Alberta’s weighted average Power Pool price for October is currently $97.05/MWh. Relative to last week’s price of $102.16/MWh, this represents a decrease of $5.11/MWh or 5%. With windy conditions and cool fall temperatures, volatility has been kept to a minimum due to the amount of wind generation supplied. Where the year-to-date average for wind generation has been 14.6% of capacity, numerous days have reached 75-80% of the province’s 2,139MW maximum wind capacity. When the province can supply nearly 1,700MW of renewable generation, market volatility is softened, as there is less reliance on expensive fossil fuel generation. This is further confirmed by periods in the past week during which the hourly demand reached over 10,000MW and the hourly price did not peak over $100/MWh. Furthermore, Power Pool pricing over the past week averaged $82.94/MWh, relative to the previous weekly average of $102.16/MWh, despite an increase in average hourly demand, rising from 9,328MW to 9,648MW. If wind generation continues to increase, we can expect to see suppressed pricing.
The weighted average Hourly Ontario Energy Price (HOEP) is settling at 4.1¢/kWh so far this month, representing a 0.3¢/kWh or 6.8% decrease over last week’s settle. The primary driver of this price decline is the decrease in temperature across the province, eliminating the grid’s need for demand response. Although HOEP is currently higher than seasonal norms, due to high gas prices, gas-burning generators contributed 1,218MW to the grid this past week, falling from an average of 1,655MW the week prior. Baseload generation, such as nuclear, picked back up this past week, increasing its output to an average of 9,098MW, a 237MW or 2.3% change compared to last week. Hydro, Wind, and Biofuel also increased output this past week (+3.4%; 3,907MW, +21%; 1,483MW, +0.5%; 21MW, respectively).
With the first Global Adjustment estimated at 6.6¢/kWh and the first estimate recovery rate at 0.8¢/kWh, October’s total market price is currently settling at 11.5¢/kWh as of today.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst
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