Rapid expansion of hydro projects a concern in B.C.

Grid Modernization drives utilities to integrate DER, AMI, and battery storage while balancing reliability, safety, and affordability; regulators pursue cost-benefit analyses, new rate design, and policy actions to guide investment and protect customer-owned resources.

Key Points

Upgrading the grid to manage DER with digital tools, while maintaining reliability, safety, and customer affordability.

✅ Cost-benefit analyses guide prudent grid investments

✅ AMI and storage deployments enable DER visibility and control

✅ Rate design reforms support customer-owned resources

Utilities’ pursuit of a modern grid, including the digital grid concept, to maintain the reliability and safety pillars of electricity delivery has raised a lot of questions about the third pillar — affordability.

Utilities are seeing rising penetrations of emerging technologies, highlighted in recent grid edge trends reports, like distributed solar, behind-the-meter battery storage, and electric vehicles. These new distributed energy resources (DER) do not eliminate utilities' need to keep distribution systems safe and reliable.

But the need for modern tools to manage DER imposes costs on utilities, prompting calls to invest in smarter infrastructure even as some regulators, lawmakers and policymakers are concerned those costs could drive up electricity rates.

The result is an increasing number of legislative and regulatory grid modernization actions aimed at identifying what is necessary to serve the coming power sector transformation and address climate change risks across the grid.

The rise of grid modernization

Grid modernization, which is supported by both conservatives and distributed energy resources advocates, got a lot of attention last year. According to the 2017 review of grid modernization policy by the North Carolina Clean Energy Technology Center (NCCETC), 288 grid modernization policy actions were proposed, pending or enacted in 39 states.

These numbers from NCCETC's first annual review of policy activity set a benchmark against which future years' activity can be measured.

The most common type of state actions, by far, were those that focused on the deployment of advanced metering infrastructure (AMI) and battery energy storage. Those are two of the 2017 trends identified in NCCETC’s 50 States of Grid Modernization report. But deployment of those technologies, while foundational to an updated grid, only begins to prepare distribution systems for the coming power sector transformation.

Bigger advances, including the newest energy system management tools, are being held back by 2017’s other policy actions requiring more deliberation and fact-finding, even as grid vulnerability report cards underscore the risks that modernization seeks to mitigate.

Utilities’ proposals to more fully prepare their grids to deliver 21st century technologies are being met with questions about completeness and cost.

Utilities are being asked to address these questions in comprehensive, public utility commission-led cost-benefit analyses and studies. This is also one of NCCETC’s top 2017 policy action trends for grid modernization. The outcome to date appears to be an increased, but still incomplete, understanding of what is needed to build a 21st century grid.

Among the top objectives of those driving the policy actions are resolving questions about private sector participation in grid modernizaton buildouts and developing new rate designs to protect and support customer-owned distributed energy resources. Actions on those topics are also on NCCETC’s list of 2017 policy trends.

Altogether, the trend list is dominated by actions that do not lead to completion of grid modernization but to more work on it.

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US Electricity Price Surge drives bills as BLS data show 15.8 percent jump; natural gas and coal costs escalate amid energy crisis, NYISO warns of wholesale prices and winter futures near $200 per MWh.

Key Points

A sharp rise in power bills driven by higher natural gas and coal costs and tighter wholesale markets.

✅ BLS reports electricity bills up 15.8% year over year

✅ Natural gas bills up 33% as fuel costs soar

✅ NYISO flags winter wholesale prices near $200/MWh

Electricity bills for US consumers jumped the most since 1981, gaining 15.8% from the same period a year ago, according to the US Bureau of Labor Statistics, and residential bills rose 5% in 2022 across the U.S.

Natural gas bills, which crept back up last month after dipping in July, surged 33% from the same month last year, labor data released Tuesday showed, as electricity and natural gas pricing dynamics continue to ripple through markets. Broader energy costs slipped for a second consecutive month because of lower gasoline and fuel oil prices. Even with that drop, total energy costs were still about 24% above August 2021 levels.

Electricity costs are relentlessly climbing because prices for the two biggest power-plant fuels -- natural gas and coal -- have surged in the last year as the US economy rebounds from the pandemic and as Russia’s war in Ukraine triggers an energy crisis in Europe, where German electricity prices nearly doubled over a year. Another factor is the hot and humid summer across most of the lower 48 states drove households and businesses to crank up air conditioners. Americans likely used a record amount of power in the third quarter, according to US Energy Information Administration projections, even as U.S. power demand is seen sliding 1% in 2023 on milder weather.

New York’s state grid operator warned of a “sharp rise in wholesale electric costs expected this winter” with spiking global demand for fossil fuels, lagging supply and instability from Russia’s war in Ukraine driving up oil and gas prices, with multiple energy-crisis impacts on U.S. electricity and gas still unfolding, according to a Tuesday report. Geopolitical factors are ultimately reflected in wholesale electricity prices and supply charges to consumer bills, the New York Independent System Operator said, and as utilities direct more spending to delivery rather than production.

Electricity price futures for this winter have increased fourfold from last year, and potential deep-freeze disruptions to the energy sector could add volatility, with prices averaging near $200 a megawatt-hour, the grid operator said. That has been driven by natural gas futures for the upcoming winter, which are more than double current prices to nearly $20 per million British thermal units.

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Global Coal Power Decline 2019 signals a record fall in coal-fired electricity as China plateaus, India dips, and the EU and US accelerate renewables, curbing carbon emissions and advancing the global energy transition.

Key Points

A record 2019 drop in global coal power as renewables rise and demand slows across China, India, the EU, and the US.

✅ 3% global fall in coal-fired electricity in 2019.

✅ China plateaus; India declines for first time in decades.

✅ EU and US shift to renewables and gas, cutting emissions.

The world’s use of coal-fired electricity is on track for its biggest annual fall on record this year after more than four decades of near-uninterrupted growth that has stoked the global climate crisis.

Data shows that coal-fired electricity is expected to fall by 3% in 2019, or more than the combined coal generation in Germany, Spain and the UK last year and could help stall the world’s rising carbon emissions this year.

The steepest global slump on record is likely to emerge in 2019 as India’s reliance on coal power falls for the first time in at least three decades this year, and China’s coal power demand plateaus, reflecting the broader global energy transition underway.

Both developing nations are using less coal-fired electricity due to slowing economic growth in Asia as well as the rise of cleaner energy alternatives. There is also expected to be unprecedented coal declines across the EU and the US as developed economies turn to clean forms of energy such as low-cost solar power to replace ageing coal plants.

In almost 40 years the world’s annual coal generation has fallen only twice before: in 2009, in the wake of the global financial crisis, and in 2015, following a slowdown in China’s coal plants amid rising levels of deadly air pollution.

The research was undertaken by the Centre for Research on Energy and Clean Air , the Institute for Energy Economics and Financial Analysis and the UK climate thinktank Sandbag.

The researchers found that China’s coal-fired power generation was flatlining, despite an increase in the number of coal plants being built, because they were running at record low rates. China builds the equivalent of one large new coal plant every two weeks, according to the report, but its coal plants run for only 48.6% of the time, compared with a global utilisation rate of 54% on average.

The findings come after a report from Global Energy Monitor found that the number of coal-fired power plants in the world is growing, because China is building new coal plants five times faster than the rest of the world is reducing their coal-fired power capacity.

The report found that in other countries coal-fired power capacity fell by 8GW in the 18 months to June but over the same period China increased its capacity by 42.9GW.

In a paper for the industry journal Carbon Brief, the researchers said: “A 3% reduction in power sector coal use could imply zero growth in global CO2 emissions, if emissions changes in other sectors mirror those during 2018.”

However, the authors of the report have warned that despite the record coal power slump the world’s use of coal remained far too high to meet the climate goals of the Paris agreement, and some countries are still seeing increases, such as Australia’s emissions rise amid increased pollution from electricity and transport.

The US – which is backing out of the Paris agreement – has made the deepest cuts to coal power of any developed country this year by shutting coal plants down in favour of gas power and renewable energy, with utilities such as Duke Energy facing investor pressure to disclose climate plans. By the end of August the US had reduced coal by almost 14% over the year compared with the same months in 2018.

The EU reported a record slump in coal-fired electricity use in the first half of the year of almost a fifth compared with the same months last year. This trend is expected to accelerate over the second half of the year to average a 23% fall over 2019 as a whole. The EU is using less coal power in favour of gas-fired electricity – which can have roughly half the carbon footprint of coal – and renewable energy, helped by policies such as the UK carbon tax that have slashed coal-fired generation.

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Hybrid renewable energy projects integrate wind, solar, and battery storage to enhance grid reliability, reduce curtailment, and provide dispatchable power in markets like Alberta, leveraging photovoltaic tracking, overbuilt transformers, and improved storage economics.

Key Points

Hybrid renewable energy projects combine wind, solar, and storage to deliver reliable, dispatchable clean power.

✅ Combine wind, solar, and batteries for steady, dispatchable output

✅ Lower curtailment by using shared transformers and smart inverters

✅ Boost farm income via leases; diversify risk from oil and gas

Third-generation farmer James Praskach has been burned by the oil and gas sector and watched wicked weather pound his crops flat, but he is hoping a new kind of energy -- the renewable kind -- will pay dividends.

The 39-year-old is part of a landowner consortium that is hosting the sprawling 300-megawatt Blackspring Ridge wind power project in southeastern Alberta.

He receives regular lease payments from the $600-million project that came online in 2014, even though none of the 166 towering wind turbines that surround his land are actually on it.

His lease payments stand to rise, however, when and if the proposed 77-MW Vulcan Solar project, which won regulatory approval in 2016, is green-lighted by developer EDF Renewables Inc.

The panels would cover about 400 hectares of his family's land with nearly 300,000 photovoltaic solar panels in Alberta, installed on racks designed to follow the sun. It would stand in the way of traditional grain farming of the land, but that wouldn't have been a problem this year, Praskach says.

"This year we actually had a massive storm roll through. And we had 100 per cent hail damage on all of (the Vulcan Solar lands). We had canola, peas and barley on it this year," he said, adding the crop was covered by insurance.

Meanwhile, poor natural gas prices and a series of oilpatch financial failures mean rents aren't being paid for about half of the handful of gas wells on his land, showing how a province that is a powerhouse for both fossil and green energy can face volatility -- he's appealed to the Alberta surface Rights Board for compensation.

"(Solar power) would definitely add a level of security for our farming operations," said Praskach.

Hybrid power projects that combine energy sources are a growing trend as selling renewable energy gains traction across markets. Solar only works during the day and wind only when it is windy so combining the two -- potentially with battery storage or natural gas or biomass generation -- makes the power profile more reliable and predictable.

Globally, an oft-cited example is on El Hierro, the smallest of the Canary Islands, where wind power is used to pump water uphill to a reservoir in a volcanic crater so that it can be released to provide hydroelectric power when needed. At times, the project has provided 100 per cent of the tiny island's energy needs.

Improvements in technology such as improving solar and wind power and lower costs for storage mean it is being considered as a hybrid add-on for nearly all of its renewable power projects, said Dan Cunningham, manager of business development at Greengate Power Corp. of Calgary.

Grant Arnold, CEO of developer BluEarth Renewables, agreed.

"The barrier to date, I would say, has been cost of storage but that is changing rapidly," he said. "We feel that wind and storage or solar and storage will be a fundamental way we do business within five years. It's changing very, very rapidly and it's the product everybody wants."

Vulcan Solar was proposed after Blackspring Ridge came online, said David Warner, associate director of business development for EDF Renewables, which now co-owns the wind farm with Enbridge Inc.

"Blackspring actually had incremental capacity in the main power transformers," he said. "Essentially, it was capable of delivering more energy than Blackspring was producing. It was overbuilt."

Vulcan Solar has been sized to utilize the shortfall without producing so much energy that either will ever have to be constrained, he said. Much of the required environmental work has already been done for the wind farm.

Storage is being examined as a potential addition to the project but implementing it depends on the regulatory system. At present, Alberta's regulators are still working on how to permit and control what they call "dispatchable renewables and storage" systems.

EDF announced last spring it would proceed with the Arrow Canyon Solar Project in Nevada which is to combine 200 MW of solar with 75 MW of battery storage by 2022 -- the batteries are to soak up the sun's power in the morning and dispatch the electricity in the afternoon when Las Vegas casinos' air conditioning is most needed.

What is clear is that renewable energy will continue to grow, with Alberta renewable jobs expected to follow -- in a recent report, the International Energy Agency said global electricity capacity from renewables is set to rise by 50 per cent over the next five years, an increase equivalent to adding the current total power capacity of the United States.

The share of renewables is expected to rise from 26 per cent now to 30 per cent in 2024 but will remain well short of what is needed to meet long-term climate, air quality and energy access goals, it added.

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Polycrystalline Tin Selenide Thermoelectrics enable waste heat recovery with ZT 3.1, matching single crystals while cutting costs, powering greener car engines, industrial furnaces, and thermoelectric generators via p-type and emerging n-type designs.

Key Points

Low-cost tin selenide devices that turn waste heat into power, achieving ZT 3.1 and enabling p-type and n-type modules.

✅ Oxygen removal prevents heat-leaking tin oxide grain skins.

✅ Polycrystalline ingots match single-crystal ZT 3.1 at lower cost.

✅ N-type tin selenide in development to pair with p-type.

So-called thermoelectric generators turn waste heat into electricity without producing greenhouse gas emissions, providing what seems like a free lunch. But despite helping power the Mars rovers, the high cost of these devices has prevented their widespread use. Now, researchers have found a way to make cheap thermoelectrics that work just as well as the pricey kind. The work could pave the way for a new generation of greener car engines, industrial furnaces, and other energy-generating devices.

“This looks like a very smart way to realize high performance,” says Li-Dong Zhao, a materials scientist at Beihang University who was not involved with the work. He notes there are still a few more steps to take before these materials can become high-performing thermoelectric generators. However, he says, “I think this will be used in the not too far future.”

Thermoelectrics are semiconductor devices placed on a hot surface, like a gas-powered car engine or on heat-generating electronics using thin-film converters to capture waste heat. That gives them a hot side and a cool side, away from the hot surface. They work by using the heat to push electrical charges from one to the other, a process of turning thermal energy into electricity that depends on the temperature gradient. If a device allows the hot side to warm up the cool side, the electricity stops flowing. A device’s success at preventing this, as well as its ability to conduct electrons, feeds into a score known as the figure of merit, or ZT.

 Over the past 2 decades, researchers have produced thermoelectric materials with increasing ZTs, while related advances such as nighttime solar cells have broadened thermal-to-electric concepts. The record came in 2014 when Mercouri Kanatzidis, a materials scientist at Northwestern University, and his colleagues came up with a single crystal of tin selenide with a ZT of 3.1. Yet the material was difficult to make and too fragile to work with. “For practical applications, it’s a non-starter,” Kanatzidis says.

So, his team decided to make its thermoelectrics from readily available tin and selenium powders, an approach that, once processed, makes grains of polycrystalline tin selenide instead of the single crystals. The polycrystalline grains are cheap and can be heated and compressed into ingots that are 3 to 5 centimeters long, which can be made into devices. The polycrystalline ingots are also more robust, and Kanatzidis expected the boundaries between the individual grains to slow the passage of heat. But when his team tested the polycrystalline materials, the thermal conductivity shot up, dropping their ZT scores as low as 1.2.

In 2016, the Northwestern team discovered the source of the problem: an ultrathin skin of tin oxide was forming around individual grains of polycrystalline tin selenide before they were pressed into ingots. And that skin acted as an express lane for the heat to travel from grain to grain through the material. So, in their current study, Kanatzidis and his colleagues came up with a way to use heat to drive any oxygen away from the powdery precursors, leaving pristine polycrystalline tin selenide, whereas other devices can generate electricity from thin air using ambient moisture.

The result, which they report today in Nature Materials, was not only a thermal conductivity below that of single-crystal tin selenide but also a ZT of 3.1, a development that echoes nighttime renewable devices showing electricity from cold conditions. “This opens the door for new devices to be built from polycrystalline tin selenide pellets and their applications to be explored,” Kanatzidis says.

Getting through that door will still take some time. The polycrystalline tin selenide the team makes is spiked with sodium atoms, creating what is known as a “p-type” material that conducts positive charges. To make working devices, researchers also need an “n-type” version to conduct negative charges.

Zhao’s team recently reported making an n-type single-crystal tin selenide by spiking it with bromine atoms. And Kanatzidis says his team is now working on making an n-type polycrystalline version. Once n-type and p-type tin selenide devices are paired, researchers should have a clear path to making a new generation of ultra-efficient thermoelectric generators. Those could be installed everywhere from automobile exhaust pipes to water heaters and industrial furnaces to scavenge energy from some of the 65% of fossil fuel energy that winds up as waste heat. 

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Canada Oil Recession Outlook analyzes the Russia-Saudi price war, OPEC discord, COVID-19 demand shock, WTI and WCS collapse, Alberta oilsands exposure, U.S. shale stress, and GDP risks from blockades and fiscal responses.

Key Points

An outlook on how the oil price war and COVID-19 demand shock could tip Canada into recession and strain producers.

✅ WTI and WCS prices plunge on OPEC-Russia discord

✅ Alberta oilsands face break-even pressure near 30 USD WTI

✅ RBC flags global recession; GDP hit from blockades, virus

A war between Russia and Saudi Arabia for market share for oil may have been triggered by the COVID-19 pandemic in China, but the oil price crash contagion that it will spread could have impacts that last longer than the virus.

The prospects for Canada are not good.

Plunging oil prices, reduced economic activity from virus containment, and the fallout from weeks of railway blockades over the Coastal GasLink pipeline all add up to “a one-two-three punch that I think is almost inevitably going to put Canada in a position where its growth has to be negative,” said Dan McTeague, a former Liberal MP and current president of Canadians for Affordable Energy. The situation “certainly has the makings” of a recession, said Ken Peacock, chief economist for the Business Council of British Columbia.

“At a minimum, it’s going to be very disruptive and we’re going to have maybe one negative quarter,” Peacock said. “Whether there’s a second one, where it gets labeled a recession, is a different question. But it’s going to generate some turmoil and challenges over the next two quarters – there’s no doubt about that.”

RBC Economics on March 13 announced it now predicts a global recession and cut its growth projections for Canada's economy in 2020 by half a per cent.

Oil price futures plunged 30% last week, dragging stock markets and currencies, including the Canadian dollar, down with them, even as a deep freeze strained U.S. energy systems. That drop came on top of a 17% decline in February, due to falling demand for oil due to the virus.

The latest price plunge – the worst since the 1991 Gulf War – was the result of Russia and the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, failing to agree on oil production cuts.

The COVID-19 outbreak in China – the world’s second-largest oil consumer – had resulted in a dramatic drop in oil demand in that country, and a sudden glut of oil, with the U.S. energy crisis affecting electricity, gas and EV markets.

OPEC has historically been able to moderate global oil prices by controlling output. But when Russia refused to co-operate with OPEC and agree to production cuts, Saudi Arabia’s state-owned company, Aramco, announced it plans to boost its oil output from 9.7 million barrels per day (bpd) to 12.3 million bpd in April.

In response to that announcement, West Texas Intermediate (WTI) prices dropped 18% to below US$34 per barrel while the Canadian Crude Index fell 24% to US$21. Western Canadian Select dropped 39% to US$15.73.

The effect on Alberta oilsands producers was severe and immediate. Cenovus Energy Inc. (TSX:CVE) saw roughly $2 billion in market cap erased on March 9, when its stock dropped by 52%, which came on top of a 12% drop March 6.

The company responded the very next day by announcing it would cut spending by 32% in 2020, suspend its oil-by-rail program and defer expansion projects.

MEG Energy Corp. (TSX:MEG), which suffered a 56% share price drop on March 9, also announced a 20% reduction in its 2020 capital spending plan.

Peter Tertzakian, chief economist for ARC Energy Research Institute, wrote last week that Russia’s plan is to try to hurt U.S. shale oil producers, who have more than doubled U.S. oil production over the past decade.

Anas Alhajji, a global oil analyst, expects that plan could work. Even before the oil price shock, he had predicted the great shale boom in the U.S. was coming to an end.

“Shale production will decline, and the myth of ‘explosive growth’ will end,” he told Business in Vancouver. “The impact is global and Canadian producers might suffer even more if the oil that Saudi Arabia sends to the U.S. is medium and heavy. This might last longer than what people think.”

The question for Alberta is how Canadian producers can continue to operate through a period of cheap oil. Alberta producers do not compete on the global market. They serve a niche market of U.S. heavy oil refiners, and Biden-era policy is seen as potentially more favourable for Canada’s energy sector than alternatives.

“On the positive side, the industry is battle-hardened,” Tertzakian wrote. “Over the past five years, innovative companies have already learned to endure some of the lowest prices in the world.”

But he added that they need WTI prices of US$30 per barrel just to break even.

“But that’s an average break-even threshold for an industry with a wide variation in costs. That means at that level about half the companies can’t pay their bills and half are treading water.”

Just prior to the oil price plunge, the International Energy Agency (IEA) updated its 2020 forecast for global oil consumption from an 825,000 bpd increase in oil consumption to a 90,000 bpd decrease, due to the COVID-19 virus and consequent economic contraction and reduction in travel.

The IEA predicts global oil demand won’t return to “normal” until the second half of 2020. But even if demand does return to pre-virus levels, that doesn’t mean oil prices will – not if Saudi Arabia can sustain increased oil production at low prices, and evolving clean grid priorities could influence the trajectory too.

The oil plunge was greeted in Alberta with alarm. Alberta Premier Jason Kenney warned Alberta is in “uncharted territory” as consumers are urged to lock in rates and said his government might have to review its balanced budget and resort to emergency deficit spending.

While British Columbians – who pay some of the highest gasoline prices in North America – will enjoy lower gasoline prices at a time when prices are usually starting a seasonal spike, B.C.’s economy could feel knock-on effects from a recession in Alberta.

“We sell a lot of inputs, do a lot of trade with Alberta, so it’s important for B.C., Alberta’s economic health,” Peacock said, “and recent tensions over electricity purchase talks underscore that.”

Last week, the Trudeau government announced $1 billion in emergency funding to cope with the virus and waived a one-week waiting period for unemployment insurance.

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