Regulatory Law Chambers logo

London Economics International LLC Module B Study: Overview of Modeling Results and Key Findings Prepared for the Alberta Utilities Commission, AUC Proceeding 28542: AUC Inquiry Into the Ongoing Economic, Orderly and Efficient Development of Electricity Generation in Alberta

Link to Decision Summarized

Market Development– Reliability

Scope of Study

The Government of Alberta directed the AUC to conduct an inquiry regarding the impact of the rising level of renewable energy on the Alberta electricity system, more specifically, the changes in the generation supply mix, system reliability and customer affordability.

London Economics International LLC (“LEI”) conducted a forward-looking analysis in the context of the province’s current wholesale market design and policy environment, leveraging data and analysis from the Alberta Electric System Operator (“AESO”).

LEI examined two Base Case outlooks for the Alberta electricity sector in the coming 20 years. The first Base Case reflects the federal draft of the Clean Electricity Regulations (“2035 Base Case”). The second Base Case is consistent with Alberta’s Alberta Emissions Reduction and Energy Development Plan (“2050 Base Case”). These Base Cases represent two different decarbonization policy pathways for the Alberta electricity sector, namely decarbonization by 2035, versus decarbonization by 2050.

Key Findings

LEI’s analysis resulted in the following six key findings:

  1. the electric grid will become less reliable: by the late 2030s, there is potential for unprecedented load shed in Alberta under the current electricity market design, regardless of the specific decarbonization policy pathway, because of insufficient supply;
  2. the current energy-only market design does not provide sufficient economic incentives to ensure electric system reliability in Alberta under the modeled conditions;
  3. growing levels of renewable generation result in lower pool prices, dampening the investment signal under the current market design and causing system reliability to decline;
  4. average pool prices will increase sharply in the late 2030s, as pool price trends are driven by carbon policies and the costs of reliability events;
  5. residential customer electric bills are expected to outpace inflation in the later years of the forecast period, at a similar trajectory to forecasted pool prices; and
  6. despite higher electric bills, there will be worsening service reliability as compared to today.

Related Posts

Yatar v. TD Insurance Meloche Monnex, 2024 SCC 8

Yatar v. TD Insurance Meloche Monnex, 2024 SCC 8

Link to Decision Summarized Download Summary in PDF Administrative Law – Judicial Review v. Statutory Appeal Application Ummugulsum Yatar (“Ms. Yatar”) contested the denial of her insurance...