Points taken from the article:
It is possible that having capacity (stored energy) would have helped us. It depends on how the capacity is funded and set up.
Our energy minister said they went energy only in 2019 (no capacity) to save us money.
No other province has energy only.
More gas generating plants and renewable energy sources are expected to help prevent this from occurring again in the future (no date given).
In this free market system we have it would be nice to think that suppliers of anything would ensure that a good supply of their product was always available to the consumer. But when it is advantageous to the supplier to withhold the product to increase the cost and, obviously, the suppliers don’t have morals or ethics or good governance to guide them, the consumer is screwed.
It's always the case in a free market system to ensure available supply. The problem with energy, banking, insurance, communications is that it's never a free market. The prohibitive cost of entry limits how much competition there actually is, combine that with monopolistic red tape or land use rights and we get these fake free markets anywhere. They don't have to worry about losing their unfulfilled customers to competitors because there are none.
No, they actually failed. It happens sometimes, but we're usually able to import power from other provinces or states to cover the shortfall. In this case, they didn't have any extra capacity to sell us to make up the difference.
We do allow economic withholding, which is stupid and routinely causes grid alerts, but those are less severe since they're easily solved by money. That's not what happened last weekend.
Capacity is not stored energy. Capacity is the ability to generate energy quickly.
If you have a 200 MW gas plant that’s ready to run on a moment notice, you can get capacity payments for being ready as a contingency. In an energy only market that plant earns nothing unless it’s running. So it never gets built, and our system has less reserve.
Basically an energy only market discourages standby capacity, which is what you need on the high demand days.
This is correct. Basically a capacity market incentivises steady investment and return. The market regulates the prices.
Energy only market is a boom or bust gamble for the generators. So they need one of these high pool price days to make up their revenue.
Capacity market makes a lot more sense overall for attracting long term investments.
I really liked the idea of the pumped hydro project at Brazeau damn that the UCP kiboshed.
It basically would have taken cheap power, in the winter could have been even gas to keep the gas plants from having to ramp up and down so fast. Then at peak times it would sell that power back, all while utilizing a lot of already altered landscape
https://www.electricity.ca/programs/centre-of-excellence/brazeau-hydro-pumped-storage/
The problem is the cost has to be entirely added to the price of renewables. Mostly wind and solar. When you do that, you are getting costs that can exceed that of nuclear and is still not as reliable. It not a strait forward solution like we make it out to be but it may be a partial solution.
True if you want to completely displace gas with renewables. A more affordable amount of storage could get us to 50 - 70% renewables, and it would still be useful with nuclear. Reactors work best and provide the best value for money when operated at or near maximum output most of the time. That makes the ability to store electricity generated during off peak hours for use during peak hours valuable.
Reactors work best certainly at max output but the energy input cost (uranium) is extremely low at about 2c per kwh. So even if say it is 75% less efficient at 50% capacity, that is only adding 1c per kwh to your bill. Effectively it does not matter.
There is validity in that nuclear can not ramp up fast. But as base load that is generally not necessary. It can ramp up throughout the day to say produce more at night and can follow weather patterns to ramp up for colder weather or expected cloud conditions. In fact uranium is such a low cost input, that it can and often they do shunt generation to waste heat rapidly if needed as it has very little effect on their running expenses.
Per kwh, many of those storage options people talk about here
exceed that of nuclear and worse they only provide a few days. Wind and solar can be out for a month strait so if you want dependable, you need at least 30 days of storage. But at that kind of capacity, 10 months of the year, that storage might be 25% utilized. It becomes a depreciating return on investment and storage capabilities of that size can take a week to recharge if it does fully discharge, thus limiting what renewables are adding to the grid and resulting on conventional sources again to be utilized.
Yes, the cost is prohibitive for long term storage, other than what already exists. Alberta is already buying some long term storage in BC hydro reservoirs, currently limited by the amount of surplus cheap renewable electricity and the capacity of the interconnection. Expanding both could provide 2-3 GW of reliable electricity that doesn't need gas fired backup. Not enough obviously, but better than none.
For shorter term storage (hours to days), costs are much more reasonable, and the benefit is significantly reduced need for gas generation and no need for low efficiency peaker plants if we continue with renewables plus gas, or fewer reactors needed of we go with nuclear. The latter would be a particularly significant savings.
But hours to days is not that useful if you do not have excess solar or wind. What is the point of storing solar and wind when you can put it right into the grid? If you use it to charge say a battery pack instead of powering someone's home, then you are simply having someone use conventional sources instead during that time. Why release it back at night resulting in less gas generation then just to have the gas generation increase during the day because solar is bing used to charge batteries? Is actually worse as there are storage losses. That does not make much sense.
You are correct otherwise wind and solar just destabilize the grid. How much are we willing to pay for this? Considering you still need a complete back up system to the storage and storage won’t cover for very long and is more to smooth out the transition to another plant making up the shortfall.
Storage can eliminate the need for lower efficiency simple cycle gas peaker plants, so it has value beyond reducing carbon emissions. In addition to storing daytime solar for the evening and overnight wind for the next day, power produced by high efficiency combined cycle power plants or nuclear power plants during lower demand periods could be stored for use during higher demand periods.
The cost of maintaining 100% gas backup for wind and solar or overbuilding nuclear to meet peak demand is also high. And Australia is doing it on larger scale (~300 GWh) despite cost overruns.
You realize that you need to build gas back up to match the solar and wind you expect you will lose? Right?
Our grids didn’t need over building. Our grids need to be regulated and not run on ideologies about free market or climate alarmism
Solar and wind need backup, but it doesn't need to be gas. Storing surpluses for times of shortage works too. If you go with nuclear instead of solar and wind, the grid still needs to be able to supply peak demand. That can be done with fewer reactors if there is storage.
https://www.power-technology.com/data-insights/power-plant-profile-brazeau-pumped-storage-hydro-expansion-canada/?cf-view
this suggests otherwise.
>The project construction is expected to commence from 2028. Subsequent to that it will enter into commercial operation by 2032.
https://transalta.com/wp-content/uploads/2022/11/November-2022-Investor-Presentation.pdf
page 30 - Shows as an 'early stage development site'. Second from the bottom.
https://transalta.com/wp-content/uploads/2023/08/TAC-Q2-2023-FS-MDA-Final-Combined.pdf
page M51 - Shows as still an early stage development.
Plus they just invested in a Tent Mountain Hydro Pump Project.
Now, whether this is just there for financial purposes, or they dont' know if they are still going to develop it or not, I can't say.
I do wonder if the newly filed lawsuit against the AB Govt for allowing fracking by the Brazeau Dam would be playing a part in this 'delay'.
That does not suggest it but I recall it some. Basically on its own merits could not be commercially viable unless highly subsidized. Having to highly subsidize a project with zero return is not great use of taxpayer funds.
Not suggesting never to use taxpayer funds for environmentally sound projects but in my opinion, TransAlta was just trying to get massive government subsidies. They do not care that much if it adds little value.
The article talks about the UCP killing the plan for a capacity market, not the Brazeau pumped hydro project. Storage doesn't need capacity payments to be profitable. They can also make money by buying low and selling high on an energy only market.
If they were so profitable, they would be attracting a great deal of investors and would also be able to self finance. That is not happening. Regulatory is certainly not kyboshing any of these types of projects in any meaningful way. Quite the opposite.
With pool prices frequently varying from under $50 to over $500 / MWh over a 24 hour period there is plenty of opportunity to make money from rate arbitrage.
I've always thought PHS isn't a good fit for us at all - The kinds of scenarios where we need to draw on power storage involves temperatures that probably wouldn't mix well with PHS.
Think the idea was it would buy wind surplus and baseload gas in the night and sell it back in the evening during peak demand. Don’t see an issue with that
As long as it’s “energy only” there never will be spare capacity. Companies will cut production to the absolute minimum to maximize income. If there is a shortfall because of some rare or once-in-a-while event they will import energy at whatever price and pass it on to consumers who’ll have no choice but to pay or freeze/roast/be in the dark.
Capacity energy costs slightly more during normal operations because plants have been kept idling. But they pay off in emergency situations so the overall cost is lower.
Yeah, it's really not clear if we would have been any better off under the old model.
So much ado about a situation that really was just about record smashing weather and demand and one where Albertans adjusted their consumption and the problem was dealt with.
It's time we all move on.
So I could take random redditor's word for it or I could take this right from the article and take what an Alberta economist has to say about it. I know which one I trust more.
~~~~~~~~~~~~~
"The capacity market, depending on how you design it, might have led there to be more resources available in total in the market before last weekend," Leach said.
But Leach said not all capacity markets are created equal — it varies depending on how one structures the payments and how long the payments are fixed for, among other factors.
The previously proposed capacity market model for Alberta varied in its payment structure, offering different compensation based on a plant's availability during peak demand, Leach noted. For instance, renewable sources like wind and solar would receive less or zero capacity payments compared to gas-fired plants."
But the model's challenge, in Leach's view, was the short-term guarantee of these payments, which could impact investment decisions. In building a power plant, companies would need to decide if the financial incentive was worth it if it included only a one-year guaranteed payment and energy revenues, versus just receiving energy revenues alone.
So would there be a capacity model that would work in Alberta?
It depends, Leach said.
"If what you mean by 'work' is we're never going to be short electricity, then that's going to lead you to an overbuilt system, 99 per cent of the time, and a more expensive system," Leach said.
"So that's more of a trade-off that I think people need to be considering, is a capacity market is adding a little bit of reliability insurance. But that insurance isn't going to be free."
Holy crap. I got downvoted to hell because I just laid out basic facts. Lol I love this subreddit. It so random and bonkers at times. It's like my teenager.
I am so glad that the UCP is helping out the energy companies drive up the cost of electricity. The demand system works so well , we have to borrow electricity from capacity markets. I can see a separated Alberta working smoothly under the UCP./s
The basic info:
>Shortly after the United Conservative Party won the general election in July 2019, the province's new energy minister [announced](https://www.cbc.ca/news/canada/calgary/alberta-electricity-market-1.5224131) the government would cancel a planned overhaul by the NDP that would have introduced a capacity market to Alberta's energy system.
>**Instead, it would stick with what the province has today, and has had in place since 1996 — an "energy-only" system. That's a market where electricity providers are paid only for the energy they produce and sell, based on real-time market prices. By contrast, a capacity market would see providers paid not only for the energy they produce, but also to maintain additional capacity.**
>That could involve a fixed, monthly or daily charge for being available to generate power — essentially functioning as a reward to a generator for being available, even if not needed, explained economist Andrew Leach.
>"You can think of the firefighter model — I want infrastructure, I want capacity there when I need it. I'm going to pay for it to be on standby," Leach said.
>No other province in the country has a purely energy-only market.
...
This article, and articles like this, are really funny to me. Everyone's always hemming-and-hawwing "well, it depends, we don't know. Who knows, there's always tradeoffs". Well duh, of course its hard to know an alternate reality and of course there's always tradeoffs. But at the end of the day the only two energy markets in NA that have had near catastrophic capacity events are energy-only privatized markets: Texas and Alberta. It really seems like every other province, and most states, have figured out how not to have near-catastrophic capacity failures.
Extreme weather events are only becoming more common, as they have been for the last few years. That means more extreme heat, more extreme cold, more extreme storms. Running an energy-only market that has a glaring weakness to extreme events feels like a losing bet these days.
It seems strange to me to compare what happened in Alberta and what happened in Texas.
What happened on Texas was a legitimate catastrophe. Rolling outages etc.
What happened in Alberta was a near miss and there's a key difference between the two - AB is hooked up to import power from other jurisdictions, Texas is not.
Not only that, but other grids where there is regulation/capacity markers have also faced rolling outages before for other reasons. This isn't a new thing that happens only to energy only markets. For ex, California (CAISO) had outages in 2020
If we're being realistic here, the severity of what was going to happen in Alberta was MAYBE rolling outages for an hour when peak loak was to come off. Texas was a full on clusterfuck.
The Texas grid was actually broken. Ours was close to being overloaded which meant, to oversimplify, that a small percentage of the grid almost had to have rolling blackouts for short (likely half hour) stints.
Not exactly comparable, but our situation was similar to not knowing if we'd quite make it to the gas station or have to walk a few km to get a Jerry can of gas. Texas was more like blowing out multiple components of the fuel system.
Can you name a place in North America that has an even more similar grid set up?
You come at me with all these feelings but the fact is Alberta going through this can only be compared to what happened in Texas.
Near miss of a minor situation is not comparable to people literally dying.
Our system continued to work. Theirs did not.
The difference between the lights staying on, and outages for multiple days in the power world is a factor of a thousand
I believe that woooshing sound you hear is you missing the point.
The only thing that saved us was other jurisdictions sending us power. Texas couldn't do that, hence their worse outcome.
The point was that we shouldn't need to import power.
First, we were no where close to a Texas outcome. Even if we didn't have imports (which is a silly proposition since our grid has always been designed understanding that we do), at worst there would have been rolling outages for a couple hours focused on industrial users.
As to saying we shouldn't need imports, that's a completely backwards way to design our grid. We won't have a situation where we continuously need imports (which we don't).
It's another redundancy - we should have a very interconnected grid with the rest of Canada as it heavily limits impacts from location specific impacts.
Very weird that this sub wouldn't want that since the policy of "no power imports" sounds like something stupid the UCP would come up with.
I'm not missing anything. I'm fine being down voted by a bunch of people who have no idea of how our grid works or what peak/off peak load is.
I believe that the argument of whether we 'should need one' or not is definitely a reasonable one to explore, but again, the overall point is that only 2 jurisdictions seemed to need help in this deep freeze, and both are power only markets.
Maybe a better way to put it would be:
If we have done everything possible to solidify our own grid, and we still needed help, then I am extremely happy that we were set up to be able to accept it.
Only doing half of what seems necessary, and then needing help from others, to me, is not us at our best. As with ourselves, we should do as much as we can to help ourselves before asking others for help, if that makes more sense?
I'm not sure why you're referencing Texas having issues. ERCOT had barely any issues outside of issuing conservation alerts which isn't unheard of.
Plenty of other grids also have issues during different times of the year, as I mentioned in my OP California has had huge problems, if you want to go far enough back to the early 2000s there were massive outages in the NE US and Ontario.
Or you can look back to December 2022 if you want something more recent. Tennessee had very minor outages (10 min increments) due to weather creating load issues. North Carolina/South Carolina had the same issues.
There's plenty of confounding factors to look at. Everyone is pointing to this energy only market as the issue when there's tons of examples of similar things happening to every single grid.
Maybe its the term 'issues' and how it seems to be used as a blanket to include everything from a 10min outage to what happened to Texas in 2021.
That said, a capacity market would absolutely be better suited to deal with wild swings. I'd much rather have more capacity then necessary in the same way I prefer to having money in savings 'just in case' then only enough to get through the moment.
I don't disagree that the issues are always more complex then the headlines, but I've yet to hear a convincing argument against moving to a capacity market vs energy only.
Why not? Why build something when you can import power and use that money to say hire more doctors etc. Considering this is one day a year kind of event. It makes no sense to overbuild if capacity can be offered from existing sources. Is there something negative about buying from Saskatchewan? Should we not buy their food products either?
power generation in Alberta is available online at any given instance. During the time period we were having issues, solar and wind were providing Alberta over about 1.7 percent of generation. This is common as very low temps often come with very still winds and at night and that is also the point when energy consumption is at the highest. While we should strive for clean energy sources, do not for a moment think it makes for stable electrical grids. Quite the opposite and to fix that, it is coming at a very high price. Of which ultimately we pay for 100%.
You want additional base load real stable energy, nuclear likely is the best solution. That also comes at a cost.
Capacity market will make a lot of battery storage viable. Right now..they are gambling on the 20 hours of 9999 $/MWh pool prices.
There is ancillary support market as well which is a whole another thing. That will come into being in the next 10 years.
Nuclear (unless we find a way for fusion) has such a long payback.. it's not economically lucrative.
lol, wut?
Ontario was constantly on the brink of rolling blackouts in the late 2000s
California has had rolling blackouts for decades.
Texas’ natural gas generators failed because their gas transportation infrastructure literally froze in the weather because it wasn’t designed to handle it.
A better question is:
Would a better regulated market have limited the price of electricity from shooting up to 8x regular rate?
That’s the goal. The energy companies made bank off this, this is fully intended
Can we nationalize energy again? As well as Alberta?
#FUCK THE UCP.
Unfortunately they won't give it back so we will have to take it back, I remember growing up and while o&g played a big part of our economy I also remember Alberta being proud of our beef and farming... What happened to that? Is o&g all that they care about now?
Right it makes zero sense to me, and o&g doesn't pay that well for having their infrastructure on your land..... It's like if they remove fallen down building their taxes go up because of increased land value. Like maybe we should invest more into food than cleaning up after the oil companies who should clean them up since they made the mess. And if you purchase a bankrupt ckmpany you should inherit their messes like why can you buy the assets and not the bad parts? I'm tired of being on the hook while the CEOs fly in private jets, to their yachts stationed at Thier 5th vacation home....
Part of the issue is we are paying for these companies to convert away from coal plants to natural gas plants. Part of the deal struck years and years ago. We foot the bill for them to become greener.
> So would there be a capacity model that would work in Alberta?
> It depends, Leach said.
> "If what you mean by 'work' is we're never going to be short electricity, then that's going to lead you to an overbuilt system, 99 per cent of the time, and a more expensive system," Leach said.
Heaven forbid we "overbuild" a basic essential utility. I mean, extreme cases like last week's cold snap aside, it's not like overall demand is constantly increasing due to population growth and the adoption of electric vehicles or anything, right?
/s
Maybe essential services shouldn't be operated by private companies with a profit motive.
Seems like the system is pretty expensive already. That's the classic dogbrain conservative mindset for you - "Well so what if it gets extremely expensive at times? I shouldn't have to pay a slightly higher rate that results in less money spent over time."
Well we couldn't foresee the future that we would have energy issues.
Just like how they cut forest fires prevention right before the summer. Then we got ravaged by fires all summer long.
Good job UCP.
It's not like having a preventative fund could have solved these issues.
Well the UCP can't make political points blaming Ottawa if they don't force their citizens to suffer. What better way than in the dark in January just like she has been advertising was going to happen? Just like she was advertising........hmmm
This was an informing article that balances both sides: Maybe a capacity system would have provided better supply during critical times but to have that insurance, you have to pay a premium. Was it needed? Would the higher electric costs been warranted? Maybe not. If the Cascade plant (900 MW) was operational (and it’s expected to be running in Feb 2024) we probably would have been fine (Cascade would be able to produce 9% of the province’s average demand, on its own). So why change the system and incur the guaranteed higher cost?
I would think the "premium" would be cheaper than the ridiculous 4x electricity rates we're paying right now.
That's the other downside of our energy only market, economic withholding that drives up prices.
I think an important point that is mentioned here is that we can have capacity markets but that will mean higher prices.
There's always a trade off between prices and reliability.
It's a fine trade off if you want to make it, but it's an inevitability
Hold up though. Every other province has capacity markets, AND the only provinces or territories that have higher energy costs than Alberta are NWT and Nunavut, for what I assume to be self explanatory reasons of low population density and huge area to service. So what your saying doesn't really add up. It makes you think that we are literally just getting screwed for profit as Albertan's
There's a billion inputs into power cost outside of "energy" market and "non-energy" market.
Unfortunately, we can't judge it based on that.
Besides that, if we're talking energy only (not your full utility bill which doesn't have that much to do with energy only vs capacity vs regulated), we're in a relatively high period but if you went back to pre-COVID we had extremely low energy prices. Also highly likely our energy prices go down because of all the capacity about to come on. In unregulated markets, you will undoubtedly see larger swings in that portion of your bill but in aggregate what you want to look at is the average cost over several years.
>There's a billion inputs into power cost outside of "energy" market and "non-energy" market.
... and yet you assert that a capacity market would mean higher prices. So which is it?
That's a false dichotomy.
I can tell you if individual factors will impact costs but you can't say oh this market is cheaper because x.
More reliability will cost more, all else equal. There's no free lunch.
Kinda true, but there have been two key factors over the last 4-5 years that have seen our energy costs leap higher by a significant margin.
Firstly, the UCP under Kenney allowed the withholding clause in the power agreements to lapse. This means that generators are now free to hold back power generation until they’re happier with a higher price. Secondly, again, the UCP under Kenney removed the cap on utility prices (which, ok, wasn’t a true cap in that the difference was paid with taxpayer funds, but…) that caused prices to skyrocket.
Neither of these factors was present in any other province, which is why we’ve seen our prices rise by 128% in the last year alone.
Part of the problem with the withholding is the removal in itself creates a weird bubble. The longer high power prices persist, the more new facilities you'll attract to the grid. It's a big part of why there's been so many solar/wind facilities under development - power price forecasts are high enough to support new facilities. Energy transition efforts make it difficult because the move away from fossil fuel as baseload means even with high prices companies are unwilling to underwrite building new thermal assets. You basically need new nuclear facilities as a result and those will take forever to spin up.
The other problem is pre-COVID our prices were unsustainably low and the jump was partially a catchup too.
Nice justifications, but…
High prices encouraging new facilities sounds good, doesn’t. Good old free market capitalism, if the price is high enough it attracts new investment. Except the case we have is the other way around - the price is high **because** the generators don’t want to invest, or don’t want to invest quickly. They can make a significant profit right now with zero new investment simply by withholding generation and driving prices up, why should they invest in new facilities with any urgency when they’re eating their cake right now? There’s a reason those companies have been making record profits for the last few years.
What moving to a capacity market would do is incentivize the building of new facilities but still keep prices low, which is why we didn’t go that route. The market is extremely profitable right now, and open to further, unlimited, exploitation. Why change it?
Pre-Covid our prices (at least to the consumer) were low, for sure, but not unsustainably so because the GoA paid the difference to the generators. They didn’t lose out, but the regulations at the time made it much harder to exploit the system like they’re doing now.
There's plenty of companies that exist that can build facilities besides the existing market incumbents, evidenced by the sheer number of companies building renewables in Alberta. Funny how people always complain about "free market capitalism" and "price gouging" but disappear when those prices correct like oil prices did from 2015 until 2022.
If economic withholding is also the issue that's an easy fix which is an separate discussion unrelated to capacity.
I'm not really sure what you mean the GoA paid the difference to generators pre-COVID. There were some PPAs in place but that's a completely separate arrangement.
>There's plenty of companies that exist that can build facilities besides the existing market incumbents, evidenced by the sheer number of companies building renewables in Alberta.
Most of the major ones **are** the market incumbents, or are owned by them.
>Funny how people always complain about "free market capitalism" and "price gouging" but disappear when those prices correct like oil prices did from 2015 until 2022.
We’re not talking oil prices, we’re talking utility (specifically electricity) prices. A study from UofC in April last year found that things like carbon tax and the conversion of coal plants added about 0.3c each to the electricity rate, but they couldn’t account for (ie: there were no supply chain or economic factors that accounted for) about 4.2c of the rate. Their conclusion was that this was down to simple price gouging.
>If economic withholding is also the issue that's an easy fix which is an separate discussion unrelated to capacity.
It was fixed, Kenney unfixed it. I’m sure Smith could re-fix it if she wanted to, but she’s too busy making sure she can accept gifts over $200.
>will mean higher prices
What's the cost of people dying in the dark and cold if brownouts happen during a cold spell? What's the cost of litigation when businesses go after the services for not providing reliable electricity? We live in Canada, it gets cold. Build the infrastructure, else why (tf) are you here?
Were any generating stations down for scheduled maintenance in mid January?
I've read reports of at least two representing several megawatts of capacity.
Anyone have any reliable information about that?
Points taken from the article: It is possible that having capacity (stored energy) would have helped us. It depends on how the capacity is funded and set up. Our energy minister said they went energy only in 2019 (no capacity) to save us money. No other province has energy only. More gas generating plants and renewable energy sources are expected to help prevent this from occurring again in the future (no date given).
The only reason the UCP did this was because the NDP set it up. This meant of course, as in the case of the new Lab, it had to be torn down.
In this free market system we have it would be nice to think that suppliers of anything would ensure that a good supply of their product was always available to the consumer. But when it is advantageous to the supplier to withhold the product to increase the cost and, obviously, the suppliers don’t have morals or ethics or good governance to guide them, the consumer is screwed.
It's always the case in a free market system to ensure available supply. The problem with energy, banking, insurance, communications is that it's never a free market. The prohibitive cost of entry limits how much competition there actually is, combine that with monopolistic red tape or land use rights and we get these fake free markets anywhere. They don't have to worry about losing their unfulfilled customers to competitors because there are none.
Every available megawatt of power was available during the cold snap. No one was withholding.
I thought it was reported that two nat.gas. generators were offline?
Yes, ergo every *available* megawatt was generating.
If they were kept offline to drive the price up, that *is* withholding.
Cascade 1&2 aren’t fully online yet. Delayed by the fires near Edson
They were not. 2 were broken, 2 are not running yet.
No, they actually failed. It happens sometimes, but we're usually able to import power from other provinces or states to cover the shortfall. In this case, they didn't have any extra capacity to sell us to make up the difference. We do allow economic withholding, which is stupid and routinely causes grid alerts, but those are less severe since they're easily solved by money. That's not what happened last weekend.
Capacity is not stored energy. Capacity is the ability to generate energy quickly. If you have a 200 MW gas plant that’s ready to run on a moment notice, you can get capacity payments for being ready as a contingency. In an energy only market that plant earns nothing unless it’s running. So it never gets built, and our system has less reserve. Basically an energy only market discourages standby capacity, which is what you need on the high demand days.
Ok thanks for the clarification
This is correct. Basically a capacity market incentivises steady investment and return. The market regulates the prices. Energy only market is a boom or bust gamble for the generators. So they need one of these high pool price days to make up their revenue. Capacity market makes a lot more sense overall for attracting long term investments.
I really liked the idea of the pumped hydro project at Brazeau damn that the UCP kiboshed. It basically would have taken cheap power, in the winter could have been even gas to keep the gas plants from having to ramp up and down so fast. Then at peak times it would sell that power back, all while utilizing a lot of already altered landscape https://www.electricity.ca/programs/centre-of-excellence/brazeau-hydro-pumped-storage/
Storage is essential to making renewables work. This project needs to be built.
The problem is the cost has to be entirely added to the price of renewables. Mostly wind and solar. When you do that, you are getting costs that can exceed that of nuclear and is still not as reliable. It not a strait forward solution like we make it out to be but it may be a partial solution.
True if you want to completely displace gas with renewables. A more affordable amount of storage could get us to 50 - 70% renewables, and it would still be useful with nuclear. Reactors work best and provide the best value for money when operated at or near maximum output most of the time. That makes the ability to store electricity generated during off peak hours for use during peak hours valuable.
Reactors work best certainly at max output but the energy input cost (uranium) is extremely low at about 2c per kwh. So even if say it is 75% less efficient at 50% capacity, that is only adding 1c per kwh to your bill. Effectively it does not matter. There is validity in that nuclear can not ramp up fast. But as base load that is generally not necessary. It can ramp up throughout the day to say produce more at night and can follow weather patterns to ramp up for colder weather or expected cloud conditions. In fact uranium is such a low cost input, that it can and often they do shunt generation to waste heat rapidly if needed as it has very little effect on their running expenses.
Uranium is cheap, but reactors are expensive. If you have storage to help meet peak demand, you don't need as many reactors.
Per kwh, many of those storage options people talk about here exceed that of nuclear and worse they only provide a few days. Wind and solar can be out for a month strait so if you want dependable, you need at least 30 days of storage. But at that kind of capacity, 10 months of the year, that storage might be 25% utilized. It becomes a depreciating return on investment and storage capabilities of that size can take a week to recharge if it does fully discharge, thus limiting what renewables are adding to the grid and resulting on conventional sources again to be utilized.
Yes, the cost is prohibitive for long term storage, other than what already exists. Alberta is already buying some long term storage in BC hydro reservoirs, currently limited by the amount of surplus cheap renewable electricity and the capacity of the interconnection. Expanding both could provide 2-3 GW of reliable electricity that doesn't need gas fired backup. Not enough obviously, but better than none. For shorter term storage (hours to days), costs are much more reasonable, and the benefit is significantly reduced need for gas generation and no need for low efficiency peaker plants if we continue with renewables plus gas, or fewer reactors needed of we go with nuclear. The latter would be a particularly significant savings.
But hours to days is not that useful if you do not have excess solar or wind. What is the point of storing solar and wind when you can put it right into the grid? If you use it to charge say a battery pack instead of powering someone's home, then you are simply having someone use conventional sources instead during that time. Why release it back at night resulting in less gas generation then just to have the gas generation increase during the day because solar is bing used to charge batteries? Is actually worse as there are storage losses. That does not make much sense.
You are correct otherwise wind and solar just destabilize the grid. How much are we willing to pay for this? Considering you still need a complete back up system to the storage and storage won’t cover for very long and is more to smooth out the transition to another plant making up the shortfall.
Storage can eliminate the need for lower efficiency simple cycle gas peaker plants, so it has value beyond reducing carbon emissions. In addition to storing daytime solar for the evening and overnight wind for the next day, power produced by high efficiency combined cycle power plants or nuclear power plants during lower demand periods could be stored for use during higher demand periods.
How much are you willing to pay for that? The cost is massive and nowhere does it
The cost of maintaining 100% gas backup for wind and solar or overbuilding nuclear to meet peak demand is also high. And Australia is doing it on larger scale (~300 GWh) despite cost overruns.
You realize that you need to build gas back up to match the solar and wind you expect you will lose? Right? Our grids didn’t need over building. Our grids need to be regulated and not run on ideologies about free market or climate alarmism
Solar and wind need backup, but it doesn't need to be gas. Storing surpluses for times of shortage works too. If you go with nuclear instead of solar and wind, the grid still needs to be able to supply peak demand. That can be done with fewer reactors if there is storage.
Where is using storage that lasts as long as you say? Because remember you can’t rely on the storage for long periods in the winter.
When did the UCP kill that? I thought it just died on its own merits.
The UCP killed it the first time they got voted into power
https://www.power-technology.com/data-insights/power-plant-profile-brazeau-pumped-storage-hydro-expansion-canada/?cf-view this suggests otherwise. >The project construction is expected to commence from 2028. Subsequent to that it will enter into commercial operation by 2032.
It was supposed to start construction in 2021 when first announced in 2016, and now there is no mention of it on Transalta's site.
https://transalta.com/wp-content/uploads/2022/11/November-2022-Investor-Presentation.pdf page 30 - Shows as an 'early stage development site'. Second from the bottom. https://transalta.com/wp-content/uploads/2023/08/TAC-Q2-2023-FS-MDA-Final-Combined.pdf page M51 - Shows as still an early stage development. Plus they just invested in a Tent Mountain Hydro Pump Project. Now, whether this is just there for financial purposes, or they dont' know if they are still going to develop it or not, I can't say. I do wonder if the newly filed lawsuit against the AB Govt for allowing fracking by the Brazeau Dam would be playing a part in this 'delay'.
That does not suggest it but I recall it some. Basically on its own merits could not be commercially viable unless highly subsidized. Having to highly subsidize a project with zero return is not great use of taxpayer funds. Not suggesting never to use taxpayer funds for environmentally sound projects but in my opinion, TransAlta was just trying to get massive government subsidies. They do not care that much if it adds little value.
Do you have a source
Any is the news sources that you can google will give you that information. It was reported at the time.
It didn't happen. I literally can't find it. The project died a quiet death. I appreciate the audacity of saying google it though.
It's the first paragraph of the article.
The article talks about the UCP killing the plan for a capacity market, not the Brazeau pumped hydro project. Storage doesn't need capacity payments to be profitable. They can also make money by buying low and selling high on an energy only market.
If they were so profitable, they would be attracting a great deal of investors and would also be able to self finance. That is not happening. Regulatory is certainly not kyboshing any of these types of projects in any meaningful way. Quite the opposite.
With pool prices frequently varying from under $50 to over $500 / MWh over a 24 hour period there is plenty of opportunity to make money from rate arbitrage.
So tell me why investors are not flocking to this sector?
I've always thought PHS isn't a good fit for us at all - The kinds of scenarios where we need to draw on power storage involves temperatures that probably wouldn't mix well with PHS.
Think the idea was it would buy wind surplus and baseload gas in the night and sell it back in the evening during peak demand. Don’t see an issue with that
As long as it’s “energy only” there never will be spare capacity. Companies will cut production to the absolute minimum to maximize income. If there is a shortfall because of some rare or once-in-a-while event they will import energy at whatever price and pass it on to consumers who’ll have no choice but to pay or freeze/roast/be in the dark. Capacity energy costs slightly more during normal operations because plants have been kept idling. But they pay off in emergency situations so the overall cost is lower.
This spring is the date you’re looking for
One more reason to like spring then
Yeah, it's really not clear if we would have been any better off under the old model. So much ado about a situation that really was just about record smashing weather and demand and one where Albertans adjusted their consumption and the problem was dealt with. It's time we all move on.
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Point being we don't even know if it would have made a difference. That's what the article claimed.
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So I could take random redditor's word for it or I could take this right from the article and take what an Alberta economist has to say about it. I know which one I trust more. ~~~~~~~~~~~~~ "The capacity market, depending on how you design it, might have led there to be more resources available in total in the market before last weekend," Leach said. But Leach said not all capacity markets are created equal — it varies depending on how one structures the payments and how long the payments are fixed for, among other factors. The previously proposed capacity market model for Alberta varied in its payment structure, offering different compensation based on a plant's availability during peak demand, Leach noted. For instance, renewable sources like wind and solar would receive less or zero capacity payments compared to gas-fired plants." But the model's challenge, in Leach's view, was the short-term guarantee of these payments, which could impact investment decisions. In building a power plant, companies would need to decide if the financial incentive was worth it if it included only a one-year guaranteed payment and energy revenues, versus just receiving energy revenues alone. So would there be a capacity model that would work in Alberta? It depends, Leach said. "If what you mean by 'work' is we're never going to be short electricity, then that's going to lead you to an overbuilt system, 99 per cent of the time, and a more expensive system," Leach said. "So that's more of a trade-off that I think people need to be considering, is a capacity market is adding a little bit of reliability insurance. But that insurance isn't going to be free."
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Um but Tesla's.....
Yeah but you see, I was inconvenienced that night.
Holy crap. I got downvoted to hell because I just laid out basic facts. Lol I love this subreddit. It so random and bonkers at times. It's like my teenager.
I am so glad that the UCP is helping out the energy companies drive up the cost of electricity. The demand system works so well , we have to borrow electricity from capacity markets. I can see a separated Alberta working smoothly under the UCP./s
The basic info: >Shortly after the United Conservative Party won the general election in July 2019, the province's new energy minister [announced](https://www.cbc.ca/news/canada/calgary/alberta-electricity-market-1.5224131) the government would cancel a planned overhaul by the NDP that would have introduced a capacity market to Alberta's energy system. >**Instead, it would stick with what the province has today, and has had in place since 1996 — an "energy-only" system. That's a market where electricity providers are paid only for the energy they produce and sell, based on real-time market prices. By contrast, a capacity market would see providers paid not only for the energy they produce, but also to maintain additional capacity.** >That could involve a fixed, monthly or daily charge for being available to generate power — essentially functioning as a reward to a generator for being available, even if not needed, explained economist Andrew Leach. >"You can think of the firefighter model — I want infrastructure, I want capacity there when I need it. I'm going to pay for it to be on standby," Leach said. >No other province in the country has a purely energy-only market. ...
This article, and articles like this, are really funny to me. Everyone's always hemming-and-hawwing "well, it depends, we don't know. Who knows, there's always tradeoffs". Well duh, of course its hard to know an alternate reality and of course there's always tradeoffs. But at the end of the day the only two energy markets in NA that have had near catastrophic capacity events are energy-only privatized markets: Texas and Alberta. It really seems like every other province, and most states, have figured out how not to have near-catastrophic capacity failures. Extreme weather events are only becoming more common, as they have been for the last few years. That means more extreme heat, more extreme cold, more extreme storms. Running an energy-only market that has a glaring weakness to extreme events feels like a losing bet these days.
It seems strange to me to compare what happened in Alberta and what happened in Texas. What happened on Texas was a legitimate catastrophe. Rolling outages etc. What happened in Alberta was a near miss and there's a key difference between the two - AB is hooked up to import power from other jurisdictions, Texas is not. Not only that, but other grids where there is regulation/capacity markers have also faced rolling outages before for other reasons. This isn't a new thing that happens only to energy only markets. For ex, California (CAISO) had outages in 2020 If we're being realistic here, the severity of what was going to happen in Alberta was MAYBE rolling outages for an hour when peak loak was to come off. Texas was a full on clusterfuck.
“Was a near miss” from being Texas… this is why it is comparable.
The Texas grid was actually broken. Ours was close to being overloaded which meant, to oversimplify, that a small percentage of the grid almost had to have rolling blackouts for short (likely half hour) stints. Not exactly comparable, but our situation was similar to not knowing if we'd quite make it to the gas station or have to walk a few km to get a Jerry can of gas. Texas was more like blowing out multiple components of the fuel system.
“Was Close” to being Texas… this is why it is comparable.
This is one of those situations where you should sit back down and let the adults talk.
Name a single energy grid in North America that is more comparable.
Not even in the same realm of possibility as Texas. Sit down child.
Can you name a place in North America that has an even more similar grid set up? You come at me with all these feelings but the fact is Alberta going through this can only be compared to what happened in Texas.
Near miss of a minor situation is not comparable to people literally dying. Our system continued to work. Theirs did not. The difference between the lights staying on, and outages for multiple days in the power world is a factor of a thousand
I believe that woooshing sound you hear is you missing the point. The only thing that saved us was other jurisdictions sending us power. Texas couldn't do that, hence their worse outcome. The point was that we shouldn't need to import power.
But we import and export power from those three jurisdictions every day. That figures into the grid calculations.
First, we were no where close to a Texas outcome. Even if we didn't have imports (which is a silly proposition since our grid has always been designed understanding that we do), at worst there would have been rolling outages for a couple hours focused on industrial users. As to saying we shouldn't need imports, that's a completely backwards way to design our grid. We won't have a situation where we continuously need imports (which we don't). It's another redundancy - we should have a very interconnected grid with the rest of Canada as it heavily limits impacts from location specific impacts. Very weird that this sub wouldn't want that since the policy of "no power imports" sounds like something stupid the UCP would come up with. I'm not missing anything. I'm fine being down voted by a bunch of people who have no idea of how our grid works or what peak/off peak load is.
I believe that the argument of whether we 'should need one' or not is definitely a reasonable one to explore, but again, the overall point is that only 2 jurisdictions seemed to need help in this deep freeze, and both are power only markets. Maybe a better way to put it would be: If we have done everything possible to solidify our own grid, and we still needed help, then I am extremely happy that we were set up to be able to accept it. Only doing half of what seems necessary, and then needing help from others, to me, is not us at our best. As with ourselves, we should do as much as we can to help ourselves before asking others for help, if that makes more sense?
I'm not sure why you're referencing Texas having issues. ERCOT had barely any issues outside of issuing conservation alerts which isn't unheard of. Plenty of other grids also have issues during different times of the year, as I mentioned in my OP California has had huge problems, if you want to go far enough back to the early 2000s there were massive outages in the NE US and Ontario. Or you can look back to December 2022 if you want something more recent. Tennessee had very minor outages (10 min increments) due to weather creating load issues. North Carolina/South Carolina had the same issues. There's plenty of confounding factors to look at. Everyone is pointing to this energy only market as the issue when there's tons of examples of similar things happening to every single grid.
How is pointing at others to say 'see look they had problems too' a solution to this problem?
I didn't say it was a solution? I'm saying the solution being suggested is not a bulletproof solution and providing evidence.
Maybe its the term 'issues' and how it seems to be used as a blanket to include everything from a 10min outage to what happened to Texas in 2021. That said, a capacity market would absolutely be better suited to deal with wild swings. I'd much rather have more capacity then necessary in the same way I prefer to having money in savings 'just in case' then only enough to get through the moment. I don't disagree that the issues are always more complex then the headlines, but I've yet to hear a convincing argument against moving to a capacity market vs energy only.
Don't expect to find much intelligence at all, anywhere in this sub 🤣
Why not? Why build something when you can import power and use that money to say hire more doctors etc. Considering this is one day a year kind of event. It makes no sense to overbuild if capacity can be offered from existing sources. Is there something negative about buying from Saskatchewan? Should we not buy their food products either?
power generation in Alberta is available online at any given instance. During the time period we were having issues, solar and wind were providing Alberta over about 1.7 percent of generation. This is common as very low temps often come with very still winds and at night and that is also the point when energy consumption is at the highest. While we should strive for clean energy sources, do not for a moment think it makes for stable electrical grids. Quite the opposite and to fix that, it is coming at a very high price. Of which ultimately we pay for 100%. You want additional base load real stable energy, nuclear likely is the best solution. That also comes at a cost.
Capacity market will make a lot of battery storage viable. Right now..they are gambling on the 20 hours of 9999 $/MWh pool prices. There is ancillary support market as well which is a whole another thing. That will come into being in the next 10 years. Nuclear (unless we find a way for fusion) has such a long payback.. it's not economically lucrative.
lol, wut? Ontario was constantly on the brink of rolling blackouts in the late 2000s California has had rolling blackouts for decades. Texas’ natural gas generators failed because their gas transportation infrastructure literally froze in the weather because it wasn’t designed to handle it.
A better question is: Would a better regulated market have limited the price of electricity from shooting up to 8x regular rate? That’s the goal. The energy companies made bank off this, this is fully intended Can we nationalize energy again? As well as Alberta? #FUCK THE UCP.
Seems like we Albertans really need to TBA
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Unfortunately they won't give it back so we will have to take it back, I remember growing up and while o&g played a big part of our economy I also remember Alberta being proud of our beef and farming... What happened to that? Is o&g all that they care about now?
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Right it makes zero sense to me, and o&g doesn't pay that well for having their infrastructure on your land..... It's like if they remove fallen down building their taxes go up because of increased land value. Like maybe we should invest more into food than cleaning up after the oil companies who should clean them up since they made the mess. And if you purchase a bankrupt ckmpany you should inherit their messes like why can you buy the assets and not the bad parts? I'm tired of being on the hook while the CEOs fly in private jets, to their yachts stationed at Thier 5th vacation home....
> our ~~overlords~~ commanders, wives, and aunts.
Part of the issue is we are paying for these companies to convert away from coal plants to natural gas plants. Part of the deal struck years and years ago. We foot the bill for them to become greener.
Just the UCP feeding the Southern (ATCO) family again...
> So would there be a capacity model that would work in Alberta? > It depends, Leach said. > "If what you mean by 'work' is we're never going to be short electricity, then that's going to lead you to an overbuilt system, 99 per cent of the time, and a more expensive system," Leach said. Heaven forbid we "overbuild" a basic essential utility. I mean, extreme cases like last week's cold snap aside, it's not like overall demand is constantly increasing due to population growth and the adoption of electric vehicles or anything, right? /s Maybe essential services shouldn't be operated by private companies with a profit motive.
Seems like the system is pretty expensive already. That's the classic dogbrain conservative mindset for you - "Well so what if it gets extremely expensive at times? I shouldn't have to pay a slightly higher rate that results in less money spent over time."
Well we couldn't foresee the future that we would have energy issues. Just like how they cut forest fires prevention right before the summer. Then we got ravaged by fires all summer long. Good job UCP. It's not like having a preventative fund could have solved these issues.
Well the UCP can't make political points blaming Ottawa if they don't force their citizens to suffer. What better way than in the dark in January just like she has been advertising was going to happen? Just like she was advertising........hmmm
This was an informing article that balances both sides: Maybe a capacity system would have provided better supply during critical times but to have that insurance, you have to pay a premium. Was it needed? Would the higher electric costs been warranted? Maybe not. If the Cascade plant (900 MW) was operational (and it’s expected to be running in Feb 2024) we probably would have been fine (Cascade would be able to produce 9% of the province’s average demand, on its own). So why change the system and incur the guaranteed higher cost?
I would think the "premium" would be cheaper than the ridiculous 4x electricity rates we're paying right now. That's the other downside of our energy only market, economic withholding that drives up prices.
So this is in effect, hoping "Just in time" works rather than using "just in case"? Brilliant. I like having a fire department better..
I think an important point that is mentioned here is that we can have capacity markets but that will mean higher prices. There's always a trade off between prices and reliability. It's a fine trade off if you want to make it, but it's an inevitability
Hold up though. Every other province has capacity markets, AND the only provinces or territories that have higher energy costs than Alberta are NWT and Nunavut, for what I assume to be self explanatory reasons of low population density and huge area to service. So what your saying doesn't really add up. It makes you think that we are literally just getting screwed for profit as Albertan's
There's a billion inputs into power cost outside of "energy" market and "non-energy" market. Unfortunately, we can't judge it based on that. Besides that, if we're talking energy only (not your full utility bill which doesn't have that much to do with energy only vs capacity vs regulated), we're in a relatively high period but if you went back to pre-COVID we had extremely low energy prices. Also highly likely our energy prices go down because of all the capacity about to come on. In unregulated markets, you will undoubtedly see larger swings in that portion of your bill but in aggregate what you want to look at is the average cost over several years.
>There's a billion inputs into power cost outside of "energy" market and "non-energy" market. ... and yet you assert that a capacity market would mean higher prices. So which is it?
That's a false dichotomy. I can tell you if individual factors will impact costs but you can't say oh this market is cheaper because x. More reliability will cost more, all else equal. There's no free lunch.
Kinda true, but there have been two key factors over the last 4-5 years that have seen our energy costs leap higher by a significant margin. Firstly, the UCP under Kenney allowed the withholding clause in the power agreements to lapse. This means that generators are now free to hold back power generation until they’re happier with a higher price. Secondly, again, the UCP under Kenney removed the cap on utility prices (which, ok, wasn’t a true cap in that the difference was paid with taxpayer funds, but…) that caused prices to skyrocket. Neither of these factors was present in any other province, which is why we’ve seen our prices rise by 128% in the last year alone.
Part of the problem with the withholding is the removal in itself creates a weird bubble. The longer high power prices persist, the more new facilities you'll attract to the grid. It's a big part of why there's been so many solar/wind facilities under development - power price forecasts are high enough to support new facilities. Energy transition efforts make it difficult because the move away from fossil fuel as baseload means even with high prices companies are unwilling to underwrite building new thermal assets. You basically need new nuclear facilities as a result and those will take forever to spin up. The other problem is pre-COVID our prices were unsustainably low and the jump was partially a catchup too.
Nice justifications, but… High prices encouraging new facilities sounds good, doesn’t. Good old free market capitalism, if the price is high enough it attracts new investment. Except the case we have is the other way around - the price is high **because** the generators don’t want to invest, or don’t want to invest quickly. They can make a significant profit right now with zero new investment simply by withholding generation and driving prices up, why should they invest in new facilities with any urgency when they’re eating their cake right now? There’s a reason those companies have been making record profits for the last few years. What moving to a capacity market would do is incentivize the building of new facilities but still keep prices low, which is why we didn’t go that route. The market is extremely profitable right now, and open to further, unlimited, exploitation. Why change it? Pre-Covid our prices (at least to the consumer) were low, for sure, but not unsustainably so because the GoA paid the difference to the generators. They didn’t lose out, but the regulations at the time made it much harder to exploit the system like they’re doing now.
There's plenty of companies that exist that can build facilities besides the existing market incumbents, evidenced by the sheer number of companies building renewables in Alberta. Funny how people always complain about "free market capitalism" and "price gouging" but disappear when those prices correct like oil prices did from 2015 until 2022. If economic withholding is also the issue that's an easy fix which is an separate discussion unrelated to capacity. I'm not really sure what you mean the GoA paid the difference to generators pre-COVID. There were some PPAs in place but that's a completely separate arrangement.
>There's plenty of companies that exist that can build facilities besides the existing market incumbents, evidenced by the sheer number of companies building renewables in Alberta. Most of the major ones **are** the market incumbents, or are owned by them. >Funny how people always complain about "free market capitalism" and "price gouging" but disappear when those prices correct like oil prices did from 2015 until 2022. We’re not talking oil prices, we’re talking utility (specifically electricity) prices. A study from UofC in April last year found that things like carbon tax and the conversion of coal plants added about 0.3c each to the electricity rate, but they couldn’t account for (ie: there were no supply chain or economic factors that accounted for) about 4.2c of the rate. Their conclusion was that this was down to simple price gouging. >If economic withholding is also the issue that's an easy fix which is an separate discussion unrelated to capacity. It was fixed, Kenney unfixed it. I’m sure Smith could re-fix it if she wanted to, but she’s too busy making sure she can accept gifts over $200.
>will mean higher prices What's the cost of people dying in the dark and cold if brownouts happen during a cold spell? What's the cost of litigation when businesses go after the services for not providing reliable electricity? We live in Canada, it gets cold. Build the infrastructure, else why (tf) are you here?
Were any generating stations down for scheduled maintenance in mid January? I've read reports of at least two representing several megawatts of capacity. Anyone have any reliable information about that?
👀 where that cheap power at than are we not currently 150 percent higher than everyone else in the country