Alberta’s weighted average Power Pool price for October is currently $102.16/MWh. Relative to last week’s price of $114.01/MWh, this represents a decrease of $11.85/MWh or 10.3%. Pricing in the province continues to decrease as generators in the province return online, bringing back much needed supply to the generation mix; this includes Sundance 6, Keephills 2 and Battle River 4, all of which have been offline for several days. Since these generation assets provide baseload supply to the grid, their return removes some market volatility, even with elevated demand levels experienced this past week. Furthermore, the province experienced a significant volume of wind generation, which also helped offset increased demand, which hit over 10,000MW the past few days. As temperatures drop and we transition into the heating season, the lower average hourly demand levels seen in the past couple of shoulder-period months may start to increase, which can lead to price increases.
The weighted average Hourly Ontario Energy Price (HOEP) is settling at 4.5¢/kWh so far this month, representing a 0.7¢/kWh or 13.5% decrease over last week’s settle. The primary driver of this price decline is the decrease in temperature across the province, reducing the grid’s need for demand response. Although HOEP is currently higher than seasonal norms, thanks to more natural gas-burning generation alongside high gas prices, the gas-burning generators contributed 1,271MW to the grid this past week, falling from an average of 1,862MW the week prior. Baseload generation, such as nuclear, picked back up this past week, increasing its output to an average of 8,695MW, a 275MW or 3.3% week-over-week change. Wind, Solar, and Biofuel also increased output this past week (+22.8%; 1,396MW, +5.8%; 70MW, +0.1%; 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 currently settling at 11.9¢/kWh as of today.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst