Alberta’s weighted average Power Pool Price for January settled to $127.56/MWh. Relative to last week’s month-to-date price of $137.34/MWh, this represents a decrease of $9.78/MWh or 7.1%. January experienced a few periods of volatility, with prices on three days reaching over $200/MWh, but compared to market expectations heading into the month, the monthly price was significantly lower. Bullish weather forecasts and previous monthly settles caused certain market analysts to anticipate a January price of over $300/MW. Fortunately, milder weather helped suppress provincial demand and prices; in fact, prices for 14 days settled below $100/MWh. Hourly demand peaked at 11,290MW on January 27th, versus December’s high of 12,193MW on the 21st, a difference of 903MW or 7.4%. Further contributing to the drop in prices were minimal generator outages and lower natural gas prices, the latter of which lowered the operational costs of Alberta’s natural gas generators.
The AESO produces Long Term Adequacy Reports on a quarterly basis, the last of which was released on February 1st, 2023. These reports include adjustments to the operational start dates of various generators in the province. Over the last few quarters, the operational start date for the Cascade Phase 2 generator, which will supply Alberta’s grid with 900MW of electricity, has continually been pushed up. With an original target of Q4 2023, the start date had, until recently, been revised to July 2023. The in-service date has now been pushed back to January 2024. As a result, market forwards for Alberta electricity have increased for the back half of this year, directly resulting from the decrease in expected supply in 2023.
The weighted average Hourly Ontario Energy Price (HOEP) is settling at 3.1¢/kWh so far for the month of February, representing a 0.4¢/kWh or 12.8% decrease over last week’s settle. Driving this price decline is the decrease in demand across the province, causing the grid’s need for demand response to diminish. Natural gas-burning supply increased by 18.2% (2,064MW) over the course of this past week. Baseload generation, such as nuclear, improved its output slightly to an average of 10,010MW, a 242.63MW or 2.5% increase compared to last week. Hydro-based generation, on the other hand, fell 1.4% to an average of 4,690MW. Wind, solar, and biofuel increased week-over-week output (+21.5%; 1,817MW, +29.4%; 26MW, +0.1%; 38MW, respectively). With the first Global Adjustment estimated at 6.3¢/kWh, February’s total market price is settling at 9.4¢/kWh as of today.
– Mark Ljuckanov, Energy Advisor / Clara Birch, Energy Data Analyst
Add comment