STIRLING: Near-blackout crisis spawns legion of armchair electricity experts

Over the weekend, Albertans held their breath and powered down appliances every night, hoping the electrical power grid would not go into rolling blackouts. The Alberta Electric System Operation (AESO,) had declared Grid Level 3 alerts, meaning there was little reserve capacity in the system. Any sudden surge in demand might put the system into controlled blackouts. Albertans cooperated as they realized the risk in a minus 40C/F polar vortex, that blackouts would force families to deal with health and safety challenges, their children being frightened in the cold and dark, the potential for frozen pipes or worse. The AESO indicated their plan would be ½ hour rolling blackouts in an equitable pattern so that no one area suffered more than any other — but the crisis was real.What was unreal was the number of armchair electricity experts who suddenly appeared on social media. Many misread the technical listings on the AESO power generation chart to claim that ten natural gas generators were offline, thus spawning wild conspiracy theories that power was being held back to spike prices. Most thought, like Pembina Institute, you could just add more renewables or battery storage and all would be well.Wrong. And wrong.Here's what professional engineers say, who work in the Alberta power generation sector and others who analyze energy issues. I’d like to calm some of those rumors with facts and insights from these people, some of whom actually keep the grid powered up.First of all, there is such a thing as economic withholding. This term relates to the manner in which market participants (generation companies) can offer their supply at certain times and certain prices. But that is different than physically withholding supply. Economic withholding is a perfectly legal price-setting mechanism that does not affect reliability. Their method is to select the lowest price offered first and in merit order after that. In good times when it is windy and sunny, since wind and solar do not have to buy fossil fuels to run their plants, they can set a bid at ZERO dollars! So, that price will be accepted and conventional power plants will basically have to run at a loss because it costs them real money to operate — they must buy fuel to run their plants.But that's just in good times.However, economic withholding is not the same as physical withholding. To keep the Alberta power grid operational, all the time, if power is needed from a power generation plant that is physically able to produce, it MUST produce, period. Of course, power plants that are off-line for maintenance cannot produce power; nor can solar plants when the sun is not shining or wind plants when the wind is not blowing. The only circumstances under which power can be physically withheld is when a plant is not capable of producing it or if environmental damage or human safety are at risk. Fines for physical withholding are HUGE; they can be up to $1 million per day plus disgorgement of any economic benefit from violating the electricity market rules. A company that fails to comply with an order of the Alberta Utilities Commission (AUC) can be fined up to $3 million per day. This is set out in sections 63 and 64 of the AUC Act. In 2015, a market participant was fined $56 million for breaking market rules related to physical withholding.So, what about those sky rocketing power prices, I asked my engineers?One critical issue is being missed entirely because it’s politically incorrect to say anything negative about renewable generation and that is that wind and solar generators are significant contributors to increasing power prices. When the wind blows and the sun shines, they reduce the energy sales and revenues available to the natural gas and remaining coal units in the province. Then, on cold windless nights, the wind and solar farm owners shrug their shoulders and say that reliability is someone else’s problem.All generators have fixed costs that must be covered if they are to stay in business. As more wind and solar generators come on line, they take away some of the revenue that used to be available to thermal (coal and natural gas) generators. In a normal competitive market, consumers benefit when lower-cost suppliers out-compete higher-cost suppliers.The problem is, when wind and solar disappear, as they have done regularly during the cold snap (for example, at 23:59 on January 12, solar was zero (of course) while wind was producing a miniscule 39 MW out of an installed capacity of 4481 MW), the gas and coal generators are all that’s left. So, consumers have a choice. We can complain and demand that natural gas and coal generators not be allowed to earn high prices when the wind is not blowing and the sun is not shining, in which case those plants will go out of business and our children will freeze in the dark; or we can stop listening to ideologue politicians who haven’t got a clue how power systems work. We must face the reality that adding thousands of megawatts wind and solar generation to a power grid is *** NOT *** cheap and does almost nothing to support reliability under extreme weather conditions.In fact, the True Costs of Wind and Solar to Alberta are staggering.A further critical factor that consumers and policymakers CAN do something about, is this.A major factor in the cost competitiveness of wind and solar is that they receive massive government subsidies. As Robert Lyman explained in his report “Broken Promises” they also receive preferential treatment on issues such as special investment/tax credits and the environment, while their thermal competitors are carbon-taxed and regulated to death. If we ‘axe the tax,’ it would remove a huge chunk of the financial incentive to build renewables, which simply cost you more and more for a parasitic system on the grid that is not there when you, the consumer, need the electrical power. Then we must equalize the playing field by axing those other incentives. Make it truly a free market and then let’s see how things operate.I like to say that renewables = billions for blackouts.One final point.Alberta consumers did not complain in 2015, 2016 and 2017 when the revenues conventional power generation companies could earn from the market were far below the levels needed to support new investment. In fact, a 2012 study by Morrison Park Advisors for the Market Surveillance Authority showed there was no interest on the part of investors for building wind or solar in Alberta because power prices were too LOW. That was when we were running almost all coal (a vast resource that Alberta owns) and natural gas!Alberta allowed ~4,500 MW of wind and solar to be built without building equivalent conventional, dispatchable power plants. Now the investment market for these reliable generators looks ‘dark’ (pardon the pun) as Premier Smith has pointed out many times, because of federal Clean Electricity Regulations. The threat by Minister Guilbeault to throw Premier Scott Moe in jail for keeping his people and ours alive during brutal winters because of coal and natural gas fired generation is surely a turn-off to potential investors and operators.Solutions? Axe the carbon tax. Axe the special treatment for renewables. Make them pull their own weight in terms of carrying the burden of costs for reliability — or pull the plug on them.After years of research, numerous scientific studies show that carbon dioxide is not the driver of global warming. There is no climate emergency, according to the more than 1,800 scientists and scholars of CLINTEL. So, let’s get off the decarbonization bandwagon before someone gets hurt or killed. This polar vortex was a good warning. Let’s not fool around and find out anything more the hard way.Michelle Stirling is the Communications Manager for Friends of Science Society

STIRLING: Near-blackout crisis spawns legion of armchair electricity experts

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