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Alberta grid operator calls for conservation as deep freeze sends prices soaring

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Alberta grid operator calls for conservation as deep freeze sends prices soaring

Alberta's grid operator declared a power emergency Jan. 16 as a blast of cold temperatures and a lack of available renewables put power reserves at dangerously low levels and sent prices surging toward C$1,000/MWh.

The Alberta Electric System Operator, or AESO, issued an Energy Emergency Alert 1 at 8:15 a.m. MT Jan. 16, indicating a demand situation that could lead to the grid manager dipping into reserves as the draw on the provincial system reached 10,998 MW. The AESO lifted the emergency later that morning as more power resources became available. As of 5 p.m. MT, demand stood at 11,287 MW and the power pool price was C$994.53/MWh. Earlier in the day, prices touched C$999.65/MWh.

The emergency was prompted as extreme cold created ramp-up problems for the province's coal and natural gas-fired power plants. Temperatures in the provincial capital of Edmonton dropped to -36 C overnight and winds made it feel colder than -40 C. The Celsius and Fahrenheit scales are the same at -40 degrees. The province has been caught under a so-called cold dome for several days, which sent temperatures plunging with very little wind to power turbines, which produced no electricity for most of the day. Solar power availability was also negligible as daylight averages around eight hours in Alberta's winter months.

"With the cold weather expected to continue over the next few days, the AESO is closely monitoring the system and will notify Albertans if grid conditions worsen," the grid operator said in a Jan. 16 statement. "Albertans are encouraged to reduce their electricity usage if possible when grid conditions are tight."

The Jan. 16 incident was the second of the week. On Jan. 13, the grid operator declared an Energy Emergency Alert 1 at 5:18 p.m. local time, and escalated to a level 2 alert about two hours later. At level 3, the AESO has to reduce load through service cutoffs. Real-time on-peak power prices Jan. 13 topped out above C$900/MWh, according to S&P Global Market Intelligence data.

The situation was exacerbated by the closure of a coal-fired plant — the 149-MW unit 3 at the Battle River plant, owned by Energy Capital Partners LLC — in central Alberta effective Jan. 1 and coal-to-gas conversion work at others. TransAlta Corp. and Capital Power Corp. operate a number of large coal and natural gas plants, while operators such as ENMAX Energy Corp. and co-generators including TC Energy Corp. add natural gas-fired resources.