Mr. Chairman Gabor, and members of the Board, Ms. Kapitany, Dr. Grant and Ms. Hamilton, thank you for listening to our presentation – it is quite basic compared to the learned discussions that have preceded us.
The Manitoba Energy Council evolved from the Bipole III Coalition to provide independent thinking on energy in Manitoba.
Our presentation centres on pointing out that the saved energy Efficiency Manitoba anticipates will not be realized.
A very thorough three-year plan by Efficiency Manitoba, but there are serious issues the Public Utility Board must address. We have reviewed this plan, and many of the transcripts of experts from the intervenors and their cross examinations – But: This presentation adds to the major considerations the PUB must address in its report and recommendations to the Minister.
We have not seen whether the need for Keeyask to serve Manitoba’s electric load has been significantly changed from 2040. We understand that beyond 2025, export contracts to the US include contract sale to Minnesota Power of 250 MW to 2035 with the MMTP interconnection. There is an 80 MW contract with Basin Electric that will extend to 2028. The seasonal diversity exchange of 200 MW with Great River Energy will extend to 2030, possibly with no net energy exchange over 1 year. Hydro will be able to benefit from short term spikes in the spot market, but without any firm contract, they will be at the mercy of this market. We appreciate that a 215 MW firm contract with SaskPower is eminent in 2022 for a total of 315 MW with the proposed new interconnection. This is quite smaller than the interconnection capacity to the US, particularly with the Manitoba Minnesota Transmission Line in operation.
Although 8 cents/kwh seems to have been accepted by EM and others as a value of the energy for Manitoba Hydro to make use of, this is too high. This electric energy surplus generated through increased efficiency and because it will not be needed for use in Manitoba, 8 cents /kwh is overly optimistic. It will end up mostly to the US because of tie-line capacity The NRGSTREAM – North American Energy daily provides electric market energy in the following categories in $US/MWh. An example for 18 Jan 2020 for the day before (Friday the 17th) with MISO Minnesota. For example, the daily average hourly peak for this past Friday is 1.86 US cent/kWh or 2.43 Canadian cents/kWh.
The MISO Minnesota LMP electric energy market prices form the basis of this analysis for using the spot market that Manitoba Hydro exports most of its surplus, non-firm, non-contracted energy to, which over the period 2010 to 2019 has not been increasing.
Since the saved energy from efficiency is non-firm, it may be stored in the hydroelectric system of Manitoba Hydro and released into the export spot market at the best possible price opportunities. Hence the selection of the MISO Minnesota daily average hourly peak for this assessment because of large tie capacity. Unlike the falling spot market prices of MISO in real dollars, Manitoba Hydro’s electricity rate increases are rising above Manitoba’s cost of living increases - an indicator that Manitoba Hydro is unprofitable.
The latest report on MISO market performance shows that when averaged over all of MISO, their market prices are dropping. Unfortunately for Manitoba, the Minnesota energy prices are lower than the MISO average.
What will Manitoba Hydro receive from EM’s stated annual saving of 379 GWhr? A substantial loss as this slide shows. The obvious way forward is to use this saved energy from the Efficiency Plan more productively.
How can Efficiency Manitoba expand their scope to generate economic growth to the province? There is the challenge in reducing consumers consumption of electricity to save on their Hydro bills, that the additional losses Manitoba Hydro accumulates will counteract a portion of these savings.
As indicated in the Efficiency Plan and in the ACT, in the future there is a way forward that can address this loss to Manitoba Hydro through Regulation. We are aware from transcripts that there is some sentiment that the PUB recommends to the Minister that only the first year of the Plan should be approved and that the second and third years be re-submitted. This would be an opportunity to recommend Regulation to allow Efficiency Manitoba to carry out demand side management initiatives with respect to fossil fuels in the transportation sector.
As an example of the falling prices of wind generation, the Canadian Wind Energy Association reports (https://canwea.ca/wind-facts/affordable-power/): “A competitive electricity-supply auction in Alberta yielded the lowest-ever rate paid for wind energy in the country, a weighted average of $37/MWh. Similarly, in October 2018, a competitive procurement in Saskatchewan resulted in an average bid price of $42/MWh, with the winning bid coming in below $35/MWh.” Keep in mind there is additional cost in balancing, achieved with wide area transmission and/or storage and/or simple cycle gas turbines. Nevertheless, this low cost of renewable energy is competitive to Manitoba Hydro’s export markets.
Electricity is the “new energy”. It is required for economic development. But this can only happen if the available electricity is low cost to support commercial and industrial profitability. Independent electricity generation such as through solar panels with batteries will add increasing financial pressure on Manitoba Hydro. This conflict for Efficiency Manitoba must be resolved by Regulation.
This Action item indicates that Efficiency Manitoba will look into what agencies will be able to support a way forward to “accelerate electrification”. What has been done in this regard?
There is much can be done to increase the provincial economy if there is a framework of support which EM and Hydro could help drive. For example, Électricité de France S.A (EDF) CEO Jean-Bernard Levy stated: “We want to become the uncontested leader in electric mobility in Europe by 2022.” https://uk.reuters.com/article/uk-edf-renewables-autos/frances-edf-wants-to-dominate-electric-vehicle-charging-market-idUKKCN1MK186
Health Canada completed the Human Health Risk Assessment for Diesel Exhaust. “Overall, it is concluded that diesel emission is associated with significant population health impacts in Canada and efforts should continue to further reduce emissions of and human exposures to diesel emission”. https://www.canada.ca/en/health-canada/services/publications/healthy-living/human-health-risk-assessment-diesel-exhaust-summary.html
A start has been made by Efficiency Manitoba. There is much more to be done as we have outlined herein. The Public Utilities Board must recommend a new Regulation for EM to continue moving forward for the economic development of the province to take advantage of our unique capacity with clean electricity – the “new energy”. Click to load the slide presentation to the PUB