By The Canadian Press

ALBERTA ENERGY

New legislation to follow through on promise to end plan to move provincial power market to capacity system

Oct 17, 2019 | 3:34 PM

Alberta has introduced legislation to follow through on its promise to end the plan to move the provincial power market to a capacity system.

Energy Minister Sonya Savage says stakeholders don’t want a complex capacity system – they want to stay with the existing energy-only system.

The former NDP government introduced the capacity system that was to go online in 2021 to ensure no electricity shortages as Alberta moves to replace coal-fired electricity with more natural gas-fired power and renewables like wind and solar.

Capacity markets pay producers for spot prices but also to build up capacity, even if it isn’t needed.

That carried the risk that consumers would have to pay for excess capacity, so the NDP government capped prices at 6.8 cents per kilowatt per hour during the transition to 2021.

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Alberta’s existing energy-only market is composed of publicly traded companies that get paid in the spot market for the power they produce.