The Tennessee Valley Authority is looking to buy up to 2,000 megawatts of renewable energy capacity by 2011.
The nation's largest public utility issued a request for proposals to buy enough clean energy from the wind, sun and other renewable sources to supply about 978,000 homes in three years. It would be like adding two new nuclear reactors to the TVA system.
The possible energy sources also could include hydropower, geothermal, ocean, tidal, biomass and other biologically derived fuels, not necessarily produced in the Tennessee Valley.
"We know that there are producers, individuals or entities, out there that would be able to respond," TVA spokesman John Moulton said. "We just want to put this request out and find out what kind of market there is."
Knoxville-based TVA supplies electricity to about 8.8 million consumers in Tennessee, Alabama, Kentucky, Mississippi, Georgia, North Carolina and Virginia.
About 60 percent of that power now comes from coal-fired plants. The agency's goal is to get more than half of its total 35,000-megawatt generation capacity from zero or low carbon-emitting sources, such as nuclear and renewable energy, by 2020.
"We have supported for a long time TVA diversifying its mix by encouraging renewable energy," said Stephen Smith, executive director of the Southern Alliance for Clean Energy. "So this is an important first step. We believe there are a number of really good opportunities in the service territory."
TVA's announcement comes as neighboring investor-owned utilities make their own moves to renewable energy — Florida Power & Light broke ground on the first of three solar power projects, Duke Energy Corp. is planning up to 12 wood-electricity power plants and Georgia Power is seeking regulatory approval to convert a coal-fired unit to wood.
TVA is not limiting its search for renewable generation to its 80,000-square-mile territory, though that has been its preference in the past to help both the environment and the economy.
TVA developed the first successful wind farm in the Southeast on Buffalo Mountain, about a half hour from Knoxville, in 2001. The agency's Green Power Switch program sells blocks of renewable energy to consumers for a small premium produced by the 18-turbine wind farm, a handful of demonstration-scale solar collectors and a methane-recovery operation.
Together, those sources generate about 50 megawatts. TVA gets most of its 3,836 megawatts of purely renewable energy from its 29 hydroelectric dams.
Buying 2,000 more renewable, non-nuclear megawatts would be a huge contribution, but may not be enough for TVA to meet tougher clean-air standards under the incoming administration of President Barack Obama, Smith said.
Moulton said TVA's renewables' solicitation is not tied to any clean-air deadlines or a specific budget.
The agency wants up to 1,000 megawatts of renewable generation delivered by June 1, increasing to 1,500 megawatts a year later and to 2,000 megawatts by June 1, 2011.
TVA is targeting individual companies capable of producing at least 1 megawatt of renewable, clean energy that would be willing to sign a power supply contract from 1 to 20 years.
Dubai Green Hydrogen advances electrolysis at the Mohammed Bin Rashid Al Maktoum Solar Park, with DEWA and Siemens enabling clean energy storage, re-electrification, and fuel-cell mobility for Expo 2020 Dubai and public transport.
Key Points
Dubai Green Hydrogen is a DEWA-Siemens project making solar hydrogen for storage, mobility, and reelectrification.
✅ Electrolysis at Mohammed Bin Rashid Al Maktoum Solar Park
✅ Partners: DEWA and Siemens; public-private demonstration plant
✅ Hydrogen for buses, re-electrification, and energy storage
Something you hear frequently if you are a clean tech aficionado is that excess solar and wind power can be used to split water into oxygen and hydrogen. The Dubai Supreme Council of Energy, the 2020 Dubai Higher Committee and the Dubai Electricity and Water Authority broke ground in early February on a solar power hydrogen electrolysis facility located in the Mohammed Bin Rashid Al Maktoum Solar Park, and related initiatives like the Solar Decathlon Middle East underscore Dubai's clean energy focus. Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Council of Energy and chairman of the Expo 2020 Dubai Higher Committee, participated in the groundbreaking ceremony, according to a report by Khaleej Times.
Saeed Mohammed Al Tayer, CEO of DEWA, said at the groundbreaking ceremony the project is important to understanding the limits of green hydrogen technology and how it can contribute to the UAE’s vision of clean energy, and aligns with DEWA's latest renewable initiatives now progressing in the emirate. “This pioneering project is a role model for strategic partnerships between the public and private sectors. It will contribute to developing the green economy concept in the UAE and explore the potential of green hydrogen technology. The hydrogen produced at the facility will be stored and deployed for re-electrification, transportation and other uses.”
Siemens is providing much of the technology that will be used at the demonstration facility, while DEWA expands its China outreach to woo renewable energy firms that can contribute to the ecosystem. Joe Kaeser, president and CEO of Siemens, said the UAE was the perfect location for Siemens to test the technology, building on advances in offshore green hydrogen the company is pursuing. One of the primary uses of the hydrogen produced will be to power Dubai’s public transportation system.
“We are aware of the stress that is placed on vehicles in this region due to the high levels of heat; with hydrogen cells, you are not putting as much strain on the vehicle and that improves its longevity,” Kaeser said. “However, this is only the first step and we are eager to explore more ways in which we can adapt the technology to other sectors. The interest from various companies and partners has been immense and we are eager to work with all interested parties.”
“Dewa, Expo 2020 Dubai and Siemens are working together to help realize His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai’s, vision to identify new energy resources and provide sustainable power as part of a balanced approach that prioritizes the environment. Our aim is to make Dubai a model of energy efficiency and safety,” said Sheikh Ahmed.
Expo 2020 Dubai intends to use the hydrogen generated at the facility to transport visitors to the Expo 2020 Dubai and the Mohammed bin Rashid Al Maktoum Solar Park, reflecting regional momentum such as Saudi Arabia's clean energy plans over the next decade, in hydrogen fuel cell powered vehicles. Live data of the green hydrogen electrolysis will be displayed at Expo 2020 Dubai to help inform broader efforts like hydrogen hubs in the United States.
PG&E Drum Fire Cause identified as a power line failure in Santa Barbara County, with arcing electricity igniting vegetation near Buellton on Drum Canyon Road; 696 acres burned as investigators and CPUC review PG&E safety.
Key Points
A failed PG&E power line sparked the 696-acre Drum Fire near Buellton; the utility is conducting its own probe.
✅ Power line failed between poles, arcing ignited vegetation.
✅ 696 acres burned; no structures damaged or injuries.
A downed Pacific Gas and Electric Co. power line was the cause of the Drum fire that broke out June 14 on Drum Canyon Road northwest of Buellton, a reminder that a transformer explosion can also spark multiple fires, the Santa Barbara County Fire Department announced Thursday.
The fire broke out about 12:50 p.m. north of Highway 246 and burned about 696 acres of wildland before firefighters brought it under control, although no structures were damaged or mass outages like the Los Angeles power outage occurred, according to an incident summary.
A team of investigators pinpointed the official cause as a power line that failed between two utility poles and fell to the ground, and as downed line safety tips emphasize, arcing electricity ignited the surrounding vegetation, said County Fire Department spokesman Capt. Daniel Bertucelli.
In response, a PG&E spokesman said the utility is conducting its own investigation and does not have access to whatever data investigators used, and, as the ATCO regulatory penalty illustrates, such matters can draw significant oversight, but he noted the company filed an electric incident report on the wire with the California Public Utilities Commission on June 14.
"We are grateful to the first responders who fought the 2020 Drum fire in Santa Barbara County and helped make sure that there were no injuries or fatalities, outcomes not always seen in copper theft incidents, and no reports of structures damaged or burned," PG&E spokesman Mark Mesesan said.
"While we are continuing to conduct our own investigation into the events that led to the Drum fire, and as the Site C watchdog inquiry shows, oversight bodies can seek more transparency, PG&E does not have access to the Santa Barbara County Fire Department's report."
He said PG&E remains focused on reducing wildfire risk across its service area while limiting the scope and duration of public safety power shutoffs, including strategies like line-burying decisions adopted by other utilities, and that the safety of customers and communities it serves are its most important responsibility.
BC Hydro LNG Load Forecast signals rising electricity demand from LNG Canada, Woodfibre, and Tilbury, aligning Site C dam capacity with BCUC review, hydroelectric supply, and a potential fourth project in feasibility study British Columbia.
Key Points
BC Hydro's projection of LNG-driven power demand, guiding Site C capacity, BCUC review, and grid planning.
✅ Includes LNG Canada, Woodfibre, and Tilbury load requests
✅ Aligns Site C hydroelectric output with industrial electrification
✅ Notes feasibility study for a fourth LNG project
Despite recent project cancellations, such as the Siwash Creek independent power project now in limbo, BC Hydro still expects three LNG projects — and possibly a fourth, which is undergoing a feasibility study — will need power from its controversial and expensive Site C hydroelectric dam.
In a letter sent to the British Columbia Utilities Commission (BCUC) on Oct. 3, BC Hydro’s chief regulatory officer Fred James said the provincially owned utility’s load forecast includes power demand for three proposed liquefied natural gas projects because they continue to ask the company for power.
The letter and attached report provide some detail on which of the LNG projects proposed in B.C. are more likely to be built, given recent project cancellations.
The documents are also an attempt to explain why BC Hydro continues to forecast a surge in electricity demand in the province, as seen in its first call for power in 15 years driven by electrification, even though massive LNG projects proposed by Malaysia’s state owned oil company Petronas and China’s CNOOC Nexen have been cancelled.
An explanation is needed because B.C.’s new NDP government had promised the BCUC would review the need for the $9-billion Site C dam, which was commissioned to provide power for the province’s nascent LNG industry, amid debates over alternatives like going nuclear among residents. The commission had specifically asked for an explanation of BC Hydro’s electric load forecast as it relates to LNG projects by Wednesday.
The three projects that continue to ask BC Hydro for electricity are Shell Canada Ltd.’s LNG Canada project, the Woodfibre LNG project and a future expansion of FortisBC’s Tilbury LNG storage facility.
None of those projects have officially been sanctioned but “service requests from industrial sector customers, including LNG, are generally included in our industrial load forecast,” the report noted, even as Manitoba Hydro warned about energy-intensive customers in a separate notice.
In a redacted section of the report, BC Hydro also raises the possibility of a fourth LNG project, which is exploring the need for power in B.C.
“BC Hydro is currently undertaking feasibility studies for another large LNG project, which is not currently included in its Current Load Forecast,” one section of the report notes, though the remainder of the section is redacted.
The Site C dam, which has become a source of controversy in B.C. and was an important election issue, is currently under construction and, following two new generating stations recently commissioned, is expected to be in service by 2024, a timeline which had been considered to provide LNG projects with power by the time they are operational.
BC Hydro’s letter to the BCUC refers to media and financial industry reports that indicate global LNG markets will require more supply by 2023.
“While there remains significant uncertainty, global LNG demand will continue to grow and there is opportunity for B.C. LNG,” the report notes.
East-West Transmission Project Ontario connects Thunder Bay to Wawa, facing OEB bidding, Hydro One vs NextBridge, First Nations consultation, environmental assessment, Pukaskwa National Park route, and reliability needs for Northwestern Ontario industry and communities.
Key Points
A 450 km Thunder Bay-Wawa power line proposal facing OEB bidding, Hydro One competition, and First Nations consultation.
✅ Competing bids: Hydro One vs NextBridge under OEB rules
✅ First Nations cite duty to consult and environmental review gaps
✅ Route debate: Pukaskwa Park vs bypass; jobs and reliability at stake
Leaders of six First Nations are urging the Ontario government to "clean up" the bureaucratic process that determines who will build an "urgently needed" high-capacity power transmission line to service northern Ontario.
The proposed 450 kilometre East-West Transmission Project is set to stretch from Thunder Bay to Wawa, providing much-needed electricity to northern Ontario. NextBridge Infrastructure, in partnership with Bamkushwada Limited Partnership (BLP) — an entity the First Nations created in order to become co-owners and active participants in the economic development of the line — have been the main proponents of the project since 2012 and were awarded the right to construct.
In 2018, Hydro One appealed to the previous Liberal government with a proposal to build the transmission line with lower maintenance costs. On Dec. 20, the Ontario Energy Board (OEB) issued a decision that said it will issue the contract to construct the project to the company with the lowest bid, even as a Manitoba Hydro line delay followed a board recommendation in a comparable case.
The transmission regime in Ontario allows competing bids at the beginning of a project to designate a transmitter, and then again at the end of the project to award leave to construct.
As a result, the Hydro One was permitted to submit a competing bid, five years after it was first proposed. The chiefs of the six First Nations say that will delay the project by two years, impede their land and violate their rights. The former Liberal government under which the project was initiated "left the door open" for competition to enter this late in the construction, according to the community leaders.
"The former government created this mess and Hydro One has taken advantage of this loophole," Fort William First Nation Chief Peter Collins said in a Queen's Park news conference on Thursday. "Hydro One is an interloper coming in at the last minute, trying taking over the project and all the hard work that has been done, without doing the work it needs to do."
Mess will explode, says chief
According to Collins, the Ontario Energy Board is likely to choose Hydro One's late submission in February, "causing this mess to explode." The electricity and distribution utility has not completed any of the legal requirements demanded by a project of this magnitude, Collins said, including extensive consultations with First Nations, such as oral traditional evidence hearings that inform regulators, and thorough environment assessments. He speculated that by ignoring these two things, even though in B.C. Ottawa did not oppose a Site C work halt pending a treaty rights challenge, Hydro One's bid will be the lowest cost.
"Hydro One's interference is a big problem," said Collins. He was flanked by the leaders of the Pic Mobert First Nation, Opwaaganasiniing (also known as the Red Rock Indian Band), Michipicoten, Biigtigong Nishnaabeg — or Pic River First Nation — and Pays Plat First Nation.
Collins also highlighted that Hydro One's proposed route for the transmission line will go through Pukaskwa National Park on which there are Aboriginal title claims, and noted that an opponent of the Site C dam has been sharing concerns with northerners, underscoring the need for meaningful engagement. NextBridge's proposal, Collins said, will go around the park.
If Hydro One is awarded the construction project, at risk, too, are as many as 1,000 job opportunities in northern Ontario (including the Ring of Fire) that are expected from NextBridge's proposal, as well as the "many millions" in contracting opportunities for the communities, Collins said.
"That companies such as Hydro One can do this and dissolve all that has been developed by NextBridge and our [partnership] and all the opportunities we have created will signal to ... everyone in Ontario that Ontario's not open for business, at least fair business," Collins said.
Ontario Energy Minister 'disappointed' by OEB's decision
In an email statement to National Observer, Energy Minister Greg Rickford's press secretary said the government acknowledged the concerns of the First Nations leaders, and is "disappointed that the OEB continues to stall on this important project."
"The East-West Tie project is a priority for Ontario because it is needed to provide a reliable and adequate supply of electricity to northwestern Ontario to support economic growth," she wrote.
In October, Rickford wrote to the OEB outlining his expectation that a prompt decision would be made through an efficient and fair process.
Despite the minister’s request, the OEB delayed a decision on this project in December — as in B.C., a utilities watchdog has pressed for answers on Site C dam stability — pushing the service date back to at least 2021. In 2017, NextBridge said that, pending OEB approval, it would start construction in 2018, with completion scheduled for 2020.
Without the transmission line, the community faces a higher likelihood of power outages and less reliable electricity overall.
"Our government takes the duty to consult seriously and it is committed to ensuring that all Indigenous communities are properly consulted and kept informed regardless of the result of the OEB process," Rickford's office's statement said.
In a letter sent to Premier Doug Ford, Rickford and to Environment Minister Rod Phillips, all members of the Bamkushwada Limited Partnership said they will be compelled to appeal the OEB's decision if the right to construct is given to Hydro One.
The entire situation, they wrote in their letter, is "an undeniable mess" that requires government intervention.
"If the Ontario government can correct this looming outcome, it is incumbent on the Ontario government to do so," they wrote, urging the government to "take all legal means to prevent the OEB from rendering an unconstitutional and unjust decision."
"Our First Nations and the north have waited five long years for this transmission project," Collins said. "Enough is enough."
ITER Nuclear Fusion advances tokamak magnetic confinement, heating deuterium-tritium plasma with superconducting magnets, targeting net energy gain, tritium breeding, and steam-turbine power, while complementing laser inertial confinement milestones for grid-scale electricity and 2025 startup goals.
Key Points
ITER Nuclear Fusion is a tokamak project confining D-T plasma with magnets to achieve net energy gain and clean power.
✅ Tokamak magnetic confinement with high-temp superconducting coils
✅ Deuterium-tritium fuel cycle with on-site tritium breeding
✅ Targets net energy gain and grid-scale, low-carbon electricity
It sounds like the stuff of dreams: a virtually limitless source of energy that doesn’t produce greenhouse gases or radioactive waste. That’s the promise of nuclear fusion, often described as the holy grail of clean energy by proponents, which for decades has been nothing more than a fantasy due to insurmountable technical challenges. But things are heating up in what has turned into a race to create what amounts to an artificial sun here on Earth, one that can provide power for our kettles, cars and light bulbs.
Today’s nuclear power plants create electricity through nuclear fission, in which atoms are split, with next-gen nuclear power exploring smaller, cheaper, safer designs that remain distinct from fusion. Nuclear fusion however, involves combining atomic nuclei to release energy. It’s the same reaction that’s taking place at the Sun’s core. But overcoming the natural repulsion between atomic nuclei and maintaining the right conditions for fusion to occur isn’t straightforward. And doing so in a way that produces more energy than the reaction consumes has been beyond the grasp of the finest minds in physics for decades.
But perhaps not for much longer. Some major technical challenges have been overcome in the past few years and governments around the world have been pouring money into fusion power research as part of a broader green industrial revolution under way in several regions. There are also over 20 private ventures in the UK, US, Europe, China and Australia vying to be the first to make fusion energy production a reality.
“People are saying, ‘If it really is the ultimate solution, let’s find out whether it works or not,’” says Dr Tim Luce, head of science and operation at the International Thermonuclear Experimental Reactor (ITER), being built in southeast France. ITER is the biggest throw of the fusion dice yet.
Its $22bn (£15.9bn) build cost is being met by the governments of two-thirds of the world’s population, including the EU, the US, China and Russia, at a time when Europe is losing nuclear power and needs energy, and when it’s fired up in 2025 it’ll be the world’s largest fusion reactor. If it works, ITER will transform fusion power from being the stuff of dreams into a viable energy source.
Constructing a nuclear fusion reactor ITER will be a tokamak reactor – thought to be the best hope for fusion power. Inside a tokamak, a gas, often a hydrogen isotope called deuterium, is subjected to intense heat and pressure, forcing electrons out of the atoms. This creates a plasma – a superheated, ionised gas – that has to be contained by intense magnetic fields.
The containment is vital, as no material on Earth could withstand the intense heat (100,000,000°C and above) that the plasma has to reach so that fusion can begin. It’s close to 10 times the heat at the Sun’s core, and temperatures like that are needed in a tokamak because the gravitational pressure within the Sun can’t be recreated.
When atomic nuclei do start to fuse, vast amounts of energy are released. While the experimental reactors currently in operation release that energy as heat, in a fusion reactor power plant, the heat would be used to produce steam that would drive turbines to generate electricity, even as some envision nuclear beyond electricity for industrial heat and fuels.
Tokamaks aren’t the only fusion reactors being tried. Another type of reactor uses lasers to heat and compress a hydrogen fuel to initiate fusion. In August 2021, one such device at the National Ignition Facility, at the Lawrence Livermore National Laboratory in California, generated 1.35 megajoules of energy. This record-breaking figure brings fusion power a step closer to net energy gain, but most hopes are still pinned on tokamak reactors rather than lasers.
In June 2021, China’s Experimental Advanced Superconducting Tokamak (EAST) reactor maintained a plasma for 101 seconds at 120,000,000°C. Before that, the record was 20 seconds. Ultimately, a fusion reactor would need to sustain the plasma indefinitely – or at least for eight-hour ‘pulses’ during periods of peak electricity demand.
A real game-changer for tokamaks has been the magnets used to produce the magnetic field. “We know how to make magnets that generate a very high magnetic field from copper or other kinds of metal, but you would pay a fortune for the electricity. It wouldn’t be a net energy gain from the plant,” says Luce.
One route for nuclear fusion is to use atoms of deuterium and tritium, both isotopes of hydrogen. They fuse under incredible heat and pressure, and the resulting products release energy as heat
The solution is to use high-temperature, superconducting magnets made from superconducting wire, or ‘tape’, that has no electrical resistance. These magnets can create intense magnetic fields and don’t lose energy as heat.
“High temperature superconductivity has been known about for 35 years. But the manufacturing capability to make tape in the lengths that would be required to make a reasonable fusion coil has just recently been developed,” says Luce. One of ITER’s magnets, the central solenoid, will produce a field of 13 tesla – 280,000 times Earth’s magnetic field.
The inner walls of ITER’s vacuum vessel, where the fusion will occur, will be lined with beryllium, a metal that won’t contaminate the plasma much if they touch. At the bottom is the divertor that will keep the temperature inside the reactor under control.
“The heat load on the divertor can be as large as in a rocket nozzle,” says Luce. “Rocket nozzles work because you can get into orbit within minutes and in space it’s really cold.” In a fusion reactor, a divertor would need to withstand this heat indefinitely and at ITER they’ll be testing one made out of tungsten.
Meanwhile, in the US, the National Spherical Torus Experiment – Upgrade (NSTX-U) fusion reactor will be fired up in the autumn of 2022, while efforts in advanced fission such as a mini-reactor design are also progressing. One of its priorities will be to see whether lining the reactor with lithium helps to keep the plasma stable.
Choosing a fuel Instead of just using deuterium as the fusion fuel, ITER will use deuterium mixed with tritium, another hydrogen isotope. The deuterium-tritium blend offers the best chance of getting significantly more power out than is put in. Proponents of fusion power say one reason the technology is safe is that the fuel needs to be constantly fed into the reactor to keep fusion happening, making a runaway reaction impossible.
Deuterium can be extracted from seawater, so there’s a virtually limitless supply of it. But only 20kg of tritium are thought to exist worldwide, so fusion power plants will have to produce it (ITER will develop technology to ‘breed’ tritium). While some radioactive waste will be produced in a fusion plant, it’ll have a lifetime of around 100 years, rather than the thousands of years from fission.
At the time of writing in September, researchers at the Joint European Torus (JET) fusion reactor in Oxfordshire were due to start their deuterium-tritium fusion reactions. “JET will help ITER prepare a choice of machine parameters to optimise the fusion power,” says Dr Joelle Mailloux, one of the scientific programme leaders at JET. These parameters will include finding the best combination of deuterium and tritium, and establishing how the current is increased in the magnets before fusion starts.
The groundwork laid down at JET should accelerate ITER’s efforts to accomplish net energy gain. ITER will produce ‘first plasma’ in December 2025 and be cranked up to full power over the following decade. Its plasma temperature will reach 150,000,000°C and its target is to produce 500 megawatts of fusion power for every 50 megawatts of input heating power.
“If ITER is successful, it’ll eliminate most, if not all, doubts about the science and liberate money for technology development,” says Luce. That technology development will be demonstration fusion power plants that actually produce electricity, where advanced reactors can build on decades of expertise. “ITER is opening the door and saying, yeah, this works – the science is there.”
Alberta Capacity Market Overhaul faces scrutiny over electricity costs, reliability targets, investor certainty, and AESO design, as UCP reviews NDP reforms, renewables integration, and deregulated energy-only alternatives impacting generators, ratepayers, and future power price volatility.
Key Points
A shift paying generators for capacity and energy to improve reliability; critics warn of higher electricity costs.
✅ UCP reviewing NDP plan and subsidies amid market uncertainty
✅ AESO cites reliability needs as coal retires, renewables grow
✅ Critics predict overprocurement and premature launch cost spikes
Jason Kenney's government is facing renewed pressure to cancel a massive overhaul of Alberta's power market that one player says will needlessly spike costs by hundreds of millions of dollars, amid an electricity sector in profound change today.
Nick Clark, who owns the Calgary-based electricity retailer Spot Power, has sent the Alberta government an open letter urging it to walk away from the electricity market changes proposed by the former NDP government.
"How can you encourage new industry to open up when one of their raw material costs will increase so dramatically?" Clark said. "The capacity market will add more costs to the consumer and it will be a spiral downwards."
But NDP Leader Rachel Notley, whose government ushered in the changes, said fears over dramatic cost increases are unfounded.
"There are some players within the current electricity regime who have a vested interest in maintaining the current situation," Notley said
Kenney's UCP vowed during the recent election to review the current and proposed electricity market options, as the electricity market heads for a reshuffle, with plans to report on its findings within 90 days.
The party also promised to scrap subsidies for renewable power, while ensuring "a market-based electricity system" that emphasizes competition in Alberta's electricity market for consumers.
The New Democrats had opted to scrap the current deregulated power market — in place since the Klein era — after phasing out coal-fired generation and ushering in new renewable power as part of changes in how Alberta produces and pays for electricity under their climate change strategy.
The Alberta Electric System Operator, which oversees the grid, says the province will need new sources of electricity to replace shuttered coal plants and backstop wind and solar generators, while meeting new consumer demand.
After consulting with power companies and investors, the AESO concluded in late 2016 the electricity market couldn't attract enough investment to build the needed power generation under the current model.
The AESO said at the time investors were concerned their revenues would be uncertain once new plants are running. It recommended what's known as a capacity market, which compensates power generators for having the ability to produce electricity, even when they're not producing it.
In other words, producers would collect revenue for selling electricity into the grid and, separately, for having the capacity to produce power as a backstop, ensuring the lights stay on. Power generators would use this second source of income to help cover plant construction costs.
Clark said the complex system introduces unnecessary costs, which he believes would hurt consumers in the end. He said what's preventing investment in the power market is uncertainty over how the market will be structured in the future.
"What investors need to see in this market is price certainty, regulatory ease, and where the money they're putting into the marketplace is not at risk," he said.
"They can risk their own money, but if in fact the government comes in and changes the policy as it was doing, then money stayed away from the province."
Notley said a capacity market would not increase power bills but would avoid big price swings, with protections like a consumer price cap on power bills also debated, while bringing greener sources of energy into Alberta's grid.
"Moving back to the [deregulated] energy-only market would make a lot of money for a few people, and put consumers, both industrial and residential, at great risk."
Clark disagrees, citing Enmax's recent submissions to the Alberta Utilities Commission, in which the utility argues the proposed design of the capacity market is flawed.
In its submissions to the commission, which is considering the future of Alberta's power market, Enmax says the proposed system would overestimate the amount of generation capacity the province will need in the future. It says the calculation could result in Alberta procuring too much capacity.
The City of Calgary-owned utility says this could drive up costs by anywhere from $147 million to $849 million a year. It says a more conservative calculation of future electricity demand could avoid the extra expense.
An analysis by a Calgary energy consulting firm suggests a different feature of the proposed power market overhaul could also lead to a massive spike in costs.
EDC Associates, hired by the Consumers' Coalition of Alberta, argues the proposal to launch the new system in November 2021 may be premature, because it could bring in additional supplies of electricity before they're needed.
The consultant's report, also filed with the Alberta Utilities Commission, estimates the early launch date could require customers to pay 40 per cent more for electricity amid rising electricity prices in the province — potentially an extra $1.4 billion — in 2021/22.
"The target implementation date is politically driven by the previous government," said Duane Reid-Carlson, president of EDC Associates.
Reid-Carlson recommends delaying the launch date by several years and making another tweak: reducing the proposed target for system reliability, which would scale back the amount of power generation needed to backstop renewable sources.
"You could get a result in the capacity market that would give a similar cost to consumers that the [deregulated] energy-only market design would have done otherwise," he said.
"You could have a better risk profile associated with the capacity market that would serve consumers better through lower cost, lower price volatility, and it would serve generators better by giving them better access to capital at lower costs."
The UCP government did not respond to a request for comment.
