Alberta’s weighted average Power Pool price for April is currently $90.71/MWh, representing an increase of $22.92/MWh or 33.8% relative to March’s settle of $67.79/MWh. At this time of year, we do not expect to see elevated pricing levels, stemming from decreased shoulder season demand. For comparison, April’s demand is currently averaging 9,077MW, whereas February’s average demand was 10,620.23MW – a significant difference of 1,543MW or 17%. While a drop like this in demand would typically decrease hourly volatility, generator maintenance and mothballing has caused supply constraints and price spikes. On April 1st, planned maintenance for the Sheppard Energy Centre began, which removed 868MW from the grid. This, combined with planned outages at facilities undertaking coal-to-gas conversions, is impacting supply to the grid. As a result, any intermittent outages are impacting prices more than we would typically expect; intermittent daily outages at Sheerness 1 & 2, Battle River 5, and Keephills 5, along with intertie electricity imports from BC, played a role in price volatility this past week.
The weighted average Hourly Ontario Energy Price (HOEP) is currently at 0.7¢/kWh for the first week of April, a drop of 1.1¢/kWh or 65% compared to March’s closing price. Driving this decrease in price is mild weather, that has weakened demand and lowered the need for natural gas in the generation mix. Compared to average March levels, April’s demand and supply are both down, with demand decreasing at a faster pace than supply (-9%, 13,637MW and -5%, 14,592MW). The supply of natural gas is down 70% compared to March (257MW), while nuclear generation is up 5% (8,613MW). Solar has made strong injections to the grid (+33%, 118MW), while hydro’s supply has remained relatively flat (+1%, 4,115MW), and wind and biofuel have sharply decreased their supply (-29%, 1,475MW and -60%, 15MW). Currently, with the first Global Adjustment estimated at 6.1¢/kWh and the first estimate recovery rate at 0.8¢/kWh, April’s total market price is 7.6¢/kWh.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst