Alberta’s weighted average Power Pool Price for October is currently $181.28/MWh. Relative to last week’s price of $215.38/MWh, this a decrease of $34.10/MWh or 15.8%. While there have been bouts of volatility in the market, the Power Pool Price averaged $124.24/MWh in the last week, helping to reduce the month-to-date price from where it was to start October. Increases in renewable generation should continue to suppress market volatility and offset generator outages and/or demand increases this shoulder season. Outages at Battle River 4 remain, while an intraday outage at the Calgary Energy Centre on the 16th increased volatility on the day.

The weighted average Hourly Ontario Energy Price (HOEP) is settling at 4.8¢/kWh so far for the month of October, no change from last week’s settle. Natural gas-burning supply decreased by 2.9% (1532MW) over the course of this past week. Baseload generation, such as nuclear, fell to an average of 6848MW, a 467.26MW or 6.4% week-over-week decline. Hydro-based generation, on the other hand, increased output, climbing 1.9% to an average of 3991MW. Wind improved output (+18.9%; 1772MW), whereas Solar and Biofuel reduced output (-14.6%; -79MW, and -2.5%; -1MW, respectively). With the first Global Adjustment estimated at 0.5¢/kWh, October’s total market price is settling at 5.3¢/kWh as of today.

Last month, the IESO published their October 2022 to March 2024 Reliability Outlook, a quantitative and qualitative adequacy assessment of Ontario’s electricity system. The reports states that the province should have adequate reserves for the upcoming winter of 2022/23 and 2023/24; however, there is potential for significant reserve shortfalls in the summer of 2023 when nuclear power generation will be at 66% of the 38,096 MW of installed capacity. Overall, the IESO estimates that there will be between 24,369 MW and 25,420 MW available next summer. To put that into context, the top coincident peak of the last 12 months happened between 5 and 6 p.m. on July 19, 2022 when the provincial demand was 22,607 MW. Less than 2,000 MW is a slim supply margin, indeed. Of course, the IESO draws up these reports with the intent to influence and regulate those who manage generation assets, compelling them to reschedule maintenance whenever possible, so that available capacity is maximized. Judging by the week-over-week drop in IESO futures prices across the board, those efforts have successfully begun. That said, the report remarks that “Ontario is entering a period of tighter supply conditions. Surplus baseload generation (SBG) is not expected to be a significant issue for the foreseeable future”. The Energy Performance Program (EPP), announced by the Ontario government on October 6th, may help to alleviate some future summer electricity demand pressure as well. Three years of annual pay-for-performance incentives are available for multi-site and single-site facilities for applications approved by December 31, 2024, where large volume customers consuming over 1,500,000 kWh year may qualify to save up to $0.04/kWh or $50/kW on savings over baseline use or demand, respectively. For more information please visit the website.

– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Grace Wilton, Senior Energy Advisor

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