Alberta’s weighted average Power Pool price for June is currently $86.83/MWh. Relative to the pricing set the week prior of $89.85/MWh, this results in a decrease of $3.02/MWh or 3.7%. The drop in pricing stemmed from minimal market volatility, as pricing between the 27th and 30th averaged $40.43/MWh, due to decreased market demand and normal seasonal temperatures. Unfortunately, pricing spiked on the 31st to $190.30/MWh at the beginning of a heat warning, elevating demand to a level unmatched by wind generation. Hourly demand in the province had a marginal increase of 17MW or 0.2%, rising from 8,943MW to 8,960MW. There were several intermittent generator outages to close out the month, including Keephills 2, Sheernes 1 & 2, Genesee 3, HR Milner and Battle River 2, all of which have since come back online. Path 2, the intertie connecting Alberta and Saskatchewan, went offline on the 31st and continues to remain down.
The weighted average Hourly Ontario Energy Price (HOEP) is at 1.0¢/kWh for the beginning of June. This represents a decrease of 34.4% or 0.5¢/kWh compared to the final May settle of 1.5¢/kWh. Driving this decline in HOEP is a more favourable spread between demand and supply, as well as an advantageous shift in the supply mix. While demand during the last week of May and opening days of June dropped 5% (13,557MW) relative to May’s average monthly levels, supply increased 2% (14,857MW). There was also a strong shift toward less expensive generation, with nuclear increasing its baseload by 6% (9,439MW) and natural gas dropping its supply by 57% (467MW). Other changes in the supply mix include wind and solar, increasing their supply (+22%, 995MW; +14%, 115MW), and hydro and biofuel lowering their supply (-9%, 3,809MW; -4%, 32MW). With the first Global Adjustment estimated at 9.9¢/kWh and the first estimate recovery rate at 0.7¢/kWh, May’s total market price settled at 12.1¢/kWh. Currently, the first Global Adjustment estimate for June is 10.8¢/kWh and the first estimate recovery rate is 0.6¢/kWh, bringing June’s current market price to 12.4¢/kWh.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst
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