RBC agrees to buy electricity from new southern Alberta solar power farm project


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RBC Renewable Energy PPA supports a 39 MW Alberta solar project, with Bullfrog Power and BluEarth Renewables, advancing clean energy in a deregulated market through a long-term power purchase agreement in Canada today.

 

Key Points

A long-term power purchase agreement where RBC buys most output from a 39 MW Alberta solar project via Bullfrog Power.

✅ 39 MW solar build in County of Forty Mile, Alberta

✅ Majority of output purchased by RBC via Bullfrog Power

✅ Supports cost-competitive renewables in deregulated market

 

The Royal Bank of Canada says it is the first Canadian bank to sign a long-term renewable energy power purchase agreement, a deal that will support the development of a 39-megawatt, $70-million solar project in southern Alberta, within an energy powerhouse province.

The bank has agreed with green energy retailer Bullfrog Power to buy the majority of the electricity produced by the project, as a recent federal green electricity contract highlights growing demand, to be designed and built by BluEarth Renewables of Calgary.

The project is to provide enough power for over 6,400 homes and the panel installations will cover 120 hectares, amid a provincial renewable energy surge that could create thousands of jobs, the size of 170 soccer fields.

The solar installation is to be built in the County of Forty Mile, a hot spot for renewable power that was also chosen by Suncor Energy Inc. for its $300-million 200-MW wind power project (approved last year and then put on hold during the COVID-19 pandemic), and home to another planned wind power farm in Alberta.

BluEarth says commercial operations at its Burdett and Yellow Lake Solar Project are expected to start up in April 2021, underscoring solar power growth in the province.

READ MORE: Wind power developers upbeat about Alberta despite end of power project auctions

It says the agreement shows that renewable energy can be cost-competitive, with lower-cost solar contracts in a deregulated electricity market like Alberta’s, adding the province has some of the best solar and wind resources in Canada.

“We’re proud to be the first Canadian bank to sign a long-term renewable energy power purchase agreement, demonstrating our commitment to clean, sustainable power, as Alberta explores selling renewable energy at scale,” said Scott Foster, senior vice-president and global head of corporate real estate at RBC.

 

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A new material made from carbon nanotubes can generate electricity by scavenging energy from its environment

Carbon Nanotube Solvent Electricity enables wire-free electrochemistry as organic solvents like acetonitrile pull electrons, powering alcohol oxidation and packed bed reactors, energy harvesting, and micro- and nanoscale robots via redox-driven current.

 

Key Points

Solvent-driven electron extraction from carbon nanotube particles generates current for electrochemistry.

✅ 0.7 V per particle via solvent-induced electron flow

✅ Packed bed reactors drive alcohol oxidation without wires

✅ Scalable for micro- and nanoscale robots; energy harvesting

 

MIT engineers have discovered a new way of generating electricity, alongside advances in renewable power at night that broaden what's possible, using tiny carbon particles that can create a current simply by interacting with liquid surrounding them.

The liquid, an organic solvent, draws electrons out of the particles, generating a current, unlike devices based on a cheap thermoelectric material that rely on heat, that could be used to drive chemical reactions or to power micro- or nanoscale robots, the researchers say.

"This mechanism is new, and this way of generating energy is completely new," says Michael Strano, the Carbon P. Dubbs Professor of Chemical Engineering at MIT. "This technology is intriguing because all you have to do is flow a solvent through a bed of these particles. This allows you to do electrochemistry, but with no wires."

In a new study describing this phenomenon, the researchers showed that they could use this electric current to drive a reaction known as alcohol oxidation—an organic chemical reaction that is important in the chemical industry.

Strano is the senior author of the paper, which appears today in Nature Communications. The lead authors of the study are MIT graduate student Albert Tianxiang Liu and former MIT researcher Yuichiro Kunai. Other authors include former graduate student Anton Cottrill, postdocs Amir Kaplan and Hyunah Kim, graduate student Ge Zhang, and recent MIT graduates Rafid Mollah and Yannick Eatmon.

Unique properties
The new discovery grew out of Strano's research on carbon nanotubes—hollow tubes made of a lattice of carbon atoms, which have unique electrical properties. In 2010, Strano demonstrated, for the first time, that carbon nanotubes can generate "thermopower waves." When a carbon nanotube is coated with layer of fuel, moving pulses of heat, or thermopower waves, travel along the tube, creating an electrical current that exemplifies turning thermal energy into electricity in nanoscale systems.

That work led Strano and his students to uncover a related feature of carbon nanotubes. They found that when part of a nanotube is coated with a Teflon-like polymer, it creates an asymmetry, distinct from conventional thermoelectric materials approaches, that makes it possible for electrons to flow from the coated to the uncoated part of the tube, generating an electrical current. Those electrons can be drawn out by submerging the particles in a solvent that is hungry for electrons.

To harness this special capability, the researchers created electricity-generating particles by grinding up carbon nanotubes and forming them into a sheet of paper-like material. One side of each sheet was coated with a Teflon-like polymer, and the researchers then cut out small particles, which can be any shape or size. For this study, they made particles that were 250 microns by 250 microns.

When these particles are submerged in an organic solvent such as acetonitrile, the solvent adheres to the uncoated surface of the particles and begins pulling electrons out of them.

"The solvent takes electrons away, and the system tries to equilibrate by moving electrons," Strano says. "There's no sophisticated battery chemistry inside. It's just a particle and you put it into solvent and it starts generating an electric field."

Particle power
The current version of the particles can generate about 0.7 volts of electricity per particle. In this study, the researchers also showed that they can form arrays of hundreds of particles in a small test tube. This "packed bed" reactor, unlike thin-film waste-heat harvesters for electronics, generates enough energy to power a chemical reaction called an alcohol oxidation, in which an alcohol is converted to an aldehyde or a ketone. Usually, this reaction is not performed using electrochemistry because it would require too much external current.

"Because the packed bed reactor is compact, it has more flexibility in terms of applications than a large electrochemical reactor," Zhang says. "The particles can be made very small, and they don't require any external wires in order to drive the electrochemical reaction."

In future work, Strano hopes to use this kind of energy generation to build polymers using only carbon dioxide as a starting material. In a related project, he has already created polymers that can regenerate themselves using carbon dioxide as a building material, in a process powered by solar energy and informed by devices that generate electricity at night as a complement. This work is inspired by carbon fixation, the set of chemical reactions that plants use to build sugars from carbon dioxide, using energy from the sun.

In the longer term, this approach could also be used to power micro- or nanoscale robots. Strano's lab has already begun building robots at that scale, which could one day be used as diagnostic or environmental sensors. The idea of being able to scavenge energy from the environment, including approaches that produce electricity 'out of thin air' in ambient conditions, to power these kinds of robots is appealing, he says.

"It means you don't have to put the energy storage on board," he says. "What we like about this mechanism is that you can take the energy, at least in part, from the environment."

 

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California’s Solar Power Cost Shift: A Misguided Policy Threatening Energy Equity

California Rooftop Solar Cost Shift examines PG&E rate hikes, net metering changes, and utility infrastructure spending impacts on low-income households, distributed generation, and clean energy adoption, potentially raising bills and undermining grid resilience.

 

Key Points

A claim that rooftop solar shifts fixed grid costs to others; critics cite PG&E rates, avoided costs, and impacts.

✅ PG&E rates outpace national average, underscoring cost drivers.

✅ Net metering cuts risk burdening low- and middle-income homes.

✅ Distributed generation avoids infrastructure spend and grid strain.

 

California is grappling with soaring electricity prices across the state, with Pacific Gas & Electric (PG&E) rates more than double the national average and increasing at an average of 12.5% annually over the past six years. In response, Governor Gavin Newsom issued an executive order directing state energy agencies to identify ways to reduce power costs. However, recent policy shifts targeting rooftop solar users may exacerbate the problem rather than alleviate it.

The "Cost Shift" Theory

A central justification for these pricing changes is the "cost shift" theory. This theory posits that homeowners with rooftop solar panels reduce their electricity consumption from the grid, thereby shifting the fixed costs of maintaining and operating the electrical grid onto non-solar customers. Proponents argue that this leads to higher rates for those without solar installations.

However, this theory is based on a flawed assumption: that PG&E owns 100% of the electricity generated by its customers and is entitled to full profits even for energy it does not deliver. In reality, rooftop solar users supply only about half of their energy needs and still pay for the rest. Moreover, their investments in solar infrastructure reduce grid strain and save ratepayers billions by avoiding costly infrastructure projects and reducing energy demand growth, aligning with efforts to revamp electricity rates to clean the grid as well.

Impact on Low- and Middle-Income Households

The majority of rooftop solar users are low- and middle-income households. These individuals often invest in solar panels to lower their energy bills and reduce their carbon footprint. Policy changes that undermine the financial viability of rooftop solar disproportionately affect these communities, and efforts to overturn income-based charges add uncertainty about affordability and access.

For instance, Assembly Bill 942 proposes to retroactively alter contracts for millions of solar consumers, cutting the compensation they receive from providing energy to the grid, raising questions about major changes to your electric bill that could follow if their home is sold or transferred. This would force those with solar leases—predominantly lower-income individuals—to buy out their contracts when selling their homes, potentially incurring significant financial burdens.

The Real Drivers of Rising Energy Costs

While rooftop solar users are being blamed for rising electricity rates, calls for action have mounted as the true culprits lie elsewhere. Unchecked utility infrastructure spending has been a significant factor in escalating costs. For example, PG&E's rates have increased rapidly, yet the utility's spending on infrastructure projects has often been criticized for inefficiency and lack of accountability. Instead of targeting solar users, policymakers should scrutinize utility profit motives and infrastructure investments to identify areas where costs can be reduced without sacrificing service quality.

California's approach to addressing rising electricity costs by targeting rooftop solar users is misguided. The "cost shift" theory is based on flawed assumptions and overlooks the substantial benefits that rooftop solar provides to the grid and ratepayers. To achieve a sustainable and equitable energy future, the state must focus on controlling utility spending, promoting clean energy access for all, especially as it exports its energy policies across the West, and ensuring that policies support—not undermine—the adoption of renewable energy technologies.

 

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Three Mile Island at center of energy debate: Let struggling nuclear plants close or save them

Three Mile Island Nuclear Debate spotlights subsidies, carbon pricing, wholesale power markets, grid reliability, and zero-emissions goals as Pennsylvania weighs keeping Exelon's reactor open amid natural gas competition and flat electricity demand.

 

Key Points

Debate over subsidies, carbon pricing, and grid reliability shaping Three Mile Island's zero-emissions future.

✅ Zero emissions credits vs market integrity

✅ Carbon pricing to value clean baseload power

✅ Closure risks jobs, tax revenue, and reliability

 

Three Mile Island is at the center of a new conversation about the future of nuclear energy in the United States nearly 40 years after a partial meltdown at the Central Pennsylvania plant sparked a national debate about the safety of nuclear power.

The site is slated to close in just two years, a closure plan Exelon has signaled, unless Pennsylvania or a regional power transmission operator delivers some form of financial relief, says Exelon, the Chicago-based power company that operates the plant.

That has drawn the Keystone State into a growing debate: whether to let struggling nuclear plants shut down if they cannot compete in the regional wholesale markets where energy is bought and sold, or adopt measures to keep them in the business of generating power without greenhouse gas emissions.

""The old compromise — that in order to have a reliable, affordable electric system you had to deal with a significant amount of air pollution — is a compromise our new customers today don't want to hear about.""
-Joseph Dominguez, Exelon executive vice president
Nuclear power plants produce about two-thirds of the country's zero-emissions electricity, a role many view as essential to net-zero emissions goals for the grid.

The debate is playing out as some regions consider putting a price on planet-warming carbon emissions produced by some power generators, which would raise their costs and make nuclear plants like Three Mile Island more viable, and developments such as Europe's nuclear losses highlight broader energy security concerns.

States that allow nuclear facilities to close need to think carefully because once a reactor is powered down, there's no turning back, said Jake Smeltz, chief of staff for Pennsylvania State Sen. Ryan Aument, who chairs the state's Nuclear Energy Caucus.

"If we wave goodbye to a nuclear station, it's a permanent goodbye because we don't mothball them. We decommission them," he told CNBC.

Three Mile Island's closure would eliminate more than 800 megawatts of electricity output. That's roughly 10 percent of Pennsylvania's zero-emissions energy generation, by Exelon's calculation. Replacing that with fossil fuel-fired power would be like putting roughly 10 million cars on the road, it estimates.

A closure would also shed about 650 well-paying jobs, putting the just transition challenge in focus for local workers and communities, tied to about $60 million in wages per year. Dauphin County and Londonderry Township, a rural area on the Susquehanna River where the plant is based, stand to lose $1 million in annual tax revenue that funds schools and municipalities. The 1,000 to 1,500 workers who pack local hotels, stores and restaurants every two years for plant maintenance would stop visiting.

Pennsylvanians and lawmakers must now decide whether these considerations warrant throwing Exelon a lifeline. It's a tough sell in the nation's second-largest natural gas-producing state, which already generates more energy than it uses. And time is running out to reach a short-term solution.

"What's meaningful to us is something where we could see the results before we turn in the keys, and we turn in the keys the third quarter of '19," said Joseph Dominguez, Exelon's executive vice president for governmental and regulatory affairs and public policy.

The end of the nuclear age?

The problem for Three Mile Island is the same one facing many of the nation's 60 nuclear plants: They are too expensive to operate.

Financial pressure on these facilities is mounting as power demand remains stagnant due to improved energy efficiency, prices remain low for natural gas-fired generation and costs continue to fall for wind and solar power.

Three Mile Island is something of a special case: The 1979 incident left only one of its two reactors operational, but it still employs about as many people as a plant with two reactors, making it less efficient. In the last three regional auctions, when power generators lock in buyers for their future energy generation, no one bought power from Three Mile Island.

But even dual-reactor plants are facing existential threats. FirstEnergy Corp's Beaver Valley will sell or close its nuclear plant near the Pennsylvania-Ohio border next year as it exits the competitive power-generation business, and facilities like Ohio's Davis-Besse illustrate what's at stake for the region.

Five nuclear power plants have shuttered across the country since 2013. Another six have plans to shut down, and four of those would close well ahead of schedule. An analysis by energy research firm Bloomberg New Energy Finance found that more than half the nation's nuclear plants are facing some form of financial stress.

Today's regional energy markets, engineered to produce energy at the lowest cost to consumers, do not take into account that nuclear power generates so much zero-emission electricity. But Dominguez, the Exelon vice president, said that's out of step with a world increasingly concerned about climate change.

"What we see is increasingly our customers are interested in getting electricity from zero air pollution sources," Dominguez said. "The old compromise — that in order to have a reliable, affordable electric system you had to deal with a significant amount of air pollution — is a compromise our new customers today don't want to hear about."

Strange bedfellows

Faced with the prospect of nuclear plant closures, Chicago and New York have both allowed nuclear reactors to qualify for subsidies called zero emissions credits. Exelon lobbied for the credits, which will benefit some of its nuclear plants in those states.

Even though the plants produce nuclear waste, some environmental groups like the Natural Resources Defense Council supported these plans. That's because they were part of broader packages that promote wind and solar power, and the credits for nuclear are not open-ended. They essentially provide a bridge that keeps zero-emissions power from nuclear reactors on the grid as renewable energy becomes more viable.

Lawmakers in Pennsylvania, Ohio and Connecticut are currently exploring similar options. Jake Smeltz, chief of staff to state Sen. Aument, said legislation could surface in Pennsylvania as soon as this fall. The challenge is to get people to consider the attributes of the sources of their electricity beyond just cost, according to Smeltz.

"Are the plants worth essentially saving? That's a social choice. Do they provide us with something that has benefits beyond the electrons they make? That's the debate that's been happening in other states, and those states say yes," he said.

Subsidies face opposition from anti-nuclear energy groups like Three Mile Island Alert, as well as natural gas trade groups and power producers who compete against Exelon by operating coal and natural gas plants.

"Where we disagree is to have an out-of-market subsidy for one specific company, for a technology that is now proven and mature in our view, at the expense of consumers and the integrity of competitive markets," NRG Energy Mauricio Gutierrez told analysts during a conference call this month.

Smeltz notes that power producers like NRG would fill in the void left by nuclear plants as they continue to shut down.

"The question that I think folks need to answer is are these programs a bailout or is the opposition to the program a payout? Because at the end of the day someone is going to make money. The question is who and how much?" Smeltz said.

Changing the market

Another critic is PJM Interconnection, the regional transmission organization that operates the grid for 13 states, including Pennsylvania, and Washington, D.C.

The subsidies distort price formation and inject uncertainty into the markets, says Stu Bresler, senior vice president in charge of operations and markets at PJM.

The danger PJM sees is that each new subsidy creates a precedent for government intervention. The uncertainty makes it harder for investors to determine what sort of power generation is a sound investment in the region, Bresler explained. Those investors could simply decide to put their capital to work in other energy markets where the regulatory outlook is more stable, ultimately leading to underinvestment in places where government intervenes, he added.

Three Mile Island nuclear power plant, Londonderry Township, Pennsylvania
PJM believes longer-term, regional approaches are more appropriate. It has produced research that outlines how coal plants and nuclear energy, which provide the type of stable energy that is still necessary for reliable power supply, could play a larger role in setting prices. It is also preparing to release a report on how to put a price on carbon emissions in all or parts of the regional grid.

"If carbon emissions are the concern and that is the public policy issue with which policymakers are concerned, the simple be-all answer from a market perspective is putting a price on carbon," Bresler said.

Three Mile Island could be viable if natural gas prices rose from below $3 per million British thermal units to about $5 per mmBtu and if a "reasonable" price were applied to carbon, according to Exelon's Dominguez. He is encouraged by the fact that conversations around new pricing models and carbon pricing are gaining traction.

"The great part about this is everybody understands we have a major problem. We're losing some of the lowest-cost, cleanest and most reliable resources in America," Dominguez said.

 

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New York Faces Soaring Energy Bills

New York faces soaring energy bills as utilities seek record rate hikes, aging grid infrastructure demands upgrades, and federal renewable policies shift. Consumers struggle with affordability, late payments, and rising costs of delivery and energy supply across the state.

 

Why is New York Facing Soaring Energy Bills?

New York faces soaring energy bills because utilities are raising rates to cover the costs of grid upgrades, inflation, and policy-driven changes in energy supply.

✅ Utilities seek double-digit rate hikes across the state

✅ Aging infrastructure and storm repairs increase delivery costs

✅ Federal policies and gas dependence push energy prices higher

New Yorkers are bracing for another wave of energy bill increases as utilities seek record-high rate hikes and policy changes ripple through the state’s power system. Electric bills in New York are the highest they’ve been in over a decade, and more than a million households are now at least two months behind on payments, a sign of pandemic energy insecurity that continues to strain budgets, owing utilities nearly $2 billion.

Record numbers of households have had their electricity or gas shut off this year — more than 61,000 in May alone — despite pandemic shut-off suspensions that had offered temporary relief, the highest the Public Utility Law Project (PULP) has ever recorded. “This August was the group’s busiest month ever,” said Laurie Wheelock, PULP’s executive director, citing a surge in calls to its hotline. “The top concern on people’s minds: rate hikes.”

Utilities across the state are pushing for significant price increases, citing aging infrastructure, the need for climate adaptation, and higher operating costs, as California regulators face calls for action amid rising bills. “We used to see single-digit rate hikes and now we see double-digit rate hikes,” said Jessica Azulay, executive director of the Alliance for a Green Economy. “That’s a new normal that is unacceptable.”

Several utilities have requested delivery rate increases of 25 percent or more, with some proposals as high as 39 percent. Upstate utilities NYSEG and RG&E are seeking to raise electric and gas bills by about $33 a month, although regulators are unlikely to approve the full amount.

The companies argue the hikes are needed “to pay for rebuilding an aging grid and expanding its capacity to meet residents’ and businesses’ service demands,” including storm repairs. They also claim the plan would create more than 1,000 jobs.

James Denn, a spokesperson for the Public Service Commission (PSC), said much of the cost pressure stems from “inflation, higher interest rates, supply chain disruptions, the global push to upgrade electrical infrastructure, and, most recently, the rising risk and uncertainty from tariffs,” trends reflected in U.S. electricity price data over the past two years.

While some have blamed New York’s clean-energy transition, a PSC report found that state climate policies account for only 5 to 9.5 percent of the average household’s electric bill, or approximately $10 to $12 per month. The bulk of the increases still come from traditional spending on infrastructure, storm resilience, and system expansion.

On the supply side, costs are rising too. President Donald Trump’s recent policies have threatened renewable-energy investment nationwide, even as states’ renewable ambitions carry significant costs, potentially adding to New York’s woes. His July “megabill” phases out a 30 percent federal tax credit for solar and wind unless projects begin construction by mid-2026. Industry experts warn that the changes could make renewables “more expensive to build” and “increase reliance on gas.”

“It just means more expensive power,” said Marguerite Wells of the Alliance for Clean Energy New York.

The state estimates Trump’s policy shifts could cost New York $60 billion in lost renewable investment. With fewer clean-energy projects moving forward, gas — which already supplies roughly half of the state’s electricity — will remain the dominant source, tying energy prices to volatile global markets and the kinds of price drivers seen in California in recent years.

Governor Kathy Hochul has called affordability “our greatest short-term challenge,” while consumer advocates are demanding reforms to reduce utility profits and overhaul “rate design,” and to strengthen protections such as the emergency disconnection moratorium that applies during declared emergencies.

“There is definitely a groundswell of concern,” Wheelock said. “We go to meetings and we’re getting questions about rate design, like, ‘What is the revenue decoupling mechanism?’ Never had that question before.”

 

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OPINION Rewiring Indian electricity

India Power Sector Crisis: a tangled market of underused plants, coal shortages, cross-subsidies, high transmission losses, and weak PPAs, requiring deregulation, power exchanges, and cost-reflective tariffs to fix insolvency and outages.

 

Key Points

India power market failure from subsidies, coal shortages, and losses, needing deregulation and reflective pricing.

✅ Deregulate to enable spot trading on power exchanges

✅ End cross-subsidies; charge cost-reflective tariffs

✅ Secure coal supply; cut T&D losses and theft

 

India's electricity industry is in a financial and political tangle.

Power producers sit on thousands of megawatts of underutilized plant, while consumers face frequent power cuts, both planned and unplanned.

Financially troubled generators struggle to escape insolvency proceedings. The state-owned banks that have mostly financed power utilities fear that debts of troubled utilities totaling 1.74 trillion rupees will soon go bad.

Aggressive bidding for supply contracts and slower-than-expected demand growth, including a recent demand slump in electricity use, is the root cause. The problems are compounded by difficulties in securing coal and other fuels, high transmission losses, electricity theft and cash-starved distribution companies.

But India's 36 state and union territory governments are contributing mightily to this financial and economic mess. They persist with populist cross-subsidies -- reducing charges for farmers and households at the cost of nonagricultural businesses, especially energy-intensive manufacturing sectors such as steel.

The states refuse to let go of their control over how electricity is produced, distributed and consumed. And they are adamant that true markets, with freedom for large industrial users to buy power at market-determined rates from whichever utility they want at power exchanges -- will not become a reality in India.

State politicians are driven mainly by the electoral need to appease farmers, India's most important vote bank, who have grown used to decades of nearly-free power.

New Delhi is therefore relying on short-term fixes instead of attempting to overhaul a defunct system. Users must pay the real cost of their electricity, as determined by a properly integrated national market free of state-level interference if India's power mess is to be really addressed.

As of Aug. 31, the country's total installed production capacity was 344,689 MW, underscoring its status as the third-largest electricity producer globally by output. Out of that, thermal power comprising coal, gas and diesel accounted for 64%, hydropower 13% and renewables accounted for 20%. Commercial and industrial users accounted for 55% of consumption followed by households on 25% and the remaining 20% by agriculture.

Coal-fired power generation, which contributes roughly 90% of thermal output and the bulk of the financially distressed generators, is the most troubled segment as it faces a secular decline in tariffs due to increasing competition from highly subsidized renewables (which also benefit from falling solar panel costs), coal shortages and weak demand.

The Central Electricity Act (CEA) 2003 opened the gates of the country's power sector for private players, who now account for 45% of generating capacity.

But easy credit, combined with an overconfident estimation of the risks involved, emboldened too many investors to pile in, without securing power purchase agreements (PPAs) with distribution companies.

As a result, power capacity grew at an annual compound rate of 11% compared to demand at 6% in the last decade leading to oversupply.

This does not mean that the electricity market is saturated. Merely that there are not enough paying customers. Distributors have plenty of consumers who will not or cannot pay, even though they have connections. There is huge unmet demand for power. There are 32 million Indian homes -- roughly 13% of the total -- mostly rural and poor with no access to electricity.

Moreover, consumption by those big commercial and industrial users which do not enjoy privileged rates is curbed by high prices, driven up by the cost of subsidizing others, extra charges on exchange-traded power and transmission and distribution losses (including theft) of 20-30%.

With renewables increasingly becoming cheaper, financially stressed distributors are avoiding long-term power purchase agreements, preferring spot markets. Meanwhile, coal shortages force generators to buy expensive imported coal supplies or cut output. The operating load for most private generators, which suffer particularly acute coal shortages in compared to state-owned utilities, has fallen from 84% in 2009-2010 to 55% now.

Smoothing coal supplies should be the top priority. Often coal is denied to power generators without long-term purchase contracts. Such discrimination in coal allocation prevails -- because the seller (state-run Coal India and its numerous subsidiaries) is an inefficient monopolist which cannot produce enough and rations coal supplies, favoring state-run generators over private.

To help power producers, New Delhi plans measures including auctioning power sales contracts with assured access to coal. However, even though coal and electricity shortages eased recently, such short-term fixes won't solve the problem. With electricity prices in secular decline, distributors are not seeking long-term supply contracts -- rather they are often looking for excuses to get out of existing agreements.

India needs a fundamental two-step reform. First, the market must be deregulated to allow most bulk suppliers and users to move to power trading exchanges, which currently account for just 10% of the market.

This would lead to genuine price discovery in a spot market and, in time, lead to the trading of electricity futures contracts. That would help in consumers and producers hedge their respective costs and revenues and safeguard their economic positions without any need for government intervention.

The second step to a healthy electricity industry is for consumers to pay the real cost of power. Cross-subsidization must end. That would promote optimal electricity use, innovation and environmental protection. Farmers enjoying nearly-free power create ecological problems by investing in water-guzzling crops such as rice and sugar cane.

Most industrial consumers, who do not have power supply privileges, have their businesses distorted and delayed by high prices. Lowering their costs would encourage power-intensive manufacturing to expand, and in the process, boost electricity demand and improve capacity utilization.

Of course, cutting theft is central to making consumers pay their way. Government officials must stop turning a blind eye to theft, especially when such transmission and distribution losses average 20%.

Politicians who want to continue subsidizing farmers or assist the poor can do so by paying cash out directly to their bank accounts, instead of wrongly relying on the power sector.

Such market-oriented reforms have long been blocked by state-level politicians, who now enjoy the influence born of operating subsidies and interfering in the sector. New Delhi must address this opposition. Narendra Modi, as a self-styled reforming prime minister, should have the courage to bite this bullet and convince state governments (starting with those ruled by his Bharatiya Janata Party) to reform. To encourage cooperation, he could offer states securing real improvements an increased share of centrally collected taxes.

Ritesh Kumar Singh is to be the chief economist of the new policy research and advocacy company Indonomics Consulting. He is former assistant director of the Finance Commission of India.

 

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Hydro-Quebec won't ask for rate hike next year

Hydro-Quebec Rate Freeze maintains current electricity rates, aligned with Bill 34, inflation indexing, and energy board oversight, delivering rebates to residential, commercial, and industrial customers and projecting nearly $1 billion in savings across Quebec.

 

Key Points

A Bill 34 policy holding power rates, adding 2020 rebates, and indexing 2021-2024 rates to inflation for Quebec customers.

✅ 2020-21 rates frozen; savings near $1B over five years.

✅ $500M rebate: residential, commercial, industrial shares.

✅ 2021-2024 rates index to inflation; five-year reviews after 2025.

 

Hydro-Quebec Distribution will not file a rate adjustment application with the province’s energy board this year, amid a class-action lawsuit alleging customers were overcharged.

In a statement released on Friday the Crown Corporation said it wants current electricity rates to be maintained for another year, as pandemic-driven demand pressures persist, starting April 1. That is consistent with the recently tabled Bill 34, and echoes Ontario legislation to lower electricity rates in its aims, which guarantees lower electricity rates for Quebecers.

The bill also provides a $500 million rebate in 2020, similar to a $535 million refund previously issued, half of which will go to residential customers while $190 million will go to commercial customers and another $60 million to industrial ones.

Hydro-Quebec said the 2020-21 rate freeze will generate savings of nearly $1 billion for its clients over the next five years, even as Manitoba Hydro scales back increases in a different market.

Bill 34, which was tabled in June, also proposes to set rates based on inflation for the years 2021 to 2024, contrasting with Ontario rate increases over the same period. After 2025 Hydro-Quebec would have to ask the energy board to set new rates every five years, as opposed to the current annual system, while BC Hydro is raising rates by comparison.

 

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