Squabble causes rise in rates

UK Energy Price Cap Cut 2024 signals relief as wholesale gas prices fall; Ofgem price cap drops per Cornwall Insight, aided by LNG supply, mild winter, despite Red Sea tensions and Ukraine conflict impacts.

Key Points

A forecast cut to Great Britain's Ofgem price cap as wholesale gas falls, easing typical annual household bills in 2024.

✅ Cap falls from £1,928 to £1,620 in April 2024

✅ Forecast £1,497 in July, then about £1,541 from October

✅ Drivers: lower wholesale gas, LNG supply, mild winter

Households in Great Britain are set to experience a significant reduction in energy costs this spring, with bills projected to drop by over £300 annually. This decrease is primarily due to a decline in wholesale gas prices, offering some respite to those grappling with the cost of living crisis.

Cornwall Insight, a well-regarded industry analyst, predicts a 16% reduction in average bills from the previous quarter, potentially reaching the lowest levels since the onset of the Ukraine conflict.

The industry’s price cap, indicative of the average annual bill for a typical household, is expected to decrease from the current £1,928, set earlier this month, to £1,620 in April – a reduction of £308 and £40 less than previously forecasted in December, as ministers consider ending the gas-electricity price link to improve market resilience.

Concerns about escalating tensions in the Red Sea, where Houthi rebels have disrupted global shipping, initially led analysts to fear an increase in wholesale oil prices and subsequent impact on household energy costs.

Contrary to these concerns, oil prices have remained relatively stable, and European gas reserves have been higher than anticipated during a mild winter, with European gas prices returning to pre-Ukraine war levels since November.

Cornwall Insight anticipates that energy prices will continue to be comparatively low through 2024. They predict a further decline to £1,497 for a typical annual bill from July, followed by a slight increase to £1,541 starting in October.

This forecast is a welcome development for Britons who have been dealing with increased expenses across various sectors, from food to utilities, amidst persistently high inflation rates, with energy-driven EU inflation hitting lower-income households hardest across member states.

Energy bills saw a steep rise in 2021, which escalated further due to the Ukraine conflict in 2022, driving up wholesale gas prices. This surge prompted government intervention to subsidize bills, with the UK price cap estimated to cost around £89bn to the public purse, capping costs to a typical household at £2,500.

Cornwall Insight noted that the supply of liquified natural gas to Europe had not been as adversely affected by the Red Sea disruptions as initially feared. Moreover, the UK has been well-supplied with gas from the US, which has become a more significant supplier since the Ukraine war, even as US electricity prices have risen to multi-decade highs. Contributing factors also include lower gas prices in Asia, mild weather, and robust gas availability.

Craig Lowrey, a principal consultant at Cornwall Insight, remarked that concerns about Red Sea events driving up energy prices have not materialized, allowing households to expect a reduction in prices.

On Monday, the next-month wholesale gas price dropped by 4% to 65p a therm.

However, Lowrey cautioned that a complete return to pre-crisis energy bill levels remains unlikely due to ongoing market impacts from shifting away from Russian energy sources and persistent geopolitical tensions, as well as policy changes such as Britain’s Energy Security Bill shaping market reforms.

Richard Neudegg, director of regulation at Uswitch, welcomed the potential further reduction of the price cap in April. However, he pointed out that this offers little solace to households currently struggling with high winter energy costs during the winter. Neudegg urged Ofgem, the energy regulator, to prompt suppliers to reintroduce more competitive and affordable fixed-price deals.

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Florida Electricity Deregulation Ruling highlights the Florida Supreme Court decision blocking a ballot measure on retail choice, preserving utility monopolies for NextEra and Duke Energy, while similar deregulation efforts arise in Virginia and Arizona.

Key Points

A high court decision removing a retail choice ballot measure, keeping Florida utility monopolies intact for incumbents.

✅ Petition language deemed misleading for 2020 ballot

✅ Preserves NextEra and Duke Energy market dominance

✅ Similar retail choice pushes in VA and AZ

Florida’s top court ruled against a proposed constitutional amendment that would have allowed customers to pick their electricity provider, even as Florida solar incentives face rejection by state leaders, threatening monopolies held by utilities such as NextEra Energy Inc. and Duke Energy Corp.

In a ruling Thursday, the court said the petition’s language is “misleading” and doesn’t comply with requirements to be included on the 2020 ballot, reflecting debates over electricity pricing changes at the federal level. The measure’s sponsor, Citizens for Energy Choice, said the move ends the initiative, even as electricity future advocacy continues nationwide.

“While we were confident in our plan to gather the remaining signatures required, we cannot overcome this last obstacle,” the group’s chair, Alex Patton, noting ongoing energy freedom in the South efforts, said in a statement.

The proposed measure was one of several efforts underway to deregulate U.S. electricity markets, including New York’s review of retail energy markets this year. Earlier this week, two Virginia state lawmakers unveiled a bill to allow residents and businesses to pick their electricity provider, threatening Dominion Energy Inc.’s longstanding local monopoly. And in Arizona, where Arizona Public Service Co. has long reigned, regulators are considering a similar move, while in New England Hydro-Quebec’s export bid has been energized by a court decision.

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France Electricity Pricing Mechanism aligns with EU rules, leveraging nuclear energy and EDF profits, avoiding Contracts for Difference, redistributing windfalls to industry and households, targeting €70/MWh amid electricity market reform and Brussels oversight.

Key Points

A framework to keep power near €70/MWh by reclaiming EDF windfalls and redistributing them under EU market rules.

✅ Targets average price near €70/MWh from 2026

✅ Skims EDF profits above €78-80 and €110/MWh thresholds

✅ Aligns with EU rules; avoids nuclear CfDs and state aid clashes

France has unveiled a new electricity pricing mechanism, hoping to defuse months of tension over energy subsidies with Brussels and its neighbors.

The strain has included a Franco-German fight over EU electricity reform with Germany accusing France of wanting to subsidize its industry via artificially low energy prices, while Paris maintained it should have the right to make the most of its relatively cheap nuclear energy. That fight has now been settled.

On Tuesday, the French government presented a new mechanism — complex, and still-to-be-detailed — to bring the average price of electricity closer to €70 per megawatt hour (MWh) as of 2026, amid Europe's electricity market revamp efforts.

"The agreement has been defined to comply with European rules and avoid difficulties with the European Commission," said France's Economy and Finance Minister Bruno Le Maire, noting that France had ruled out other "simpler" options that would have caused tension with Brussels.

For example, France has not yet envisaged the use of state-backed investment schemes called Contracts for Difference (CfD), which were the main source of discord in talks with Germany on the electricity market reform and the EU push for more fixed-price contracts in generation. The compromise agreed by EU ministers last month gives the Commission the power to monitor CfDs in the nuclear sector.

"France wanted to limit as much as possible the European Commission's nuisance power," said Phuc-Vinh Nguyen, an energy expert at the Jacques Delors Institute think tank in Paris.

The announcement came weeks after French President Emmanuel Macron promised that France would "take back control" of its electricity prices to allow its industry to make the most of the country's relatively cheap nuclear energy.

Germany, by contrast, has moved to support energy-intensive industries with an industrial electricity subsidy, underscoring the policy divergence.

“The price of electricity has always been a major competitive advantage for the French nation, and it must remain so,” Le Maire said.

Under the new mechanism, part of a broader deal on electricity prices between the state and EDF, the government will seize EDF profits above certain thresholds and redistribute them directly to industry and households to bring prices closer to the desired level. Specifically, the government will redistribute 50 percent of EDF’s additional profits if prices rise above €78-€80 per MWh, and 90 percent of extra profits if prices rise above €110 per MWh.

The move also marks a new step in the government's power grab at EDF, after the company was fully nationalized earlier this year.

For years, France has been discussing an EDF reform with the Commission in order to address concerns by Brussels regarding disguised state aid to the company. In particular, the Commission wanted assurances that any state aid given to nuclear would be kept separate from those parts of the business subject to competition, such as renewable energy development.

An economy ministry official close to Le Maire argued that the new pricing mechanism would settle matters with Brussels on that front. A Commission spokesperson said Brussels was in contact with France on the file, but declined further comment.

The mechanism will replace the existing EU-mandated energy pricing mechanism, dubbed ARENH, which was set to expire at the end of 2025, and which has forced EDF to sell some of its electricity to competitors at a fixed low price since 2010, and comes amid contested electricity market reforms at EU level.

The new system could benefit EDF because it won't be bound to sell energy at a lower price, but instead will be allowed to auction off its energy to competitors. On the other hand, the redistribution system would deprive the company of some profits when electricity prices are higher. No wonder, then, that negotiations between the government and EDF have been "difficult," as Le Maire put it.

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NB Power eCharge Network expands EV charging in New Brunswick with fast chargers, level 2 stations, Trans-Canada Highway coverage, and green infrastructure, enabling worry-free electric vehicle travel and lower emissions across the province.

Key Points

NB Power eCharge Network is a provincewide EV charging system with fast and level 2 stations for reliable travel.

✅ 15 fast-charging sites on Trans-Canada and northern New Brunswick

✅ Level 2 stations at highways, municipalities, and businesses

✅ 20-30 minute DC fast charging; cut emissions ~80% and fuel ~75%

NB Power announced Friday the eCharge Network, the province’s first electric vehicle charging network aimed at giving drivers worry-free travel everywhere in the province.

The network includes 15 locations along the province’s busiest highways where both fast-chargers and level-2 chargers will be available. In addition, nine level-2 chargers are already located at participating municipalities and businesses throughout the province. The new locations will be installed by the end of 2017.

NB Power is working with public and private partners to add to the network to enable electric vehicle owners to drive with confidence and to encourage others to make the switch from gas to electric vehicles, supported by a provincial rebate program now available.

“We are incredibly proud to offer our customers and visitors to New Brunswick convenient charging with the launch of our eCharge Network,” said Gaëtan Thomas, president and CEO of NB Power. “Our goal is to make it easy for owners of electric vehicles to drive wherever they choose in New Brunswick, and to encourage more drivers to consider an electric vehicle for their next purchase.”

An electric vehicle owner in New Brunswick can shrink their vehicle carbon footprint by about 80 per cent while reducing their fuel-related costs by about 75 per cent, according to NB Power, and broader grid benefits are being explored through Nova Scotia's vehicle-to-grid pilot across the region.

In addition to the network of standard charging stations, the eCharge network will also include 400 volt fast-charging stations along the Trans-Canada Highway and in the northern parts of New Brunswick. The first of their kind in New Brunswick, these 15 fast-charging stations, similar to Newfoundland and Labrador's newly completed fast-charging network connecting communities, will enable all-electric vehicles to recharge in as little as 20 to 30 minutes. Fast-charge sites will include standard level-2 stations for both battery electric vehicles and plug-in hybrids.

NB Power will install fast-charge and level-2 sites at five locations throughout northern New Brunswick, addressing northern coverage challenges seen elsewhere, such as Labrador's infrastructure gaps today, which will be cost-shared with government. Locations include the areas of Saint-Quentin/Kedgwick, Campbellton, Bathurst, Tracadie, and Miramichi.

“Our government understands that embracing the green economy and reducing our carbon footprint is a priority for New Brunswickers,” said Environment and Local Government Minister Serge Rousselle. “Our climate change action plan calls for a collaborative approach to creating the strategic infrastructure to support electric vehicles throughout all regions in the province, and we are pleased to see this important step underway. New Brunswickers will now have the necessary network to adopt new methods of transportation and contribute to our provincial plan to increase the number of electric vehicles on the road and will help meet emission reduction targets as we work to combat climate change.”

An investment of $500,000 from Natural Resources Canada will go towards purchasing and installing the charging stations for the 10 fast-charging stations along the Trans-Canada Highway.

“The eCharge Network will make it easier for Canadians to choose cleaner options and helps put New Brunswick’s transportation system on a path to a lower-carbon future,” said Moncton-Riverview-Dieppe MP Ginette Petitpas Taylor. “The Government of Canada continues to support green infrastructure in the transportation sector that will advance Canada’s efforts to build a clean economy, create well-paying jobs, and achieve our climate change goals.”

Petitpas Taylor attended for federal Natural Resources Minister Jim Carr.

Fast chargers are being installed at the following locations along the Trans-Canada Highway across New Brunswick:

– Irving Big Stop, Aulac

– Edmundston Truck Stop

– Irving Big Stop, Saint-André

– Johnson Guardian, Perth-Andover

– Murray’s Irving, Woodstock

– Petro-Canada / Acorn Restaurant, Prince William

– Irving Big Stop, Waasis

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Ontario Battery Energy Storage anchors IESO strategy, easing peak demand and boosting grid reliability. Projects like Oneida BESS (250MW) and nearly 3GW procurements integrate renewables, wind and solar, enabling flexible, decarbonized power.

Key Points

Provincewide grid batteries help IESO manage peaks, integrate renewables, and strengthen reliability across Ontario.

✅ IESO forecasts 1,000MW peak growth by 2026

✅ Oneida BESS adds 250MW with 20-year contract

✅ Nearly 3GW storage procured via LT1 and other RFPs

Ontario’s electricity grid is facing increasing demand amid a looming supply crunch, prompting the province to invest heavily in battery energy storage systems (BESS) as a key solution. The Ontario Independent Electricity System Operator (IESO) has highlighted that these storage technologies will be crucial for managing peak demand in the coming years.

Ontario's energy demands have been on the rise, driven by factors such as population growth, electric vehicle manufacturing, data center expansions, and heavy industrial activity. The IESO's latest assessment, and its work on enabling storage, covering the period from April 2025 to September 2026, indicates that peak demand will increase by approximately 1,000MW between the summer of 2025 and 2026. This forecasted rise in energy use is attributed to the acceleration of various sectors within the province, underscoring the need for reliable, scalable energy solutions.

A significant portion of this solution will be met by large-scale energy storage projects. Among the most prominent is the Oneida BESS, a flagship project that will contribute 250MW of storage capacity. This project, developed by a consortium including Northland Power and NRStor, will be located on land owned by the Six Nations of the Grand River. Expected to be operational soon, it will play a pivotal role in ensuring grid stability during high-demand periods. The project benefits from a 20-year contract with the IESO, guaranteeing payments that will support its financial viability, alongside additional revenue from participating in the wholesale energy market.

In addition to Oneida, Ontario has committed to acquiring nearly 3GW of energy storage capacity through various procurement programs. The 2023 Expedited Long-Term 1 (LT1) request for proposals (RfP) alone secured 881MW of storage, with additional projects in the pipeline. A notable example is the Hagersville Battery Energy Storage Park, which, upon completion, will be the largest such project in Canada. The success of these procurement efforts highlights the growing importance of BESS in Ontario's energy strategy.

The IESO’s proactive approach to energy storage is not only a response to rising demand but also a step toward decarbonizing the province’s energy system. As Ontario transitions away from traditional fossil fuels, BESS will provide the necessary flexibility to accommodate increasing renewable energy generation, a clean energy solution widely recognized in jurisdictions like New York, particularly from intermittent sources like wind and solar. By storing excess energy during periods of low demand and dispatching it when needed, these systems will help maintain grid stability, and as many utilities see benefits even without mandates, reduce reliance on fossil fuel-based power plants.

Looking ahead, Ontario's energy storage capacity is expected to grow significantly, complemented by initiatives such as the Hydrogen Innovation Fund, with projects from the 2023 LT1 RfP expected to come online by 2027. As more storage resources are integrated into the grid, the province is positioning itself to meet its rising energy needs while also advancing its environmental goals.

Ontario’s increasing reliance on battery energy storage is a clear indication of the province’s commitment to a sustainable and resilient energy future, aligning with perspectives from Sudbury sustainability advocates on the grid's future. With substantial investments in storage technology, Ontario is not only addressing current energy challenges but also paving the way for a cleaner, more reliable energy system in the years to come.

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Ontario-Quebec Electricity Trade Agreement ends as Ontario pivots to IESO procurement, hydropower alternatives, natural gas capacity, and energy auctions, impacting grid reliability, power imports, and GHG emissions across both provincial markets.

Key Points

A seven-year power import pact; Ontario will end it, shifting to IESO procurement and gas capacity.

✅ Seasonal hydropower exchange of 2.3 TWh annually.

✅ IESO projects Quebec supply constraints by decade end.

✅ Ontario adds gas, auctions; near-term sector GHGs rise.

The Ontario government does not plan to renew the Ontario-Quebec electricity trade agreement, Radio-Canada is reporting.

The seven-year contract, which expires next year, aims to reduce Ontario's greenhouse gas (GHG) emissions by buying 2.3 Terawatt-hours of electricity from Quebec annually — that corresponds to about seven per cent of Hydro-Quebec's average annual exports.

The announcement comes as the provincially owned Quebec utility continues its legal battle over a plan to export power to Massachusetts.

The Ontario agreement has guaranteed a seasonal exchange of energy, since Quebec has a power surplus in summer, and the province's electricity needs increase in the winter. Ontario plans on exercising its last and only option in the summer of 2026, for a block of 500 megawatts.

The office of the Ontario Minister of Energy Todd Smith says the province will save money by relying "on a competitive procurement process" instead, amid debates over clean, affordable electricity policy in Ontario. And, the Independent Electricity System Operator (IESO), the equivalent of Hydro-Quebec in Ontario, added that, at any rate, Quebec is expected to "run out of electricity in the middle or at the end of the decade."

During the Quebec election campaign, Premier Francois Legault said his province needed to increase hydroelectricity production because he is expecting demand for hydroelectricity to increase by an additional 100 terawatt-hours in the coming decades — half of Hydro-Quebec's current annual output.

Coalition Avenir Quebec pitches more hydro dams to Quebec voters
The provinces will still continue to buy and sell power, reaching deals through annual energy auctions.

Eloise Edom, an associate researcher at Polytechnique Montreal's Institut de l'energie Trottier, says the announcement came as somewhat of a surprise because "we're still talking about a lot of energy."

Hydro-Quebec refused to comment on "the SIERE [Independent Electricity System Operator]'s intentions for the agreement, which ends next year," said company spokesperson Lynn St-Laurent.

No green options
Yet Ontario is running out of electricity, even as questions persist about whether it is embracing clean power to meet demand, in part because of plans to refurbish nuclear reactors at the Bruce and Darlington generator stations.

Windsor has already lost out on a $2.5-billion factory because the region is short of electricity for new industrial loads. And by 2025, Toronto will run out of power for the electrification of its transit system, according to the latest estimates from the IESO.

The Ford government recently announced that it hopes to extend the life of the Pickering nuclear station amid ongoing debate. It is also evaluating the possibility of increasing hydroelectricity production at its existing dams.

For now, Ontario is banking on its natural gas plants to meet demand, which have won most recent IESO tenders for contracts running until 2026. Last Friday, the province announced that it was going to buy an additional 1,500 megawatts by 2027.

"The [Ontario energy] minister's expectations may be that the increase in natural gas prices is temporary and that it will fade," energy economist Jean-Thomas Bernard said. "With this in mind, he probably does not want to sign a long-term contract [with Hydro-Quebec] and prefers to buy electricity on a day-to-day basis and through calls for tenders."

If the Quebec deal expires, Ontario, Canada's second highest GHG emitter, would have to increase its emissions for the sector, at least in the medium term, with electricity getting dirtier as gas fills the gap.

Last year, the IESO found that it would be very difficult to set a moratorium on natural gas before 2030. The IESO must produce a final report on the subject for the energy minister by the end of November.

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