On July 26th Alberta’s electricity market hit its regulated peak price of $1000 per megawatt-hour (MWh) and stayed there for hours 17, 18 and 19. The price soon dropped back down but the commentary continues.
Upon seeing there had been a price spike, I checked to how industrial wind turbines had performed and saw they’d performed exactly as I’d expected, with output dropping from hour 14 to hour 18.
I expected that as I’d seen it in 2014 and in 2012. I didn’t think this was a particularly big event. Prices have been very low in Alberta and this spike will do little to change the yearly average. Alberta is examining a capacity market, and the intent of those is to prevent high price hours – but Texas is an example of a jurisdiction thus far avoiding capacity markets/costs by upping the maximum peak market price. Theoretically, peak pricing can be healthy in encouraging new market entrants with peaking generation, or demand reduction, products. While seeing the one event as not particularly problematic, I did put some short thoughts up on twitter:
Capacity credit is an awkward term I’ll return to.
A response to my tweet tagged Andrew Leach who later put some other suspects for the cost spike up on Twitter, including:
If you look at what pulled out of the market, you had BR5 and Milner out, and then one Keephills and one Sundance coal unit exit…
And, on top of having those 4 coal units out, two more ramped down and wind generation dropped…
As
@JesseJenkins often points out, we need to re-think “base load” – AB had at least 6 “base load” coal plants out during summer peak.
“two more ramped down and wind generation dropped” is interesting. I’ll simply point to a recent post on flexibility as speculation on that point.
I rudely responded to the last point – which is the point the dreadful Pembina Institute now has a blog post picking up on.
So now I feel I must address the silly commentary from the time, and money, wasting Pembina and associates crowd.