The Tennessee Valley Authority board made a commitment to cap its carbon emissions growth by 2020 in an effort to muzzle its contributions to climate change.
Proposals to find ways to increase renewable energy sources like solar power and to persuade customers to use less electricity — including by offering incentives — were approved, too.
The actions, which came as the agency recognizes its 75th anniversary, could mark a return to the leadership role TVA took in energy conservation in the 1970s but later dropped.
Nuclear power was listed among the "clean" energy sources that officials said would be looked to increasingly.
"The real objective is to reduce the carbon footprint," TVA CEO and President Tom Kilgore said after the meeting at the Marriott Shoals Hotel and Spa.
"Nuclear (power) does not produce carbon. I cannot argue that it doesn't produce radioactive waste that has to be dealt with."
But, with population growth in the region, large additional sources of energy are needed, he said, adding that nuclear power can provide that without putting more carbon in the air.
TVA, which is self-financing, is the largest public power producer in the country, providing virtually all of the electricity used in Tennessee and parts of six other states.
good move, but no nukes
John McFadden, head of the nonprofit Tennessee Environmental Council in Nashville, said in a phone interview that he was "glad" about TVA's turn toward energy conservation and cleaner power, a move that some utilities made several years ago.
"It's obvious it's something we've really needed to do for a long time," he said. "All you have to do is look at the mountaintops in the Great Smoky Mountains and see all the dead trees.
"And Knoxville is the asthma capital.Â…
"They should have been leading the country in this."
Nuclear power, however, should not be in the mix, he added.
"We have no long-term plan to deal with nuclear waste," he said.
"You can't sell a kilowatt hour of nuclear power for what it costs to produce it. That's why the federal government is having to subsidize the nuclear industry."
TVA is still carrying billions of dollars of debt from its first spurt of nuclear plant building that took place in the 1970s and 1980s, he said.
One new TVA goal is a reduction within five years — in part through customers' energy efficiency — of 1,400 megawatts of electricity use at peak times. This would be the equivalent of building a nuclear reactor to provide energy on days during the summer and winter when energy use spikes.
"We do think it's a goal that's very achievable," said Joe Hoagland, TVA vice president for energy efficiency and demand response.
Pilot programs could include financial incentives to buy energy-efficient appliances and lights.
Making the 2020 date to halt growth in carbon emissions was viewed as more challenging. Most of TVA's electricity comes from coal, which releases carbon that adds to climate change.
Weather remains a stumbling block on another front.
TVA official Bill McCollum said drought could continue to hamper hydroelectric energy generation at its dams this summer.
"We still need significantly more than the normal amount of rainfall between now and June," McCollum said.
When its clean, relatively inexpensive hydroelectric production falls behind, TVA must buy more costly electricity from other producers.
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 electricity price spike drives 25% CPI surge amid heatwave demand, coal-to-gas conversions, hydro shortfalls, and outages; consumers weigh fixed-rate plans, solar panels, home retrofits, and variable rates to manage bills and grid volatility.
Key Points
A recent 25% monthly rise in Alberta power prices driven by heatwave demand, constraints, outages, and fuel shifts.
✅ Heatwave pushed summer peak demand near record
✅ Coal-to-gas conversions and outages tightened supply
✅ Fixed-rate plans, solar, retrofits can reduce bill risk
Albertans might notice they are paying more when the next electricity bill comes in as bills on the rise in Calgary alongside provincial trends.
According to the consumer price index, Alberta saw its largest monthly increase since July 2015 as the price of electricity in Alberta rose 25 per cent amid rising electricity prices across the province.
“So I paid negative $70 last month. I actually made money. To supply power to the grid,” said Conrad Nobert, with Climate Action Edmonton.
Norbert is an environmental activist who favours solar power and is warning that prices will continue to go up along with the rising effects from climate change.
“My thoughts are that we can mitigate the price of power going up by taking climate action.”
Alberta experienced one of the hottest summers on record and many people were left scrambling to buy air conditioners.
That demand, along with a number of other factors, drove up prices, prompting some households to lock in rates for protection, says an assistant professor at the University of Calgary who teaches electricity systems.
“At the end of June, during the heatwave, we were a couple megawatts shy of setting an all-time record demand for electricity in the province. That would have been the first time that record for demand in the summer. Traditionally Alberta is a winter peaking province, as shown by an electricity usage record during a deep freeze not long ago,” explained Sara Hastings Simon, an assistant professor at the University of Calgary.
There are a few ways consumers can save money on their power bill; installing solar panels and retrofitting your home to opting for a fixed-rate plan, or considering protections like a consumer price cap where applicable.
“So by default, people are put into a variable rate plan, that changes month to month and that helps to manage prices so you don’t get that big surprise at where prices might be. I think we will get a lot more people looking at that option.”
A statement provided by Dale Nally, Alberta’s Associate Minister of natural gas and electricity, noted recent policy changes including the carbon tax repeal and price cap now in place that affect consumers, says in part:
“This period of high market prices is driven by low supplies of hydro-generated electricity from British Columbia and the pacific northwest, scheduled outages for coal-gas-conversions, unplanned infrastructure outages and unprecedented, and record-breaking high demand due to hot weather. We expect some of the factors that have caused recent increases in prices will be short-term.”
TTC Winter E-Bike and E-Scooter Ban addresses lithium-ion battery safety, mitigating fire risk on Toronto public transit during cold weather across buses, subways, and streetcars, while balancing micro-mobility access, infrastructure gaps, and evolving regulations.
Key Points
A seasonal TTC policy limiting lithium-ion e-bikes and scooters on transit in winter to cut battery fire risk.
✅ Targets lithium-ion fire hazards in confined transit spaces
✅ Applies Nov-Mar across buses, subways, and streetcars
✅ Sparks debate on equity, accessibility, and policy alternatives
The Toronto Transit Commission (TTC) Board recently voted to implement a ban on lithium-ion-powered electric bikes (e-bikes) and electric scooters during the winter months, a decision that reflects growing safety concerns. This new policy has generated significant debate within the city, particularly regarding the role of these transportation modes in the lives of Torontonians, and the potential risks posed by the technology during cold weather.
A Growing Safety Concern
The move to ban lithium-ion-powered e-bikes and scooters from TTC services during the winter months stems from increasing safety concerns related to battery fires. Lithium-ion batteries, commonly used in e-bikes and scooters, are known to pose a fire risk, especially in colder temperatures, and as systems like Metro Vancouver's battery-electric buses expand, robust safety practices are paramount. In recent years, Toronto has experienced several high-profile incidents involving fires caused by these batteries. In some cases, these fires have occurred on TTC property, including on buses and subway cars, raising alarm among transit officials.
The TTC Board's decision was largely driven by the fear that the cold temperatures during winter months could make lithium-ion batteries more prone to malfunction, leading to potential fires. These batteries are particularly vulnerable to damage when exposed to low temperatures, which can cause them to overheat or fail during charging or use. Since public transit systems are densely populated and rely on close quarters, the risk of a battery fire in a confined space such as a bus or subway is considered too high.
The New Ban
The new rule, which is expected to take effect in the coming months, will prohibit e-bikes and scooters powered by lithium-ion batteries from being brought onto TTC vehicles, including buses, streetcars, and subway trains, even as the agency rolls out battery electric buses across its fleet, during the winter months. While the TTC had previously allowed passengers to bring these devices on board, it had issued warnings regarding their safety. The policy change reflects a more cautious approach to mitigating risk in light of growing concerns.
The winter months, typically from November to March, are when these batteries are at their most vulnerable. In addition to environmental factors, the challenges posed by winter weather—such as snow, ice, and the damp conditions—can exacerbate the potential for damage to these devices. The TTC Board hopes the new ban will prevent further incidents and keep transit riders safe.
Pushback and Debate
Not everyone agrees with the TTC Board's decision. Some residents and advocacy groups have expressed concern that this ban unfairly targets individuals who rely on e-bikes and scooters as an affordable and sustainable mode of transportation, while international examples like Paris's e-scooter vote illustrate how contentious rental devices can be elsewhere, adding fuel to the debate. E-bikes, in particular, have become a popular choice among commuters who want an eco-friendly alternative to driving, especially in a city like Toronto, where traffic congestion can be severe.
Advocates argue that instead of an outright ban, the TTC should invest in safer infrastructure, such as designated storage areas for e-bikes and scooters, or offer guidelines on how to safely store and transport these devices during winter, and, in assessing climate impacts, consider Canada's electricity mix alongside local safety measures. They also point out that other forms of electric transportation, such as electric wheelchairs and mobility scooters, are not subject to the same restrictions, raising questions about the fairness of the new policy.
In response to these concerns, the TTC has assured the public that it remains committed to finding alternative solutions that balance safety with accessibility. Transit officials have stated that they will continue to monitor the situation and consider adjustments to the policy if necessary.
Broader Implications for Transportation in Toronto
The TTC’s decision to ban lithium-ion-powered e-bikes and scooters is part of a broader conversation about the future of transportation in urban centers like Toronto. The rise of electric micro-mobility devices has been seen as a step toward reducing carbon emissions and addressing the city’s growing congestion issues, aligning with Canada's EV goals that push for widespread adoption. However, as more people turn to e-bikes and scooters for daily commuting, concerns about safety and infrastructure have become more pronounced.
The city of Toronto has yet to roll out comprehensive regulations for electric scooters and bikes, and this issue is further complicated by the ongoing push for sustainable urban mobility and pilots like driverless electric shuttles that test new models. While transit authorities grapple with safety risks, the public is increasingly looking for ways to integrate these devices into a broader, more holistic transportation system that prioritizes both convenience and safety.
The TTC’s decision to ban lithium-ion-powered e-bikes and scooters during the winter months is a necessary step to address growing safety concerns in Toronto's public transit system. Although the decision has been met with some resistance, it highlights the ongoing challenges in managing the growing use of electric transportation in urban environments, where initiatives like TTC's electric bus fleet offer lessons on scaling safely. With winter weather exacerbating the risks associated with lithium-ion batteries, the policy seeks to reduce the chances of fires and ensure the safety of all transit users. As the city moves forward, it will need to find ways to balance innovation with public safety to create a more sustainable and safe urban transportation network.
Ontario Clean Energy Expansion signals IESO-backed renewables, energy storage, and low-CO2 power to meet EV-driven demand, offset Pickering nuclear retirement, and balance interim gas-fired generation while advancing grid reliability, decarbonization, and net-zero targets.
Key Points
Ontario Clean Energy Expansion plans to grow renewables and storage, manage short-term gas, and meet rising demand.
✅ IESO long-term procurements for renewables and storage
✅ Interim reliance on gas to replace Pickering capacity
✅ Targets align with net-zero grid reliability goals
After cancelling hundreds of renewable power projects four years ago, the Doug Ford government appears set to expand clean energy to meet a looming electricity shortfall across the province.
Recent announcements from Ontario Energy Minister Todd Smith and the province’s electric grid management agency suggest the province plans to expand low-CO2 electricity with new wind and solar plans in the long-term, even as it ramps up gas-fired power over the next five years.
The moves are in response to an impending electricity shortfall as climate-conscious drivers switch to electric vehicles, farmers replace field crops with greenhouses and companies like ArcelorMittal Dofasco in Hamilton switch from CO2-heavy manufacturing to electricity-based production. Forecasters predict Canada will need to double its power supply by 2050.
While Ontario has a relatively low-CO2 power system, the province’s electricity supply will be reduced in 2025 when Ontario Power Generation closes the 50-year-old Pickering nuclear station, now near the end of its operating life. This will remove 3,100 megawatts of low-CO2 generation, about eight per cent of the province’s 40,000-megawatt total.
The impending closure has created a difficult situation for the Independent Electricity System Operator (IESO), the provincial agency managing Ontario’s grid. Last year, it forecasted it would need to sharply increase CO2-polluting natural gas-fired power to avoid widespread blackouts.
This would mean drivers switching to electric vehicles or companies like Dofasco cutting CO2 through electrification would end up causing higher power system emissions.
It would also fly in the face of the federal government’s ambition to create a net-zero national electricity system by 2035, a critical part of Canada’s pledge to reduce CO2 emissions to zero by 2050.
Yet the Ford government has appeared reluctant to expand clean energy. In the 2018 election, clean electricity was a key issue as it appealed to anti-turbine voters in rural Ontario and cancelled more than 700 renewable energy contracts shortly after taking office, taking 400 megawatts out of the system.
But there are signs the government is having a change of heart. IESO recently released a list of 55 companies approved to submit bids for 3,500 megawatts of long-term electricity contracts starting between 2025 and 2027, and the energy minister has outlined a plan to address growing energy needs as well.
The companies include a variety of potential producers, ranging from Canadian and global renewable companies to local utilities and small startups. Most are renewable power or energy storage companies specializing in low- or zero-emission power. IESO plans additional long-term bid offerings in the future.
This doesn’t mean gas generation will be turned off. IESO will contract yearly production from existing gas plants until 2028 (the annual contract in 2023 will be for about 2,000 megawatts). As well, IESO has issued contracts to four gas-fired producers, a small wind company and a storage company to begin production of about 700 megawatts to boost gas plant output starting between 2024 and 2026.
While this represents an expansion of existing gas-fired generation, Smith has asked IESO to report on a gas moratorium, saying he doesn’t believe new gas plants will be needed over the long term.
The NDP and Greens criticized the government for relying on gas in the near term. But clean energy advocates greeted the long-term plans positively.
The IESO process “will contribute to a clean, reliable and affordable grid,” said the Canadian Renewable Energy Association.
Rachel Doran, director of policy and strategy at Clean Energy Canada, said in an email the potential gas generation moratorium “is an encouraging step forward,” although she criticized the “unfortunate decision to replace near-term nuclear power capacity with climate-change-causing natural gas.”
There will have to be a massive clean energy expansion to green Ontario’s grid well beyond what has been announced in recent days for Ontario to meet its future energy needs (think a doubling of Ontario’s current 40,000-megawatt capacity by 2050).
But these first steps hold promise that Ontario is at least starting on the path to that goal, rather than scrambling to keep the lights on with CO2-polluting natural gas.
ERCOT Ancillary Services Clawback and VOLL Pricing summarize PUCT and IMM actions on load shed, real-time pricing adders, clawbacks, and settlement corrections after the 2021 winter storm in the Texas power grid market.
Key Points
Policies addressing clawbacks for unprovided AS and correcting VOLL-based price adders after load shed ended in ERCOT.
✅ PUCT ordered clawbacks for ancillary services not delivered.
✅ IMM urged price correction after firm load shed ceased.
✅ ERCOT's VOLL adder raised costs by $16B during 32 hours.
Potomac Economics, the Independent Market Monitor (IMM) for the Electric Reliability Council of Texas (ERCOT), filed a report with the Public Utility Commission of Texas (PUCT) that certain payments were made by ERCOT for Ancillary Services (AS) that were not provided, even as ERCOT later issued a winter reliability RFP to procure capacity during subsequent seasons.
According to the IMM (emphasis added):
There were a number of instances during the operating days outlined above in which AS was not provided in real time because of forced outages or derations. For market participants that are not able to meet their AS responsibility, typically the ERCOT operator marks the short amount in the software. This causes the AS responsibility to be effectively removed and the day-ahead AS payment to be clawed back in settlement. However, the ERCOT operators did not complete this task during the winter event, echoing issues like the Ontario IESO phantom demand that cost customers millions, and therefore the "failure to provide" settlements were not invoked in real time.
Removing the operator intervention step and automating the "failure to provide" settlement was contemplated in NPRR947: Clarification to Ancillary Service Supply Responsibility Definition and Improvements to Determining and Charging for Ancillary Service Failed Quantities; however, the NPRR was withdrawn in August 2020 amid ongoing market reform discussions because of the system cost, some complexities related to AS trades, and the implementation of real-time co-optimization.
Invoking the "failure to provide" settlement for all AS that market participants failed to provide during the operating days outlined above will produce market outcomes and settlements consistent with underlying market principles. In this case, the principle is that market participants should not be paid for services that they do not provide, even as a separate ruling found power plants exempt from providing electricity in emergencies under Texas law, underscoring the distinction between obligations and settlements. Whether ERCOT marked the short amount in real-time or not should not affect the settlement of these ancillary services.
On March 3, 2021, the PUCT ordered (a related press release is here) that:
ERCOT shall claw back all payments for ancillary service that were made to an entity that did not provide its required ancillary service during real time on ERCOT operating days starting February 14, 2021 and ending on February 19,2021.
On March 4, 2021, the IMM filed another report and recommended that:
the [PUCT] direct ERCOT to correct the real-time prices from 0:00 February 18,2021, to 09:00 February 19, 2021, to remove the inappropriate pricing intervention that occurred during that time period.
The IMM approvingly noted the PUCT's February 15, 2021 order, which mandated that real-time energy prices reflect firm load shed by setting prices at the value of lost load (VOLL).1
According to the IMM (emphasis added):
This is essential in an energy-only market, like ERCOT's, where the Texas power grid faces recurring crisis risks, because it provides efficient economic signals to increase the electric generation needed to restore the load and service it reliably over the long term.
Conversely, it is equally important that prices not reflect VOLL when the system is not in shortage and load is being served, and experiences in capacity markets show auction payouts can fall sharply under different conditions. The Commission recognized this principle in its Order, expressly stating it is only ERCOT's out-of-market shedding firm load that is required to be reflected in prices. Unfortunately, ERCOT exceeded the mandate of the Commission by continuing to set process at VOLL long after it ceased the firm load shed.
ERCOT recalled the last of the firm load shed instructions at 23:55 on February 17, 2021. Therefore, in order to comply with the Commission Order, the pricing intervention that raised prices to VOLL should have ended immediately at that time. However, ERCOT continued to hold prices at VOLL by inflating the Real-Time On-Line Reliability Deployment Price Adder for an additional 32 hours through the morning of February 19. This decision resulted in $16 billion in additional costs to ERCOT's market, prompting legislative bailout proposals in Austin, of which roughly $1.5 billion was uplifted to load-serving entities to provide make-whole payments to generators for energy that was not needed or produced.
However, at its March 5, 2021, open meeting (related discussion begins around minute 20), although the PUCT acknowledged the "good points" raised by the IMM, the PUCT was not willing to retrospectively adjust its real-time pricing for this period out of concerns that some related transactions (ICE futures and others) may have already settled and for unintended consequences of such retroactive adjustments.
Alberta Electricity Market Reform reshapes policy under the UCP, weighing a capacity market versus energy-only design, AESO reliability rules, renewables targets, coal phase-out, carbon pricing, consumer rates, and investment certainty before AUC decisions.
Key Points
Alberta Electricity Market Reform is the UCP plan to reassess capacity vs energy-only, renewables, and carbon pricing.
✅ Reviews capacity market timeline and AESO procurement
✅ Alters subsidies for renewables; slows wind and solar growth
✅ Adjusts industrial carbon levy; audits Balancing Pool losses
Hearings kicked off this week into the future of the province’s electricity market design, amid an electricity market reshuffle pledged by the province, but a high-stakes decision about the industry’s fate — affecting billions of dollars in investment and consumer costs — won’t be made inside the meeting room of the Alberta Utilities Commission.
Instead, it will take place in the office of Jason Kenney, as the incoming premier prepares to pivot away from the seismic reforms to Alberta’s electricity sector introduced by the Notley government.
The United Conservative Party has promised to adopt market-based policies, reflecting changes to how Alberta produces and pays for power, that will reset how the sector operates, from its approach to renewable energy and carbon pricing to re-evaluating the planned transition to an electricity “capacity market.”
“Every ball in electricity is up in the air right now,” Vittoria Bellissimo, of the Industrial Power Consumers Association of Alberta, said Tuesday during a break in the commission hearings.
Industry players are uncertain how quickly the UCP will change direction on power policies, but there’s little doubt Kenney’s government will take a strikingly different approach to the sector that keeps the lights on in Alberta.
“There’s some things they are going to change that are going to impact the electricity industry significantly,” said Duane Reid-Carlson, chief executive of consultancy EDC Associates.
“But I don’t think it’s going to be upheaval. I think the new government will proceed with caution because electricity is the foundation of our economy.”
Alberta’s electricity market has been turned on its head in recent years due to the recession, power prices dropping to near two-decade lows and several transformative policies initiated by the NDP.
The Notley government’s climate plan included an accelerated phase-out of all coal-fired generation and set targets for more renewable energy.
The most significant, but least-understood, move has been the planned shift to an electricity capacity market in 2021.
Under the strategy, generators will no longer solely be paid for the power produced and sold into the market; they will also receive payments for having electricity capacity available to the grid on demand.
The change was recommended by the Alberta Electric System Operator (AESO) as a way to reduce price volatility and provide more reliability than the current energy-only market, which some argue needs more competition to deliver better outcomes.
The independent system operator and industry officials have spent more than two years planning the transition since the switch was announced in late 2016. Proposed rules for the new system, outlining market changes, are now being discussed at the Alberta Utilities Commission hearings.
However, there is no ironclad guarantee the system remake will go ahead following the UCP’s election victory last week — amid calls to scrap the overhaul from a Calgary retailer — it plans to study the issue further — while other substantive electricity changes are already in store.
The UCP has promised to end “costly subsidies” to renewable energy developments and abandon the NDP’s pledge to have such energy sources make up 30 per cent of all power generation by 2030.
It will remove the planned phase-out of coal-fired electricity generation, although federal regulations for a 2030 prohibition remain in place.
It will also ask the auditor general to conduct a special audit of the massive losses sustained by the province’s Balancing Pool due to power purchase arrangements being handed back to the agency three years ago.
While Kenney has pledged to cancel the provincewide carbon tax, a levy on large industrial greenhouse gas emitters (such has power plants) will still be charged, although at a reduced rate of $20 a tonne.
The biggest unknown remains the power market’s structure, which underpins how the entire system operates.
The UCP has promised to consult on the shift to the capacity market and report back to Albertans within 90 days.
The complex issue may sound like an eye-glazer, but it will have a profound effect on industry investment, as well as how much consumers pay on their monthly electricity bills.
A number of industry players worry the capacity market will lead AESO to procure more power than is necessary, foisting unnecessary costs onto all Albertans.
“I still have concerns for what the impact on consumers is going to be,” said energy market consultant Sheldon Fulton. “I’d love to see the capacity market go away.”
An analysis by EDC Associates found the transition to a capacity market will procure additional electricity before it’s needed, requiring consumers to pay up to 40 per cent more — an extra $1.4 billion — for power in 2021-22 than under the existing market structure.
“I don’t think there’s any prejudged outcome,” said Blake Shaffer, former head trader at TransAlta Corp. and a fellow-in-residence at the C.D. Howe Institute.
“But it really matters about getting this right.”
Evan Bahry, executive director of the Independent Power Producers Society of Alberta, said the fact the UCP’s review was confined to just 90 days is helpful, as it avoids throwing the entire industry into a prolonged period of uncertainty.
As for the greening of Alberta’s power grid, amid growing attention to clean grids and storage, the demise of the NDP’s Renewable Electricity Program will likely slow down the rapid pace of wind and solar development. But it’s unlikely to stop the growth trend as costs continue to fall for such developments.
“Renewables over the last number of years have evolved to the point that they make sense on a subsidy-free basis,” said Dan Balaban, CEO of Greengate Power Corp., which has developed 480 MW of wind power in Alberta and Ontario.
