New Ontario initiative aims to manage energy use

EU Electricity Market Reform Opposition highlights nine states resisting an overhaul of the wholesale power market amid gas price spikes, urging energy efficiency, interconnection targets, and EU caution rather than redesigns affecting renewables.

Key Points

Nine EU states reject overhauling wholesale power pricing, favoring efficiency and prudent policy over redesigns.

✅ Nine states oppose redesign of wholesale power market.

✅ Call for efficiency and 15% interconnection by 2030.

✅ Ministers to debate responses amid gas-driven price spikes.

Germany, Denmark, Ireland and six other European countries said on Monday they would not support a reform of the EU electricity market, ahead of an emergency meeting of energy ministers to discuss emergency measures and the recent price spike.

European gas and power prices soared to record high levels in autumn and have remained high, prompting countries including Spain and France to urge Brussels to redesign its electricity market rules.

Nine countries on Monday poured cold water on those proposals, in a joint statement that said they "cannot support any measure that conflicts with the internal gas and electricity market" such as an overhaul of the wholesale power market altogether.

"As the price spikes have global drivers, we should be very careful before interfering in the design of internal energy markets," the statement said.

"This will not be a remedy to mitigate the current rising energy prices linked to fossil fuels markets across Europe."

Austria, Germany, Denmark, Estonia, Finland, Ireland, Luxembourg, Latvia and the Netherlands signed the statement, which called instead for more measures to save energy and a target for a 15% interconnection of the EU electricity market by 2030.

European energy ministers meet tomorrow to discuss their response to the price spike, including gas price cap strategies under consideration. Most countries are using tax cuts, subsidies and other national measures to shield consumers against the impact higher gas prices are having on energy bills, but EU governments are struggling to agree on a longer term response.

Spain has led calls for a revamp of the wholesale power market in response to the price spike, amid tensions between France and Germany over reform, arguing that the system is not supporting the EU's green transition.

Under the current system, the wholesale electricity price is set by the last power plant needed to meet overall demand for power. Gas plants often set the price in this system, which Spain said was unfair as it results in cheap renewable energy being sold for the same price as costlier fossil fuel-based power.

The European Commission has said it will investigate whether the EU power market is functioning well, but that there is no evidence to suggest a different system would have better protected countries against the surge in energy costs, and that rolling back electricity prices is tougher than it appears during such spikes.

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BC Hydro Review Phase 2 Recommendations advance affordable electricity rates, clean energy adoption, electrification, and demand response, supporting heat pumps, EV charging, and low-income programs to cut emissions and meet CleanBC climate targets.

Key Points

Policies to keep rates affordable and accelerate clean electrification via heat pump, EV, and demand response incentives.

✅ Optional rates, heat pump and EV charging incentives

✅ Demand response via controllable devices lowers peak loads

✅ Expanded support for lower-income customers and affordability

The Province and BC Hydro have released recommendations from Phase 2 of the BC Hydro Review to keep rates affordable, including through a provincial rate freeze initiative that supported households, and encourage greater use of clean, renewable electricity to reduce emissions and achieve climate targets.

“Keeping life affordable for people is a key priority of our government,” said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation. “Affordable electricity rates not only help British Columbians, they help ensure the price of electricity remains competitive with other forms of energy, supporting the transition away from fossil fuels to clean electricity in our homes and buildings, vehicles and businesses.”

While affordable rates have always been important to BC Hydro customers, amid proposals such as a modest rate increase under review, expectations are also changing as customers look to have more choice and control over their electricity use and opportunities to save money.

Guided by input from a panel of external energy industry experts, government and BC Hydro have developed recommendations under Phase 2 of the BC Hydro Review to reduce electricity costs for individuals and businesses, even as a 3.75% increase has been discussed, as envisioned by the CleanBC climate strategy. This is also in alignment with TogetherBC, the Province’s poverty reduction strategy, and its guiding principle of affordability.

“As we promote increased use of electricity in B.C. to achieve our climate targets, we need to continue to focus on keeping electricity rates affordable, especially for lower-income families,” said Nicholas Simons, Minister of Social Development and Poverty Reduction. “Through the BC Hydro Review, and continuing engagement with stakeholders and organizations to follow, we are committed to finding ways to keep rates affordable, so everyone has access to the benefits of B.C.’s clean, reliable electricity.”

Recommendations include having BC Hydro consider providing more support for lower-income BC Hydro customers, informed by a recent surplus report that highlighted funding opportunities. These include incentives and exploring optional rates for customers to adopt electric heat pumps, and facilitating customer adoption of controllable energy devices that provide BC Hydro the ability to offer incentives in return for helping to manage a customer’s electricity use. 

Electrification of B.C.’s economy helps customers reduce their carbon footprint and supports the Province’s CleanBC climate strategy, and is an important part of keeping electricity affordable even amid higher BC Hydro rates in recent periods. As more customers make the switch from fossil fuels to using clean electricity in their homes, vehicles and businesses, BC Hydro’s electricity sales will increase, providing more revenue that helps keep rates affordable for everyone.

“We’re making the transition to a cleaner future more affordable for people and businesses across British Columbia through our CleanBC plan,” said George Heyman, Minister of Environment and Climate Change Strategy. “By working with BC Hydro and other partners, we’re making sure everyone has access to clean, affordable electricity to power technologies like high-efficiency heat pumps and electric vehicles that will reduce harmful pollution and improve our homes, buildings and communities.”

Chris O’Riley, president and CEO, BC Hydro, said: “Given the impact of COVID-19 on British Columbians, affordability is more important than ever. That’s why we are committed to continuing to keep rates affordable and offering customers more options that allow them to save on their bills while using clean electricity.”

In July 2021, the Province announced a first set of recommendations from Phase 2 of the BC Hydro Review amid a 3% rate increase approved by regulators. The next announcement from Phase 2 will include recommendations to increase the number of electric vehicles on the road.

In addition, as part of the Draft Action Plan to advance the Declaration on the Rights of Indigenous Peoples Act, the Province is proposing to engage with Indigenous peoples to identify and support new clean energy opportunities related to CleanBC, the BC Hydro Review and the British Columbia Utilities Commission Indigenous Utilities Regulation Inquiry, and to consider lessons from Ontario's hydro policy experiences as appropriate.

B.C. is the cleanest electricity-generation jurisdiction in western North America, with an average of 98% of its electricity generation coming from clean or renewable resources.

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Methane Hydrate CO2 Sequestration uses carbon capture and nitrogen injection to swap gases in seafloor hydrates along the Gulf of Mexico, releasing methane for electricity while storing CO2, according to new simulation research.

Key Points

A method injecting CO2 and nitrogen into hydrates to store CO2 while releasing methane for power.

✅ Nitrogen aids CO2-methane swap in hydrate cages, speeding sequestration

✅ Gulf Coast proximity to emitters lowers transport and power costs

✅ Revenue from methane electricity could offset carbon capture

The world is quickly realizing it may need to actively pull carbon dioxide out of the atmosphere to stave off the ill effects of climate change. Scientists and engineers have proposed various carbon capture techniques, but most would be extremely expensive—without generating any revenue. No one wants to foot the bill.

One method explored in the past decade might now be a step closer to becoming practical, as a result of a new computer simulation study. The process would involve pumping airborne CO2 down into methane hydrates—large deposits of icy water and methane right under the seafloor, beneath water 500 to 1,000 feet deep—where the gas would be permanently stored, or sequestered. The incoming CO2 would push out the methane, which would be piped to the surface and burned to generate electricity, whether sold locally or via exporters like Hydro-Que9bec to help defray costs, to power the sequestration operation or to bring in revenue to pay for it.

Many methane hydrate deposits exist along the Gulf of Mexico shore and other coastlines. Large power plants and industrial facilities that emit CO2 also line the Gulf Coast, where EPA power plant rules could shape deployment, so one option would be to capture the gas directly from nearby smokestacks, keeping it out of the atmosphere to begin with. And the plants and industries themselves could provide a ready market for the electricity generated.

A methane hydrate is a deposit of frozen, latticelike water molecules. The loose network has many empty, molecular-size pores, or “cages,” that can trap methane molecules rising through cracks in the rock below. The computer simulation shows that pushing out the methane with CO2 is greatly enhanced if a high concentration of nitrogen is also injected, and that the gas swap is a two-step process. (Nitrogen is readily available anywhere, because it makes up 78 percent of the earth’s atmosphere.) In one step the nitrogen enters the cages; this destabilizes the trapped methane, which escapes the cages. In a separate step, the nitrogen helps CO2 crystallize in the emptied cages. The disturbed system “tries to reach a new equilibrium; the balance goes to more CO2 and less methane,” says Kris Darnell, who led the study, published June 27 in the journal Water Resources Research. Darnell recently joined the petroleum engineering software company Novi Labs as a data scientist, after receiving his Ph.D. in geoscience from the University of Texas, where the study was done.

A group of labs, universities and companies had tested the technique in a limited feasibility trial in 2012 on Alaska’s North Slope, where methane hydrates form in sandstone under deep permafrost. They sent CO2 and nitrogen down a pipe into the hydrate. Some CO2 ended up being stored, and some methane was released up the same pipe. That is as far as the experiment was intended to go. “It’s good that Kris [Darnell] could make headway” from that experience, says Ray Boswell at the U.S. Department of Energy’s National Energy Technology Laboratory, who was one of the Alaska experiment leaders but was not involved in the new study. The new simulation also showed that the swap of CO2 for methane is likely to be much more extensive—and to happen quicker—if CO2 enters at one end of a hydrate deposit and methane is collected at a distant end.

The technique is somewhat similar in concept to one investigated in the early 2010s by Steven Bryant and others at the University of Texas. In addition to numerous methane hydrate deposits, the Gulf Coast has large pools of hot, salty brine in sedimentary rock under the coastline. In this system, pumps would send CO2 down into one end of a deposit, which would force brine into a pipe that is placed at the other end and leads back to the surface. There the hot brine would flow through a heat exchanger, where heat could be extracted and used for industrial processes or to generate electricity, supporting projects such as electrified LNG in some markets. The upwelling brine also contains some methane that could be siphoned off and burned. The CO2 dissolves into the underground brine, becomes dense and sinks further belowground, where it theoretically remains.

Either system faces big practical challenges, and building shared CO2 storage hubs to aggregate captured gas is still evolving. One is creating a concentrated flow of CO2; the gas makes up only .04 percent of air, and roughly 10 percent of the smokestack emission from a typical power plant or industrial facility. If an efficient methane hydrate or brine system requires an input that is 90 percent CO2, for example, concentrating the gas will require an enormous amount of energy—making the process very expensive. “But if you only need a 50 percent concentration, that could be more attractive,” says Bryant, who is now a professor of chemical and petroleum engineering at the University of Calgary. “You have to reduce the [CO2] capture cost.”

Another major challenge for the methane hydrate approach is how to collect the freed methane, which could simply seep out of the deposit through numerous cracks and in all directions. “What kind of well [and pipe] structure would you use to grab it?” Bryant asks.

Given these realities, there is little economic incentive today to use methane hydrates for sequestering CO2. But as concentrations rise in the atmosphere and the planet warms further, and as calls for an electric planet intensify, systems that could capture the gas and also provide energy or revenue to run the process might become more viable than techniques that simply pull CO2 from the air and lock it away, offering nothing in return.

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Ontario Global Adjustment Deferral offers COVID-19 electricity bill relief to industrial and commercial consumers not on the RPP, aligning GA to March levels for Class A and Class B manufacturers to improve cash flow.

Key Points

A temporary GA deferral easing electricity costs for Ontario industrial and commercial users not on the RPP.

✅ Sets Class B GA at $115/MWh; Class A gets equal percentage cut.

✅ Applies April-June 2020; automatic bill adjustments and credits.

✅ Deferred charges repaid over 12 months starting January 2021.

Manufacturers welcome the Government of Ontario's decision to defer a portion of Global Adjustment (GA) charges as part of support for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan.

"Manufacturers are pleased the government listened to Canadian Manufacturers & Exporters (CME) member recommendations and is taking action to reduce Ontario electricity bills immediately," said Dennis Darby, President & CEO of CME.

"The majority of manufacturers have identified cash flow as their top concern during the crisis, "added Darby. "The GA system would have caused a nearly $2 billion cost surge to Ontario manufacturers this year. This new initiative by the government is on top of the billions in support already provided to help manufacturers weather this unprecedented storm, while other provinces accelerate British Columbia's clean energy shift to drive long-term competitiveness. All these measures are a great start in helping businesses of all sizes stay afloat during the crisis and, keeping Ontarians employed."

"We call on the Ontario government to continue to consider the impact of electricity costs on the manufacturing sector, even after the COVID-19 crisis is resolved," stated Darby. "High prices are putting Ontario manufacturers at a significant competitive disadvantage and, discourages investments." A recent report from London Economics International (LEI) found that when compared to jurisdictions with similar manufacturing industries, Ontario's electricity prices can be up to 75% more expensive, underscoring the importance of planning for Toronto's growing electricity needs to maintain affordability.

To provide companies with temporary immediate relief on their electricity bills, the Ontario government is deferring a portion of Global Adjustment (GA) charges for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting from April 2020, as some regions saw reduced electricity demand from widespread remote work during the pandemic. The GA rate for smaller industrial and commercial consumers (i.e., Class B) has been set at $115 per megawatt-hour, which is roughly in line with the March 2020 value. Large industrial and commercial consumers (i.e., Class A) will receive the same percentage reduction in GA charges as Class B consumers.

The Ontario government intends to keep this relief in place through the end of June 2020, alongside investments like smart grid technology in Sault Ste. Marie to support reliability, subject to necessary extensions and approvals to implement this initiative.

Industrial and commercial electricity consumers will automatically see this relief reflected on their bills. Consumers who have already received their April bill should see an adjustment on a future bill.

Related initiatives include developing cyber standards for electricity sector IoT devices to strengthen system security.

The government intends to bring forward subsequent amendments that would, if approved, recover the deferred GA charges (excluding interest) from industrial and commercial electricity consumers, as Toronto prepares for a surge in electricity demand amid continued growth, over a 12-month period beginning in January 2021.

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FERC Capacity Markets face scrutiny as GAO flags inconsistent data on resource adequacy and costs, urging performance goals, risk assessment, and better metrics across PJM, ISO-NE, NYISO, and MISO amid cost-recovery proposals.

Key Points

FERC capacity markets aim for resource adequacy, but GAO finds weak data and urges goals and performance reviews.

✅ GAO cites inconsistent data on resource adequacy and costs

✅ Calls for performance goals, metrics, and risk assessment

✅ Applies to PJM, ISO-NE, NYISO; MISO market is voluntary

Capacity markets may or may not be functioning properly, but FERC can't adequately make that determination, according to the GAO report.

"Available information on the level of resource adequacy ... and related costs in regions with and without capacity markets is not comprehensive or consistent," the report found. "Moreover, consistent data on historical trends in resource adequacy and related costs are not available for regions without capacity markets."

The review concluded that FERC collects some useful information in regions with and without capacity markets, but GAO said it "identified problems with data quality, such as inconsistent data."

GAO included three recommendations, including calling for FERC to take steps to improve the quality of data collected, and regularly assess the overall performance of capacity markets by developing goals for those assessments.

"FERC should develop and document an approach to regularly identify, assess, and respond to risks that capacity markets face," the report also recommended. The commission "has not established performance goals for capacity markets, measured progress against those goals, or used performance information to make changes to capacity markets as needed."

The recommendation comes as the agency is grappling with a controversial proposal to assure cost-recovery for struggling coal and nuclear plants in the power markets. So far, the proposal would only apply to power markets with capacity markets, including PJM Interconnection, the New England ISO, the New York ISO and possibly MISO. However MISO only has a voluntary capacity market, making it unclear how the proposed rule would be applied there. 

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EDF Nuclear Power Price Deal sets a 70 euros/MWh reference price, adds consumer protection if wholesale electricity prices exceed 110 euros/MWh, and outlines taxation mechanisms to shield bills while funding nuclear investment.

Key Points

A government-EDF deal setting 70 euros/MWh with safeguards above 110 euros/MWh to protect consumers.

✅ Reference price fixed at 70 euros/MWh, near EDF costs.

✅ Consumer shield above 110 euros/MWh; up to 90% extra-revenue tax.

✅ Review clauses maintain 70 euros/MWh through market swings.

State-controlled power group EDF and the French government have reached a tentative deal on future nuclear power prices, echoing a new electricity pricing scheme France has floated, a source close to the government said on Monday, ending months of tense negotiations.

The two sides agreed on 70 euros per megawatt hour (MWH) as a reference level for power prices, aligning with EU plans for more fixed-price contracts for consumers, the source said, cautioning that details of the deal are still being finalised.

The negotiations aimed to find a compromise between EDF, which is eager to maximise revenues to fund investments, and the government, keen to keep electricity bills for French households and businesses as low as possible, amid ongoing EU electricity reform debates across the bloc.

EDF declined to comment.

The preliminary deal sets out mechanisms that would protect consumers if power market prices rise above 110 euros/MWH, similar to potential emergency electricity measures being weighed in Europe, the source said, adding that the deal also includes clauses that would provide a price guarantee for EDF.

The 70 euros/MWH agreed reference price level is close to EDF's nuclear production costs, as Europe moves to revamp its electricity market more broadly. The nuclear power produced by the company provides 70% of France's electricity.

The agreement would allow the government to tax EDF's extra revenues at 90% if prices surpass 110 euros/MWH, in order to offset the impact on consumers. It would also enable a review of conditions in case of market fluctuations to safeguard the 70 euro level for EDF, reflecting how rolling back electricity prices is tougher than it appears, the source said.

French wholesale electricity prices are still above 100 euros/MWH, after climbing to 1,200 euros during last year's energy crisis, even as diesel prices have returned to pre-conflict levels.

A final agreement should be officially announced on Tuesday after a meeting between Finance Minister Bruno Le Maire, Energy Transition Minister Agnes Pannier-Runacher and EDF chief Luc Remont.

That meeting will work out the final details on price thresholds and tax rates between the reference level and the upper limit, the source said.

Negotiations between the two sides were so fraught that at one stage they raised questions about the future of EDF chief Luc Remont, who was appointed by President Emmanuel Macron a year ago to turn around EDF.

The group ended 2022 with a 18 billion-euro loss and almost 65 billion euros of net debt, hurt by a record number of reactor outages that coincided with soaring energy prices in the wake of Russia's invasion of Ukraine.

With its output at a 30-year low, EDF was forced to buy electricity on the market to supply customers. The government, meanwhile, imposed a cap on electricity prices, leaving EDF selling power at a discount.

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