The Canadian Climate Institute, a think tank focused on climate policy, has published a blog post by Jason Dion, Sara Hastings-Simon and Tim Weis on the evolving electricity market in Alberta. They discuss how grid emergencies and price spikes have raised questions about whether it is time for a redesign.
The post discusses the transmission policy reforms being looked at by the Alberta Electricity System Operator (AESO) and provincial government, which the authors argue could end up upping the costs for renewable energy such as wind and solar, thereby undermining their competitiveness.
They write:
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The recent electricity price spikes witnessed in Alberta have come as the market moved between years with supply surplus, to tighter market conditions. While it is a market design feature that new supply investment waits for very high prices resulting from tightening supply, the last few years in Alberta were aggravated by a lack of competition. The resulting price volatility is challenging for consumers, particularly those unable to access the non default electricity rate, and with record-high prices in 2022 and 2023, the government intervened to buffer segments of the residential market by capping the price of the regulated rate for electricity with a loan to be repaid later.
Following these developments and interventions, the need for a deeper market redesign has come sharply into focus. Major changes are in the works, with recent policy announcements and more policy discussions and roll-outs to come over the rest of this year.
What does all this mean for affordable, reliable, and clean electricity for Albertans?
“Alberta’s evolving electricity market,” by Jason Dion, Sara Hastings-Simon and Tim Weis, Canadian Climate Institute, May 13, 2024.
Read the blog post originally published by the Canadian Climate Institute on May 13, 2024.
