Alberta’s weighted average Power Pool price for August is currently $104.60/MWh. Relative to last week’s price of $143.49/MWh, this represents a decrease of $38.89/MWh or 27.1%. This is a significant drop and one we have rarely experienced so far this year. Causing this dip in pricing is lower demand levels, with average hourly demand decreasing from 9,840MW last week to 9,533MW currently, a difference of 307MW or 3.1%. Peak demand also dropped week over week, from 11,023MW on August 3rd at 5pm MST down to 10,495MW on August 6th at 3pm MST. Week over week peak pricing also shifted drastically, from $938.21/MWh on August 6th at 6pm MST to $113.03/MWh on August 11th at 5pm MST. August has shown us that extreme weather patterns combined with minimal renewable generation results in volatile pricing. However, this month has also shown that volatility subsides with lower demand and increased renewable generation.
The weighted average Hourly Ontario Energy Price (HOEP) is at 3.4¢/kWh for the month of August, an increase of 1.0¢/kWh or 42% compared to last week’s settle. With Ontario currently in an extended heat wave and experiencing the hottest period of the summer thus far, the steep increase in price is caused by a jump in demand and strong injections of expensive natural gas burning generation to meet peak demand. Compared to average August levels, demand has risen 7% (16,528MW), while supply has only increased 5% (17,162MW). With a sharp increase in demand, dispatchable natural gas burning generation has increased its grid supply by 31% (2,195MW). Wind also made strong injections (+26%, 850MW), while the supply of all other generations sources either remained stable (nuclear 10,216MW; hydro 3,745MW) or declined (solar -4%, 116MW; biofuel -7% 40MW). With the first Global Adjustment estimated at 8.1¢/kWh and the first estimate recovery rate at 0.6¢/kWh, August’s total market price is 12.1¢/kWh.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst
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