Alberta’s weighted average Power Pool price for October is currently $114.01/MWh, a decrease of $28.06/MWh or 19.8% relative to last week’s price of $142.07/MWh. While last week’s elevated pricing was a result of volatility in early parts of the month, prices have remained steady this past week, averaging $89/MWh. Volatility to start the week can be attributed to generator outages at Battle River 4, Keephills 2 and Sundance 6, which have a combined maximum capacity of 951MW. Coinciding with the outages was minimal wind activity, which caused the grid to rely on more expensive forms of generation. Week-over-week demand levels increased slightly by 1%, as parts of the province dipped to sub-0°C temperatures.
The weighted average Hourly Ontario Energy Price (HOEP) settled at 5.2¢/kWh month-to-date, representing a 0.2¢/kWh or 5.6% increase over last week’s settle. The primary driver of this price hike is the increased use of demand response generators, which are typically expensive natural gas-burning generation. Coupled with high gas prices, the gas-burning generators contributed an average of 1,862MW to the grid this past week, an increase of 1,021MW or 121% compared to September’s average. The use of demand response was also needed as baseload generation, with nuclear falling to levels only seen last March, decreasing its output to an average of 8,271MW, a -1,618MW or -16% change compared to September. Wind, Solar, and Biofuel also decreased output this past week (-22%; 997MW, -32%; 64MW, -47%; 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 12.6¢/kWh.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst
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