A look at Alberta’s electricity market today: Prices up 200% compared to April 2017
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| Source: Insitu Power Daily Report |
By: Nick Clark
Today coal is providing under 40% of Alberta’s internal electricity generation, and natural gas is over 50%. Out of service: Battle River (149MW), Milner (145MW), Sheerness 1 (400MW), Sundance 2 (280MW), Sundance 3 (368MW), and Sundance 5 (406MW). In total over 1,700 MW of coal fired generation capacity, which was once available, is now offline.
Over the last few years, a surplus supply of generation when all coal plants were fired up drove Power Pool prices down. Looking back at 2017 the average price paid for generation in April 2017 was under $20/MWh. During the first 10 days of 2018 the average is hovering around $60/MWh. This is a 200% increase in the cost of energy. April 1, Regulated Rate Option (RRO) retail prices in Calgary jumped up over 9 cents/kWh.
Luckily, the load is staying below the 10,000 MW threshold, or power pool prices would be even higher today. Temperatures are rising and it looks like winter is over.
While coal plants go offline – today, over 10% of the load is being supplied by generation imported from British Columbia, Montana, local wind farms, and other resources in Alberta. The first large scale Solar Farm in Brooks is being spotlighted as a bright light and the future for our province, but we need to keep it in perspective, as at maximum production, the facility in Brooks will only generate 15 MW out of the 10,000 needed. Wind generation will start increasing in production as the wind picks up with the warmer spring temperatures. This is good news as there is over 1,400 MW of maximum installed market capacity available when the wind is blowing.
This is just a look at the market at this point in time, as it changes by the minute. Some consumers in Alberta are protected by the cap on the RRO, but really all the cap means is that the government is taking money out of the carbon levy to subsidize this. Don’t be fooled, the cost of energy has gone up. Who does the higher prices hurt the most? I wonder if the impact and risk of what we are seeing unfold has been quantified? With a 200% increase in the cost of electricity, this year over last, I would suspect that it will impact the industrial sector or our natural resource sector the most.
It is time to get off the subsidy rates of the government and hold the government accountable to spend the Carbon Levy dollars for what it was intended; not to try to hide the fact that the cost of electricity is up 200% this year over last.
Residential and small business owners can protect themselves by locking into a guaranteed fixed rate available through a number of energy marketing companies, the likes of Spot Power. Competitive market participants are offering stable prices up to 10% below the government cap of 6.8 cents/kWh. Click here for more information.
Over the last few years, a surplus supply of generation when all coal plants were fired up drove Power Pool prices down. Looking back at 2017 the average price paid for generation in April 2017 was under $20/MWh. During the first 10 days of 2018 the average is hovering around $60/MWh. This is a 200% increase in the cost of energy. April 1, Regulated Rate Option (RRO) retail prices in Calgary jumped up over 9 cents/kWh.
Luckily, the load is staying below the 10,000 MW threshold, or power pool prices would be even higher today. Temperatures are rising and it looks like winter is over.
While coal plants go offline – today, over 10% of the load is being supplied by generation imported from British Columbia, Montana, local wind farms, and other resources in Alberta. The first large scale Solar Farm in Brooks is being spotlighted as a bright light and the future for our province, but we need to keep it in perspective, as at maximum production, the facility in Brooks will only generate 15 MW out of the 10,000 needed. Wind generation will start increasing in production as the wind picks up with the warmer spring temperatures. This is good news as there is over 1,400 MW of maximum installed market capacity available when the wind is blowing.
This is just a look at the market at this point in time, as it changes by the minute. Some consumers in Alberta are protected by the cap on the RRO, but really all the cap means is that the government is taking money out of the carbon levy to subsidize this. Don’t be fooled, the cost of energy has gone up. Who does the higher prices hurt the most? I wonder if the impact and risk of what we are seeing unfold has been quantified? With a 200% increase in the cost of electricity, this year over last, I would suspect that it will impact the industrial sector or our natural resource sector the most.
It is time to get off the subsidy rates of the government and hold the government accountable to spend the Carbon Levy dollars for what it was intended; not to try to hide the fact that the cost of electricity is up 200% this year over last.
Residential and small business owners can protect themselves by locking into a guaranteed fixed rate available through a number of energy marketing companies, the likes of Spot Power. Competitive market participants are offering stable prices up to 10% below the government cap of 6.8 cents/kWh. Click here for more information.