Alberta’s weighted average Power Pool price for November is currently $86/MWh. Relative to October’s month-end price of $96.82/MWh, this is a decrease of $10.82/MWh or 11.2%. Hourly demand in the province has behaved in an opposing manner, with an increase of 495MW or 5.2%. Typically when demand rises we expect to see higher Power Pool prices. The disparity between current market behaviour and pricing expectations can be explained by the significant volume of inexpensive wind generation being produced in the province so far this month. Alberta has a maximum wind capacity of 2,139MW, while the average hourly demand in the province this month has been just under 10,000MW. We’ve experienced several consecutive days this month where the average supply generated by wind has reached 75% of capacity, which represents roughly 15% of Alberta’s overall demand. On days when a dip in wind generation occurred, like on November 8th when the average supply was only 58%, several hours reached over $200/MWh.
The weighted average Hourly Ontario Energy Price (HOEP) is settling at 4.0¢/kWh so far this month, representing a 0.6/kWh or 15% increase over last week’s settle. The primary driver of this price increase is the slower than anticipated decrease in temperature across the province, causing the grid’s need for demand response to increase week-over-week. High priced natural gas-burning generation has caused higher than seasonal HOEP, with contribution of ~1,870MW to the grid this past week, an increase of 11% from last week. Baseload generation, such as nuclear, decreased its output to an average of 8,743MW, a 187MW or 2.1% decrease compared to last week. Meanwhile, Hydro and Solar increased output this past week (+0.02%; 3,830MW, +3.7%; 80MW, respectively).
With the first Global Adjustment estimated at 5.7¢/kWh and the first estimate recovery rate at 0.6¢/kWh, November’s total market price is currently settling at 10.3¢/kWh as of today.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst
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