The CCRE Commentary publications are authored by recognized experts and are intended to present fact-based, reasoned opinions and points of view about the some of the challenging issues facing the energy sector. These commentaries, each focused on a single subject, are aimed at extending the value of the CCRE's existing network and conference discussions.
They are also meant to stimulate a broader and more inclusive public forum to help advance a fuller understanding of available clean, reliable energy system options for the future. As each Commentary is "electronically published it becomes part of the CCRE's Publication Library. These are available for free and can be downloaded from the CCRE's website. As each Commentary is released a copy is also emailed to our subscriber list and to key stakeholders in government, agencies, institutions and organizations involved in the energy sector.
If you have attended a CCRE event or received an email communication from us in the past, you are on our subscriber list and will automatically receive copies of CCRE Commentary. Please contact us if you would like to be added to the list. And of course unsubscribing can be requested just as simply.
Do you have an opinion, information or analysis which you would like to share with the world? Please consider doing that by authoring an article for an upcoming CCRE Commentary. More details are provided in the Author Guide but the first step is to contact us.
In "A Truly Smart Electricity Price Plan for Ontario" author Paul Acchione outlines how Ontario's existing smart metering and renewable electricity generation investments can work together to reduce consumers' costs. Based on an analysis made by the Ontario Society of Professional Engineers (OSPE), the author shows how improved rate design could make better use of existing generation resources by reducing both waste and "fire sale" exports.
Acchione describes how a rate design that better reflects the time-varying availability of renewable and clean baseload electricity would reduce consumers' costs and GHG emissions from gas-fired generation. Consumers' savings would cover the cost of control equipment that would automatically adjust their household electricity use to track the grid supply.
A 44-year veteran of Ontario's power generation industry, Paul Acchione is now a Management Consultant at Market Intelligence and Data Analysis Corporation of Toronto. He was President and Chair of OSPE and previously worked for Ontario Power Generation and Ontario Hydro. He is currently a member of OSPE's Energy Task Force and the Canadian Standard Association's Advisory Council on Renewable Energy.
Paul Acchione, P. Eng. | 416.570.6070 | [email protected]
In "Apples to Apples: Fixing Ontario's Electricity Price Mismatch" author Greg Baden analyzes why Ontarians pay as much as $60 per megawatt-hour (or 6 cents per kilowatt-hour) more for their own electricity than do those in surrounding US states who import from Ontario. He finds that Ontario's export pricing practices assume all markets are similar but in fact Ontario's market structure is significantly different to its neighbours.
Baden confirms his earlier recommended remedy of equalizing in-province and export prices by changing the monthly Global Adjustment calculation to an hourly one and adding it to the real-time market price to give a "true" hourly price. He then goes on to recommend that Ontario align with its export markets by giving generators and customers the option of committing to prices and quantities in a Day-Ahead market as an alternative to the Real-Time market. Ontario is unique among the regional electricity markets into which it exports in not having a Day-Ahead market - analogous to selling apples in a marketplace for oranges.
Greg Baden has over 30 years of experience in the gas and electricity industry. He founded BECL and Associates in 2006 prior to which he was vice president for electricity sector business development for Shell Trading/Coral Energy. With Shell, he was responsible for the commercial arrangements of Ontario's Brighton Beach power station and now advises clients in both Ontario and Alberta on energy markets and commercial matters.
Greg Baden | 403.771.5887 | [email protected]
In "Rethinking Ontario's Long-Term Energy Plan" author Marc Brouillette outlines how Ontario's 2013 long term energy plan will not achieve its stated objectives. His analysis using data from the plan itself shows that Ontario is locking itself into a higher GHG future at higher cost and with lower economic benefits than the 2010 plan which it replaces.
Brouillette finds this outcome is the result of increasing the proportion of wind power in the generation mix which requires a parallel duplicate investment in gas-fired generation to ensure reliability. His analysis shows that this supply combination pushes out nuclear generation which produces no GHG, has a lower life-cycle cost and creates significant spin-off benefits for the Ontario economy.
Marc Brouillette is the principal consultant at Strategic Policy Economics and has been advising provincial and federal government ministries, agencies, and crown corporations for over 20 years on issues in the aerospace, energy, and gaming sectors. He specializes in matters that involve technology based public-private initiatives in policy driven regulated environments.
Marc Brouillette | 416.564.4185 | [email protected]
In "Ensuring Customers Benefit when Electric Utilities Combine" author and investment banker Don Carmichael finds that Ontario electricity customers are missing out on savings when their distribution utilities are amalgamated into larger and more efficient ones. The promise of reduced electricity rates underlies the Ontario government's endorsement of recent recommendations by an expert panel to combine Ontario's approximately 80 local electric utilities into some 8-12 larger regional distributors. Carmichael finds that a provincial tax on utility sales and debt-financed acquisitions by provincially-owned Hydro One are inflating acquisition process and diverting new-found efficiency savings from customers to shareholders and lenders.
If policy makers do not want to remove these impediments to reducing rates, the author suggests a carrot-and-stick alternative which includes a temporary automatic approval process for distribution utility mergers that involve only share swaps and can guarantee customer savings. Following that, rates for all distribution utilities would be benchmarked against the most cost efficient utility in the region. During this period, the Ontario Energy Board's existing full regulatory approval process would continue to apply for the purchase or sale of a utility, but with a new proviso that the transaction must guarantee meaningful rate reductions for customers.
Don Carmichael | 416.578.6166 | [email protected]
In "Overcoming Public Opposition to New Electricity Infrastructure Projects" author Emay Cowx outlines the importance of understanding the values of stakeholders when building acceptance for electricity projects. Traditionally, project developers have focused on technical and financial expertise but the soft sciences have much to offer in gaining public acceptance.
The many recent cases where the public has rejected both fossil and renewable electricity generation projects show that economic arguments alone are no longer adequate. A closer look reveals that conducting uninformed and loosely managed public project consultations can do more harm than good. Poorly designed consultation processes increase "social friction" and cause latent community concerns to coalesce into hardened active opposition.
Cowx recommends that to build social acceptance, project developers move beyond education and awareness activities and engage in a collaborative dialogue. To enable such productive two-way discussion, developers need to understand stakeholders' values and that requires investing effort in upfront research. The result will be a platform from which stakeholders' understanding of new electricity infrastructure will be improved through a mutual exploration with the developer of risks, benefits and tradeoffs.
Emay Cowx | 416.809.6653 | [email protected]
In "Reforming Ontario's Electricity Distribution Sector" author David McFadden, one of the members of the government-appointed panel that recently reported on this matter, gives some of the background behind the panel's recommendations to consolidate Ontario's 80 separate electricity distribution utilities into eight to 12 larger regional utilities. This would bring Ontario in closer alignment with not only other provinces but, indeed, worldwide practice. He points out that stakeholders advised the panel that the status quo is not an option for meeting customers' needs in a future that will look very different from the past.
David J. McFadden, QC | 416.369.7243 | [email protected]
In "Hope is not enough: Inspiring better energy policy" author Steven Lightfoot concludes that setting intelligent energy policy cannot be based on "hope".
In his commentary Lightfoot critiques the concept of "applied hope" made popular by environmental guru Amory Lovins, and advocate of hydrogen fuel. Lightfoot contends that Lovins's "applied hope" of a hydrogen-powered vehicle is a "pipedream" when measured against the practical challenges of producing hydrogen in sufficient quantities to become a practical fuel system.
Lightfoot observes, "Unfortunately, hope that simple solutions exist to complex energy challenges is driving simplistic and unrealistic energy policy around the world. We should let hope inspire us, but not let it inform the rational process we require to solve problems."
Lightfoot says what is needed is policy-makers who don't rely on hope and are encouraged "to ask the tough questions, to insist on quantification of information for comparative purposes, to seek out fact-based information and to use reason and experience when making decisions."
Steven Lightfoot is based in Montreal and continuing an extensive career in gas turbine engineering now works in the design, construction and commissioning of electricity generating plants including district energy and waste-to-energy projects. Through his frequent writing and speaking engagements he also contributes to the public discourse on energy policy and its connection to both the environment and the economy.
Steven Lightfoot | 514.830.7838 | [email protected]
In "Putting the Pieces Back Together: "True Pricing" for Ontario Electricity" authors Greg Baden and Lucia Tomson outline some of the unintended consequences of the Global Adjustment (GA) including undermining the rewards for consumers to conserve and avoid peak use and exporting electricity at prices barely half of what Ontario industries pay.
Baden and Tomson suggest that by calculating an hourly GA similarly to the way the hourly market price is calculated, the "true price" of electricity would be restored. That in turn would allow exports to be priced the same as Ontario consumption and would better reward residential, commercial and industrial consumers who conserve and avoid peak use.
The GA is the charge on electricity bills which covers the long term costs of generation of all types - wind, solar, gas and nuclear - that the generators do not recover when competing in the electricity market. The authors explain how the GA has altered competitive behaviour in a way that has reduced market prices and increased GA so that today GA represents more than half consumers' cost of electricity.
Ontario's Auditor General has indicated that trends will continue and that "By 2014, the GA is expected to be six cents per kilowatt hour - almost two-thirds of the electricity charge - and will be almost two times more than that year's projected hourly Ontario energy price."
Because as a monthly charge, GA is not paid on exports which are based on hourly prices, customers outside Ontario can buy Ontario-generated electricity at less than half the price paid by Ontarians. And because GA is established as a monthly flat rate, it swamps the hourly price variations which reward conservation and avoiding peak-use. Baden and Tomson have determined that Ontarians underpriced exports by about $440 million in 2011 and their figures show losses on exports of about $1.3 billion over the last 4 years.
Greg Baden, Author | 403.251.1250 | [email protected]
In "CANDU at Darlington: Securing Jobs and Energy for the new Economy", the author Don Lawson makes a strong case for negotiations to start immediately for ordering Enhanced CANDU 6 reactors to provide a safe, secure and reliable source of electricity to replace the reactors at Pickering which will end their useful lives shortly after 2020. Buying CANDU will utilize local manufacturing expertise, and secure existing highly skilled jobs in the nuclear industry in Canada. CANDU technology has the added benefit of being fueled by natural uranium from Canada while all other nuclear technology options required imported enriched fuel.
Lawson concludes "deciding to build the Enhanced CANDU 6 at Darlington is a sound way to maintain a secure electricity supply for Ontario and … it ensures also that an indigenous nuclear industry will remain available to supply Canada's energy requirements."
Don Lawson | 905.845.9988 | [email protected]
This issue entitled "Keeping the Baby, Throwing out the Bathwater" proposes replacing Ontario's Feed-in Tariff Program (FIT) with a Distributed Generation Tariff (DGT) Program. The author Dr. Jan Carr argues that a DGT model will better protect customers from rising prices by eliminating multiple price categories and the excessive costs required under the FIT Program. A DGT Program will Dr. Carr contends benefit consumers, communities and the environment while facilitating the development of worthwhile small-scale generating projects.
Jan Carr, Editor CCRE Commentary | 416.319.8090 | [email protected]
Council for Clean and Reliable Electricity (CCRE) launches a commentary initiative with the first review focusing on Ontario's FIT Program. The CCRE is a forum for reasoned analysis on subjects related to electricity policy. In the past the Council has sponsored conferences on clean coal technology, nuclear power, governance models in the electricity sector and biomass energy opportunities.
This new CCRE Commentary initiative is intended to stimulate debate on current electricity public policy. The first Commentary entitled "There's a Baby in the Bathwater" tackles Ontario's new Feed-in Tariff Program (FIT). Dr. Carr, a respected leader in the Canadian electricity sector, contends that while good in theory the FIT program is economically unsustainable in practice.
Jan Carr | 416.319.8090 | [email protected]