Powerful Changes: Alberta’s Electricity Market Redesign with Blake Shaffer

ARC ENERGY IDEAS

Recently, Alberta announced significant changes to its power market: short-term changes to stop economic withholding and a long-term redesign of Alberta’s deregulated electricity market into a restructured energy market (REM).

This week, our guest, Blake Shaffer, Associate Professor in the Department of Economics and School of Public Policy at the University of Calgary, helps us understand these changes.

Here are some questions Jackie and Peter asked Blake: Why does Alberta need a market redesign? Was the near-brownout during a frigid weekend in January a sign that the current system is not working? What is “economic withholding” and how does it contribute to higher prices? The REM is expected to have a “day-ahead market,” how does that work? The REM could also have a wide pricing range, from negative prices to ones that exceed the current maximum of $999/MWh. What is the benefit of a wide price range? Do the proposed changes hurt renewable power projects? The REM is also considering changes to transmission; how significant could these changes be? Will the REM changes negatively impact entities that contracted power under the existing rules? What are your views on the Clean Electricity Regulations (CER) legislation, that aims to make Canada’s electricity sector net zero by 2035?
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