes in this province are heated by oil and that has to change; presumably, the bulk of this need will swing over to electricity.
To better protect myself from the coming price shocks (and I fully expect they will be painful), I've invested heavily in energy efficiency and I've already made the switch away from oil. As noted here before, the previous owners of this home consumed 5,700 litres of fuel oil and I believe some 14,600 kWh of electricity in the year prior to our purchase. I've effectively cut our fuel oil demand to near zero (roughly 120 litres a year for supplemental heating and DWH during extended power cuts and to help prevent the radiator pipes from freezing during extremely cold weather where routed through exterior walls) and with respect to electricity, our twelve month rolling average now stands at 10,475 kWh.
To put this into context, our home is a 42-year old, 235 m2 single detached Cape Cod and our local climate is colder than that of Buffalo, NY. Oil and electricity combined, our total household energy usage is just under 50 kWh per m2 and I believe the Passive House standard is 118 kWh/m2. With a little more air sealing and by replacing the older of our two ductless heat pumps with a high efficiency Fujitsu, my goal is to ultimately get that under 40 kWh per m2.
Anyone who hasn't already started to take steps to cut their energy use had better do so now because I fear time is quickly running out. Insulate, air seal and get off electric resistance and oil as fast as you can.
Cheers,
Paul
Thank you for your interesting response HereInHalifax.
May I suggest that you use a geothermal heat pump instead of the conventional ones. You will then get a much more efficient heating system, even less dependent on electricity and oil.
You are quite right. It is wise to be prepared for the unexpected in terms of energy supply.
How much is your overall annual heating/electricity bill?
Take care,
JB
P.S: Can you send me your e-mail so that we can exchange e-mails bilaterally. My e-mail is jonatan252000@yahoo.com
Hi JB,
Our fuel oil costs at 87.9-cents a litre are approximately $100.00 a year. I could likely cut that by half or more if I were to add antifreeze to the radiator lines but it's not a bad idea to exercise the boiler periodically to hopefully prevent things from seizing up. As it now stands, our 900-litre tank will be filled once every seven years; by comparison, during the winter months, my neighbour's tank is topped up about once every three weeks. When you add in the cost of electricity, including the meter charge, our total household expenditure is just under $1,500.00 per year or about $125.00 per month.
A GSHP is not a good fit for us because we're basically built on rock and the small amount of top soil that we do have is mostly clay which, as you can appreciate, is not a great thermal conductor. In any event, our two heat pumps consume, in total, roughly 4,000 kWh a year and I could get that down to perhaps 2,800 kWh if I were to replace the older of our two units with a Fujitsu 12RLS and, at that point, I can't imagine how a GSHP could do that much better.
Cheers,
Paul
Hi HereInHalifax,
$ 1500 per year including heating and all other electrical appliances is not expensive at all for a detached +200 square meter 42 year old house. You have done a very good insulation job and have installed an efficient heating system.
When does Nova Scotia plan to retire its coal power plants?
JB
Hi JB,
Trenton 5 was commissioned in 1970 and so it's fast approaching the end of its economic life. Point Tupper was placed in service in 1973 and it too will soon reach the end of its road. In a July 8, 2008 filing with the NSUARB, the "Probable Retirement Date for Depreciation Purposes" for Trenton 5 is shown as 2010 and for Point Tupper it's 2013. The next coal-fired plants theoretically in line for retirement are Lingan 1 and 2 in 2021 with Lingan 3 and 4 to follow in 2025.
Source: http://www.nspower.ca/site-nsp/media/nspower/IR-001toIR-126.pdf
Their decommissioning could occur sooner or later; I guess it depends upon how difficult/costly it will be for Nova Scotia Power to meet its emission requirements in the years to come.
Cheers,
Paul
Hi Paul,
Thank you for the interesting info.
What is your overall assessment of Nova Scotia's current and future energy situation?
JB
In a word, "bleak". Some 80 per cent of our electricity is currently generated through the burning of coal and oil, our transportation and housing sectors are likewise heavily dependent upon imported oil, and our off-shore oil and gas industries are in terminal decline. The SS Minnow is taking on water.
Cheers,
Paul
No wonder you decided to improve the heating facilities of your house...
What potential solutions to you see?
JB
I expect a growing portion of our energy needs will be met by electricity and this will involve imported hydro from the LCF as well as expanded wind, tidal and biomass. We need to get far more aggressive with respect to demand reduction, and the recent creation of Efficiency Nova Scotia is a small step in the right direction. It will be costly and no doubt painful endeavour, but the consequences of doing nothing are unimaginable.
Cheers,
Paul
Importing electricity from LCF is very likely a technical and economical pipedream...
How about tidal and wind power? Large off shore wind farms coupled with tidal power and individal geothermal heating/cooling units and a bit of unimaginable...
JB
I disagree. Both Newfoundland and Labrador and Nova Scotia are publicly committed to making this happen, as is Emera, the corporate parent of Nova Scotia Power. NSP needs this energy to meet the province's renewable energy standards -- 25 per cent by 2015 and, potentially, 40 per cent by 2020 (see: http://gov.ns.ca/energy/resources/EM/renewable/renewable-electricity-pla...). No question, it will be a costly and technically challenging undertaking, but it's a critical piece of the puzzle. At this point, tidal is mostly eye candy and wind and biomass can only take us so far.
Cheers,
Paul
Does Nova Scotia still have positive EROEI coal reserves that could be used?
JB
P.S: To be quite frank, if I were the Nova Scotia power authorities I would push for an energy mix that I can as much as possible control like local coal mines, local tidal power, local wind power... Trusting never tested undewater electrical transmission lines that run several hundred miles underwater and that cannot easily be repaired appears to be quite a gamble.
Coal mining in this province is officially dead, Westray being the final nail in that coffin, besides which our coal is extremely high in S, Hg and Cl, making it largely unfit for consumption. NSP won't touch it.
I don't know much about the technical ins and outs of submarine cables and their associated risks -- BC EE would be in a much better person to address this point. I do know that the NorNed cable that connects Norway and the Netherlands is nearly 600 km in length whereas the proposed link between Cape Ray, NL and Lingan, NS is 180 km (110 miles).
Cheers,
Paul
How much onshore wind resource is there?
I'm not sure, Nick; we're still in the exploratory stages, but I expect it would be substantial. In July of this year, Nova Scotia and Maine signed a memorandum of understanding to work together on this front.
See: http://www.maine.gov/tools/whatsnew/index.php?topic=Gov+News&id=110128&v...
Of course, if Cape Wind is any indicator, it won't come cheap.
Cheers,
Paul
Well, I was wondering about onshore resource, as that it would indeed be much cheaper.
Right you are... my mistake.
Pretty good actually, given our seabound coast.
See: http://www.nspower.ca/en/home/environment/renewableenergy/wind/map.aspx
We currently have 138 MW of installed capacity in place and that's expected to more than double within the next two years.
For a detailed assessment of our wind potential and the integration of wind resources within our power system, see: http://www.gov.ns.ca/energy/resources/EM/Wind/NS-Wind-Integration-Study-...
For planning purposes, NSP assumes a 40 per cent winter capacity factor and a 32 per cent annual capacity factor (as noted above, NSP is winter peaking).
Source: http://oasis.nspower.ca/site-nsp/media/Oasis/10%20Year%20System%20Outloo...
Cheers,
Paul
Paul, presumably you are running into the problem of wind power being wanted, but not where anyone lives, or can see it? Are there going to be turbines built within sight of all the American owned houses in Peggy's Cove, etc. After all, those owners bought their oceanfront hideaways to get away from that awful wind energy development in Nantucket Sound.
I am sure they will not appreciate having wind turbines on the horizon, much less the foreshore, to provide expensive power to their LEED certified holiday homes - they would much rather provide hazardous jobs to the hard working coal miners out of sight underground.
The whole purpose of having these environmentally friendly retreats that they fly to on weekends is to disconnect themselves from the busy, industrialised world that made it possible for them to own these retreats in the first place.
Hi Paul,
I can't say I've heard of any serious opposition but, then again, I haven't had my ear to the ground. There are two in-province opposition groups identified on the NS Wind website -- the Folly Lake-Wentworth Valley Environmental Preservation Society and something called Pugwash windfarm which appears to be a personal blog. You can find links to both at: http://www.nswind.ca/resources.htm
Personally, I would hate to see the province littered from one end to the other with industrial wind farms when I know we can use electricity far more wisely. Still, if we want to free ourselves from coal and oil, we need to step up to the plate.
Cheers,
Paul
I don't have a problem with the odd wind farm, but end to end would be a tragedy. Some scenic areas, should remain scenic areas, I'm sure the NS government will see to that.
I think the Lower Churchill is a better option, as of course, is efficiency
I fully agree, Paul; I would hate to see this province despoiled so that we can all frolic in our hot tubs. The LCF, although not without its own set of social and environmental consequences, seems like a more appropriate fit in many ways (after energy efficiency, of course!).
There's one small consolation perhaps: wind turbines can be decommissioned and the site physically restored to its original condition; twenty or thirty years later, the scares will have largely if not fully healed. Mountain top removal and large-scale hydro, on the other hand....
Cheers,
Paul
On the other hand, we could redefine wind turbines as a scenic attraction.
Think Holland...
Well, that's true, Nick, but I'm rather fond of things as they are.
The picture on the front cover of this report (oddly enough) was taken not far from our family property in St. Anns, or Baile Anna if you prefer to keep to its original Gaelic name.
See: http://www.gov.ns.ca/energy/resources/EM/renewable/renewable-electricity...
I'm a fiercely proud Canadian but my love for this province runs even more deep; for me, this place is pure magic and a large part of this is due to its unspoiled beauty (I'm sure anyone from Newfoundland and Labrador can relate). I don't ever want that to change.
Cheers,
Paul
Paul,
Very impressive stats - I hope you don't run into problems with "oil aging" in your tank.
Sounds like a good example for a magazine write up, sponsored by Fujitsu, of course.
Thanks, Paul. I've been thinking about this as well. The good news is that it's an inside tank and so the fuel is not subject to large temperature swings. The original tank which was 34-years old was replaced in 2002 shortly after we took possession and has a bottom outlet to minimize water accumulation -- that should help too. The filter was changed in May of 2008 when the boiler was last serviced, but we've only burned a couple hundred litres since then so it should still be in pretty good shape. I haven't added any fuel stabilizer or an anti-bacterial agent as yet, but that's on my to-do list.
I often speak of the Fujitsu 12RLS because it's such a fantastic product; with an HSPF of 12.0 it could theoretically supply 1.7 times more heat per kWh than our Friedrich. It's hard to justify a change out in purely economic terms, but shaving another 1,200 or so kWh from our power bill is rather appealing -- basically, that's enough electricity to satisfy our domestic hot water needs for eight or nine months of the year. And, of course, our current system has another eight or ten years of life left in it and so it won't be tossed into the dust bin; rather, it will be passed on to someone else who can put it to good use.
Cheers,
Paul
Have you had any experience with Daikin heat pumps? My local plumbing/heating outfit is a Daikin agent and can't get Fujitsu. They seem to be on the same level as LG etc.
I can;t believe so many houses out there heat with oil! There must be a huge opportunity for the heat pumps.
Personally I think the ductless are the best thing to come along in a while - something that can replace a lot of baseboards. The potential Quebec for that must be huge.
I have wondered if the conservation efforts by BC Hydro might be better focused on just heat pumps instead of everything but the kitchen sink. The 430 rebate for an old fridge is hardly going to make anyone buy a new one, or turn off the beer fridge in the garage. Certainly on a kW avoided basis, they must be cheaper than the new site C projects, and likely most other forms of new generation.
Not first hand, Paul. I understand they're a reputable player, but perhaps a bit pricey. If it's helpful, I can purchase a 12RLS with all of the miscellaneous do-dads for under $2,000.00.
With an HSPF of 12.0, the 12RLS supplies, on average, 3.5 kWh of heat for every kWh consumed -- the potential savings are thus enormous. Anyone who heats now with oil hot water or electric baseboard would be well served by one of these units. And you're absolutely right, utilities should be doing a lot more to promote this. The only one I know that's pursuing this with any vigour is the BPA and its member utilities. See: http://www.nwductless.com/
Cheers,
Paul
At what temperature difference does it reach a COP of 3.5?
The best COP I read of so far is 4.2 at 2C (cold) and 35C (hot) (and still a COP of 2.8 at -15C (cold) and 35C (hot)):
https://institute.ntb.ch/fileadmin/Institute/IES/pdf/Pr%C3%BCfResLW10101...
http://www.heliotherm.at/cms/en/waermepumpen/heliotherm-air-source-heat-...
(But I don't think that they are available for $2000).
The older of our two units has a nominal heating capacity of 14,000 BTU/hr or 4.1 kW at 47°F/8.3°C and at this temperature draws approximately 1,175-watts, which puts its COP a hair under 3.5. At one time you could download the service manuals for these products from the Friedrich website, but that's no longer the case so you'll have to take what I'm about to say at my word -- based on the performance curves as I've interpreted them, heat output falls roughly 400 BTU/0.12 kW for every degree Celsius downward; it's not perfectly linear as I recall, but certainly close enough.
The other thing to note is that this is a non-inverter (single speed) model and so its power consumption can be accurately measured at various temperature points (by contrast, the power draw of our Sanyo which is an inverter system is all over the map because its compressor ramps up and down according to load). So, for example, at 1°C this particular unit draws 1,125-watts; at -3°C, it's pulling 1,035-watts; and at -13°C, its down to 970-watts. Thus, if my numbers are more or less correct, at 1°C, its COP is running in the range of 2.9; at -3°C, it's closer to 2.6 or 2.7; and at -13°C when it pretty much calls it a day, we're down to perhaps 1.6 - 1.7. Knock off between 5 and 15 per cent for defrosting depending upon ambient air temperature and relative humidity (the biggest penalty occurs around the 0°C mark and falls off rather sharply as you move up or down from there).
Knowing its limitations, I use a couple tricks to help goose-up the numbers. For example, rather than have it maintain a set temperature, I'll run it flat out for several hours at a time, thus minimizing the standby losses that normally occur whenever the compressor cycles on and off. Secondly, during the swing seasons, I restrict its operation to the warmest times of the day as the spread between daytime and night time temperatures can be fairly significant; there's enough thermal mass in our home to help even things out and thereby maintain an acceptable level of comfort. As we move further into the heating season, I closely monitor the weather forecast and whenever temperatures are expected to fall, I'll bank as much heat as I can to coast through the cold snap; likewise, if it's expected to warm-up, I'll hold off turning it back on until the mercury starts to climb. Fortunately for us, with our maritime weather, temperatures bounce up and down all the time, e.g., right now, it's +12°C whereas this same time yesterday it was -1°C. I'm willing to trade off some personal comfort by letting indoor temperatures swing within a 5 to 10°C span as need be. This sort of "hands on" approach allows me to maximize operating efficiency and to displace the greatest amount of fuel oil possible.
This model has a HSPF of 7.2 in our climate zone, which translates to be a seasonal average COP of 2.1. Using a combination of the above techniques and depending upon the severity of our winter, I can generally bump that up to between 2.6 and 2.8, i.e., closer to a system with a HSPF of 9.0 or 9.5.
Lastly, a large part of the rationale for replacing this unit is that I can achieve significantly better results with a Fujitsu 12RLS without having to micro-manage its day-to-day and hour-by-hour operation. It's not a huge burden as such and I kinda enjoy the challenge, but there's something to be said about "set and forget" convenience and the added comfort of maintaining a more constant indoor temperature.
Cheers,
Paul
Thank you for your elaborate response.
Might I suggest passive solar. Cold climate low-e windows will get you half way there. Who can argue with free energy?
Hi apater,
I replaced all of our operable windows and doors with Pella Architectural series low-e/argon units back in 2002. The fixed units are either triple pane or are fitted with exterior wooden storms and two sets of 3M window kits (one on the inside and a second in between the window and storm). Now, if you could arrange for some winter sun, I'd be indebted to you. :-)
Cheers,
Paul
We added 12mm laminated glass to fixed double-pane windows, and 9mm lami to operable double-pane windows (older Pella).
We no longer need heat until outside temps are below about -5 degrees C: we run on lights and body heat.
Hi Nick,
You've got us beat hands down. We turned on our heat on October 10th which was a little earlier than usual. In the last 22 days of that month, the mean air temperature was 8.4°C and total heat supplied was an estimated 307 kWh. Our actual energy use according to our Kill-a-Watt power monitor was 85 kWh, so our COP for October was 3.6. In November, the ambient air temperature was 4.0°C and total heat supplied was pegged at 1060 kWh; our actual energy usage was 345 kWh, so the COP for this thirty day period would be in the range of 3.1.
I don't know how accurate this might be, but I've estimated our home's demand point at 13°C/55°F and our average heat loss at 0.175 kW per °C whenever temperatures fall below this point. So, for the month of October, this would suggest a space heating requirement of 425 kWh (1.38 above actual) and for November it would be 1,134 kWh (1.07 above actual).
Some of the difference is likely due to variations in solar and other internal heat gains and average wind speed. We also tend to bump up the thermostat a bit as the weather turns progressively colder. The other part of our problem is that our relative humidity is so high that if we don't keep the heat on we run the real risk of mould and mildew.
Cheers,
Paul
Paul/Nick,
Do you use a heat exchanger, in particular to ensure that you get some fresh oxygen into your houses?
JB
Additional layers of window glass don't reduce air infiltration.
I installed a Venmar HEPA 3000 heat recovery unit when we started to tighten things up. I believe a heat recovery ventilation system has been a code requirement for all new construction in this province for some twenty years now.
Cheers,
Paul
This house stores the summer sun in a tank and does not require any heating furnace:
http://www.jenni.ch/pdf/Mediendokumentation_Einweihung%20Solar-MFH%2031....
Obviously this house was designed with a big tank from the start, so an older house could not be renovated this way within reasonable costs, but even a smaller water tank could increase heating cycle periods and allow the evaporator of the heat-pump to run at higher average temperatures.
in Canada, the colder the province is, the cheaper electricity.
If you say strictly provinces then you may be right, but go north into the territories and it rapidly gets more expensive.
Though not always because of lack of potential.
The Mackenzie river, between Yellowknife and Inuvik (close to sea level) has enough hydro potential to produce more electricity than Alberta does today (about 12GW). Not quite so simple to harness it all, but that is the potential that is there.
Yukon has plenty of potential too, though not quite as much, but neither place can get it anywhere, and don't really have many options for turning the electricity into something else.
Hello Curious Canuck.
You have rightly said that: "So the only province in trouble is, as RMG said, Ontario."
A quick question: where do you think Ontario will find the + 10 000 MW (more than a third of its total capacity) that they will be losing when all their remaining rapidly aging nuclear power plants (18) go offline (at the latest by 2020 according to Atomic Energy Canada)?
Ontario has not yet started building any replacement nuclear plants and it takes 10 years to build a nuclear power plant... Ontario has rejected the latest bid from Atomic Energy Canada for new nuclear power plants saying it was too expensive and now the Canadian Feds want to sell Atomic Energy Canada!
JB
P.S: I would appreciate if you could provide me your e-mail so that we can further discuss this issue bilaterally. My e-mail is jonatan252000@yahoo.com
Hi Curious Canuck,
You have said that in Canada "electricity is a provincial business".
What are then you views about Newfoundland, Nova Scotia, New Brunswick and P.E.I asking the Canadian Feds for a nice fat subsidy to cover the cost of expensive underwater electrical transmission lines between Newfoundland and Nova Scotia within the framework of Danny "W" testament hydroelectric project?
Given the latest constitutional challenge of the Canadian Feds in the area of securities regulation, I would also be curious to know if you think that the Canadian Feds could invoke their constitutional authority to regulate interprovincial and international commerce to somehow get a hold in the regulation of the electricity business in Canada...
JB
In Canada everybody is asking federal government to subsidy everything. That's a tradition, on top of that 10 years ago Liberal gov't unloaded a lot of its deficit onto provinces and municipalities, so provinces genuinely have less money.
Underwater line: be my guest. Politics involving Quebec...I am not going there...
Federal government will not regulate anything except drivel and will not invoke anything. That's a Canadian political tradition. NEP? FLQ? Constitution? Charlottetown?
... the Canadian Feds could invoke their constitutional authority to regulate interprovincial and international commerce to somehow get a hold in the regulation of the electricity business in Canada...
The Canadian constitution precludes that. It specifically assigns regulation of electric power to the provinces. Any changes to that clause will be made over the dead bodies of the provincial politicians, or more likely, the provincial politicians will make sure that the federal politicians are casualties in the next election. Even if they are in the same party.
Hello RMG.
You have rightly said that: "Canada does have a bit of a problem in that its most populous province, Ontario, has run out of hydroelectric potential, has no significant coal or natural gas reserves, and has nuclear reactors that have reached or exceeded their "best before" date. Ontario's electricity prices will probably double in the next 20 years. Its three smallest provinces have similar problems."
A quick question: where do you think Ontario will find the + 10 000 MW (more than a third of its total capacity) that they will be losing when all their remaining rapidly aging nuclear power plants (18) go offline (at the latest by 2020 according to Atomic Energy Canada)?
Ontario has not yet started building any replacement nuclear plants and it takes 10 years to build a nuclear power plant... Ontario has rejected the latest bid from Atomic Energy Canada for new nuclear power plants saying it was too expensive and now the Canadian Feds want to sell Atomic Energy Canada!
JB
P.S: I would appreciate if you could provide me your e-mail so that we can further discuss this issue bilaterally. My e-mail is jonatan252000@yahoo.com
I have no idea where Ontario is going to find 10,000 MW of new electric capacity. They have been pursuing dead ends for the past few of decades, and their current strategy seems to be to pursue more dead ends.
Their best option was probably nuclear, but they should have started the process of replacing their reactors with more reliable ones two decades ago.
Regardless of what they do, it is going to cost them a lot more money than they are used to paying for electricity.
Hello RMG,
As you rightly indicate Ontario has a problem...
Here is how they might try to solve it:
1) By getting a nice fat Canadian Government subsidy through Atomic Energy Canada for buying new nuclear power plants at a very reduced rate compared to the initial bid that they have rejected. That "subsidy" would be provided to Ontarion after the Conservative Government gets a majority at the coming Spring election...
2) A new Canadian national energy program could also be set up by a Canadian Government having a safe majority. This program would spread the oil & gas revenues currently only collected by Alberta to all the other provinces, including for the major part Ontario which would then use that money to purchase an updated collection of nuclear power plants at market price...
JB
Here political situation is very simple:
1. There will be no fat subsidy from conservatives.
2. There will be no national energy policy.
As far as Alberta situation, here are two links that address a lot of issues and show that the Alberta picture is not exactly as rosy as people believehttp://www.nationalpost.com/todays-paper/Vices+revenues+Alberta/3449203/story.html
and
http://www.scienceforpeace.ca/the-alberta-tar-sands
CuriousCanuck,
You have a good analysis of the situation but do you seriously think that the Canadian Feds will let Ontario's economy implode without at least attempting something? After all, the Canadian Federal minister of Finance is Jim Flaherty...
JB
I think Ontario has already had its "get out of jail free" card from the Feds. There will be a revolt if the rest of the country has do it again - supporting Quebec all the time is hard enough, we can't afford to do Ontario at the same time.
Ontario will just have to take its lumps, it's not like they couldn't see it coming.
Its sorta funny to watch you guys kicking hopefully at Ontario when you apparently can't even read. Electricity availablilty is not going to be a problem for Ontario any time soon, as you'd know if you followed news. In fact the present strategy includes shutting down a further 4.5 GW of coal-fired generation over the next ten years. BTW, when might we expect Alberta to stop generating electricity with dirt-burners?.
Presently Ontario is exporting to the US about 2.5 GW continuous. In the next ten years, the plan is to a) refurbish all present reactors not yet done except perhaps two of the Pickering ones now mothballed. b) near the end of the term, construct 2 GW of new nuclear. c) add a bit more N Gas combined cycle. d) convert Niagra Falls from run-of-river to a storage peaker. e) add significant new wind generation to the 750 MW now installed. f) add whatever additional small hydro can still be economically developed, perticularly in the north g) implement a serious conservation program to improve GDP per unit energy.
Following is from Snapshot of the
Power Industry in Ontario - pp 4 - Association of Power Producers of Ontario
To be built or replaced by 2025: 22,000 megawatts
Currently underway: . . . . . .: 8,000 megawatts
BTW, wholesale costs here are about 80% of the average for New England states.
Now, if we could just get those stubid praire conservatives feds to not pull another Diefenstupid / Avro Arrow type move with AECL. Good luck on that though, eh?
Hi LenGould,
That Ontario snapshot brochure to which you are referring is dated September 2007... A lot of water has flowed down Niagara Falls since then!
Is it true that the cost of electricity in Ontario has been approved by regulatory authorities to go up by 50% during the next five years?
Have the Ontario authorities decided to take off line the province's dinosaur coal power plants yet?
When are the Canadian Feds going to announce the new owner of Atomic Energy Canada?
JB
Hi Len,
One of the first things I learned when I came to Canada is that the 2nd most popular sport is inter provincial nitpicking, and that is not always a bad thing.
If you think Ontario's electricity future is bright then I am happy for you. I'm sure the stranded debt will be paid off one day, maybe even in time to borrow a bunch more for the next gen of power plants, whatever they will be.
As for AECL/Avro arrow, do you mean you don;t want it shut down?
If so I'm the Feds would welcome a bid from Ontario. They might even offer to swap AECL for Ontario's stake in GM, though I'm not sure who comes out worse in that bargain.
With 8000MW underway, only another 16,000 to go. At ten years to build a nuke plant they had better not wait too long to start.
Not sure where you're getting the "10 years to build nukes". Most recent new ones by AECL were at Quinshan, 46 months from first concrete to first criticality in 2003. Of course the Cdn. Natural Gas industry feeds a lot of money into things like legal costs etc. for delaying in every possible way nuclear plant work (and hydro energy and LNG also), in particular google "Energy Probe", then "Tom Adams". Over the past 10 years he has concurrently "worked" as executive director of Energy Probe (a strong anti-nuclear lobby group) and at the same time under his own name, written several papers promoting the use on Natural Gas generation in Ontario. If you also google "Grain Sarsons" you'll find several examples of their fighting against hydro power.
Thanks guys. ;<[
Len,
You are forgetting about the time to complete the environmental studies and the public hearings and the licensing...
JB
Spoken like a true "environmentalist lawyer". ;<)
Len,
Are you saying that because a nuke can be built quickly and cheaply in a country that has hopelessly lax human safety and environmental protection rules, that it can be built in that timeframe here?
Do you really think if someone finally decides to build a CANDU tomorrow, in Ontario, that it will be producing megawatts in 46 months, let alone ten years?
Ontario has been arguing for at least 46 months about what to do next. It will probably take another 46 months to decide, and then take ten years to build the reactors. Unless, of course, they decide to buy BC and AB coal instead, then they can be up and running faster, and cheaper, than any CanCan't reactor .
So there are anti nuke people in Ontario - who knew? Come out to Vancouver and propose a nuke and see what happens - here you have to do an environment impact study to put in a wood fireplace!
Every industry has its opponents - if Ontario can't deal with the anti nukes, then it shouldn't be doing nukes. There are plenty of other options for Ontario to not get power from other than nukes.
Paul, I stated factually 46 months "from first concrete to first criticallity". If you think it is rational to a) continue arguing in courts about completion after the project has progressed to pouring concrete, and b) count all the time spent arguing about construction in advance as "construction time", then of course, you get to say anything you want.
Naturally I agree China's environmental standards are not as high as here, but as far as the design and construction of CANDU reactors goes, the difference has zero effect. One significant difference there to here also is that once the decision has been made to construct the reactor, then no further interference is allowed from minor external fanatics, which is clearly an advanced state compared to this.
BTW, when might we expect Alberta to stop generating electricity with dirt-burners?.
Given that Alberta has vast coal fields, Alberta's coal is considerably cleaner than the high-sulfur stuff that Ontario imports from the eastern US, and Alberta's power plants have more pollution controls than Ontario's, probably not very soon.
It would also be relatively easy to sequester the CO2 emissions in deep formations in Alberta. In fact they could use the CO2 from power plants in CO2 miscible flood projects to improve oil recovery in old oil fields. Ontario lacks deep formations suitable for CO2 sequestration.
So, Ontario lacks electricity, lacks uranium for its nuclear plants. lacks coal, lacks a good hockey team and even lacks places to store CO2? What, if anything do they have going for them?
So, as you post your messages using your RIM BlackBerry or via Nortel fiber optic switches, drive to work in your Lexus (the only such factory outside of Japan) or Toyota or Suzuki or GM or Ford or Chrysler, drink water from plastic bottles moulded in Husky moulds (largest plastic mould-maker in the world), trust your doctors to implement the results of three among the largest medical research centres in Canada, trust your next flight on an airbus A380 to the landing gear built here, trust the data centre in north TO to record all transactions for the largest bank in the world (Citibank), kick dirt at AECL which has constructed a significant proportion of all the world's nuclear reactors with entirely locally-developed technology and an unblemished safety record, go to your factory job to work alongside ATS automations world-class factory automation systems, etc. etc. etc. you must wonder to yourself "How the heck did Ontario ever become the most wealthy province for endless decades, carrying all the western farmers for decades through the tough times until the resource plays kicked in for a short time?"
I might also note that Ontario lacks fools who might make statements like yours, which is a good thing "going for them" ,<)
Ok, so Ontario does have some positives, though you wouldn't know it watching the Ont govt.
But as far as electricity goes, it does seem like there is some serious work to do.
My understanding of the bids for AECL is that the two parties were not interested in completing development of the next generation, but rather wanted to buy the"order book" for maintenance of existing stuff - that is not a vote of confidence.
Well, I suggest its more of an indication of their perceptions of the future of nuclear energy given the existence of rabid irrational opposition. One little-known added acpability of the CANDU, (which China is presently testing) is it's ability to "burn up" many of the nasties in spent fuel from light-water reactors. That capability alone should guarantee AECL a bright future one would think, but no, the irrational opposition to nuclear don;t really want a solution to the spent fuel issue, that would make their religion less saleable.
Given that the US has 104 light water reactors using once through fuel, you would think there would be more interest in the CANDU from the US. At the very least, there should be a never ending supply of fuel for Ontario from them - though I'm sure there will be the inevitable objections to that concept, if it isn't being done already.
One little-known added acpability of the CANDU, (which China is presently testing) is it's ability to "burn up" many of the nasties in spent fuel from light-water reactors.
A better known capability is its ability to generate weapons-grade plutonium, which of course India used to build its first atomic bomb. This causes the regulators to become nervous when some third-world country develops a sudden urge to buy CANDU reactors in preference to the light-water reactors that other countries are selling.
It saves them the cost and effort of constructing their own uranium enrichment plant. Just surreptitiously pull some fuel rods out of the reactor, extract the plutonium from them, and build a bomb.
How the heck did Ontario ever become the most wealthy province for endless decades...
Well, other than the fact it has major population centers directly across the Detroit River from Detroit, which made it an obvious location for US car manufacturers to set up branch plants to take advantage of lower wage rates, there is the fact that it has Niagara Falls, which gave it some of the lowest hydroelectricity rates in North America for quite a long period of time.
Unfortunately, there is only one Niagara Falls, and Ontario's population has exceeded the level where it can provide cheap electricity for all of them. Given their cost overruns and reliability problems, its CANDU reactors have not provided additional electricity at anything near the same low rate, and of course now they're falling apart. Other solutions have also worked out badly, so I guess at this point Ontario is screwed.
...carrying all the western farmers for decades through the tough times until the resource plays kicked in for a short time?
Well, I've talked to a large number of old western farmers, and they don't remember this particular period of time. What they actually remember is the Depression, the Dustbowl days, and the Ontario, Quebec, and Federal governments saying that they would never subsidize the western farmers, or bail out the Alberta government, after it went bankrupt and defaulted on its debts from 1936 through 1945.
It's something like Camelot and the era of King Arthur. It was a mythical time that never really happened, but the people of Ontario would like to believe it did. If it had really happened, they would probably have had a lot fewer problems with the West during the last few decades. The western farmers have long, long memories and are prone to holding grudges.
Of course, the Federal government did eventually subsidize the western farmers, but that came after 1947, when Leduc well #1 blew in and they discovered Alberta was sitting on hundreds of billions of dollars worth of oil. After that the Federal tax take from Alberta became truly astronomical, and the Feds found they could use all that Alberta oil money to subsidize the western farmers - and of course the eastern fishermen, the Quebec maple syrup manufacturers, and anybody else who wanted a handout.
I can go on in considerably more detail, but I'll only do it if you provoke me.
You may have talked to "old western farmers", I grew up with them and still have a brother who hobbys with 200 head cattle in Alberta after retiring and selling his 20,000 head feedlot. I know all the stories, how the price of barley in 2002 was exactly the same as it was in 1970, and that's Ontario's fault or something like that.
However I can also read, eg this interview by Canadian Business of Jim Peterson, Federal Minister of International Trade between 2003 and 2006, criticising OTHER nations high subsidies compared to the apparently LOW subsidies in Canada, a fair point.
Jim Peterson on crippling agricultural subsidies and Canada's trade policy
That's an acknowledged $3.7 billion of "support" to Canada's approx. 3% of population who are farmers. (246,923 farms, 729,405 persons, average $15,794 per farm). Agreed, not all of it comes from the Federal level (I presume) but of that which does, a large proportion of it comes from Ontario.
Agreed, I grant you that the east didn't provide much support for the west during the dirty thirties, and my father held that grudge all his life. But times were tough then in Ontario too. It would have been extremely difficult to have raised taxes in depression-hit Ontario at that time in order to provide subsidies to people trying to farm an apparent dust-bowl desert with no percieved future. Also, in those days the concept we now have of government's helping the needy out in the rough times simply didn't exist. And to listen to the present (western conservative) federal government, that is where they are taking us back to, the "good old days" of "individual responsibility and low taxes". You can't have it both ways. And the issue is completely unrelated to Alberta oil. Some reality might help.
At this point in time, Alberta is the most urbanized province in Canada, so a subsidy for rural farmers in not particularly a subsidy for Albertans.
The concept of subsidizing farmers is relatively new, and the grudges of western Canadian farmers predate predate WWII. Prior to that time, the farmers in Canada were subsidizing the industrialists through what was called the National Policy .
There is also the fact that during the Depression, when the Alberta government went bankrupt and 25% of the Alberta population was out of work, the federal government managed to extract more money in taxes in Alberta than it spent in the province.
And when grain markets improved in WWII, the Canadian government decided to support the British war effort by selling wheat to Britain at one-half its market value. However, they didn't subsidize exports to Britain, they just paid the farmers half the going market value for their grain.
Of course, as you say, they felt Alberta had no perceived future, so why bother supporting it. Particularly in Ontario, people thought the good times would roll forever.
However, after Alberta discovered its massive oil and gas fields after WWII, Albertans were not keen on subsidizing the rest of the country because they had never been subsidized themselves. The "days of individual responsibility" were the only kind of days they had experienced. The government had never done anything for them before, so they didn't expect it to do anything for them now.
This attitude still persists in Alberta and is in sharp contrast to attitudes in Eastern Canada, where government subsidies are considered an entitlement. The government has always subsidized them before, so people expect it to subsidize them forever.
If only...
Unfortunately Nortel is belly up, RIM is loosing market share, AECL is a lame duck, nobody buys Suzukis, Lexus is a small volume manufacturer, failing landing gears are Canadian specialty (OK this one is on Bombardier in Quebec...), AECL build just 12 reactors outside of Canada so far, some of them before 1974and the interest in CANDU is relatively mild.
so we are left with a mould maker, data and call centre, and two decent hospitals?.
Ontario was a most wealthy province, because of manufacturing driven by lower labour cost, public health care and cheap Canadian dollar for most of the time. Agricultural subsidies are political and economic issues, but the actual cost to the party paying subsidies is not that much (compared to other things)
Now it's not good, really. If something is made in Ontario, it is for US market, which is in (for all practical purposes) recession, and dollar at parity. So Ontario runs now a big trade deficit (something like $10B) Personal debt per capita in Canada is higher than in the USA (or as ratio to disposable income). I am sure Ontario with McHouses leads here.
You guys are hilarious. Sad, true, but still very funny. Face it, you'd snap up the opportunity to start a Lexus assembly plant in your home town in a second, if it were offered. But it won't be, because you don't have the miles and miles of high-skilled specialty machining companies, the sub-parts manufacturers, specialty casting and etc. etc. infrastructure required to make those operations viable. On my way to work each morning I drive through large areas entirely dedicated to high-tech machining facilities, heat-treating plants, casting plants, tooling fabricators, toolmakers, etc. etc. City block after city block, all competing, competitive, requiring an extremely high-skilled workforce.
But all you western conservative neo-cons can think of is cutting back on the educational system and providing tax breaks for home schooling. Don't complain to us over the results.
As soon as NAFTA passed, there were all the reasons to be be in Ontario was: cheaper labour, no health cost and weak dollar + NAFTA. But then Mexico had its NAFTA and the jobs (read whole factories were dismantled and shipped to Mexico to Maquiladoras). A few years later the whole thing went to China. US used to import 80% of Canadian exports And now Ontario's trade deficit is $10B - it would have been $300B for USA, adjusted for population.
I am not saying Ontario will go down the tubes, but the outlook is not very bright.
There are all these manufacturing companies but they simply do not make as much stuff as they used to. Google the following item: "manufacturing jobs losses ontario" and you will see the hemorrhage of jobs over last 10 years.
Finally, I am not a western neo-con, please...I moved West from Ottawa 3 months ago. I've been teaching at high school and college level and believe that in good context education vouchers would go far to fix our education systems. That's for a another discussion but not on TOD.
Is Canada suffering from the Dutch Disease, where strong oil exports raise the exchange rate, and make manufacturing unable to compete?
Hi Nick,
You rightly said that Canada looks like it is suffering from the so called "Dutch Disease". The "Loonie" is now trading at par with the $US and the net effect of this is to sink the comptetiveness of Ontario manufactured products which are mostly exported south.
As a result Ontario's economy is sinking ($Can 25 billion deficit this year), they do not have the money to replace their aging nuclear and coal power plants, electrical rates are shooting up to the roof (+50% during the coming 5 years) and within the coming decade Ontario industries are likely to be running for the exits, strangled by their electrical power bills, trying to find a place where they will be able to afford some long-term electrical supply contracts.
Meanwhile, the oil and gas producers in Canada are getting richer everyday with the rise in the world price of hydrocarbons and the absence of any NEP.
At some point in a not too far from now Ontario is likely to try to use its demographic and political muscle to convince the Canadian Feds to much further "spread the commodity whealth". Alberta has already said that if a new NEP was ever attempted by Ontario and the Canadian Feds, they would separate faster than Quebec ever thought that it would be possible to do... Meanwhile the US Feds are looking up at their northern border thinking that it would not be so bad if that was to happen. After all they do badly need the oil, the gas, the water and all the rest of resource basket that would become more readily available if the "Canadian dinosaur" was to unexpectedly succumb to a particularly bad episode of political fracking...
Since the adoption of NAFTA a considerable amount of economic change has taken place within North America and it comes to mind that a cross-border political "rationalization" might become necessary, essentially for the sake of efficiency and security, within a foreseable future. Particularly with the resource hungry Chinese dragon now rapidly rising...
JB
Get a grip on reality, eh? Sure it's been a bit tough adjusting to the loonie appreciating so rapidly as far as manufactured goods exports to US goes, but the suburb of TO where I live is still growing very rapidly, home prices have never stopped rising, residential construction has only slowed down a little (a good thing, it was too hot a couple years ago). Many exporting companies in Ontario no longer depend on the US market (eg. RIM is worldwide, Magna covers all EU, you wouldn't believe the number of small specialty experts dealing everywhere in the world.) Also, the appreciating loonie has helped a lot of importing companies such as the one my daughter is CFO of, imports Honda engine all eastern Canada, my neighbour, president of Panasonic Canada (and also a board member of parent), tons of others easily named.
Ontario is not only heavily dependent on exports, but on imports as well, so the appreciating loonie, though it takes some pain to adjust older contracts to, comes out about a wash overall. I'd be more concerned about areas of the country which are heavily dependent on tourism, such as BC, but I'm not willing to say they might now be hurting without specific knowledge.
Can't replace electric generation? You must be joking. You can see from the ISEO's website that the Import / Export balance has gone from approximately zero net in 2004 to net exports of 10.3 Twh in 2009 approx. 1,100 MW continuous, enough to shut down Lambton and part of Nanticoke coal stations, and convert Ft. Frances to bio-mass in 2010.
Reports of the demise of Ontario are greatly exagerated, essentially wishfull thinking by somewhat wierd westerners. Not at all surprising though, I've had Albertans tell me openly they "wish Toronto would fall into the lake" (and when I'm out there I DO know enough to never argue or debate with anyone I don't know VERY well, as it can be unhealthy). On inquiring I found that they had never visited Toronto, so I supposed they simply can't stand cultural diversity or something like that, an attitude which, though not held by a mojority of Albertans is still far too common, especially unexpressed.
What is Canada's overall balance of trade?
Have Canada's exports shifted from manufacturing to oil & gas?
Canada's balance of trade has been in a deficit situation for the last couple of years, primarily because of a decline in exports to the US. Prior to the US recession, Canada had a trade surplus. The biggest problem has been a decline in exports of automobiles and parts to the US.
Canada is one of the few developed countries that is a net exporter of energy, and that has been true for some time. Natural gas exports are declining, but oil exports are showing a strong increase due to new oil sands production coming on stream.
Let's hope all of the above is true. There is notpoint arguing in a he-said, he-said manner, so let's agree on one: Leafs and Sens .....
Face it, you'd snap up the opportunity to start a Lexus assembly plant in your home town in a second, if it were offered.
No, speaking as a member of the local Town Planning Commission, I would say probably not. I look on automobile manufacturing as a sunset industry. With the probable decline in global oil production coming in the next few decades, I would say we would not want to have an industry that is going to fade away.
But all you western conservative neo-cons can think of is cutting back on the educational system and providing tax breaks for home schooling.
You're getting eastern Canadian urban mythology confused with reality. In the recent Programme for International Assessment tests, at the state/province level, students in the province of Alberta scored second in the world in reading and science, and eighth in mathematics. In Canada, Alberta students ranked first in reading and science, and second in math.
However, students in the province of Shanghai, China, scored tops in the world in all three categories, so we may have to take a look at what they're doing.
1) The Canadian government wants to get out from having to subsidize Atomic Energy of Canada. They've spent billions of dollars on it, and it has gotten them nowhere. It seemed like a good idea at the time, but turned out badly. They would much rather foist the costs off on the provinces.
2) A new National Energy Program is unlikely after the disastrous experience with the old one. A new one would be much worse because it's not just Alberta any more - there are about 5 provinces with major oil and gas production now. The Feds probably don't feel the urge to get into a knock-down drag-out political fight with half of the provinces.
The net result is that the Canadian government is just going to allow Ontario to deal with its own problems.
The Feds wouldn't need to subsidize AECL if they'd simply rationalize that idiotic new (1998ish) Nuclear Regulator the Fed Liberal Party dreamed up solely to cause problems for the Ont. provincial Conservative government of the time. That one move alone cost ontario 3 yrs delay in a six-month-scheduled Pickering A project and caused (then Ont. Hydro) to spend nearly $2 billion to import replacement power from USA coal-burners. Just the same as that same stupid agency has been playing games with the medical isotope reactors, constantly changing their so-called minds on what the definition of "backup power" and "original design" are, to the point where finally the chairwoman had to be fired (thankfully).
You wanna play those games, it's gonna cost you. :<)
Thank you Rembrandt.
Hi,
Note that all prices in this article are in Canadian dollars but they are about the same as US$ (0.99$)
Electricity prices varies a lot between provinces because it's a province regulated domain in our federal system.
Here in Quebec, we do have many interconnexion with US. The exchange goes on both sides because we buy electricity when the tarif is low because of low demand (in the nights, when AC of heating is not needed). We usualy store it in our damms by closing generators as needed. It can be done in minutes really. We sell back the surplus production in high sport prices. There is probably fixed contract also.
Since the 70's Quebec as built many very large hydro electric complex. Those are not small feat, they are encompassing large geographical area, joining together rivers and creating gigantic lakes troughout our province. We are proud of them, really.
Currently, we are constructing an 8,7 TWh complex called Eastmain 1A
And La Romaine (french only) for 8 TWh. Scheduled to be built from 2009 to 2020.
There is more project and there is more project built or already owned by RioTinto Alcan, wich are deemed to cost from 0.02 to 0.03 CAD (Canadian $) per KWh.
It's said that until 2005 or so, new or old hydro project costed only 0,03-0,04 CAD$ per KWh.
New project would be costing about 0.05$ KWh
If I look at my electric bill for september-october 2010, the cost are listed like this :
Subscription fee for 55 days at 0.4064$ = 22.35$
Power consommation : 30 first kWh per day = 1 010 kWh at 0.0545 $ = 55.05
Subtotal 77.40
HST (normal Federal tax) 5 % = 3.87$
PST (normal provincial sale tax) 7.5% = 6.10$ This tax will go up a percent in january.
So for two month, a 4 1/2 pieces appart cost me only 87.37$
Did you know that many customers complains when there is an electricity rise here?
My sole an only heating means are electric heaters. We are not used to gas powered appliance : stoves, drying machine, water heaters, heaters. We mainly see them in movies...
I do think that 0.12$ kWh is paid for wind generator project and maybe a bit more when local municipalities are funding 50% or more of the project.
A 25 MW project (between 12-16 wind generator) is being projected in my county and they will be paid 0.125$/kWh. The project is said to be generating around 1 milion $ of local profit that will be distributed between the different cities and municipalities of the county.
Industrial tarif
Tarif G - General small user
Monthly fee : 12.33 $
Price of power over 50 kW : 15.54/kW
15 090 first kWh : 0.0882 $/kWh
after 15 090 kWh : 0.0485 $/kWh
Tarif M - Medium size user (between 100 kW - 5 000 kW) 13 000 contract for the province
Power fee : 13.44$/kW
210 000 first kWh : 0.0451$/kWh
after 210 000 kWh : 0.0319$/kWh
Tarif L - Large user over 5 000 kW 240 contract for the province
Power fee : 12.18 $ kW
110% overflow from the subscribed power in winter :
per day of overflow : 7.11 $/kW
monthly maximum : 21.33 $/kW
Power price : 0.0299 $/kWh
There are other tarif stated here for general business tarif but it is widely known that if your name is RioTintoAlcan or any aluminium producer, your price could be lower.
I think that it's as close as we can get to "too cheap to meter" electricity.
Ah, Quebec Hydro engineer invented the high voltage 750 000 volt transport cables. They run for thousands of miles from producing facilities to our cities.
@Wolfricus
That is an amazingly low price for industry, it shows how problematic energy price rises are for energy intensive industrial processes. For these to my knowledge at least 20%+ of operational costs are energy, sometimes up to 50%.
Impressive, makes me wonder if there is a lot of expansion potential for Hydro power in Canada (probably not).
Rembrandt
In Canada, in the 20's and 30's 80% of power production was going to paper mills and wood mills.
In 1936 or so, the first damm in Lake Saint-John was built to power an aluminium factory for Alcan. The lake level grew up some feet and because the relatively low lands were really good soil, many farms and property were permenently covered by the lake. We even has a village that was half drowned forever in St-Méthode and a some part of a street is still missing in Roberval.
Oh, did I mention that the villagers or owners were not really warned nor paid for lost land, houses, farms, income and moving expenses? And sometimes we dare to talk rough about other countries that dare to offert help and compensation for moving resident of future drowned area. Figures :)
Nevertheless, this project and many other paved the way for a rich aluminium production development in the Sagnenay-Lac-Saint-Jean région in Québec and in Côte-Nord. I guess Quebec account for a significant part of aluminium production in the world (about 10%).
As for planned expension, the 2 project that I talked about are the most significant. We are mainly running out of big rivers that are not protected or already dammed.
That's why I'm really keeping an eye at the KiteGen guys!
Pascal
There is a great deal of expansion potential for hydro in Canada, but it is in the far north, and most of the population is in the far south.
The main exception is Ontario, which has almost no hydro potential left, even in the north. It could bring in hydro power from undeveloped sites in northern Manitoba and Quebec, but the main industrial centres in Ontario are very far south - in fact the southern tip of Ontario is further south than the northern boundary of California.
The net result is that if Ontario wants to buy power from Quebec or Manitoba, it has to outbid buyers in the northeastern and midwestern US. The people in Ontario are not used to paying nearly that much for electricity.
Consumers in Quebec and Manitoba, though, can buy electricity from government-owned Hydro Quebec and Manitoba Hydro at cost, not at market value.
By law, customers in Quebec pay 2.79¢/kWh for the generation component of their electric bill (the price will be increased to 3.79¢/kWh by 2018). The average production cost of Hydro-Québec facilities was estimated at 2.0¢/kWh in the latest financial profile, for an healthy 28% margin. The cost structure reflects the high construction/low operating cost structure and the low interest rates.
It would be more accurate to state that Hydro-Québec wholesale price on the Quebec market is far below the marginal cost of new generation capacity.
I just can't let this pass without comment. Under a 1969 agreement signed between the Quebec and Newfoundland governments, Quebec agreed to buy 4,900 of the 5,200 MW Upper Churchill hydro development. The project lies in the Province of Newfoundland and Labrador. Those were innocent times in Newfoundland; the agreement contains no escalator for inflation and commits the government to sell to Hydro Quebec at the rate of 0.25425 cents per kWh until 2016, when the rate drops to 0.2 cents per kWh until 2041.
That's why Hydro Quebec is able to calculate such a low cost of generation.
You mean this contract right?
First and contrary to popular belief, the May 12, 1969 contract was not signed by the governmnet of Newfoundland, but between Hydro-Québec and Churchill Falls (Labrador) Corporation, a company owned by Brinco, in which the Quebec Crown corporation was a large investor (34.2%).
Yes, folks at HQ are guilty of driving a hard bargain. But any honest observer of the Quebec electric scene would also acknowledge that HQ also took significant risks in this venture. When it committed to CFLCo, HQ had to mothball active development of the Outardes 2, 3 and 4 complex and delayed decision on the James Bay project, incurring significant costs due to inflation and higher interest rates in the 70s.
The price was set at 2.5 mils/kWh for 40 years and 2.0 mils/kWh for an automatic 25 years extension. But the contract also involved substantial investments by HQ, including $100 M in bonds, loan guarantees for the general mortgage, an equity stake, a take-or-pay kind of agreement (30 TWh constituted one third of all electricity consumed in Quebec at the time) and the construction of a 3 X 700 miles long 735kV line, at HQ expense.
It's far from clear if Hydro would have invested in the $900 M scheme if the price had been much higher than 2.5 mils/kWh. You seem to forget that companies such as ConEd and Ontario Hydro broke talks with the promoters in the early 60s because the asking price 4.3 mils at the Quebec border was much as they were then willing to pay (transmission costs were estimated at the time at 1.5 mils).
So please, stop spouting Danny Williams' nonsense and misinformation.
Very nicely put...
Danny "W" has now come and gone by but Newfoundland and its partners are now asking the Canadian Feds for a big subsidy to pay for the cost of the expensive underwater electricity lines. Kind of an embarrasssing precedent that would infringe the north american commercial rules in electricity trading...
A few questions:
1) Is it technically possible to build such transmission lines between Newfoundland and Nova Scotia?
2) The project announced by now retired Danny "W" will cost close to $7 billion and is for less than 1000 MW... Is that economically realistic?
JB
P.S: I would appreciate if you could provide me your e-mail so that we can privately correspond. Mine is: jonatan252000@yahoo.com
A provincial government asking for a big subsidy from the feds? Say it aint so! At least it is for something useful, not like the Quebec government asking for money for a new hockey stadium in Quebec City for an NHL team they don't even have.
For a Canadian, a hockey team is an essential service.
Australians could not understand that...
JB
We understand the essential need to have a sport where you can beat big brother. Australia's choice for that is cricket. Takes five days to have a game to beat England, which gives much more opportunity for beer drinking than three periods of hockey.
So, since Quebec already has a team, you would, of course, agree it is more important that the next one be in the maritimes, or Manitoba, right?
Cricket?
In the mind of a true Canadian and American, anybody who plays a national game with the name of a creature that is in the same family as the cockroach has a colonial attitude…
America is the land of the free!
JB
It would be more accurate to state that Hydro-Québec wholesale price on the Quebec market is far below the marginal cost of new generation capacity.
This does mean it is not below market price - defined as what the highest bidder is willing to pay, well, the US will pay quite a bit more than what Quebec is charging its own customers.
Quebec is shooting itself in the foot in this regard, as by keeping its domestic rates so low, a lot of electricity is used inefficiently, that could have been exported instead, and returned to the people. Same as how KSA and Venzuela etc do with oil, except that Quebec is not OPEC and is a price taker, not maker.
So many Quebec houses use simple resistance heating, as we have just been given an example, that for example, could be replaced with heat pumps. Then, even if the electricity price doubled, they would get their heat for less than today, and have huge amounts to export.
Of course, Quebec does not need to make money from the exporting to the US, instead it simply gets given money from the Cdn government and the other provinces, just for being Quebec - the sweetest deal of all! Fortunately, this will not last much longer, and neither will their low prices - it's just a question of whether they jump or are pushed.
Hi Paul,
You have said: "Of course, Quebec does not need to make money from the exporting to the US, instead it simply gets given money from the Cdn government and the other provinces, just for being Quebec - the sweetest deal of all! Fortunately, this will not last much longer, and neither will their low prices - it's just a question of whether they jump or are pushed."
This is an interesting comment coming from an Australian expatriate now living in Vancouver.
But who do you think will be pushing Quebec out of Canada or forcing it to jump out of that country...
JB
I didn't say that Quebec will jump or be pushed out of the country, but that their flow of money from the other provinces will eventually stop, either by their choice, or (more likely) everyone else's.
I think their subsidised electricity prices will eventually stop too -but I concede that will always be "their" choice when they finally end them, it is just whether/when they are forced by economic circumstance to do so.
As for Quebec possibly leaving the country, that is a whole different question, though you could apply the "jump or push" analogy there - I hadn't thought about the possibility of rest of the provinces pushing Quebec out, but that's an interesting idea - could see that provoking some heated debate!
As for electricity, Quebec is well endowed with the stuff, and with potential, but I think they are squandering it. BC is not much better, but at least recognises the value in not underpricing the stuff - given that we are still a net importer of electricity there is more work to be done here.
Dear Paul,
Quebec might simply decide to use its cheap electricity to attract all those energy intensive industries that are currently paying through the nose for electrical power all over the world and get the jobs and the income tax that go with those investments.
If peak oil and for that matter peak hydrocarbon is a dire reality about to strike us all, as stated all over The Peak Oil Drum, then energy intensive industries will be looking for a "safe heaven" pretty soon. When they look around the planet for a place where they can simply continue to get electrical power they might find that Quebec is one of those sustainable "islands of civilization" where the "juice" is still flowing.
BC is in a similar position as Quebec but it will need to rapidly develop its remaining hydroelectric potential if it wants to be able to benefit from the strategic window of opportunity that is about to open.
As for Australia, it has lots of coal but is too close to China, which may soon grap everything if things get serious as far as Peak Hydrocarbons are concerned.
JB
BC is in a similar position as Quebec but it will need to rapidly develop its remaining hydroelectric potential if it wants to be able to benefit from the strategic window of opportunity that is about to open.
BC is in a similar position to Quebec in that it has large amounts of hydroelectric potential in its north, but is in a different position in that it also has huge amounts of potential coal and shale gas resources.
People who don't know what I'm talking about haven't looked at the geological maps. BC also has some good deepwater ports that are hardly developed, and it is right across the Pacific from China.
I guess that by about 2050 there will be more people living in BC than in Quebec. Just a guess, of course, but one based on current demographic trends.
Quebec might simply decide...
Yeah, wish they would hurry up and do that...
to use its cheap electricity to attract all those energy intensive industries that are currently paying through the nose for electrical power all over the world and get the jobs and the income tax that go with those investments.
And how's that working out? How many new car plants are being built in Quebec? Quebec has had this cheap power for decades, so it must now have lots of industry, low unemployment, and be a prosperous province. I would define success in that as being the point where Quebec becomes a "have" province and not a "have not" one - wake me up when they start paying into equalisation.
The cheap energy policy has been a failure - other than smelting,which does not really provide many jobs for the electricity consumed, it has not attracted any industry of note to the province. The aluminium companies love it though, smelt with underpriced electricity and sell the aluminium at full price, and send the difference to their shareholders, a very efficient transfer of wealth I'd say, though I'm not sure the woman in Montreal street would agree, if she knew what was going on.
BC is in a similar position as Quebec
Looked at a map lately? BC has far more economic opportunity than Quebec - is in a great position to trade with the US and the entire Pacific Rim. It does export more than just electricity. There is more hydro development to be done, though it does not have to be "rapid"
As for Australia, it has lots of coal but is too close to China, which may soon grap everything if things get serious as far as Peak Hydrocarbons are concerned.
Being close to, but separated by water from your major trading partners has its advantages - prevents them from trying things. The only thing China could grab if it wanted to would be N. Korea, with Mongolia and Taiwan also possibilities. Anything else, even they know they can;t do it, that's why they just buy stuff with their US bonds instead - it's much easier, and bonds are getting cheaper all the time, while military is getting more expensive.
I rate the chances of America grabbing Canada (or parts of it) as higher than China taking Australia.
Dear Paul,
There are a lot of Australian expatriates in the US and in Canada who think that Australia is "safe" from China...
But make no mistake, the Middle Empire is rising again. China is rapidly building a big navy, has a land army with the size of the population of Australia and a large collection of ballistic nukes.
The US is now unlikely to be willing to trade ballistic missiles with China because of Taiwan, Korea, Japan or Australia... The Dragon has become just too strong in many respects.
I agree that North America is likely to eventually "consolidate" in the face of adversity and probably an outright challenge coming from beyond the Pacific. North America might even become a refuge for all those Australians who, after receiving a conscription order, decide that it is better for their health to stay away from the Dragon's fire...
A rapidly declining net energy production at the scale of the planet is likely to bring about the unexpected emergence of a "new world order" in which the Middle Empire may not be willing to play "second violin".
Take care,
JB
Jonatan,
China has no blue water navy to speak of, and won;t for a while. They are trying to build an aircraft carrier or two - but they are a bit late to that party, the time of the carrier has peaked, the drones are taking over, and they will be as irrelevant as battleships within 20 yrs.
Their star is rising, but look at how they are doing it - by buying stuff all over the world, just so much more efficient than going to war for it.
Paul,
Australia might soon receive from China an "offer that it cannot refuse"...
JB
Well, Australia will be happy to see just what such an offer is. Maybe it will be for Australia and China to split Indonesia amongst them, or swap Hong Kong for the Gold Coast.
Australia is open to offers, it just never accepts them - not good for national unity - something Australians consider important.
Actually the Chinese "business proposal" is likely to be of following nature: full access to all of Australia's strategic resources (that "united" Australians will dig themselfves out of the ground under the supervision of Chinese political managers) or a one way trip for the "united" Australian population to the sunny sand beaches of the Gobi desert...
JB
P.S: Of course the Autralian expatriates living in BC will not be covered by the "deal" unless they decide to voluntarily "stand united" with their fellow compatriotes.
Hello RMG,
You have rightly said that:
"There is a great deal of expansion potential for hydro in Canada, but it is in the far north, and most of the population is in the far south.
The main exception is Ontario, which has almost no hydro potential left, even in the north. It could bring in hydro power from undeveloped sites in northern Manitoba and Quebec, but the main industrial centres in Ontario are very far south - in fact the southern tip of Ontario is further south than the northern boundary of California.
The net result is that if Ontario wants to buy power from Quebec or Manitoba, it has to outbid buyers in the northeastern and midwestern US. The people in Ontario are not used to paying nearly that much for electricity.
Consumers in Quebec and Manitoba, though, can buy electricity from government-owned Hydro Quebec and Manitoba Hydro at cost, not at market value."
Ontario desperately needs to find a replacement for the +10 000 MW that its current 18 rapidly aging nuclear reactors produce before 2020 because at the latest by that date they need will to be retired for safety reasons (according to Atomic Energy Canada).
If they cannot manage this replacement, all the energy consuming industries that Ontario currently host will need to move elsewhere to places that will be able to provide them with the electrical power that they need to continue to simply operate... This will imply nothing less the economic implosion of the Ontario economy and a shifting of the center of gravity of Canada to where those industries go.
JB
If they cannot manage this replacement, all the energy consuming industries that Ontario currently host will need to move elsewhere to places that will be able to provide them with the electrical power that they need to continue to simply operate... This will imply nothing less the economic implosion of the Ontario economy and a shifting of the center of gravity of Canada to where those industries go.
That's true, and provincial economic development ministries across Canada have operators standing by to accept calls from companies wanting to move. Call 1-800-BYBY-ONTARIO.
Interprovincial politics in Canada do not always involve playing nice.
Well, not all the industries will move. I suspect that if GM called the hotline they might be told all the spaces are full. Energy intensive industries are OK, but bailout intensive ones can stay where they are.
[]
RMG has said: "That's true, and provincial economic development ministries across Canada have operators standing by to accept calls from companies wanting to move. Call 1-800-BYBY-ONTARIO.
Interprovincial politics in Canada do not always involve playing nice."
I somehow get the feeling that the Canadian Supreme Court will allow in 2011 the Canadian Federal Government (inspired by Ontario minister Jim Flaherty) to push over the provincial securities regulatory framework, in particular that of Alberta, Manitoba and Quebec and thereby open the door for a another important constitutional push over in the area of energy...to somehow find a "solution" to Ontario's energy problem.
JB
The trouble with Alberta bailing Ontario out of its electricity supply crisis is that Alberta does not have the lowest electricity prices in Canada. It lacks new hydroelectric potential and has to rely on natural gas and wind power for incremental production. The really cheap electricity is in some of the poorer provinces, who are relying on it to boost their industrial capacity.
The optics are bad for the Canadian government. If the federal finance minister stood up in Parliament and said, "Fair is fair. It's time for the Mennonite farmers of Manitoba, the rural Habitants of Quebec, and the cod fishermen of Newfoundland to bail out the industrialists and bankers of Ontario", it would go over extremely badly, even in Ontario.
Yes, who was it who said "let the Eastern bums freeze in the dark" ? They nailed it back then - Ontario's energy problems, are Ontario's problems.
But having energy problems seems to be a favourite pastime of Ontario governments , and makes a good spectator sport for everyone else - why change the system?
Yes, who was it who said "let the Eastern bums freeze in the dark" ?
I think it was somebody from Texas, and Eastern Canadians misunderstood the context he was speaking in.
However, Ontario's electricity problems are very much self-inflicted and could have been avoided with some forward planning. None of the other provinces are much interested in bailing them out.
and Eastern Canadians misunderstood
I find that very hard to believe...
[]
By now Ontario is a recipient of (equalization) transfer payments. So they already do support Ontario.
There were plenty of Ontario-related posts, so I'll put my two cents here
Speaking of missing 15 or so GW from Ontario picture down to 2025; Hydro a few years ago (maybe in the 2007 document) admitted the gap pretty much the same way IEA admitted gap in oil "to be found and developed..."
They already closed some coal already - just because recession and disappearance of manufacturing made them redundant: nuclear and hydro provide pretty much 100% of baseload.
Ontario Power Generation http://www.opg.com ,and http://www.opg.com/power has a nice display showing current output. As I am writing this, OPG is generating:
6234MW nuclear
3537MW hydro
1608MW thermal
In 2009 coal and gas was 10% of total generated by OPG: "In 2009, OPG generated about 70% of the electricity in Ontario or 92.5 terawatt hours (TWh). Our 2009 generation mix consisted of 51% nuclear, 39% hydroelectric and 10% thermal electricity."
There is extra power from Bruce Power which is outside OPG:
They have 4700 nuclear installed capacity, but no idea how much they generate now.
JB,
My first question would be: how do we know that those nuclear plants really need to be decommissioned? In the US, such plants are routinely licensed for extensions of 10 and 20 years.
The problem is that the CANDU nuclear reactors that Ontario uses have turned out to have much shorter lifespans than originally expected. They have been much worse than the reactors that the US has built. US nuclear reactors have become more reliable as they got older. The CANDU reactors have become less reliable as they age.
Ontario's nuclear reactors are now to the point where they must either be completely rebuilt or decommissioned. The problem with rebuilding them is that the design is inherently flawed, and there is no guarantee that after rebuilding the reactors will have a longer lifespan than they originally did.
And just to underscore your point, RMG:
See: http://www.cbc.ca/canada/new-brunswick/story/2010/12/06/nb-nbpower-aecl-...
According to AECL, this refurbishment (if and when completed) will extend its service life by twenty-five to thirty years; some have suggested the final number could be closer to ten. Of course, the Province wants federal taxpayers to reimburse their billion plus share in cost overruns. Sorry, you bought this Plymouth Volare, you live with it. Who knows how much we're already on the hook for the Federal portion.
What a bloody fiasco. CANDU? CANNOT.
Cheers,
Paul
There was a nuclear advocate on TOD who claimed that most of those additional costs were avoidable - that they were the result of regulation or litigation. I think he claimed that a large part of the cost was replacement power during the delays, not additional direct costs like construction. Does that make sense?
I'm not sure I can provide you with a proper answer, Nick, but I suspect it's a little more complicated than that. The original cost of the Point Lepreau retrofit was to be 1.4 billion and now we're looking at an additional three years to complete this work (and this seems to be a moving target) and a further billion in replacement power. However, I have no idea how much AECL will be paying for their share of these added expenses; under the terms of their agreement with NB Power, they're on the hook for all additional costs except replacement power and I'll be curious to see where the final price tag falls on this one.
Cheers,
Paul
I guess his argument was that the delays were social, not engineering: that there were regulatory problems, or interventions by environmental groups, or some such.
If true, that would suggest that some kind of proper planning process (or legislative end-run) could pave the way for a cost-effective and timely refurbishment of the other nuclear power plants.
You may be right on that, but anyone who thinks there won't be regulatory issues with nuclear is deluding themselves. It is highly regulated, and under the microscope in all areas, so that's just the nature of the beast. It is one of the reasons why with nuclear, the "fuel" cost is a miniscule portion of the total cost of electricity production.
There have actually been engineering problems there too.
I can't see why there should be a legislative end run made - if the rules are there to be met, then they should work out how to meet them before starting work.
Same for environmental interventions - it' not like they can't see that coming.
The lack of such issues is precisely why so many NG turbines are being built - the nuke and coal industry are running interference for them!
Well, in this case I think it's fair to say it's 100 per cent engineering/bad management. Here's a prime example:
See: http://www.cbc.ca/canada/new-brunswick/story/2010/11/02/nb-point-lepreau...
Cheers,
Paul
Might also have helped if you guys hadn't dropped the turbine in the harbour, eh ;<)
Good thing AECL gave NB Power plenty of time to repair them.
Cheers,
Paul
There was a nuclear advocate on TOD who claimed that most of those additional costs were avoidable - that they were the result of regulation or litigation.
Well, there the fickle finger of blame has to be pointed directly in the faces of the politicians of Ontario. If, when it became painfully apparent that their CANDU reactors were failing prematurely, they had said, "Well, that's it. We've had enough. We're suing Atomic Energy of Canada for selling us defecting reactors and going out for bids on new ones to Hitachi-GE, Toshiba-Westinghouse, and Areva", they might have been able to control the scope of the crisis. At least they might have been able to extract more money from the Canadian government.
But as it is they mucked around until the situation was irretrievable and the costs of temporary fixes had escalated out of control. And now their solutions are... solar power, offshore wind generators in Lake Ontario, holding hands and singing "Kumbya", and other equally effective ideas.
RMG,
Ontario has three separate nuclear power plant parks: Pickering, Darlington and Bruce.
Apparently Pickering A1 and A4 have been refurbished (with massive cost overruns) but Pichering A2 and A3 are closed. But all the 4 Pickering B nuclear power plants are not even worth any type of refurbishment attempt. But all the Pickering plants are condemned for closure I do not know exactly when but before 2020.
The 4 Darlington nuclear power plants ran into massive cost overruns when they were built and Ontario has rejected in 2009 the Atomic Energy Canada (AEC) bid to build 4 more plants because they were too high...
Bruce A1 and A2 are currently being refurbished at great cost. Bruce A4 is also supposed to be refurbished. No one really knows until when the refurbished Bruce reactors would be able to run. No decision has been taken concerning the Bruce A3 reactor and the 4 Bruce B reactors.
Apparently Bruce Power is one of the companies that has presented a bid to buy AEC.
To your knowledge what are the main technical flaws of the 18 remaining Ontario nuclear power plants? They are all CANDU reactors but not of the same generation?
JB
Frst point is, yes, those reactors are expensive to refurbish, but still cheaper than building new ones (or than changing to any alternative source of electricity). The purpose of the most recent RFP's to build new reactors was to get accurate comparison costs of buying new replacement reactors rather than refurbishing the existing ones. Two main things learned from the resulting bids were a) AECL's bids were lower than any of its competitors, eg. AREVA. and b) new build's are more costly than refurbishings.
That's why the new build's of 2 new 1,100 MW ACR's has been postponed to the very tail end of the scheduled requirements needed to shut down all the coal burners, with refurbishments of all the existing except perhaps 2 of the 8 at Pickering to be done, as needed, first.
Not clear at all where you're getting your information, but I'd suggest perhaps basing your posts on something better than thus far.
RMG,
Should Canada attempt to develop all its hydroelectric / tidal power potential to ensure that it still has some energy to heat the place when oil and gas reserves expire?
After all there is only a 10 year conventional gas /oil reserve left and a hell of a lot of people are heating their houses using gas and oil. As for unconventional tar sand oil, it requires gas to produce...
As for unconventional shale gas, it requires a lot of water, has considerable environmental impact and a much lower EROEI.
JB
Don't forget wind. At minimum it extends fossil fuels. IMO it can do far more.
Wind generated power is "fairly" cheap at least in Canada, if you want the power at night in winter. However, if you want power at mid-day on a hot summer day, chances are you'll be firing up backup gas turbines. That incidentally is why big natural gas investors like T. Boone Pickens etc. are promoting the heck out of wind generation. They know that the primary effect of building wind generation is to shut down high efficiency baseload generating stations like nuclear because they must run 24 / 7 at full load, so the maximum that can be operated is the minimum load available to operate. When wind gen. is given priority access to the market, as now, and can't control when it generates, if a big spike of wind generation happens then the minimum available to operate for the baseload plants is reduced. When that happens then nuclear and baseload coal must be taken entirely off the grid operator's schedule, and fast-starting low-efficiency gas turbines used to supply a LOT more of the power than before for the periods when wind generation doesn't operate, about 70% of the time.
The net result is often that MORE fuel is burned for generation when wind is added to the ISO's schedule than without it, despite what the promoters will tell you. It is certainly the case when the baseload being shut down is nuclear, as in Ontario. It all depends on the characteristics of the wind regime in the area. According to Ont. ISEO's hourly records for 2008 / 2009, most wind power was generated at nights in winter, with almost none on summer days, when loads here peak.
However, we've just built two huge new multi-turbine gas-fired stations in this area alone (I think about 500 MW each), so the wind should be covered for a while yet.
My solution to that problem, BTW, is to implement a really smart computerized retail electricity market system, called IMEUC.
Independent Market for Every Utility Customer - IMEUC
The goal is to strongly encourage everyone to match their consumption profile to the available generation profile, using market incentives. All automated, aside from the $5.00 / month charge to cover initial investment in the VERY smart meters, communications and central data collection and storage (in anticipation of the question, double redundant disk storage for a year costs about $0.003 per customer.) Once in place, allows every customer to purchase directly from the generating companies, just like the large industrials. Huge price difference there.
Also provides for future electric auto charging and billing, etc. etc.
Len,
I'm not sure I understand your market model - it looks like a scheme to pay less to efficient (=low cost) generators of electricity and more to inefficient (=high cost) ones.
But that seems to be in keeping with Ontario policy of encouraging the most high cost producers possible, like this scheme;
http://fit.powerauthority.on.ca/Storage/102/11128_FIT_Price_Schedule_Aug...
It must be a strange pace to live...
You've missed understanding IMEUC completely.
You clearly don't understand electricity marketing, particularly the SMD (Standard Market Design) model, which is used with very minor variations presently in every de-regulated market area in the world, and which IMEUC also uses. Under the SMD, every generation company is paid exactly the same price in every time interval the are operating. See the Alberta system, or Texas, Ontario, etc. Note that wind generation in all these areas is given a bypass from the free market with long-term fixed-price contracts and legislated top priority in the dispatch schedule regardless of grid conditions.
IMEUC simply amounts to a means to accurately track exactly which customers are causing unexpected peak demands and penalizing them economically for doing so, by implementing a system of forward purchasing of "options to consume during the following day" paid 24 hrs in advance at 50% of the settled market price non-refundable UNLESS the ISO needs a load reduction and broadcasts a request for that. All option purchasing and tracking is done automatically by a tiny computer built into the smart meter, no customer involvement required. The meter also communicates with loads within the customer's facility via a powerline carried network (or etc.) to shed when necessary any loads which the customer has one-time programmed as sheddable within parameters eg. the fridge for 30 minutes max. PROVIDED it's temperature is below a given temperature, the A/C unit for 1/2 hour max. provided the building interior temperature is below 23 degC, the plug-in car in the garage only allowed to charge from 8:00PM to 8:00AM unless the customer presses an over-ride button in their kitchen to allow charging at mid-day regardless of price etc. Smart communicating appliances of all sorts will come if the system is implemented, because customers will desire them as they can facilitate the customer being able to stay on their meter's daily options purchased plan, by which they will achieve significant reductions in energy costs.
IMEUC also implement three secondary goals.
First enabling the grid operator to accurately match loads to supplies from intermittent sources such as wind and solar, thus allowing a greater percentage penetration of those sources.
Second, encouraging customers to shift their loads away from peak periods when much of the load is generated by inefficient peaker units onto high-efficiency low-emissions baseload units. Ice-storage air conditioners with the ice made at night, etc. would become economically wise.
Third, encouraging customers to implement their own distributed generation units by paying them fairly for the service. eg. as much as home heating is going to be done by natural gas, it should be being done using micro-CHP units, with a SOFC fuel cell or small gas engine generating electricity for the home or for the grid, with the heating of space and hot water done using the waste heat from the CHP unit. These are technically ready, but have no market now because the price-regulated present markets don't reward them fairly. IMEUC will do that.
Wind generated power is "fairly" cheap at least in Canada, if you want the power at night in winter.
Running a heat pump with wind in the winter is actually quite smart.
And a heat pump which replaces a gas furnace and is solely powered by a combined cycle gas power plant does reduce natural gas consumption by 50% and CO2 production by 50% even if wind contribution was always 0%. If the same heat pump is powered by a flexible combined heat and power plant (and 0% wind contribution), the natural gas consumption (CO2-emission) can even be reduced by 60%: http://www.iwk.ch/attachments/135_Effizientere%20Nutzung%20von%20fossile... (Figure 7).
Of course, if a heat pump replaces an oil furnace and is also solely powered by a combined cycle gas power plant, the CO2 reduction is also significantly higher than 50%.
The net result is often that MORE fuel is burned for generation when wind is added to the ISO's schedule than without it
Actually:
http://www.awea.org/newsroom/pdf/04_05_2010_Colorado_emissions_response.pdf
summer days, when loads here peak.
It can vary, Per HereinHalifax on December 12, 2010 - 2:59pm
In Québec and New Brunswick where electric heat predominates, the peak is typically early morning. Outdoor temperatures are generally coldest at this time of day and setback thermostats are coming out of their night time slumber. In addition, some 80 to 90 per cent of all homes in these two provinces are fitted with electric water heaters and most are energized during those critical morning hours as folks enjoy their hot showers.
A Hydro-Québec press release dated January 16, 2009 tells us that their highest peak recorded to date occurred between the hours of 07h00 and 08h00 (see: www.hydroquebec.com/4d_includes/la_une/PcFR2009-008.htm), and NB Power's historical peak occurred on January 16th, 2004 between 08h00 and 09h00 (see: http://www.nbpower.com/html/en/about/media/media_release/pdfs/peakdemand...
For Nova Scotia Power, our winter peaks generally fall between 19h00 and 20h00, more in keeping with the other jurisdictions you mention (see: http://oasis.nspower.ca/system_report/hourly_total_net_Nova_Scotia/Hourl...
BTW, in these parts, utilities are winter peaking and winter is when our wind resources are at their greatest, so that meshes rather nicely. Unfortunately, a large portion of this energy is generated overnight when electricity demand is relatively low. The City of Summerside, PEI thinks it has the answer:
http://www.cbc.ca/canada/prince-edward-island/story/2010/12/09/pei-summe...
Should Canada attempt to develop all its hydroelectric / tidal power potential to ensure that it still has some energy to heat the place when oil and gas reserves expire?
After all there is only a 10 year conventional gas /oil reserve left and a hell of a lot of people are heating their houses using gas and oil.
Building new hydro for home heating is generally uneconomic in Canada. It only makes sense where natural gas is not available. The natural gas supply is not going to run out any time soon - like the US, Canada has huge reserves of shale gas and Arctic gas. The main difference is that the Canadian reserves are probably bigger than the American ones.
The key word in the reserves estimates is "conventional". Most Canadian oil production now is non-conventional (i.e. oil sands) and there is about a 400 years supply of it at current production rates. Non-conventional gas reserves are probably similar in scale, but nobody has really bothered to evaluate them. Water is not a constraint on shale gas production in Canada.
Heating with oil, though, is a bad idea because oil prices will track international prices, and those are likely to skyrocket (again) in the near future. It's economically more efficient to sell the oil to the Americans and use something else to heat your house. Ground source heat pumps are generally more economic in the southern regions.
RMG,
The Canadian conventional gas reserves and now down to 10 years.
The extraction of conventional Artic gas is quite a technological & economic challenge because, once extracted, you need to find a way to get that gas to markets... Pipeline ($$$), LNG (LNG tankers built as ice breakers?).
As for the so called unconventional gas, its EROEI is much lower than conventional gas and it requires huge amounts of water to do the fracking along with a collection of toxic chemical products. There is also the risk that you contaminate the underground water that is used by the farmers and the rest of the population on which soil you will be digging. If one day one of those tax paying voters open its water tap and can light the water that starts flowing, you are in deep trouble... All in all, there is no way that you can extract the same amounts of unconventional gas at the same cost as the conventional stuff and you are likely to hit the environmental wall as far as extraction volumes are concerned.
Now when the price of gas starts going up either because of distance (tranportation cost) or because of the fracking cost, the EROEI of tar sand oil (already about only 1.5) goes even further down... and when there is no more gas because the Canadians need it to heat their houses, then the tar sand business is over...
Unless oil companies want to use nuclear power plants to provide the tar sand cooking heat. In which case they better start building now because it takes 10 years to build a nuclear power plant (including the time for the environmental study, for the public hearings and for the licensing).
JB
The Canadian conventional gas reserves and now down to 10 years.
That number doesn't mean what you think it does. It is the reserves-to-production ratio (R/P). A ratio of 10:1 is actually fairly healthy. The Canadian government estimates that production 10 years from now will be about the same as it is today. The key issue is that domestic consumption will probably increase, and as a result, exports to the US will decline by an equal amount.
And then there are the unconventional gas reserves, which are probably an order of magnitude greater than conventional reserves. While the claim that the US has 100 years of unconventional gas is debatable, Canada probably does have 100 years left because its reserves are on the same scale as the US, while consumption is much less.
The main complication is that unconventional gas is much more expensive than conventional gas, so you can expect natural gas to become more expensive. The limiting factor there is that at some point, LNG will become economic, and they will start to bring in LNG from other countries.
As for the so called unconventional gas, its EROEI is much lower than conventional gas and it requires huge amounts of water to do the fracking along with a collection of toxic chemical products. There is also the risk that you contaminate the underground water that is used by the farmers and the rest of the population on which soil you will be digging.
Nonsense. We've been using hydraulic fracturing to stimulate production from wells in Canada for 50 years and so far we've managed to avoid contaminating the ground water. And it's not as if we're going to inject all the surface water into formations to frac them - Canada has about 20% of the world's fresh water.
Also, the basic ingredients in frac fluid are fresh water and sand. All the chemicals are optional. And as for the chemicals, my wife said, "Surfactants? They use surfactants to frac wells? When I was an ER nurse, we used to inject surfactants into babies in the Emergency Room to get them breathing again!" Toxic is a relative concept.
It's just naive easterners who think this is something new. Don't teach your grandmother how to suck eggs, and don't teach Albertans how to frac wells.
the EROEI of tar sand oil (already about only 1.5) goes even further down... and when there is no more gas because the Canadians need it to heat their houses, then the tar sand business is over...
For one thing EROEI of oil sands is much better than 1.5, it's more in the range of 6:1 and could be improved with a little research. For another thing, the oil sands plants will not be cut back when gas supplies get short, it will be you easterners. That's in the government planning documents. Sorry about that.
However, natural gas is much more fungible than oil, and Canada has about a 400 year supply of oil sands, so if natural gas runs short you can switch to oil heating, although you won't like the price.
The US Energy Information Administration says that Canada has proven conventional gas reserves of 58 tcf while annual production in 2008 was 6 tcf (down from 6.6 tcf in 2007). Which rationally implies that there is currently slightly less than 10 years of Canadian conventional gas proven reserves left:
http://www.eia.doe.gov/cabs/canada/NaturalGas.html
One can argue about all the rest, in particular how many more years of gas usage is left if you take into account currently undefined amounts of positive EROEI and ecologically acceptable unconventional gas.
But the bottom line is that you rightly said that when Canadian gas starts running low and that a choice will need to be made between continuing to boil Alberta tar sand or heating Ontario houses, the Alberta government has already decided that it will be tar sand boiling. Politics being what it is today in Canada, you will no doubt agree that for the above mentioned Alberta government choice to become effective, the Canadian Feds and the Canadian Supreme Court would need to have somehow by then "vanished"...
JB
The reserves-to-production ratio (R/P) is a commonly misunderstood indicator of oil and gas assets. This can be serious because countries can make bad decisions based on it if they do not understand what it is.
The main problem is that it is expressed in years. A R/P of 10 years does not mean you are going to run out in 10 years. 10 years from now, Canada will probably still have an R/P of 10 years of gas.
You will only run out of gas if you stop drilling wells, or drill nothing but dry holes. The key indicator is reserves replacement ratio. If you replace less than 100% of the gas you produce, then your R/P ratio will decrease. However if you replace more than 100%, it will increase.
I could go on, but realize that this is Oil 101. There is a book called Oil 101 by Morgan Downey which is a good starting point for this kind of stuff.
Trying to predict accurately when production will actually peak and start to decline is PhD material.
RMG,
I understand your point quite well but how about having a fresh look at the actual quantities of conventional proven gas reserves discovered during the past years and comparing that with the actual annual gas usage? And then see what the actual numbers tell us about the future...
Global proven conventional oil discoveries fell below actual annual oil usage in the early 1980s... and then never went above after, which implies that we are actually emptying the tank...
Tar sand oil is dependent on gas... No gas no tar sand oil. Unless you want to use nuclear power plants by the dozen: a very expensive and sensitive proposition for Alberta. Using coal to cook oil out of tar sands is a bit farfetched. Might as well transform coal into oil directly using a well know coal to oil conversion process that the Germans used in WWII.
JB
I know all about production rates versus reserve estimates. I used to design software to let companies do the calculations automagically. Just input your capital budget, push the button, and it will tell you how much gas you will produce x years into the future.
However, the key new factor is non-conventional gas. It is a game-changer. How much is there? Nobody knows, but there appears to be an awful lot of it. It is changing the natural gas market and depressing prices considerably in North America.
Tar sand oil is dependent on gas... No gas no tar sand oil. Unless you want to use nuclear power plants by the dozen: a very expensive and sensitive proposition for Alberta. Using coal to cook oil out of tar sands is a bit farfetched. Might as well transform coal into oil directly using a well know coal to oil conversion process that the Germans used in WWII.
Oil sands production is dependent on a source of process heat, like many other industries. Like the other industries, they will use the cheapest, most convenient source of process heat available.
For example, the cement plant across the valley from me (one of the biggest in the world) used to burn natural gas until the price went up. Then they redesigned the plant to burn coal. They also put in pollution controls, so the plume of smoke from the plant is gone. However, they can now switch from coal to gas and back again at will. Now that the price of gas is down, who knows what they are burning? I suppose I could go and ask them.
Oil sands plants are similar. If they run out of gas they can burn coal, but most likely they would gasify the heavy ends from the oil sands they process, and burn the syngas. They'll do whatever is cheapest. Nuclear is unlikely because it's not cheap, but it is possible.
But the oil sands plants aren't going to run out of gas in the short to medium term because there are unconventional sources nearby in NE BC. They'll bring them on production. That's the cheapest solution unless the price of gas skyrockets in the US, in which case they'll sell the gas to the Americans and switch their plants to syngas or coal or whatever.
RMG,
Time will tell which one of us is right...
There may a lot of unconventional gas around but the important factor is the following: what is the EROEI of this unconventional gas?
A low EROEI will considerably increase the cost of gas once the mirage of plentifulness has dissipated (there is already considerable questionning about the creative accounting of some companies involved in the exploration and extraction of shale gas). Using very low EROEI unconventional gas to heat out oil from tar sand would severely impact the already very low EROEI of tar sand oil and its economic profitability...
If the EROEI of unconventional gas reserves turns out to be negative, then forget about those unconventional gas reserves as a new massive source of heat to extract oil from tar sand. You cannot massively extract a negative EROEI hydrocarbon reserve unless it is somehow subsidized by a massively positive EROEI energy source. That is just plan physics mixed with a touch of economics...
JB
what is the EROEI of this unconventional gas?
I believe a TOD article about a year ago said that NG production E-ROI had dropped from about 40, to roughly 20.
That's not a significant difference.
Do you have evidence that unconventional gas E-ROI is lower than that?
Nick,
The creative accounting of the firms that are involved in shale gas exploration and production is evidence that something is fudgy about the unconventional shale gas EROEI.
I, like quite a few others, are waiting for independent expert (such as Charles Hall) papers on the EROEI of unconventional gas.
JB
There is a lot of potential for further hydro development in Quebec (an estimate by the Canadian Hydro Association sets the undeveloped potential at 44,000 MW) but at what price? Up until a few years ago, Hydro-Québec used the "3¢ rule" to gauge the economic viability of a potential project. However unit cost for recent projects, such as Toulnustouc (526 MW), Péribonka (405 MW), Eastmain-1, Eastmain-1-A-Sarcelle-Rupert and Romaine 1-4 (1,200 MW) are costlier, with costs ranging from 4 to 9¢/kWh.
With natural gas prices hovering around $4/mmBTU and high transmission costs (the 500-km Romaine transmission lines will cost over $1.2 billion), the business case for building the next developments on the list (Petit-Mécatina 3 and 4 (1,200 MW) and Magpie 2 and 5 (800 MW)) has not been made yet.
I wouldn't count on natural gas staying that low for a very long time. Be smart to build the hydro stations now while the gas is cheap, and then have the power available in say 5 or 10 years time, when gas will inevitably rise much closer on a per-kwh basis to oil.
Hi WolfRicus,
Thank you for your very nice summary briefing about Quebec's situation.
A quick question: You may know that Nova Scotia is currently experimenting with tidal power in the Bay of Fundy. Is it true that Quebec has very high potential tidal power projects in the Ungava Bay?
JB
P.S: I would appreciate if you could provide me with your e-mail so that we may continue our exchange on a bilateral basis. My e-mail is: jonatan252000@yahoo.com
For a tour d'horizon of electricity prices in North America, you might want to check this annual publication by Hydro-Québec: Comparison of Electricity Prices in Major North American Cities. The latest issue was released last month and compares domestic, commercial and industrial electric rates in 25 North American cities.
Hello ClaudeB,
Is it true that Quebec has very high potential tidal power projects in the Ungava Bay?
JB
P.S: I would appreciate if you could provide me with your e-mail so that we may continue our exchange on a bilateral basis. My e-mail is: jonatan252000@yahoo.com
Is it true that Quebec has very high potential tidal power projects in the Ungava Bay?
Jonatan,
If we assume, as your posts seem to indicate, that you are from/in Quebec, why are you asking this question? It seems odd to be asking people who are obviously non-Quebecers about this, but then, maybe Quebecers just have no clue about their own backyard?
If you don't know the answer, you can google it as easily as we can, and you will come up with this resource;
http://pesn.com/2006/08/14/9500297_Quebec_tidal/
Then you will see that, theoretically, there is a very large potential. Same as, theoretically, there is large potential from nuclear fusion.
What is not theoretical is that this is a long a way from anywhere else, so even if it can be developed before fusion is, you will need one large and long transmission line.
With the very cheap rates that Hydro-Quebec charges, I'm sure they have lots of money in the bank to do such a project - just don't ask the Feds for help on it. But you could ask Newfoundland and Labrador about it - I'm sure they would carry the power - for a price.
That country is also a big exporter of electricity to the United States, too.
It looks like the net exports are about 20B kWhs, or an average of about 2.2GW. That's only one half of 1% of average US consumption, so "big" is relative.
Nick, for once I agree with you here- sort of.
The net exports are surprisingly small, But if you look at the peak hour exports (I don't have access to that data) they are much, much larger. Since almost all the Canadian provinces have lots of hydro, they use their interconnects to sell it south at peak times, and then shut down the turbines and buy back cheap coal/nuke/CCGT baseload in off peak.
So, the monetary value per kWh exported is very high, and it serves an important function of providing peak supply to parts of the US grids. BC is a major provider of peak power to California (when they pay their bills).
if you look at the peak hour exports (I don't have access to that data) they are much, much larger. Since almost all the Canadian provinces have lots of hydro, they use their interconnects to sell it south at peak times
Fascinating. It would be very interesting to see that data - that should be a large resource for balancing wind intermittency.
I was walking through the mountains about a vertical mile above the Revelstoke Dam on the Columbia River in BC when California was having its big power crisis a few years ago. It was interesting to see. The reservoir was empty and seeded to grass so that the dust didn't blow around.
However, BC Hydro was storing water during the day. When 5:00 pm rolled around, they would turn the Columbia River on at full blast and wind the turbines up to full power (1000 MW). They would run it flat out for an hour or two, and then turn the Columbia off and wait for the reservoir to fill again.
BC Hydro made something like half a billion dollars from California that year. The Bonneyville Power Authority made similar amounts of money from its big dams on the Columbia. The California government blamed the private utilities for ripping off the public, but failed to mention that the really big payments went to the BC and US governments. There might have been repercussions, such as them deciding not to sell electricity to California any more.
The big losers were the people of California who had to pay for this peak power, and the salmon, of which there are almost none left in the Columbia. It once had one of the biggest salmon runs in the world.
BC Hydro made something like half a billion dollars from California that year.
I have the impression that Enron, who engineered much of the debacle, made something like 10x as much.
Well, it didn't do Enron much good!
I'm not sure it is fair to say they engineered the debacle - that blame really starts with the Ca government. They set up the system, and then expected the power companies to not game it! More importantly, they made it so hard to build any new powerplants in Ca, that no one did. The out of state plants could decide to sell to Ca, or not - Ca running out of electricity is not their problem.
In desperation to recover, for the last decade, the only powerplants to be built in Ca are NG ones, so the electricity is quite expensive. Ca's renewable standard, which requires 20% renewables by 2020, basically amounts to "import 20% renewables" because it is so hard to get approval to build anything there! Great business for wind farms in Or and Wa.
My understanding is that Enron went far beyond "gaming the system" - if their actions weren't illegal, they definitely should have been.
My understanding is the Enron really did create much of the apparent shortage in power, and IIRC they in effect resold the same power multiple times.
I'm not saying they didn;t do all sorts of illegal things, they did, but not necessarily in the way that people think.
So they bought and sold the same power several times - big deal? Stock, futures, credit default swaps etc are bought and sold multiple times.
As long as you deliver when your contract says to deliver,(and most futures contracts never live that long) what is the problem? Enron was not actually charged with failing to deliver when they said they would. They may have decided not to sell at certain times to try to drive prices up, but that is part and parcel of commodity trading, so what did people expect?
See the discussion on yesterdays drumbeat about oil futures trading - the contracts traded in a single day, just on the NYMEX, are several x the total world daily production, so of course stuff is being bought and sold multiple times - why should electricity be any different?
The difference with electricity is that it is an essential service - if sellers exercise their right to not sell anything they are not obligated to, then what? The utilities are left scrambling and just have to keep upping the price until someone takes it. Kinda like an airline with an overbooked flight, keep upping the ante until someone bites. It costs, but overall, they deem that to be worth it for the benefits of full planes.
The theory with the electricity market was the same, by having all these producers, there would be a competitive market that the utilities (the buyers) could divide and conquer. But the producers weren't going to just take it lying down, they learned how to play chicken, and learned well. All they had to lose was money. but for the utilities, if you don't buy enough electricity, you have blackouts etc and lose a lot more than just money - who is in the disadvantaged trading position?
The Ca government even required the utilities to sell of their older (=paid off) powerplants to third parties, to make the market more competitive. This left the utilities even more exposed, ad they now had little alternative but to buy in the market.
They could easily have seen this coming if they had turned their trading model into a board game and watched a bunch of college business students play it - every game would end with the utilities going broke!
They did unwind some of the problems they created, but Ca electricity prices remain 2x their neighbours...
Actually the biggest scam Enron used to make money from California was "creating false congestion". They'd buy power from unusually distant places, then route it along unusual routes which would result in the ISO's rules triggering large payments to compensate customers and suppliers for their inability to transmit the power. They'd also arrange to do "maintenance outages" on plants near customers in order to load up the long distance transmission lines. Its all on record.
One might argue that Cali created this problem by leaving the possibility open in their market design, but in fact much of the transmission involved was interstate, thus under FERC jurisdiction (or at least in limbo between), and FERC conveniently (many say illegally) refused to check for or to police the practice, or to do very much about it afterward. Several investigative reporters have documented close ties between ENRON execs and the Bush white house (FERC's boss), including spending weekends at the white house as invited guests .....
http://dissidentvoice.org/Articles8/Leopold_Enron-Emails-CA.htm
Actually the biggest scam Enron used to make money from California was "creating false congestion". They'd buy power from unusually distant places, then route it along unusual routes which would result in the ISO's rules triggering large payments to compensate customers and suppliers for their inability to transmit the power. They'd also arrange to do "maintenance outages" on plants near customers in order to load up the long distance transmission lines. Its all on record.
I still don;t see what the problem is here. If you contract a trucking company to move stuff from A to B, you do not care what route they take, as long as they get it there when they said they would..If they cause a traffic jam somewhere in the process, so what?
Unless there were specific rules they broke about how to route power from A to B, or when a plant can go on maintenance what is the problem? should they wait until plant X is not near customers to do maintenance? That could be quite some time..
One might argue that Cali created this problem by leaving the possibility open in their market design, but in fact much of the transmission involved was interstate,
Yes, California created this problem. If they didn't realise they can't regulate out of state transmission, they shouldn't be in the electricity business in the first place.
Also, if they didn't realise that electricity companies trade to maximise their revenue, instead of just being nice, they shouldn't be in the electricity (or any other) business.
So Enron tried to milk their connections in Washington?
They should be hung, drawn and quartered, because no other company in the history of America has ever tried something so underhanded.
Lets face it, American companies are the system gamers par excellance. if you set up a system, they will game it. You have to set up your system so that they game it in the way you want, otherwise they will game it in they way they want.
Enron (and BC Hydro, and BPA) did not fail to deliver when they said they would, they did not default on what they were contractually obligated to do. California just assumed they would do more for less because that's what "nice' companies would do, to get good karma - that is after all the California way.
The free market asks no quarter, and gives none. Ca wanted a free market, because under their system that regulated hoe much money utilities could make, they thought they were making too much money. they assumed that if you remove limits to how much money companies can make, the companies would somehow make less. For some reason the Ca gov't were surprised when the companies learned, quickly, how to make more.
I am sure if Ontario privatised heart surgeries that heart surgeons would quickly learn that a dying patient will pay anything for surgery. The Ontario govt would complain about heart surgeons sending patients along backroads to the hospital thereby creating unnecessary delays in Ontario's otherwise highly efficient traffic system, while also complaining that OR nears patients were down for maintenance, wondering why they couldn't put down for maint OR's that were a long way away from customers instead.
That sure seems like a government way to view it, with the inevitable results.
I propose a truly radical idea - why not let the buyers and sellers of electricity come to agreement as to the price, and leave government out of it altogether, as is done every day on the stock market, at the gas station, the food store, etc etc.
When government wants a "free" market, but only at a "low" price, one of these two conditions will not be satisfied, and, likely, neither will the customers.
The only mystery is that the Ca govt thought it would never happen to them.
Don't bother. Much smarter people than you have tried and failed to apologize for Enron. Waste of time.
I'm not apologising for Enron at all. I am saying the Ca govt brought the mess on themselves. One of the worst system gamers was the LA Dept of Water and Power, if that is who you mean by generators close to customers, and that is a utility owned by LA County.
There was no need for the California market design to explicitly state rules against practices which were already illegal (and they were, eg. Enron was busted, all those distribution entities were bankrupted). They had every right to expect that FERC should have policed those illegal practices in a timely fashion, but that clearly didn't happen.
The only errors in the California market design were their maximum price protection of the retail customers, and their allowing the large commercial / industrials to operate outside of the SMD market with bi-lateral contracts. Both were due to undemocratic political influences, which are at the core of most problems debated in the political realm.
In theory it is a large balancing resource, but that assumes the dams just sit there waiting for the wind to die down before turning on. In reality, they just turn them on and off whenever it is profitable to do so.
Here is BC Hydro's annual report for 2000, right when the California thing was at it's peak.
http://www.docstoc.com/docs/8321307/BC-Hydro-annual-report-two-thousand
Some highlights;
They sold 46,000Gwh domestically, and 22,000 export. Five years earlier they sold about 40,000 domestic and exported about 5,000 - see what was going on?
Also, of that 22,000Gwh exported, they only generated 15% of it, the remaining 85% was what they bought in the off peak market. So, by having stored hydro they were able to buy and resell 19,000GWh - not bad.
They made $1bn in export sales, so an average price of 4.5c/kWh on the wholesale market.
The build out of wind in Wa and Or is good for BC hydro, as in the night, the wind producers drive down the wholesale price, so its even cheaper for BCH. During the daytime peak, wind is just swamped by demand, so has no effect in depressing prices then. So wind increases the spread between peak and off peak - that is why there is more simple cycle GT being built in CA - the more wind you have, the more profitable peaking power is! And if you haven't got much hydro, and Ca doesn't, then SCGT it is.
California really has been very generous at spreading its wealth to Or, Wa and BC via electricity. I'm not sure if the Ca residential ratepayers agree that's a good idea, but then they are part of the problem - if you run your a/c on your 3500 sqft house all day in summer time, then you are creating the high peak prices - they do not exist if there is not the demand for it.
In theory it is a large balancing resource, but that assumes the dams just sit there waiting for the wind to die down before turning on. In reality, they just turn them on and off whenever it is profitable to do so.
But, if falling wind production raises prices, isn't that the same thing?
During the daytime peak, wind is just swamped by demand, so has no effect in depressing prices then.
Are you sure? That doesn't sound right.
if you run your a/c on your 3500 sqft house all day in summer time, then you are creating the high peak prices
Yes. Oddly enough, Californians pay for that privilege with very high tiered rates.
Rembrandt,
Thank you for this analysis. It is interesting to see Denmark having the enormous taxes to finance renewable energy, Spain and the Netherlands also have high taxes, I presume for the same reasons. It would be interesting to fit Germany in this pattern. I bet they also pay a shitload of taxes to have their ~1% primary energy consumption coming from renewables...
-Snomm
1%??? Don't give such incorrect numbers please!
Actually (2009) we generate 16% of electricity from renewables (thereof less than 20% hydro --> ~3,3% of total, 40% wind energy --> ~4,6% of total).
Primary energy consumption from renewables excelled 10% in 2009 and may reach ~11% this year (based on the end energy usage, based on primary source 9% 2010 and 10% 2011).
http://de.wikipedia.org/wiki/Erneuerbare_Energie
We pay ~0,24€/kWh private (thereof 40% tax), industrie pays around 0,10€/kWh... Taxes for renewables (EEG) account for 0,02€/kWh of direct taxes, but they are rising (next year around 0,035€/kWh) because of photovoltaic power generation. Wind energy generation doesen't cost us that much today.
http://de.wikipedia.org/wiki/Strompreis
That's the composition of the german electricity prices for consumers according to BMU (German Environment Ministry).
Germany may be missing in the above article, but other numbers are plain wrong. Rembrandt is dutch I believe, so he should've sensed that the numbers are wrong for at least NL if he'd ever taken a good look at his electricity bill.
Electricity prices are somewhere around €0,07 per kWh
Energiebelasting (Energy Tax):
0 - 10.000 kWh = €0,1114 per kWh ex. Vat
10.000 - 50.000 kWh = €0,0406 per kWh ex. Vat
50.000 - 10 GWh = €0.0108 per kWh ex. Vat
> 10 GWh = €0,0005 per kWh ex. Vat for bussinesses and €0,0010 per kWh ex. Vat for everyone else
(Source: http://www.rijksoverheid.nl/documenten-en-publicaties/vragen-en-antwoord...)
Vat is 19%.
So consumer electricity prices are:
~€0,07 + €0,1114* + 19% = €0,2115
So if we look at the graph "Household electricity price (2009)" we see that price of €0,28 is absurdly high and that a price excluding taxes of about €0,22 is more in line with the total price of electricity.
Also the statement that the Netherlands has about 15% tax on electricity is off course wrong.
(€0,2115 - €0,07) / €0,2115 × 100% = 67% of the end tarrif is tax.
(€0,2115 - €0,07) / €0,07 × 100% = 202% tax on the energy cost.
This is all excluding grid connection and delivery cost, but also exlcuding a €397,- tax return every household gets via it's electricity bill. This about compensates.
Why didn't the author do a quick and easy check on the credibility of his source?
*Average household consumption is around 3500kWh/yr so the €0,1114 tarrif normally applies
@PC
1) You are talking about euro cents, the 26 cents electricity price for the Netherlands in the article are denominated in US dollar cents (as clearly stated everywhere). In 2009 a dollar was worth approximately 0.72 euro (conversion rate used by the IEA).
In calculation the price back for consumers which you are talking about, this comes down to an average electricity price of 0.185 euro cents per kWh.
2) It is correct that the lowest Dutch pay energy taxes, around 0.l09 euro cents on electricity in 2009. The IEA gives the following figures, Ex-tax price 0.154 euro cents, excise tax 0.0023 euro cents, and VAT 0.0297 euro cents (per kWh). The eco-tax which you refer to is also published. The IEA excludes the tax return on the electricity bill.
The numbers seem to be correct, but the accounting looks off as the IEA only includes the former MEP tax as a tax, and the energy tax for households in the normal price.
I have sent the IEA an e-mail to see why this is the case, thanks for pointing out the potential error.
Final note, referring to your last question. You don't have to be so hot headed about simple fact checks, you can also ask things in a more friendly manner.
Rembrandt
@PC
I have received a reply from the IEA that they have sent my inquiry to Statistics Netherlands (CBS) as that is where they receive their data from. As soon as they hear from them I'll know the details about how the price level of the Netherlands is made (and will publish it there).
Rembrandt
Yes, I was too rough with my ~1%. If you include water power and wood-combustion it is more, however these low-tech and mature techniques may not increase the electricity bill as much as the fancy new renewable technologies like solar and wind. These expensive measures to overcome the energy crisis are barely noticeable in terms of primery energy comsumption.
Since this topic is plain of ideology and undermined by politics, questioning these technologies ends up often in hot-headed responses, the same thing is true for nuclear.
-Snomm
No - wind alone accounts for around 5% of electrical power generation and also quite more than 1% of primary energy usage. Wind power in Germany is allready competitive (but it becomes a problem if you expand it further because of the shut-down of conventional coal and nuclear plants - see Denmark). You can discuss the German photovolitaic efforts but thats quite another thing...
I agree with Rembrandt, as I have learned that researching for costs and prices is not an easy job.
the 26 cents electricity price for the Netherlands in the article are denominated in US dollar cents (as clearly stated everywhere). In 2009 a dollar was worth approximately 0.72 euro
I would suggest using Purchasing Power Parity conversions, instead. I think they'd be closer to .9. Currency market conversions are very misleading. Also, .72 euro is too low even for pure market rates: right now it's about .75.
@SMOMM
The case of Denmark is quite interesting because they use a lot of coal power, which I didn't know before I wrote the article. At the same time they are increasing their share of renewable electricity quite swiftly. At some point in the not so far future this will have to eat into the electricity costs that industry has to pay, if renewable electricity keeps expanding in Denmark.
I do advise to check that primary energy consumption figure, see dare100em.
Rembrandt
This is because of coal-fired CHP District Heating Systems developed in response to the 1970s' oil-shocks? Presumably there is a trade-off here between lower-cost domestic heating and higher-cost electricity?
best
phil
@Phil harris,
Difficult to check as the Energy Prices & Taxes doesn't include coal price data for Denmark. Hopefully some Danish visitors reading this would like to chip in.
Hello Rembrandt, could you help me source the data in bold?
Best Regards
@thearch
IEA, 2010. Energy Prices and Taxes: Quarterly Statistics 3rd quarter 2010. IEA Publications: Paris.
I planned to do a post about import costs of natural gas from this publication. Don't know when it will appear.
Rembrandt
I can't entirely agree with the explanation for the variance of costs on the countries that use hydroelectricity. Paraguay costs are down because they get their energy mainly from Itaipú, that has a very low maintance cost, and is nearly completely paid for. The electricity costs of brazilian hydroelectric generators vary a lot more than that country-wide comparation, ranging from Itaipú's (last time I checked it was at 2007) R$40 (nearly US$20) a MWh to nearly R$300 (nearly US$150) a MWh on the newest dams.
There is probably some variance due to distribution, but I don't think that is as big as the variance of generating costs.
@Marcosdumay,
Your hypothesis is hence that the electricity price difference between hydropower nations mainly arises whether fixed capital costs have already been paid or not? Or is it more due to lower maintenance costs of different sites?
Thanks for contributing.
Both capital costs and maintence vary widely from one place to the other.
The capital variance is more obvious, there are varying waterfall heights, varying lake sizes, varying river width. Also, of course, the interest rate and the amount already paid down help to increase the variation.
The maintence costs are less visible, some lakes require draging, some waters have solid residues, that interferes with the engines, some kinds of plants are a problem. There are probably plenty of other factors, I'm by no way an expert on that, those are the ones I can see at the media.
How much of the difference in cost to residential versus industrial customers is due to distribution costs? Are large apartment buildings charged less than single-family houses? Are large industrial users charged less than small businesses? It would seem logical that residential prices would be higher due to distribution and other factors, such as not participating in load shedding. As noted by previous posters, some businesses that are large users, such as aluminum smelters pay less for electricity. Large data centers, such as those run by Google and Amazon, probably pay negotiated rates.
Do taxes include taxes paid by generators and distributors, such as property taxes, income taxes, ad valorem taxes, and so forth? Tax structures probably vary a lot depending on whether electricity is generated and distributed by public authorities or private businesses.
How do countries compare with respect to the part of the cost of electricity that is due to recovery of fixed costs and investments (i.e. depreciation, return on investment for generating station, transmission lines and distribution networks) versus variable costs (i.e. fuel, maintenance, operation, general sale and administration expense, net gain on energy trading and futures contracts, and so forth)? There is probably a lot of difference between countries that have grown a lot recently versus those that have low growth rates.
"Many countries therefore have a clear industrial policy to try to keep their industries as competitive as possible"
Be careful assuming association as causation. Industrial users typically purchase power at higher voltage and own their own distribution network within the facility. In contrast, delivering power to residential customers involves a massive network of substations (full of expensive capital items like transformers and breakers), hundreds of miles of cable, and an entire support infrastructure to troubleshoot (most industrial complexes keep engineers and craft on staff). If one were able to include the cost burdens industry is forced to internalize, I expect you'd find ultimate prices very similar.
I'd also like to take a moment to discuss fuel. There is a massive trend within the US generation industry to transition to natural gas. Though at less than $4 per MMBTU prices are some of the lowest in history, this is still roughly double the fuel cost of coal, (not to mention hydro, solar, or nuclear), and exposes customers to the greatest potential for cost swings. It is true that increased efficiency of combined cycle plants and reduced O&M costs make gas generation cost competitive with other fuel types....for now.... Perhaps someone should write a piece on what transforming 60% of US generation to NG would do in 10 years?
I'll second your comments about the internalised costs for industry. I used to manage a modest internal high voltage distribution system (for a ski resort), and every bit of maintenance on it was expensive. It is expensive for the utilities too, but they have economies of scale - for them to keep spares of transformer types X and Y on hand is a miniscule cost compared to the number of X and Y they have. We could not afford to do it as having three of X and three of Y and four of Z, and a spare of each, would quickly mean you have a warehouse of equipment, ageing and depreciating, even though it is not being used. You are too small to have the servicing equipment, and pay top dollar for when you need it.
Mines, factories, smelters, pulp mills etc have their own systems because it is intimate to the construction of their facilities, and they are big enough to justify the equipment and dedicated staff - but if the site is not, then let the utility do it! Otherwise your costs divided by the kWh will make the residential rate look cheap.
AS for NG, the main reason for the shift is, IMO, that NG turbines offer the fastest development and lowest investment risk- simple as that. Try to build a coal, nuclear, or hydro plant, and you will be fighting regulatory battles and environmentalists and counting birds and fish for years. Emissions rules on coal plants will only get tighter, while with NG you already meet them all. They have a small footprint, can be made to look like an innocuous building and can be built almost anywhere - especially close to the load centres - try building a nuke or coal plant on the outskirts of town! Even the solar developers in the California desert have their regulatory battles and have to track every lizard and tortoise.
There is the risk of fuel price increases with NG, but then, you are able to sell peak power, and for peak power you are, really, just competing against the other NG and plants as the coal and nukes are already running flat out, likely so are the hydro - you get to be the last, highest priced supplier! You can also shut down when the off peak price is too low - coal plants can back off, but can;t stop or they will lose money even faster!
A bigger risk for customers is not having enough electricity -then it gets very expensive, or you don;t have any. This is what happened to California in 2000. No one was building new plants because the regulatory environment was such that you can build your plant cheaper and faster somewhere else. And then Ca didn't have what it needed when it needed it.
NG fired peak power may be expensive, but not enough peak power is even more expensive - it is the price we pay for reliability without rationing.
@light299, Paul Nash
Do you have any idea how to get hold of such data (internalized costs of electricity) per sector? I think the only way would be per company disclosure, or theoretical calculations, it's probably not published anywhere.
Rembrandt
Rembrandt, I would agree that good data on that will be hard to find - it can be very site specific. Best thing would be to interview the electrical manager for a large industrial site.
As an indication of the difference from the utility's point of view, here is how BC hydro charges rates (not incl taxes) to customers;
Residential;
Small commercial under 35kW $0.0816/kWh, no demand charge
Large commercial, over 35 kW, $0.0393/kWh, $ 4.18/kW demand for 35-115kW, $8.02/kW demand over 115kW (per month)
Industrial (transmission customers) $0.2817/kWh, $5.81/kW demand
These rates go through the scrutiny of the BC Utilities Commission, so they are probably a reasonable reflection of what it actually costs to service the different customers, on average.
A large commercial customer could consider upgrading to a transmission customer, but you would only do this if you had a lot of kWh per year to cover the cost of owning the equipment yourself. If your load is variable, then it is better to let the Utility own the equipment, if it is consistent, it is better to own it yourself, because the Utility's pricing assumes a certain amount of variability.
Most large industrial customers, of course, have fairly consistent loads!
For residential, you have a massive investment in poles, wires, transformers, meters etc etc, with relatively low/variable loads, so if you are recovering the cost by kWh,it has to be expensive. It really is like the markup on goods at a mall store compared to what the store owner buys for - at least 100%.
Where it gets really interesting with the industrial customers, IMO, is they they are all buying at less than the marginal cost of generation. You couldn't build a hydro project today on a price of 2.8c/kWh. So if a new industrial customer comes along, do they get the same rate as all the others, or do they pay the marginal cost? Of course, they pay the same rate as everyone else, so they are being subsidised by everyone else. Governments accept this because, by definition, a new industrial customer means new jobs.
And these days, that is the only statistic that really counts.
@Paul Nash
Thank you for the extensive answer. I presume this should be $0.02817/kWh (not 0.2817). I think this is important as the real energy price on which society is based is the industrial user price, and in comparisons with energy source costs that needs to be compared. Your examples shows some basis that could be used to make a sufficiently realistic theoretical model of commercial/industry prices including infrastructure and hidden subsidies.
Will think this through a bit further.
Rembrandt
Hi Rembrandt,
Yes, it was meant to be $0.02817/kWh
I forgot to add, that for the industrial customers, they have a provision where they evaluate the "baseline" (=average over a few years) energy use, and then charge the 2.8c for 90% of the baseline, and the last 10% is charged at 7.36c.
So, this is clearly to encourage efficiency, and prices the marginal electricity closer to the marginal cost of production.
BC Hydro is looking to break up the commercial service in into above and below 150kW, and do the same for the large portion.
More detail;s on rates here;
http://www.bchydro.com/youraccount/content/business_rates.jsp
I like this approach because any efficiency projects save the most expensive energy, and , 10% reduction from efficiency is quite achievable.
The high marginal rate could be seen as a disincentive to expansion of production, but I don't think so, as for anything other than smelting, the electricity input is a small part of the overall cost.
BC Hydro also has an "interruptible" rate for non transmission commercial customers, of the $0.02817, but to get that you give BCH the right to cut your load in half at 30 minutes notice! My greenhouse client is on this rate (which they don't offer any more).
Historically, the Public Utilities Commission approach, for regulating utility prices, was to have them do a detailed cost of service study, to establish precisely the costs of servicing different customer classes. This was done for elec, gas and water utilities. The results were almost always the same - industrial customers were much cheaper to serve, if you divide the cost by the amount of product, and so rates were set accordingly - that is why I think they are a fair indicator of the actual cost difference in serving residential and commercial and industrial customers.
This is changing these days as rates are being designed specifically to encourage conservation, hence things like BC Hydro's 90% baseline provision.
For conservation rates, the approach is nothing to do with the cost of service, it is about setting the marginal cost to the customer high enough that they will do something to reduce consumption. Sounds good, but for different customers that price can be very different.
You also have to be careful to not make it too expensive, where a customer shuts down and moves - Washington State had an aluminium smelter that did just that - it is now in China.
BC Hydro is offering to pay 10c/kWh as a standing offer for any new renewable energy projects up to 10 MW. Larger projects are by negotiated rates, and are apparently 10-13c/kWh, so this gives an idea of what the marginal cost is, if we want renewable energy.
if we would accept coal, it would probably be 7c or so.
There are no coal plants in BC, but there is a lot of coal. You could build a coal plant, but only if you do complete CO2 capture and storage, and then it would qualify for the renewable rates. Since no one is planning a CCS coal plant, even at 13c/kWh, we can presume the cost would be higher still than this.
With the exception of metal smelting, I am not of the opinion that cheap power attracts industry, to any great extent, as the Quebec failure demsonstrates. In Australia, the island state of Tasmania developed extensive hydro projects (flooding out spectacular wilderness to do so, like Lake Pedder) to attract industry with cheap power. The only industry they attracted was, surprise, an aluminium smelter!
For other industries, like general or auto manufacturing, they preferred to be closer to the main cities, either close to their markets and/or their suppliers. The cost of operating "remotely" can quickly exceed the benefit of cheap electricity.
That is why there is lots of undeveloped hydro in Canada's north - but who want to build, and work at a factory up there? The only way to do it is to pay the people ridiculous amounts of money, as the oil industry does, and then your cheap power advantage is nullified.
Also, attracting industry is hard if there is not already other industry there. A car plant, for example, needs a lot of support services, and of they are not available at location X, it is not a good place for a car plant, regardless of how cheap the energy is.
Aluminium smelters are the best, and possibly only, exception to this rule.
Agree most. Would only add that I was surprised to learn that all smeltered nickel from Sudbury Ontario is shipped to Norway (from mid-northern Ontario right past Quebec to Norway) for electro-refining. I guess shipping costs aren't a significant issue.
Just about every old gas plant I have driven by recently seems to have a brand-new building sitting next to it that I am pretty sure is a NG burning power plant. Many of them are on the fringes of major cities, but I'm sure that the vast majority of residents have no idea what they are.
The gas plants themselves were sitting far out on the open prairie when they were built, and when the cities came and gobbled them up, the city people didn't have the choice of shutting down the gas plant. They were grandfathered into the zoning regulations. Once people have gotten used to living close to a big gas plant with its huge red-and-white striped flare stacks, all its chrome pipes and towers, and a big yellow mountain of sulfur beside it, an obscure gray building next door to doesn't look that menacing.
Most of the gas plants I worked at had their own backup power systems, and many of them would disconnect from the grid and run on their own generators during lightning season (they couldn't afford a plant upset due to a lightning strike on the lines), but the innocuous-looking power plants sitting next to them are a new feature.
@light299
I doubt that this is the case overall across the industry in most countries. For some sectors maybe but not in general. In the Netherlands were I come from the energy intensive industry has the lowest electricity price achieved bargained directly with the Ministry of Economic Affairs. Your point also doesn't explain the very clear difference in tax structures.
Point on natural gas electricity consumption in the U.S. increasing well taken, worth taking a look at.
I question the validity of this analysis. Countries that are clearly different as to land area, location, resources and such are being compared on nominal electricity cost.
It seems to me that only thing clearly common among the countries is people. Yet the article does not even mention the per capita income for the various countries which obviously affects the real cost of electricity to consumers in each country.
Here is a list of per capita income in dollars for countries:
http://www.nationmaster.com/graph/eco_gro_nat_inc_percap-gross-national-...
From the article's list we note that both the United States and
Kazakhstan have low consumer electricity rates. But the United States has a per capita income of about $33,000.00 while Kazakhstan per capita income is about $1,300.00.
This is a big difference. I submit that the real cost of electricity is not cheap for a Kazakhstan consumer even though he pays about a third the rate Americans do.
His per capita income is only about 1/25th of an American's. So in real terms he is paying a higher proportion of his income for electricity than an American. If we divide 1/3 the American rate by 1/25th the American income, we find that Kazakhstan consumers experience a real cost of electicity about 8 times higher than an American.
I have chosen this example to show a major flaw in the article's analysis. The nominal price of consumer electricity can not be compared from country to country because it is not countries that experience this cost but consumers in each.
There are significant differences in per capita income among the countries listed. The amount of consumer income that goes for electricity is the valid metric for comparing the true cost to them for this form of energy.
Nominal cost by country does not mean much and ascribing that cost to the form of energy used to produce electricity is a stretch without considering the varying ability of consumers to pay in each country.
Good points, but careful not to confuse issues. One issue is the cost of electricity and how this links to how it is "made". Another issue I raised with Rembrandt when reviewing this was the socio economic structures of countries and how their electricity industries were organised. Your point about per capita incomes moves on to affordability. Would be interesting to know on your list where the cut off is for countries that have a stable grid where virtually everyone is connected and those that are not.
Using the average per capita income is a bit deceptive, as a small number of very high income earners inflates this figure. If you used the median income, you would have a much more meaningful indicator of the relative cost to the residential customer.
In discussing the relative cost to income, it is the lower portion of income earners that are important - once you get above a certain income level, where you have any amount of disposable income, the cost of electricity is not really important. It is an essential along with water - you just pay the bill, and cut back in other areas (driving, eating out, new cloths etc) if you need to.
Thanks for this excellent posting, which has data I was looking for, as I am looking in which countries there is already grid parity for photovoltaics (i. e. the price of electricity from photovoltaics is the same or lower than the price of power from the public grid).
The electricity price of Mexico looks surprisingly low to me. As far as I remember this depends very much of the region and the type of consumer, and in many places the price is much higher (above 20 cents; unfortunately I don't have the data and source at hand right now) - therefore people are beginning to install PV modules in order to save money - without any subsidies.
(BTW: In Germany, the government expects PV grid parity to start in 2012. According to the numbers shown here in quite a few countries (Italy, Spain, El Salvador) are supposed to have already grid parity.
According to a study financed by the German Industry Association BDI in almost all sorts of industries the share of total production costs is below 2% (except for a dozen of specific types like the Electric arc furnace production of steel, the production of aluminium, paper, some chemicals and a few more). So I don't think that electricity prices play such an important role in competitivity or in decisions about the location for industries - except for the mentioned special industries, which in fact (according to the industry) employ several thousands of people in Germany and thus have a strong lobby here.
In order to understand these numbers one shouldn't only look at taxes but also at subsidies, as in many countries electricity or its infrastructure or fuels are subsidized.
In order to understand these numbers one shouldn't only look at taxes but also at subsidies, as in many countries electricity or its infrastructure or fuels are subsidized.
Indeed, like solar in the countries mentioned above. Solar has only reached "grid parity" when, in the absence of subsidies, it gets built in preference to coal, NG etc - I don't see that happening yet.
The price of domestic electricity in Mexico varies by average summer temperature to allow for cooling to humane levels. The prices are subsidised and subject to IVA (Value Added Tax), previously 15% now 16%. If you use less electricity you get rewarded by a lower rate but if you use too much you are punished by a higher rate that is equal to the cost of production.
Using June 2009 in Zone 1B (mine) you are charged (in Pesos)
if you use less than 225 KWHrs
0.593 for the first 125 KWHrs
0.694 over that
if you use more than 225 KWHrs
0.593 for the first 125 KWHrs
0.890 for the next 75 KWHrs
2.353 over that
(the above break points are different in summer/winter)
If you use too much you get charged to high consumer DAC rate
68.73 fixed charge plus
2.599 for ALL KWHrs
Work with about 12 pesos to the US dollar, 10 to the Canadian and 20 to the GBP
Source: http://www.cfe.gob.mx/casa/ConocerTarifa/Paginas/Conocetutarifa.aspx
(the site seems to have just gone down, probably forgot to put a shilling in the meter)
If you are on the lower rates, saving electricity ceases to be cost effective. If you are on the higher rates then there are savings to be made. As I understand the feed in system you can only use it as a credit against electricity used.
NAOM
Work with about 12 pesos to the US dollar, 10 to the Canadian and 20 to the GBP
At this point in time, the exact exchange rate is 12.43 pesos to the US dollar, 12.34 to the Canadian dollar, and 19.69 to the British pound.
Both the Canadian and Australian dollars are now trading at $0.99 American. For most practical purposes you can use 1 USD = 1 CAD = 1 AUD.
Trouble is the rates change all the time, you'd need to take the June 2009 figures to match the prices I quoted though yours would be good for the current prices. I do seem to have under rated the Canadian dollar, 11 would have been better. I did take, more or less, the street price rather than the interbank rate as it probably a better match for quick and dirty personal comparisons rather than accurate industry figures, you would need to go through all sorts of spot data to get that.
NAOM
If you want to know what the current exchange rate to Canadian dollars are on any given day, just use the Bank of Canada Exchange Rate Calculator . It tracks about 50 different currencies, and its rates are officially recognized by the Canadian government. It will give you rates for any day for the last 10 years.
Other than that, there are links to sites with more comprehensive exchange rate calculators.
While I like the purpose of this study, it is too bad that there are a few "island" countries missing from the analysis. Examples would be Iceland, New Zealand and Australia, which, respectively rely primarily on geothermal, hydro, and coal . They are not interconnected to anyone else, so then you get an almost pure "play" on their main electricity source, not influenced by buying from or selling to neighbours.
You could also take the island concept a step further and look at Hawaii, which is equally not interconnected to to anything, and relies almost entirely on petroleum for electricity, and, not surprisingly, has very electricity rates.
Countries like Norway and Sweden that have flexible hydro can profit greatly at the expense of neighbours that don't, like Denmark and The Netherlands. The electricity prices reflect, at least to some extent, the advantage of being in an interconnected market - hydro is not as valuable to a country if you don't have a desperate one next door wanting to buy it, and wind is even less valuable if you can't sell the excess to someone else that has the ability to store it.
My Australian Electricity Bill shows approx
Normal Household Tariff 20 cents/kWh (incl GST)
Supply Charge 60 cents per day
Australian generation is approx 80% coal and 15% gas
An idea that has come up occasionally on this site and others interested in energy and the economy is to replace fiat currency with currency based on energy. This would be tied to a steady-state economy model.
I imagine a currency called the Kwat, which would be accepted by energy providers for the purchase of 1kwh of energy. The number of Kwats allowed in circulation would be equal to the number of kilowatt hours that could be generated in a 10 year span of time pegging energy generation at 10% of the economy, putting energy companies (or more likely government run public utilities) in charge of money creation instead of banks (which under a steady-state model would be government run as well).
So based on the data above, a Kwat would be worth about 15 cents US on the world market today. In the next decade of energy contraction, watching the value of the Kwat shall be of interest to me.
Simply think at Benjamin Franklin and Pennsylvania monetary system (see "Early American currency"), they guaranteed the currency with what seemed to be the most important for a living and for an healthy society and state: real estate immovable.
Now, we are agreeing that ENERGY is the most important for a living. Then, switching to a KWAT as you propose (you are not alone) is switching to a past and fruitful period in the american history indeed.
Numerous comments (starting with http://www.theoildrum.com/node/7215#comment-750541) have stated that Ontario has no additional hydro-electric potential. This is not true. There are few mega projects, except in the far North. However, there are thousands of micro-hydro sites that can easily be tapped. Most of these micro-hydro sites are near the existing electrical grid, and can therefore be easily attached to existing infra-structure. Millions of micro-hydro sites would be close to a James Bay mega project in generating capacity. See http://www.lio.ontario.ca/imf-ows/imf.jsp?site=renew_en and http://www.small-hydro.com/index.cfm?Fuseaction=countries.country&Country_ID=13 that provides maps on these site locations.
My first assignment with the Ontario Ministry of Energy was to draft a publication entitled "Streams of Power" which was intended to serve as a how-to guide for micro and small hydro development in Ontario.
Cheers,
Paul
The following relates to electricity price in S.W. Ontario. The system is complex. I will report details of my Sept./Oct. bill (35 days).
1) we have two periods in the year - summer(May 1 to Oct.31, and winter.) The peak time in summer is from 11am to 5pm; Mid-Peak from 7am t 11am, and 5pm to 9 pm. Off peak for the rest of the day , it also includes Sat. and Sun. and holidays. In winter ,Peak times are from 7am to 11am, and 5 pm to 9 pm; mid peak time from 11am to 5 pm. Off peak times same as summer.
2) Peak rate is 9.9 cents/kWh, Mid-peak is 8.0 cents/kWh, and off peak is 5.3 cents/kWh.
We pay for transmission line losses at a rate of 8.5% of the total metered consumption.
For the metered period of 35 days in Sept./Oct. we used 559 kWh, which when multiplied by the factor 1.085 (to account for line loss) amounts to 606 adjusted kWh.
This was made up of 71kWh @ 9.9 = $ 7.03
196.65kWh @ 8.0 = 15.65
339.61kWh @ 5.3 = 18.0
Delivery Charges 46.26
Regulatory Charges 4.42
Debt Retirement 3.91
Tax @ 13% 12.26
Total to pay 106.53
Average cost of electricity I used 19.05 cents/kWh. We try to avoid using power at peak times.
Details of other charges can be obtained from hydroonenetworks.com
Note: consumers can purchase power on contract from retail distributors, or from Hydro 1. It is my experience that power purchased from retail distributors is more expensive than that purchased from Hydro 1.
John S.
The general comparisons seem helpful but I would posit the differences between Poland and Kazakhstan are land locked coal supplies.
If I look at the US, Powder River Basin coal at mine mouth is about 70 cents/MMBtu.
Appalachian steam coal on the other hand is about $2.60/MMBTu.
Poland and West Virgina have easy access to seaports and international markets. So their domestic coal costs will track with global prices.
Kazakstan and Wyoming are land locked. Heavy long distance rail is the only access to international markets and the cost of moving coal in 2-3cents/ton mile.
The following is information on the energy used in my home, provided as a comparison to the information provided by Hereinhalifax (above).
I designed and built my home in 1984/5 with the long side (about 60 Ft. (containing the living rooms) facing due south). It is a single story home with full basement. The total first floor area is 195 sq.m. Two people live in this home.
The top 4 ft. of the basement is externally insulated with 4inches of extruded styrofoam; the lower 4 ft. with 2 inches of the same. The stud walls are raised an extra 18 inches to enable 18 inches (R60) of fiberglass insulation to be placed on the ceiling. The stud walls are insulated with 3 separated layers (to stop 'short circuiting' air currents) of fiberglass insulation (total R36). Windows are triple glazed. All interior walls insulated to R12 to allow heating of occupied rooms only.
Electricity is used for base-board heaters, (thermostats in each room) water heating, cooking, lighting etc. Natural gas became available in 1995, and supplies a stove in the basement rec. room. This stove burns at the rate of 7000 BTU's /h when it is turned on. Heat from this appliance is allowed to rise to the upper floor area (via open doors) where it provides background heat to the first floor; area. The natural gas consumption for the 2008 year was 853 cu.m. (from the gas bill). One cubic meter of nat. gas has the heating equivalent of 10kWh of electricity, so the nat. gas consumption is equivalent to 8530 kWh of electricity = 23 kWh/day. (95% of this is used during the winter months November to April).
During the summer months the minimum electricity consumption is 15 kWh per day, and this will be related to hot water, cooking, laundry, and appliances (mostly fridge and freezer). In the period Oct. to Mar. 2008 we used 4670 kWh of electricity (= 32 kWh per day)(Data from the electricity bill). Subtracting 15 kWh per day for water heating etc. this leaves 17 kWh per day for heating. If I assume heating for 6 months at 17 kWh per day, 3 months at 8 kWh per day and 12 months at 15 kWh/day for hot water etc. my total usage is 5475+730+3102 = 9307 kWh of electricity over the year. Which equals 25.7 kWh/day.
Now add the nat.gas consumption and the average daily energy consumption is approx. 49 kWh/day.
This was my first (and only) attempt to build a home. I found that the most difficult task was sealing against air in-leakage. I feel sure I could do better if I did it again!
John S.
Several Comments have been made about the supply of electricity, and its future availability, in Ontario. I would like to present what I believe is more up-to-date information.
I sent comments to the Planning Dept. of my local Municipality (I live east of Toronto), dated 12th. Nov. 2010, with the objective of apprising them of economic effects of possible energy shortages that may come about in the next 2 to 5 years. (The Official Plan of the Municipality is being revised. It covers the period up to 2031 and does not mention the economy!) My facts were obtained from the websites of the Ontario Power Authority (www.powerauthority.on.ca) and the Independent Electrical System Operator (www.ieso.ca). Some of the information is set out below:
1) Ontario shut down 2000MW of coal fired electrical generating capacity on Oct.1st.2010. The Prov. Govt. has plans to close the remaining coal fired plants by 2014. There is a possibility that two
of these stations will be converted to burn biomass (wood pellets?). I think that this would add about 600 MW electrical.
2) The two currently operating reactors (approx. 1100 MWe) at Pickering 'A" G.S. will likely be shut down by 2018. (Two are already shut down.)
Also the 4 units at Pickering 'B' G.S. (approx.2200 MWe) will probably be shut down by 2023.
3) There are reasonably firm plans to refurbish the four reactors at Darlington GS (3000 MWe), beginning about 2014, with completion around 2023 or 2024. This is expected to extend the lifetime of
each unit by about 25 years.
4) There is the expectation that 2 or 4 new reactors will be built at Darlington GS. But so far there has been no announcement of the type of reactor, or the potential start date. (I think that the
Prov. Govt. may choose to build gas fired stations because they are cheaper to construct, and can be built in a fairly short time period.and the Province is running a deficit!)
5) Two units at Bruce GS 'A' (1500 MWe) are currently being refurbished and should be on-line by 2012. The two units which are currently in service will then be taken off line and refurbished. They
should be in-service again by 2016. Thus, the avaiable power from Bruce GS ('A' and 'B') should remain at 4500 MWe until 2016, when it should increase to 6000MWe. The refurbished reactors should be
in service for another 25 years (till 2035 or so).
6) Renewables include wind, photo-voltaics, hydro,bio-gas and bio-mass. The total currently installed wind capacity is 1250 MW with another 400 MW in construction.
As of June 2010 the OPA has contracts for 6622 MW of renewable energy including Hydro), 6700 MW of 'clean energy' (Nat. Gas) and 3000 MW of Nuclear (Bruce 'A' referred to above)
7) The IESO considers supply availability to be OK for the next 18 months, but by 2018 supply will be approx. 20% below required levels. If we add currently committed new capacity, we will have about
+1% of the required reserve capacity, which is 20% of the peak demand, expected to be 23000 MW in 2018.
My opinion is that in the period 2016 to 2020, Ontario could be about 5000 MW below its required reserve capacity. This need not be a crippling deficit if a concerted effort is made to conserve electricity, and to improve the efficiency with which it is used. There is also the question of the economy, if we are in depression then there could well be a much reduced peak demand. And then there is population - the official plan requires that the municipality plan for an increase in population by a factor of two by 2031! So who cares to make a forecast?
John S.
Please note that these numbers do not account for rate schedule structures that move electricity costs into other sectors. For example, in Arizona, the structures of the utilities' rate schedules have long shifted electricty costs into the captive small business sector where they are, in turn, passed through to the consumers of goods and services. Thereby, effectively creating a hidden energy tax.
http://ratecrimes.blogspot.com/2009/06/sun-belt-rate-plan-survey.html