January’s weighted average Hourly Ontario Energy Price (HOEP) is currently 3.3¢/kWh – up 0.5¢/kWh or 18.5% from last week’s settle. The primary driver of this price hike was the increased use of demand response generators, which typically utilize expensive natural gas as their fuel source. Natural gas-burning generation supply increased by 25.3% (2,103MW) over the course of this past week, whereas base-load generation such as nuclear fell by 1.0% (-103.1MW), decreasing its output to an average of 10,124MW. Biofuel also saw a decrease in output compared to the week prior, dropping 11.5% (-33MW). Hydro-based generation on the other hand increased output, climbing 0.7% to an average of 4,000MW. Wind and solar increased output this past week as well, climbing 5.5% (2,430MW) and 58.3% (20MW), respectively. With the first Global Adjustment estimate at 4.8¢/kWh, January’s total market price is currently 8.1¢/kWh, as of today.
Alberta’s weighted average Power Pool price for January is currently $130.67/MWh; relative to last week’s price of $154.08/MWh, this represents a decrease of $23.41/MWh or 15.2%. We’ve experienced some day-to-day volatility over the past week, with elevated pricing levels on January 7th settling to $282.04/MWh, and then dropping to an average of $59.26/MWh between the 8th and 11th, before climbing to $128.05/MWh on the 12th. As a result of the variance, pricing over the past week averaged $113.71/MWh, which helped suppress some of the elevated pricing we saw last week. Several generator outages experienced late in the week contributed to the pricing volatility, with Keephills 3, Sheerness 2, Battle River 5, and Sundance 4 continuing to remain offline. However, wind generation was able to maintain supply this past week, which helped keep prices relatively low and led to minimal levels of volatility (less than expected); in fact, during days in which prices were kept in check, we saw 65-75% wind capacity. Decreased levels of demand also helped suppress pricing, falling 123MW or 1.1% over the course of the week.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst