Government is restoring investor confidence in Alberta’s electricity system by returning to a cost-effective, reliable energy-only market
The Voice of Canada News:
Reviewing which market-based system is best for Albertans was a government commitment, and this decision comes after stakeholders – including industry and consumers – expressed overwhelming support for maintaining Alberta’s energy-only market, rather than creating a complex capacity market. Feedback was received through consultations and written submissions.
“Albertans and investors need certainty in our province’s electricity market system, not an experiment. The energy-only market works. Investors want to participate in it and it provides Albertans with reliable and affordable electricity.” –Sonya Savage, Minister of Energy
Currently, there are nearly 5,000 megawatts of natural gas, wind and solar generation projects fully approved in the province. This decision provides additional investor certainty in putting shovels in the ground, and will result in additional jobs for Albertans.
Alberta has been operating an energy-only market for electricity since 1996. In 2016, the previous government announced the province would transition to a capacity market, which would have been operational in 2021.
“The former government’s ideological meddling with our electricity system resulted in the return of the Power Purchase Arrangements (PPAs), costing consumers $2 billion. The response from industry to maintain an energy-only market was overwhelming, and this is yet another example of promise made, promise kept.”Sonya Savage, Minister of Energy
Energy-only market versus capacity market
A key difference between the markets is how electricity generators are paid.
- In energy-only markets, electricity generators are paid only for the electricity they produce in real time when electricity is required.
- In capacity markets, electricity generators are paid for their overall ability to produce electricity, in addition to the electricity they produce and sell in real time.
Government will table the necessary legislation and amend regulations to stop the implementation of the capacity market as soon as possible.
