CanREA Concerned about Alberta Uncertainty
March 27, 2024
Restructured Energy Market and new consultation herald more upheaval for Alberta’s renewable energy industry
The Canadian Renewable Energy Association (CanREA) is concerned about prolonged and increasing uncertainty for Alberta’s renewable energy and energy storage industry, after new documents were released by the provincial government and the Alberta Electric System Operator (AESO).
Speaking at the annual conference of the Independent Power Producers Society of Alberta (IPPSA) in Banff, Alberta Minister of Affordability and Utilities Nathan Neudorf said that the province is moving ahead with significant electricity market reforms, based on recommendations from the AESO.
Specifically, in a letter to the AESO today, Minister Neudorf requested that the AESO work with industry and stakeholders to design, and submit to the government for consideration, a draft restructured energy market design based on the AESO’s Recommendation Report.
Mike Law, AESO’s President and CEO, confirmed in his address at the IPPSA conference that the AESO will run a new consultation to develop the first draft of the technical design for the “Restructured Energy Market” (REM), to be completed by fall 2024, with new market rules to come into effect in 2027.
“Today’s announcements introduced another significant layer of uncertainty for Alberta’s market, which will make the province less attractive to investors,” said Vittoria Bellissimo, CanREA’s President and CEO.
“However, CanREA does support the AESO’s collaborative engagement approach. We expect to be at the table, working to ensure the new market design recommendations work for existing renewable energy and energy storage assets and their customers, while also providing a path forward for future investment in these critical technologies in Alberta.”
According to the AESO, these reforms will focus on supporting affordability, reliability and system decarbonization by 2050. The cornerstones of the proposed reforms include a day ahead market, an administrative scarcity pricing mechanism, and adjustments to the current pricing system.
CanREA’s priorities, going into the consultation period, include:
- Any market reform must encourage wind, solar and energy storage technologies to play a foundational role in the electricity system of the future.
- The AESO needs to ensure there is a path forward for renewable and energy storage investment under this new REM framework, including a workable tariff for energy storage.
- The AESO’s REM recommendations should ensure that any new rules honour investments made by generators and their customers who have purchased electricity from these facilities via power purchase agreements (PPAs).
“These changes could provide opportunities for energy storage in Alberta, but we urge the government and the AESO to consider market structures that provide continued opportunity for renewables,” said Evan Wilson, Vice President of Policy—Western Canada and National Affairs at CanREA.
“We plan to continue to engage with the provincial government and participate in all consultation processes to ensure the success for renewable energy deployment in Alberta. It is critical for Alberta to get this right if it is to remain an attractive location for international investment,” said Wilson.
In recent years, Alberta has led Canada in new renewable energy development, representing more than 90% of Canada’s growth last year alone, but its position as Canada’s clean energy powerhouse is expected to falter in the coming years as a delayed effect of the 2023-24 moratorium, a negative consequence that will only be amplified by continued policy uncertainty.
