Alberta’s weighted average Power Pool price for January settled at $75.18/MWh. The last week of January experienced a significant number of hourly price spikes, which was primarily driven by extensive cold periods throughout the province. Parts of the province also experienced extreme weather warnings, which drove temperatures down even more. At the end of January, there were a few intermittent outages at HR Milner, Battle River 4 and Sundance 6. These outages contributed further to volatile periods on the 28th and 29th, as the cold weather continued to put upward pressure on pricing; the hourly Power Pool price was $184.68/MWh. The last two days of the month, aided by warmer temperatures, helped to normalize pricing and curb pricing volatility, as the hourly pricing for these days dropped to $46.90/MWh. With February expected to realize extreme winter temperatures, recent price volatility should continue.
The weighted average Hourly Ontario Energy Price (HOEP) is currently at 1.9¢/kWh for February, an increase of 0.2¢/kWh or 12% compared to January’s final settle. A decrease in temperatures brought on a shift in the supply mix toward dispatchable, expensive natural gas, causing an uptick in HOEP. While demand rose 4% (16,921MW) compared to January average levels, a far greater increase occurred on the supply side (+8%, 18,343MW). Although renewable sources such as wind and solar saw large supply increases (+99%, 2,461MW; +128%, 72MW), an increased contribution of natural gas to the grid (12%, 1,457MW) tends to have a strong impact on HOEP. Most other generating sources decreased their supply: hydro (-3%, 4,341MW), biofuel (-32%, 24MW), and nuclear (+1%, 9,988MW).
Currently, with the first Global Adjustment estimated at 9.8¢/kWh and the first recovery rate estimated at 0.6¢/kWh, February’s total market price is 12.3¢/kWh.
In other electricity news, in response to the stay-at-home order, the provincial government is extending electricity rate relief for customers on a regulated price plan (RPP). Electricity prices will remain frozen at 8.5¢/kWh until February 9, 2021 for customers on Time-Of-Use (TOU) and tiered pricing.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst