Alberta's Power Reform: Implications For Electricity Providers And Consumers

A fundamental shift in the structure of Alberta's electricity market is underway. The provincial government has promised to phase out the current energy-only market (EOM) and replace it with a capacity market system (CMS), to be fully implemented by 2021. The transition was recommended by the Alberta Electric System Operator (AESO) in its report, Alberta's Wholesale Electricity Market Transition Recommendation (AESO Report). The change will significantly impact Alberta's electricity providers and consumers. Here are some implications, from the AESO Report, of implementing a CMS in Alberta.

1. Shift to a Less Carbon-Intensive Electricity Grid

Under the current EOM, power generators sell electricity into an Alberta-wide pool and are only paid for the power that they produce. While the EOM has historically met its objective of delivering reliable and competitively priced power, the AESO has expressed concern that the EOM may be unable to meet the additional objective