Provinces continue to back nuclear power

Alberta Energy-Only Electricity Market faces capacity market debate, AESO price cap review, and coal-to-gas shifts by TransAlta and Capital Power, balancing reliability with volatility as investment signals evolve across Alberta's grid.

Key Points

An energy market paying generators only for electricity sold, with AESO oversight and a price cap guiding new capacity.

✅ AESO reviewing $999 per MW-h wholesale price cap.

✅ UCP retained energy-only; capacity market plan cancelled.

✅ TransAlta and Capital Power shift to coal-to-gas.

The Kenney government’s decision to cancel the redesign of Alberta’s electricity system to a capacity market won’t side-track two of the province’s largest power generators from converting coal-fired facilities to burn natural gas as part of Alberta’s shift from coal to cleaner energy overall.

But other changes could be coming to the province’s existing energy-only electricity market — including the alteration of the $999 per megawatt-hour (MW-h) wholesale price cap in Alberta.

The heads of TransAlta Corp. and Capital Power Corp. are proceeding with strategies to convert existing coal-fired power generating facilities to use natural gas in the coming years.

Calgary-based TransAlta first announced in 2017 that it would make the switch, as the NDP government was in the midst of overhauling the electricity sector and wind generation began to outpace coal in the province.

At the time, the Notley government planned to phase out coal-fired power by 2030, even as Alberta moved to retire coal by 2023 in practice, and shift Alberta into an electricity capacity market in 2021.

Such a move, made on the recommendation of the Alberta Electric System Operator (AESO), was intended to reduce price volatility and ensure system reliability.

Under the energy-only market, generators receive payments for electricity produced and sold into the grid. In a capacity market, generators are also paid for having power available on demand, regardless of how often they sell energy into the provincial grid.

The UCP government decided last month to ditch plans for a capacity market after consulting with the sector, saying it would be better for consumers.

On a conference call, TransAlta CEO Dawn Farrell said the company will convert coal-fired generating plants to burn gas, although it may alter the mix between simple conversions and switching to so-called “hybrid” plants.

(A hybrid conversion is a larger and more-expensive switch, as it includes installing a new gas turbine and heat-recovery steam generator, but it creates a highly efficient combined cycle unit.)

“Our view is fundamentally that carbon will be priced over the next 20 years no matter what,” she said Friday.

“We cannot get off coal fast enough in this company, and gas right now in Alberta is extremely inexpensive…

“So our coal-to-gas strategy is completely predicated on our belief that it’s not smart to be in carbon-intensive fuels for the future.”

Elsewhere in Canada, the Stop the Shock campaign has advocated for reviving coal power, underscoring ongoing policy debates.

The company said it’s planning the coal-to-gas conversion and re-powering of some or all of the units at its Keephills and Sundance facilities to gas-fired generation sometime between 2020 and 2023.

Similarly, Capital Power CEO Brian Vaasjo said the Edmonton-based company is moving ahead with a project that will allow it to burn both coal and natural gas at its Genesee generating station, even as Ontario’s energy minister sought to explore a halt to natural gas generation elsewhere.

In June, the company announced it would spend an estimated $50 million between 2019 and 2021 to allow it to use gas at the facility.

“What we’re doing is going to be dual fuel, so we will be able to operate 100 per cent natural gas or 100 per cent coal and everything in between,” Vaasjo said in an interview.

“You can expect to see we will be burning coal in the winter when natural gas prices are high, and we will be burning natural gas in summer when gas prices are real low.”

The transition comes as the government’s decision to stick with the energy-only market has been welcomed by players in the industry, and as Alberta's electricity future increasingly leans on wind resources.

A study by electricity consultancy EDC Associates found the capacity market would result in consumers paying an extra $1.4 billion in direct costs in 2021-22, as it required more generation to come online earlier than expected.

These additional costs would have accumulated to $10 billion by 2030, said EDC chief executive Duane-Reid Carlson.

For Capital Power, the decision to stick with the current system makes the province more investable in the future. Vaasjo said there was great uncertainty about the transition to a capacity market, and the possibility of rules shifting further.

Officials with Enmax Corp. said the city-owned utility would not have invested in future generation under the proposed capacity market.

“There is no short-term need (today) for new generation, so we’re just looking at the market and saying, ‘OK, as it evolves, we will see what happens,’” said Enmax vice-president Tim Boston.

Sticking with the energy-only market doesn’t mean Alberta will keep the existing rules.

In a July 25 letter, Alberta Energy Minister Sonya Savage directed AESO chair Will Bridge to examine if changes to the existing market are needed and report back by July 2020.

AESO, which manages the power grid, has been asked to investigate whether the current price cap of $999 per megawatt-hour (MW-h) should be changed.

The price ceiling hasn’t been altered since the energy-only market was implemented by the Klein government about two decades ago.

While allowing prices to go higher would increase volatility, reflecting lessons from Europe’s power crisis about scarcity pricing, during periods of rising demand and limited supply, it would send a signal to generators when investment in new generation is required, said Kent Fellows, a research associate at the University of Calgary’s School of Public Policy.

“Keeping the price (cap) too low could end up costing us more in the long run,” he said.

In a 2016 report, AESO said the province examined raising the price cap to $5,000 per MW-h, but “determined that it was unlikely to be successful in attracting investment due to increased price volatility.”

However, the amount of future generation that will be required in Alberta has been scaled back by the province.

In the United States, the Electricity Reliability Council of Texas (ERCOT) allows wholesale power prices in the state to climb to a cap of $9,000 per megawatt hours as demand rises — as it did Tuesday in the midst of a heat wave, according to Bloomberg.

Jim Wachowich, legal counsel for the Consumers’ Coalition of Alberta, said while few players are exposed to spot electricity prices, he has yet to be convinced raising the cap would be good for Albertans.

“Someone has to show me the evidence, and I suspect that’s what the minister has asked the AESO to do,” he said.

Generators say they believe some tinkering is needed to the energy-only market to ensure new generation is built when it’s required.

“The No. 1 change that the government has to … think about is in pricing,” added Farrell.

“If you don’t have enough of a price signal in an energy-only market to attract new capital, you won’t get new capital — and you’ll run up against the wall.”

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Asia Electricity Consumption 2025 highlights an IEA forecast of surging global power demand led by China, lagging access in Africa, rising renewables and nuclear output, stable emissions, and weather-dependent grids needing flexibility and electrification.

Key Points

An IEA forecast that Asia will use half of global power by 2025, led by China, as renewables and nuclear drive supply.

✅ Asia to use half of global electricity; China leads growth

✅ Africa just 3% consumption despite rapid population growth

✅ Renewables, nuclear expand; grids must boost flexibility

Asia will for the first time use half of the world’s electricity by 2025, even as global power demand keeps rising and Africa continues to consume far less than its share of the global population, according to a new forecast released Wednesday by the International Energy Agency.

Much of Asia’s electricity use will be in China, a nation of 1.4 billion people whose China's electricity sector is seeing shifts as its share of global consumption will rise from a quarter in 2015 to a third by the middle of this decade, the Paris-based body said.

“China will be consuming more electricity than the European Union, United States and India combined,” said Keisuke Sadamori, the IEA’s director of energy markets and security.

By contrast, Africa — home to almost a fifth of world’s nearly 8 billion inhabitants — will account for just 3% of global electricity consumption in 2025.

“This and the rapidly growing population mean there is still a massive need for increased electrification in Africa,” said Sadamori.

The IEA’s annual report predicts that low-emissions sources will account for much of the growth in global electricity supply over the coming three years, including nuclear power and renewables such as wind and solar. This will prevent a significant rise in greenhouse gas emissions from the power sector, it said.

Scientists say sharp cuts in all sources of emissions are needed as soon as possible to keep average global temperatures from rising 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial levels. That target, laid down in the 2015 Paris climate accord, appears increasingly doubtful as temperatures have already increased by more than 1.1 C since the reference period.

One hope for meeting the goal is a wholesale shift away from fossil fuels such as coal, gas and oil toward low-carbon sources of energy. But while some regions are reducing their use of coal and gas for electricity production, in others, soaring electricity and coal use are increasing, the IEA said.

The 134-page also report warned that surging electricity demand and supply are becoming increasingly weather dependent, a problem it urged policymakers to address.

“In addition to drought in Europe, there were heat waves in India (last year),” said Sadamori. “Similarly, central and eastern China were hit by heatwaves and drought. The United States, where electricity sales projections continue to fall, also saw severe winter storms in December, and all those events put massive strain on the power systems of these regions.”

“As the clean energy transition gathers pace, the impact of weather events on electricity demand will intensify due to the increased electrification of heating, while the share of weather-dependent renewables poised to eclipse coal will continue to grow in the generation mix,” the IEA said. “In such a world, increasing the flexibility of power systems while ensuring security of supply and resilience of networks will be crucial.”

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EECBG Program Funding empowers states, Tribes, and local governments with DOE grants to deploy clean energy, energy efficiency, EV infrastructure, and community solar, cutting emissions, lowering utility bills, and advancing net-zero decarbonization.

Key Points

EECBG Program Funding is a $550M DOE grant for states, Tribes, and governments to deploy clean energy and efficiency.

✅ Supports EV infrastructure and community solar deployment

✅ Cuts emissions and lowers utility costs via efficiency

✅ Prioritizes Justice40 benefits for underserved communities

The Biden-Harris Administration, through the U.S. Department of Energy (DOE), today released a Notice of Intent announcing $550 million to support community-based clean energy in state, Tribal, and local governments — serving more than 250 million Americans. This investment in American communities, through the Energy Efficiency and Conservation Block Grant (EECBG) Program, will support communities across the country to develop local programming and deploy clean energy technologies to cut emissions, advance a 90% carbon-free electricity goal nationwide, and reduce consumers’ energy costs, and help meet President Biden’s goal of a net-zero economy by 2050. 

“This funding is a streamlined and flexible tool for local governments to build their electricity future with clean energy,” said U.S. Secretary of Energy Jennifer M. Granholm. “State, local, and Tribal communities nationwide will be able to leverage this funding to drive greater energy efficiency and conservation practices to lower utility bills and create healthier environments for American families.”   

The EECBG Program will fund 50 states, five U.S. territories, the District of Columbia, 774 Tribes, and 1,878 local governments in a variety of capacity-building, planning, and infrastructure efforts to reduce carbon emissions and energy use and improve energy efficiency in the transportation, building, and other related sectors. For example, communities with this funding can build out electric vehicle infrastructure and deploy community solar to serve areas that otherwise do not have access to electric vehicles or clean energy, particularly through a rural energy security program where appropriate.  

The $550 million made available through the Bipartisan Infrastructure Law (BIL) represents the second time that the EECBG Program has been funded, the first of which was through the American Recovery and Reinvestment Act of 2009. With this most recent funding, communities can build on prior investments and leverage additional clean energy funding from DOE, other federal agencies, and the private sector to achieve sustained impacts, supported by a Clean Electricity Standard where applicable, that can put their communities on a pathway to decarbonization. 

Through the EECBG Program and the Office of State and Community Energy Programs (SCEP), DOE will support the many diverse state, local, and tribal communities across the U.S., including efforts to revitalize coal communities through clean energy, as they implement this funding and other clean energy projects. To ensure no communities are left behind, the program aligns with President’s Justice40 initiative and efforts toward equity in electricity regulation to help ensure that 40% of the overall benefits of clean energy investments go to underserved and overburdened communities. 

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Germany January Power Mix shows gas-fired generation rising, coal steady, and nuclear phaseout impacts, amid cold weather, energy prices, industrial demand, and emissions targets shaping renewables, grid stability, and security of supply.

Key Points

The January electricity mix, highlighting gas, coal, renewables, and nuclear exit effects on emissions, prices, and demand.

✅ Gas output up 13% to 8.74 TWh, share at 18.6%.

✅ Coal share 23%, down year on year, steady vs late 2023.

✅ Nuclear gap filled by gas and coal; emissions below Jan 2023.

Germany's electricity generation in January presented a fascinating snapshot of its energy transition journey. As the country strives to move away from fossil fuels, with renewables overtaking coal and nuclear in its power mix, it grapples with the realities of replacing nuclear power and meeting fluctuating energy demands.

Gas Takes the Lead:

Gas-fired power plants saw their highest output in two years, generating 8.74 terawatt hours (TWh). This 13% increase compared to January 2023 compensated for the closure of nuclear reactors, which were extended during the energy crisis to shore up supply, and colder weather driving up heating needs. This reliance on gas, however, pushed its share in the electricity mix to 18.6%, highlighting Germany's continued dependence on fossil fuels.

Coal Fades, but Not Forgotten:

While gas surged, coal-fired generation remained below previous levels, dropping 29% from January 2023. However, it stayed relatively flat compared to late 2023, suggesting utilities haven't entirely eliminated it. Coal still held a 23% share, and periodic coal reliance remains evident, exceeding gas' contribution, reflecting its role as a reliable backup for intermittent renewable sources like wind.

Nuclear Void and its Fallout:

The shutdown of nuclear plants in April 2023 created a significant gap, previously accounting for an average of 12% of annual electricity output. This loss is being compensated through gas and coal, with gas currently the preferred choice, even as a nuclear option debate persists among policymakers. This strategy kept January's power sector emissions lower than the previous year, but rising demand could shift the balance.

Industry's Uncertain Impact:

Germany's industrial sector, a major energy consumer, is facing challenges like high energy prices and weak consumer demand. While the government aims to foster industrial recovery, uncertainties linger due to a shaky coalition and limited budget, and debate about a possible nuclear resurgence continues in parallel, which could reshape policy. Any future industrial revival would likely increase energy demand and potentially necessitate more gas or coal.

Cost-Driven Choices and Emission Concerns:

The choice between gas and coal depends on their relative costs, in a system pursuing a coal and nuclear phase-out under long-term policy. Currently, gas seems more favorable emission-wise, but if its price rises, coal might become more attractive, impacting overall emissions.

Looking Ahead:

Germany's energy transition faces a complex balancing act, with persistent grid expansion woes and exposure to cheap gas complicating progress. While the reliance on gas and coal highlights the difficulties in replacing nuclear, the focus on emissions reduction is encouraging. Navigating the challenges of affordability, industrial needs, and climate goals will be crucial for a successful transition to a clean and secure energy future.

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Nation Rise Wind Farm Ruling overturns Ontario cancellation, as Superior Court finds the minister's decision unreasonable; EDP Renewables restarts 100-megawatt project near Cornwall, citing jobs, clean energy, and procedural fairness over bat habitat concerns.

Key Points

Ontario court quashes cancellation, letting EDP Renewables finish 100 MW Nation Rise project and resume clean energy.

✅ Judges call minister's decision unreasonable, unfair

✅ EDP Renewables to restart construction near Cornwall

✅ 100 MW, 29 turbines; costs awarded, appeal considered

Construction of a wind farm in eastern Ontario, as wind power makes gains nationwide, will move ahead after a court quashed a provincial government decision to cancel the project.

In a ruling released Wednesday, a panel of Ontario Superior Court judges said the province's decision to scrap the Nation Rise Wind Farm in December 2019 did not meet the proper requirements.

At the time, Environment Minister Jeff Yurek revoked the approvals of the project near Cornwall, Ont., citing the risk to three bat species.

That decision came despite a ruling from the province's Environmental Review Tribunal that determined the risk the project posed to the bat population was negligible.

The judges said the minister's decision was "unreasonable" and "procedurally unfair."

"The decision does not meet requirements of transparency, justification, and intelligibility, as the Minister has failed to adequately explain his decision," the judges wrote in their decision.

The company behind the project, EDP Renewables, said the 29-turbine wind farm was almost complete when its approval was revoked in December, even as Alberta saw TransAlta scrap a wind farm in a separate development.

The company said Thursday it plans to restart construction on the 100-megawatt wind farm.

"EDPR is eager to recommence construction of the Nation Rise Wind Farm, which will bring much-needed jobs and investment to the community," the company said in a statement. "This delay has resulted in unnecessary expenditures to-date, at a time when governments and businesses should be focused on reducing costs and restarting the economy."

A spokesman for Yurek said the government is disappointed with the outcome of the case but did not comment on a possible appeal.

"At this time, we are reviewing the decision and are carefully considering our next steps," Andrew Buttigieg said in a statement.

NDP climate change critic Peter Tabuns said the court decision is an embarrassment for the minister and the government. He urged the government not to pursue an appeal.

Yurek "was found to have ignored the evidence and the facts," he said. "They didn't just lose, their case collapsed. They had nothing to stand on. Taking this to appeal would be a complete and total waste of money."

Green party Leader Mike Schreiner said the ruling proves the government was acting based on ideology over evidence when it revoked the project's approval.

"As we shift towards a post-COVID recovery, we need the Ford government to give up the irrational crusade against affordable and reliable clean energy," Schreiner said in a statement.

Last year, the NDP revealed the province had spent $231 million to cancel more than 750 renewable energy contracts, a move Ford said he was proud of, shortly after winning the 2018 election.

The Progressive Conservatives have blamed the previous Liberal government, as leadership candidates debate how to fix power, for signing the bad energy deals while the province had an oversupply of electricity.

The Ford government, amid a new stance on wind power, has also said that by cancelling the contracts it would ultimately save ratepayers $790 million -- a figure industry officials have disputed.

At the time of the wind farm cancellation, the government also said it would introduce legislation that would protect consumers from any costs incurred, though a developer warned cancellations could exceed $100M at the time.

It has since acknowledged it will have to pay some companies to cancel the deals and set aside $231 million to reach agreements with those firms, and more recently has moved to reintroduce renewable projects in some cases.

On Wednesday, the judges awarded Nation Rise $126,500 in costs, which the government will have to pay.

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Ontario Hydrogen Strategy accelerates green hydrogen via electrolysis, reduced electricity rates, and IESO pilots, leveraging ICI, interruptible rates, and surplus power to grow clean tech, low-carbon energy, and export markets across Ontario.

Key Points

A provincial plan to scale green hydrogen with electricity costs, IESO pilots, and surplus power to boost tech.

✅ Amends ICI to admit hydrogen producers from 50 kW demand

✅ Enables co-located electrolysers to use surplus curtailed power

✅ Offers interruptible rates via IESO pilot for flexible loads

The Ontario Ministry of Energy is seeking input on accelerating Ontario’s hydrogen economy. The province has been promoting growth in the clean tech sector, including low-carbon energy production and the Hydrogen Innovation Fund, as an avenue for post-COVID-19 economic recovery. Hydrogen produced through electrolysis (or “green hydrogen”) has been central to these efforts, complimenting both federal and provincial initiatives to create vibrant domestic and export markets for the energy as a principal alternative to conventional fossil fuels.

On April 14, 2022, the Ministry filed a proposal (the Proposal) on the Environmental Registry of Ontario (ERO) to gather input from stakeholders, aligning with the province’s industrial electricity pricing consultation underway. As part of Ontario’s Hydrogen Strategy, the Ministry is considering several options that would provide reduced electricity rates for green hydrogen producers to make production more economically competitive with other energies. To date, the relatively high production cost of green hydrogen has been a challenge facing its adoption, both domestically and internationally.

The Proposal features three options:

• Amending the rules for the Industrial Conservation Initiative (ICI) applicable to hydrogen producers;
• Enabling onsite hydrogen production using electricity that would otherwise be curtailed; and
• Providing an interruptible electricity rate for hydrogen producers.

Option 1: Amending the ICI rules

Option 1 would amend the ICI rules to allow all hydrogen producers with an average monthly peak demand of 50kW to participate. Hydrogen producers’ facilities could qualify for ICI in the first year of operation with a peak demand factor determined based on a deemed consumption profile, using a method yet to be determined by the Ministry. At the end of the first year, their global adjustment (GA) charges would be reconciled based on their actual consumption pattern. As set out in our prior article, GA was introduced by the province in January 2005 to ensure reliable, sustainable and a diverse supply of power at stable and competitive prices, aligning with plans to rely on battery storage to meet rising energy demand. The Ministry’s current proposal would require hydrogen producers to place a security deposit for their facilities’ first year of operation with the Independent Electricity System Operator (IESO) or their Local Distribution Company (LDC) to ensure other consumer would not be adversely affected.

Option 2: Enable onsite hydrogen production using surplus electricity

Option 2 would allow businesses to co-locate hydrogen electrolysers at electricity generation facilities, drawing on recent electrolyzer investment trends, to make use of what would become curtailed generation. Under this option in the Proposal, the developer for the hydrogen production facility would be required to be a separate legal entity from the one that owns or operates the electricity generation facility. Based on this required level of independence, the hydrogen developer would be required to pay the electricity generator for the electricity supply.

At this stage, it is not clear whether, or how the generator would be required to share the revenue with other consumers. The next steps of the Proposal may require regulatory amendments, and/or amendments to electricity generator’s contracts, consistent with efforts enabling storage in Ontario's electricity system to integrate flexible resources.

Option 3: Interruptible electricity rates for hydrogen producers

In 2021, the Ministry posted a proposal on the ERO including an Interruptible Rate Pilot that was to be developed in conjunction with the IESO in order to address stakeholder feedback received during the 2019 Industrial Consultation specific to the challenges of identifying and responding to peak demand events while participating in the ICI. The pilot was targeted towards large electricity consumers, where participants were charged GA at a reduced rate in exchange for agreeing to reduce consumption during system or local reliability events, as identified by IESO.

Option 3 would allow for the introduction for a dedicated stream for hydrogen producers into the interruptible rate pilot, which is currently under development with the IESO. This would take into account the unique circumstances of hydrogen producers, as well as the importance of the hydrogen sector in Ontario’s Low-Carbon Hydrogen Strategy. Under the pilot, participants would be given advance notice by the IESO to reduce demand over a fixed number of hours, several times each year, and emerging vehicle-to-grid models where EV owners can sell electricity back to the grid highlight additional flexibility options. Ultimately, the pilot would support low-carbon hydrogen production by offering large electricity consumers, such as hydrogen producers, reduced electricity rates in exchange for reduces consumption during system or local reliability events.

Following this initial development work, the Ministry intends to consult with stakeholders later this year to determine design details, as well as the timing for the potential roll out of the proposed pilot.

Key takeaways

The design options are not meant to be mutually exclusive, and might be pursued by the Ministry in combination. Ultimately, Ontario is focusing on ways to reduce electricity rates in an attempt to make the province a leader in the adoption of green hydrogen, as made clear in the Ontario Hydrogen Strategy, even as an electricity supply crunch looms, underscoring the urgency. Stakeholders will want to participate in this process given its long-term implications for both the hydrogen and power sectors.

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