Excerpts from our Weekly Energy Report
This week’s authors: John Kiemele and Deighton Jarrett
The weighted average Hourly Ontario Energy Price (HOEP) is currently 1.0¢/kWh for May, a further decrease over price settlements from last week. Bruce Power’s 781 MW Unit 3 station has come back online after scheduled maintenance, which has helped boost nuclear output in the province. Additionally, increased amounts of precipitation throughout Ontario led to an increase in hydro-electric generation. When electricity has been drawn from the grid, nuclear and hydro-electric generators have been covering 91% of the generation needed this month, which is up from 85% coverage in the month of April. Conversely, the most expensive generation in Ontario (natural gas generators) have produced their lowest ever output levels this month, falling from 1,305 MW in January to 331 MW this past week. These factors combined to decrease the HOEP over the past week. Coupled with this month’s first Global Adjustment estimate of 12.9¢/kWh, May’s total market price is currently 13.9¢/kWh.
Alberta’s weighted average Power Pool price for May is currently settling at $39.93/MWh, which is an 11% decrease from last week’s settle of $44.77/MWh.
This fall in prices was partially caused by a 3% decrease in electricity demand, which helped the system operator avoid using expensive generators to supply the grid. In addition, on May 15, three generators came back online, adding 1,168 MW of electricity generation back into the market and helping to exert downward pressure on prices.
Forward contracts for calendar year 2020 Alberta electricity fixed prices have increased by 3% since last Thursday. Currently, indicative offers for 7×24 and 7×16 contracts are trading at approximately $54/MWh and $66/MWh respectively.