Alberta’s weighted average Power Pool price for January is currently settling at $154.08/MWh. Relative to December’s month-end price of $128.29/MWh, this results in an increase of $25.79/MWh or 20.1%. While the first three days of the month saw relatively low prices, averaging just $74.91/MWh, prices shot up the past couple of days. On January 4th and 5th, prices averaged $268.11/MWh, reaching a high of $749.33/MWh on January 5th at 6pm MST. Consistently elevated levels of demand contributed to the increased levels of pricing, even though a demand record of 11,939MW was set on a more stable day – Monday January 3rd at 6pm MST. Coinciding with the past two days of volatility has been decreased or minimal levels of wind generation. On both the 4th and 5th, when hourly pricing peaked, there was zero wind generation in the province which, in turn, caused the province to rely on more expensive forms of fossil fuel generation. The only major generator outage this week occurred at Keephills 1.

The weighted average Hourly Ontario Energy Price (HOEP) settled at 2.7¢/kWh the opening week of 2022, representing a 0.8/kWh or 23.3% decrease over December’s final settle of 3.6¢/kWh. The primary driver of this price decline is less use of expensive natural gas-burning generators. Month-to-date supply of 1,545MW has been generated via natural gas, a decrease of 21% compared to last month. Nuclear baseload generation significantly increased this past week, supplying an average of 10,275MW to the grid, an increase of 11% compared to December. Cheap wind generation also increased its output, climbing to 2,315MW (an increase of 13%), whereas hydro, solar, and biofuel all decreased output (3,860MW; -3%, 10MW; -59%, 29MW; -41%, respectively).

With the first Global Adjustment estimated at 4.8¢/kWh and the First Estimate Recovery Rate finalizing in 2021, January’s total market price is currently settling at 7.5¢/kWh as of today.

– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst

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