Category Archives: Market Assessment

Q4 Market Report: Pendulum Swinging to Markets – Will Ontario Get it Right?

Power Advisory LLC Q4 Ontario Market Report now available.

Over the past few months, there has been much concern (and justifiably so) over rising electricity costs to Ontario’s customers. In part due to this concern, the Ontario Government suspended the Large Renewable Procurement and just announced cancellation of the last round of procurements under the Feed-in Tariff Program. Clearly, there is now heightened awareness to cut costs within Ontario’s electricity sector.

We believe these cost issues are pushing the Ontario Government to find avenues towards potential resolutions, and one of these avenues is the Independent Electricity System Operator’s (IESO’s) Market Renewal Initiative. This is evident based on the Ministry of Energy’s remarks at the Association of Power Producers of Ontario’s annual banquet on November 15, 2016 and then at the November 28, 2016 Empire Club of Canada luncheon.

While Ontario’s wholesale electricity market should evolve through the Market Renewal Initiative, many Ontario-specific conditions and factors must be taken into account. First, Ontario’s Climate Change Action Plan will serve as a foundation within the forthcoming Ontario Government’s revised Long- Term Energy Plan which will set electricity policy. Therefore, evolution of Ontario’s wholesale  electricity market must result in outcomes to meet policy objectives. Second, Ontario’s supply mix is heavily ‘baseloaded’ with a very high concentration of non-emitting resources with high fixed costs and low marginal costs. We believe this supply mix will pose unique challenges to evolve Ontario’s wholesale market design, and therefore somewhat limiting application of some components of the U.S. wholesale market designs. Because of these challenges, any wrong turns in the evolution of Ontario’s wholesale market could actually result in higher costs to Ontario’s electricity ratepayers – so let’s take the time to get it right!

Commentary on Alberta’s November Announcements of a Capacity Market and Coal Phaseout Now Available

On November 23, the Government of Alberta announced its intention to create a capacity market within Alberta’s wholesale electricity market, and released a detailed Alberta Electricity System Operator recommendation paper titled Alberta’s Wholesale Electricity Market Transition Recommendation that provides background and support for the changes being made.
The Electricity Market Transition Report can be found here.

Power Advisory’s summary and commentary on the Government of Alberta announcements is available below.

download energy report

The following day, the Government announced it had concluded agreements with the coal-fired generation facility owners to cease operation by 2030. These developments are part of fundamentally defining a different path going forward for Alberta’s electricity sector than the one it has been following for almost the past 20 years.
The Coal-Fired Generation Agreement Announcement can be found here.

Power Advisory’s summary and commentary on the Capacity Market Recommendation report is available below.

download energy report

Power Advisory Summary of TriState RFP Winners

The various electric distribution companies and state agencies in Massachusetts, Connecticut and Rhode Island announced the results of the Clean Energy RFP Tuesday, indicating that contracts were being negotiated with six developers for about 460 MW.  The results are surprising as Power Advisory’s summary shows.

Please click here for Power Advisory’s summary of the Clean Energy RFP

Update on Pan-Canadian and Provincial Carbon Pricing

On October 3, the Government of Canada proposed a pan-Canadian pricing benchmark for carbon pollution. The announcement came as Environment Minster Catherine McKenna met with provincial counterparts to discuss coordination of the Pan-Canadian Framework on Clean Growth and Climate Change, and the Paris climate agreement was officially ratified.

Power Advisory has reviewed the announcement and provided our summary and commentary.

Power Advisory Carbon Pricing Commentary.

Power Advisory presents a case study on Ontario retail price impacts

On October 4th Travis Lusney, Director at Power Advisory, presented a case study on Ontario retail price impacts to the Canadian Energy Research Institute (CERI) at the CERI 2016 Electricity Conference in Calgary.

This presentation provided a case study on Ontario’s Regulated Price Plan (RPP) and the impact on residential and small business consumers in the provinces.  The case study briefly reviewed the history of the RPP  and reasoning for the recent price escalations for consumers in the program.  A discussion on the benefits and drawbacks of the RPP approach was provided along with current changes under consideration.  The presentation also presented dynamic pricing concepts in electricity and examples from other jurisdictions.  Power Advisory provided commentary on the overall effectiveness of the RPP and Ontario’s retail price impacts.

For more information, please see the CERI 2016 Electricity Conference website

Alberta Announces Firm Target of 30% Renewable Energy by 2030

Today the Alberta Government announced a firm target of 30% renewable energy by 2030.  As part of this firm target, the government will support an additional 5,000 MW of renewable generation by 2030 (see here).  The 30% target had not previously been identified as a firm target, and prior indications had been that the support for renewables would be 4,200 MW by 2030.  As such, this announcement marks a strengthening of renewable targets for Alberta.

The 30% energy target will be achieved mainly through the Renewable Electricity Program (REP) that targets large-scale grid renewables.  The Government’s news release states that “the province will solicit enough investment in Alberta’s electricity system to meet the target, while ensuring projects come online in a way that does not impact grid reliability and is cost-effective”.  The government expects that $10.5B of investment in Alberta renewables will be supported through this initiative.

A few high-level details were released, re: the REP:

  • Projects to be based in Alberta;
  • Only new or expanded projects;
  • Projects must be 5 MW or greater;
  • Projects must meet the Natural Resources Canada definition of renewable sources.

Further details on how the REP will operate will be released later this year and will be based on recommendations provided by the AESO.  The Government is now working with AESO on detailed program design and remains on target to release details of the program in the coming months.

Work is also underway to improve Alberta’s rules around smaller-scale electricity generation, including micro-generation.  Government is engaging expert stakeholders on ways to make it easier for individual Albertans and communities to create their own renewable energy.  These small-scale generation initiatives along with energy efficiency programs are being developed under the auspices of the newly created Energy Efficiency Alberta organization.

Power Advisory leads consortium of renewable energy developers improvements to the connection assessment process in Ontario

Travis Lusney, Director at Power Advisory LLC (Power Advisory), was retained to be the technical lead for a consortium of over 20 potential Large Renewable Procurement (LRP) II participants representing different technology types (e.g., solar generation, on-shore wind generation, hydroelectric generation, and bioenergy).

As the technical lead, Power Advisory developed a new connection assessment process for the LRP II process and presented the proposed process with participating entities, including industry associations (i.e., Canadian Wind Association (CanWEA), Canadian Solar Industries Association (CanSIA), Ontario Waterpower Association (OWA), etc.). Power Advisory built consensus within the consortium by preparing technical briefings, leading group discussions and clearly understanding and incorporating individual entity’s needs.  The draft consortium positions were presented to the Independent Electricity System Operator (IESO), who is overseeing the LRP II procurement and is the integrated system planner for Ontario.

Power Advisory was well positioned to be the technical lead for potential LRP II participants.  Travis Lusney is a former transmission power system planner and was a lead on the initial development of the Transmission Availability Test (TAT) and Distribution Availability Test (DAT), the connection assessment processes first used in the Feed-In Tariff (FIT) program, and subsequently used in the LRP I process.  Since joining Power Advisory, Travis has been an essential resource for a wide variety of clients seeking an understanding of the Ontario power system and developing a strategy for project development.  Travis’ deep knowledge of the Ontario power system and extensive understanding of the opportunities and shortcomings of connection capability are valuable resources for leading changes to the LRP II connection assessment process.

Power Advisory has a history of successfully leading and advising consortium of developers on a wide range of electricity sector matters.  Power Advisory successfully negotiated changes to the IESO market rules and IESO contracts related to integration of variable transmission connected renewable generation into the IESO electricity market.

For further information, please contact Travis at tlusney@poweradvisoryllc.com

Massachusetts Senate Passed Clean Energy Bill

On June 30, 2016, the Massachusetts Senate passed energy bill S.2372.  The energy bill is part of an effort to diversify the state’s energy mix and comply with greenhouse gas emissions reduction requirements.  The energy bill is expected to have a significant impact on the long-term energy policy and opportunities for renewable energy development.

Power Advisory Review of Clean Energy Generation Senate Bill