Durango pulls plug on green power to cut budget

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.

“There is a path to clean electricity ahead.”

Chris Varcoe is a Calgary Herald columnist.

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Karpowership LNG powership in Senegal will supply 15% of the grid, a 235 MW floating power plant bound for Dakar, enabling fast deployment, base-load electricity, and cleaner natural gas generation for West Africa.

Key Points

A 235 MW floating plant supplying 15% of Senegal's grid with fast, reliable, lower-emission LNG electricity.

✅ 235 MW LNG-ready floating plant meets 15% of Senegal's demand

✅ Rapid deployment: commercial operations expected early October

✅ Cleaner natural gas conversion planned after six months

Turkey's Karpowership company, the designer and builder of the world's first floating power plants and the global brand of Karadeniz Holding, will meet 15% of Senegal's electricity needs from liquefied natural gas (LNG) with the 235-megawatt (MW) powership Ayşegül Sultan, which started its voyage from Turkey to Senegal, where an African Development Bank review of a coal plant is underway, on Sunday.

Karpowership, operating 22 floating power plants in more than 10 countries around the world, where France's first offshore wind turbine is now producing electricity, has invested over $5 billion in this area.

In a statement to members of the press at Karmarine Shipyard, Karpowership Trade Group Chair Zeynep Harezi said they aimed to provide affordable electricity to countries in need of electricity quickly and reliably, as projects like the Egypt-Saudi power link expand regional grids, adding that they could commission energy ships capable of generating the base electric charge of the countries, as tidal power in Nova Scotia begins supplying the grid, in a period of about a month.

Harezi recalled that Karpowership commissioned the first floating energy ship in 2007 in Iraq, followed by Lebanon, Ghana, Indonesia, Mozambique, Zambia, Gambia, Sierra Leone, Sudan, Cuba, Guinea Bissau and Senegal, while Scottish tidal power demonstrates marine potential as well. "We meet the electricity needs of 34 million people in many countries," she stressed. Harezi stated that the energy ships, all designed and produced by Turkish engineers, use liquid fuel, but all ships can covert to the second fuel.

Considering the impact of electricity production on the environment, Harezi noted that they plan to convert the entire fleet from liquid fuel to natural gas, with complementary approaches like power-to-gas in Europe helping integrate renewables. "With a capacity of 480 megawatts each, the world's largest floating energy vessels operate in Indonesia and Ghana. The conversion to gas has been completed in our project in Indonesia. We have also initiated the conversion of the Ghana vessel into gas," she said.

Harezi explained that they would continue to convert their fleets to natural gas in the coming period. "Our 235-MW floating electric vessel, the Ayşegül Sultan, sets sail today to meet 15% of Senegal's electricity needs on its own. After an approximately 20-day cruise, the vessel will reach Dakar, the capital of Senegal, and will begin commercial operation in early October," Harezi continued. "We plan to use liquid fuel as bridging fuel in the first six months. At the end of the first six months, we will start to produce electricity from LNG on our ship. Thus, Ayşegül Sultan will be the first project to generate electricity from LNG in Africa, while the world's most powerful tidal turbine is delivering power to the grid, officials said. Our floating power plant to be sent to Mozambique is designed to generate electricity from LNG. It is also scheduled to start operations in the next year."

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Ireland Coal-Free Electricity Record: EirGrid reports 25 days without coal on the all-island grid, as wind power, renewables, and natural gas dominated generation, cutting CO2 emissions, with Moneypoint sidelined by market competitiveness.

Key Points

It is a 25-day period when the grid used no coal, relying on gas and renewables to reduce CO2 emissions.

✅ 25 days coal-free between April 11 and May 7

✅ Gas 60%, renewables 30% of generation mix

✅ Eurostat: 6.8% drop in Ireland's CO2 emissions

The island of Ireland has gone a record length of time without using coal-fired electricity generation on its power system, Britain's week-long coal-free run providing a recent comparator, Eirgrid has confirmed.

The all-island grid operated without coal between April 11th and May 7th – a total of 25 days, it confirmed. This is the longest period of time the grid has operated without coal since the all-island electricity market was introduced in 2007, echoing Britain's record coal-free stretch seen recently.

Ireland’s largest generating station, Moneypoint in Co Clare, uses coal, with recent price spikes in Ireland fueling concerns about dispatchable capacity, as do some of the larger generation sites in Northern Ireland.

The analysis coincides with the European statistics agency, Eurostat publishing figures showing annual CO2 emissions in Ireland fell by 6.8 per cent last year; partly due to technical problems at Moneypoint.

Over the 25-day period, gas made up 60 per cent of the fuel mix, while renewable energy, mainly wind, accounted for 30 per cent, echoing UK wind surpassing coal in 2016 across the market. Coal-fired generation was available during this period but was not as competitive as other methods.

EirGrid group chief executive Mark Foley said this was “a really positive development” as coal was the most carbon intense of all electricity sources, with its share hitting record lows in the UK in recent years.

“We are acutely aware of the challenges facing the island in terms of meeting our greenhouse gas emission targets, mindful that low-carbon generation stalled in the UK in 2019, through the deployment of more renewable energy on the grid,” he added.

Last year 33 per cent of the island’s electricity came from renewable energy sources, German renewables surpassing coal and nuclear offering a parallel milestone, a new record. Coal accounted for 9 per cent of electricity generation, down from 12.9 per cent in 2017.

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FERC Grid Resiliency Pricing Opposition underscores industry groups, RTOs, and ISOs rejecting DOE's NOPR, warning against out-of-market subsidies for coal and nuclear, favoring competitive markets, reliability, and true grid resilience.

Key Points

Coalition urging FERC to reject DOE's NOPR subsidies, protecting reliability and competitive power markets.

✅ Industry groups, RTOs, ISOs oppose DOE NOPR

✅ PJM reports sufficient reliability and resilience

✅ Reject out-of-market aid to coal, nuclear

A diverse group of a dozen energy industry associations representing oil, natural gas, wind, solar, efficiency, and other energy technologies today submitted reply comments to the Federal Energy Regulatory Commission (FERC) continuing their opposition to the Department of Energy's (DOE) proposed rulemaking on grid resiliency pricing and electricity pricing changes within competitive markets, in the next step in this FERC proceeding.

Action by FERC, as lawmakers urge movement on aggregated DERs to modernize markets, is expected by December 11.

In these comments, this broad group of energy industry associations notes that most of the comments submitted initially by an unprecedented volume of filers, including grid operators whose markets would be impacted by the proposed rule, urged FERC not to adopt DOE'sproposed rule to provide out-of-market financial support to uneconomic coal and nuclear power plants in the wholesale electricity markets overseen by FERC.

Just a small set of interests - those that would benefit financially from discriminatory pricing that favors coal and nuclear plants - argued in favor of the rule put forward by DOE in its Notice of Proposed Rulemaking, or NOPR, as did coal and business interests in related regulatory debates. But even those interests - termed 'NOPR Beneficiaries' by the energy associations - failed to provide adequate justification for FERC to approve the rule, and their specific alternative proposals for implementing the bailout of these plants were just as flawed as the DOE plan, according to the energy industry associations.

'The joint comments filed today with partners across the energy spectrum reflect the overwhelming majority view that this proposed rulemaking by FERC is unprecedented and unwarranted, said Todd Foley, Senior Vice President, Policy & Government Affairs, American Council on Renewable Energy.

We're hopeful that FERC will rule against an anti-competitive distortion of the electricity marketplace and avoid new unnecessary initiatives that increase power prices for American consumers and businesses.'

In the new reply comments submitted in response to the initial comments filed by hundreds of stakeholders on or before October 23 - the energy industry associations made the following points: Despite hundreds of comments filed, no new information was brought forth to validate the assertion - by DOE or the NOPR Beneficiaries - that an emergency exists that requires accelerated action to prop up certain power plants that are failing in competitive electricity markets: 'The record in this proceeding, including the initial comments, does not support the discriminatory payments proposed' by DOE, state the industry groups.

Nearly all of the initial comments filed in the matter take issue with the DOE NOPR and its claim of imminent threats to the reliability and resilience of the electric power system, despite reports of coal and nuclear disruptions cited by some advocates: 'Of the hundreds of comments filed in response to the DOE NOPR, only a handful purported to provide substantive evidence in support of the proposal. In contrast, an overwhelming majority of initial comments agree that the DOE NOPR fails to substantiate its assertions of an immediate reliability or resiliency need related to the retirement of merchant coal-fired and nuclear generation.'

Grid operators filed comments refuting claims that the potential retirement of coal and nuclear plants which could not compete for economically present immediate or near-term challenges to grid management, even as a coal CEO criticism targeted federal decisions: 'Even the RTOs and ISOs themselves filed comments opposing the DOE NOPR, noting that the proposed cost-of-service payments to preferred generation would disrupt the competitive markets and are neither warranted nor justified.... Most notably, this includes PJM Interconnection, ... the RTO in which most of the units potentially eligible for payments under the DOE NOPR are located. PJM states that its region 'unquestionably is reliable, and its competitive markets have for years secured commitments from capacity resources that well exceed the target reserve margin established to meet [North American Electric Reliability Corp.] requirements.' And PJM analysis has confirmed that the region's generation portfolio is not only reliable, but also resilient.'

The need for NOPR Beneficiaries to offer alternative proposals reflects the weakness of DOE'srule as drafted, but their options for propping up uneconomic power plants are no better, practically or legally: 'Plans put forward by supporters of the power plant bailout 'acknowledge, at least implicitly, that the preferential payment structure proposed in the DOE NOPR is unclear, unworkable, or both. However, the alternatives offered by the NOPR Beneficiaries, are equally flawed both substantively and procedurally, extending well beyond the scope of the DOE NOPR.'

Citing one example, the energy groups note that the detailed plan put forward by utility FirstEnergy Service Co. would provide preferential payments far more costly than those now provided to individual power plants needed for immediate reasons (and given a 'reliability must run' contract, or RMR): 'Compensation provided under [FirstEnergy's proposal] would be significantly expanded beyond RMR precedent, going so far as to include bailing [a qualifying] unit out of debt based on an unsupported assertion that revenues are needed to ensure long-term operation.'

Calling the action FERC would be required to take in adopting the DOE proposal 'unprecedented,' the energy industry associations reiterate their opposition: 'While the undersigned support the goals of a reliable and resilient grid, adoption of ill-considered discriminatory payments contemplated in the DOE NOPR is not supportable - or even appropriate - from a legal or policy perspective.

About ACORE

The American Council on Renewable Energy (ACORE) is a national non-profit organization leading the transition to a renewable energy economy. With hundreds of member companies from across the spectrum of renewable energy technologies, consumers and investors, ACORE is uniquely positioned to promote the policies and financial structures essential to growth in the renewable energy sector. Our annual forums in Washington, D.C., New York and San Franciscoset the industry standard in providing important venues for key leaders to meet, discuss recent developments, and hear the latest from senior government officials and seasoned experts.

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Advanced Nuclear Technology drives decarbonization through innovation, SMRs, and a stable grid, bolstering U.S. leadership, energy security, and clean power exports under supportive regulation and policy to meet climate goals cost-effectively.

Key Points

Advanced nuclear technology uses SMRs to deliver low-carbon, reliable power and strengthen energy security.

✅ Accelerates decarbonization with firm, low-carbon baseload power

✅ Enhances grid reliability via SMRs and advanced fuel cycles

✅ Supports U.S. leadership through exports, R&D, and modern regulation

The most cost-effective way--indeed the only reasonable way-- to reduce greenhouse gas emissions and foster our national economic and security interests is through innovation, especially next-gen nuclear power innovation. That's from Rep. Greg Walden, R-Oregon, ranking Republican member of the House Energy and Commerce Committee, speaking to a Subcommittee on Energy hearing titled, "Building a 100 Percent Clean Economy: Advanced Nuclear Technology's Role in a Decarbonized Future."

Here are the balance of his remarks.

Encouraging the deployment of atomic energy technology, strengthening our nuclear industrial base, implementing policies that helps reassert U.S. nuclear leadership globally... all provide a promising path to meet both our environmental and energy security priorities. In fact, it's the only way to meet these priorities.

So today can help us focus on what is possible and what is necessary to build on recent policies we've enacted to ensure we have the right regulatory landscape, the right policies to strengthen our domestic civil industry, and the advanced nuclear reactors on the horizon.

U.S. global leadership here is sorely needed. Exporting clean power and clean power technologies will do more to drive down global Co2 emissions on the path to net-zero emissions worldwide than arbitrary caps that countries fail to meet.

In May last year, the International Energy Agency released an informative report on the role of nuclear power in clean energy systems; it did not find current trends encouraging.

The report noted that nuclear and hydropower "form the backbone of low-carbon electricity generation," responsible for three-quarters of global low-carbon generation and the reduction of over 60 gigatons of carbon dioxide emissions over the past 50 years.

Yet IEA found in advanced economies, nuclear power is in decline, with closing plants and little new investment, "just when the world requires more low-carbon electricity."

There are various reasons for this, some relating to cost overruns and delays, others to policies that fail to value the "low-carbon and energy security attributes" of nuclear. In any case, the report found this failure to encourage nuclear will undermine global efforts to develop cleaner electricity systems.

Germany demonstrates the problem. As it chose to shut down its nuclear industry, it has doubled down on expanding renewables like solar and wind. Ironically, to make this work, it also doubled down on coal. This nuclear phase out has cost Germany $12 billion a year, 70% of which is from increased mortality risk from stronger air pollutants (this according to the National Bureau of Economic Research). If other less technologically advanced nations even could match the rate of renewables growth reached by Germany, they would only hit about a fifth of what is necessary to reach climate goals--and with more expensive energy. So, would they then be forced to bring online even more coal-fired sources than Germany?

On the other hand, as outlined by the authors of the pro-nuclear book "A Bright Future," France and Sweden have both demonstrated in the 1970s and 1980s, how to do it. They showed that the build out of nuclear can be done at five times the rate of Germany's experience with renewables, with increased electricity production and relatively lower prices.

I think the answer is obvious about the importance of nuclear. The question will be "can the United States take the lead going forward?"

We can help to do this in Congress if we fully acknowledge what U.S. leadership on nuclear will mean--both for cleaner power and industrial systems beyond electricity, here and abroad--and for the ever-important national security attributes of a strong U.S. industry.

Witnesses have noted in recent hearings that recognizing how U.S. energy and climate policy effects energy and energy technology relationships world-wide is critical to addressing emissions where they are growing the fastest and for strengthening our national security relationships.

Resurrecting technological leadership in nuclear technology around the world will meet our broader national and energy security reasons--much as unleashing U.S. LNG from our shale revolution restored our ability to counter Russia in energy markets, while also driving cleaner technology. Our nuclear energy exports boost our national security priorities.

We on Energy and Commerce have been working, in a bipartisan manner over the past few Congresses to enhance U.S. nuclear policies. There is most certainly more to do. And I think today's hearing will help us explore what can be done, both administratively and legislatively, to pave the way for advanced nuclear energy.

Let me welcome the panel today. Which, I'm pleased to see, represents several important perspectives, including industry, regulatory, safety, and international expertise, to two innovative companies--Terrapower and my home state of Oregon's NuScale. All of these witnesses can speak to what we need to do to build, operate and lead with these new technologies.

We should work to get our nation's nuclear policy in order, learning from global frameworks like the green industrial revolution abroad. Today represents a good step in that effort.

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China Coal-Fired Power Consolidation targets capacity cuts through mergers, SASAC-led restructuring, debt reduction, asset optimization, and retiring inefficient plants across state-owned utilities to improve efficiency, stabilize liabilities, and align with energy transition policies.

Key Points

A SASAC-driven plan merging utility assets to cut coal capacity, reduce debt, and retire outdated, loss-making plants.

✅ Merge five central utilities' coal assets to streamline operations

✅ Target 25-33% capacity cuts and >50% loss reduction by 2021

✅ Prioritize debt-ridden regions: Gansu, Shaanxi, Xinjiang, Qinghai, Ningxia

China plans to slash coal-fired power capacity at its five biggest utilities by as much as a third in two years by merging their assets, amid broader power-sector strains that reverberate globally, according to a document seen by Reuters and four sources with knowledge of the matter.

The move to shed older and less-efficient capacity is being driven by pressure to cut heavy debt levels at the utilities. China, is, however, building more coal-fired power plants and approving dozens of new mines to bolster a slowing economy, even as recent power cuts highlight grid imbalances.

The five utilities, which are controlled by the central government, accounted for around 44% of China’s total coal-fired power capacity at the end of 2018, a share likely to be tested by rising electrification goals, with electricity to meet 60% by 2060 according to industry forecasts.

“(The utilities) will strive to reduce coal-fired power capacity by one quarter to one third ...cutting total losses by more than 50% from the current level to achieve a significant decline in debt-to-asset ratios by the end of 2021,” the document said.

The plan, initiated and overseen by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), follows heavy losses at some of the utilities, amid a pandemic-era demand drop that hit industrial consumption.

Some of their coal-fired power stations have filed for bankruptcy in recent years as Beijing promotes the use of renewable energy and advances its nuclear program while opening up the state-controlled power market.

The SASAC did not immediately respond to a fax seeking comment and the sources declined to be identified as they were not authorised to speak to the media.

The utilities - China Huaneng Group Co, China Datang Corp, China Huadian Corp, State Power Investment Corp and China Energy Group - did not respond to faxes requesting comment.

Together, they had 474 coal-fired power plants with combined power generation capacity of 520 gigawatts (GW) at the end of last year.

Their coal-fired power assets came to 1.5 trillion yuan ($213 billion) while total coal-fired power liabilities were 1.1 trillion yuan, the document said.

The document was seen by two people at two of the utilities and was also verified by a source at SASAC and a government researcher.

It was not clear when the document was published but it said the merging and elimination of outdated capacity would start from 2019 and be achieved within three years, aiming to improve the efficiency and operations at the companies, reflecting a broader electricity sector mystery that policymakers are trying to resolve.

Utilities with debt-ridden operations in the northwestern regions of Gansu, Shaanxi, Xinjiang, Qinghai and Ningxia would be the first to carry out the plan, it said, even as India ration coal supplies during demand surges.

The government researcher said the SASAC has been researching possible consolidation in the coal-fired power sector since 2017, but added: “It’s easier said than done.”

“No one is willing to hand in their high quality assets and there is no point in merging the bad assets,” the government researcher said.

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