Making Sense of Energy

Energy Market Update December 2016

Alberta 

A total of 630 abandoned oil wells have been counted as part of the newest fiscal year update by the Orphan Well Association (OWA) group in Alberta. Abandoned wells indicate bankruptcy on the part of the oil producer and failure to make payments to the landowners where the wells are located. An abandoned well is also unlikely to have proper reclamation done to return the land to a natural state. The OWA is funded by industry and takes on the role of reclaiming the land. (Source: The Edmonton Journal)

SUPPLIED / CALGARY HERALD

Dodds Coal Mine in South East Alberta is seeing an increase in sales of thermal coal prior to new carbon tax legislation coming into effect in the new year of 2017. Customers are reportedly stocking up and there are expectations that the demand will fall in the future when the commodity is more expensive. (Source: The Edmonton Journal)

Electricity Prices for Alberta

The Alberta power pool price averaged 2.421 cents per kWh in December 2016. This price is 0.789 cents higher than last month’s average of 1.632 cents per kWh. The pool price has averaged 1.824 cents per kWh over the last 12 months.

As of December 7, 2016, the forward market was predicting electricity prices for the calendar years of 2016, 2017, 2018, 2019 and 2020. These prices are 3.20, 3.26, 3.975, 4.275, and 4.70 cents per kWh respectively.

Gas Prices for Alberta

Direct Energy’s gas rate for December was $2.579 per GJ in the North and $2.579 per GJ in the South. The January rate has been set at $3.745 per GJ in the North and $3.745 per GJ in the South. Alberta gas prices have averaged $2.088 per GJ over the last 12 months.

As of December 1, 2016, the forward market was predicting gas prices for the calendar years of 2017, 2018, 2019, 2020, and 2021. These prices are 3.12, 2.86, 2.78, 2.77, and 2.78 cents per GJ respectively.

 

British Columbia 

Source: Kinder Morgan

Two environmental groups have jointly filed for judicial review of the federal government’s recent approval of Kinder Morgan’s Trans Mountain pipeline expansion. Living Oceans Society and Raincoast Conservation Foundation cited the dangers of increased tanker traffic to killer whales, who are protected under Canada’s Species at Risk Act, as the basis for the lawsuit. Concerns about climate change and oil spills has led to increased opposition of pipelines in North America over recent months. (Source: Financial Post)

 

Ontario 

The Ontario Energy Board (OEB) is rejecting the request of the province’s auditor general to clarify the global adjustment charge on electricity bills. The global adjustment charge is applied to cover the difference between guaranteed prices the Ontario government contractually promised to electricity generators and actual market prices of electricity. The auditor general estimates that 70 percent of consumer electricity rates is accounted for by the global adjustment. Energy Minister Glenn Thibeault’s office has said that the government will not instruct the OEB to break down the global adjustment charge on consumer electricity bills. (Source: Global News)

Electricity Prices for Ontario

The Hourly Ontario Energy Price (HOEP) was an average of 1.943 cents per kWh in December 2016. This price is 0.45 cents higher than last month’s 1.493 cents per kWh. The weighted-average price was 2.085 cents per kWh during December 2016. The twelve month moving average was 1.607 cents per kWh up to December 2016.

The second estimate for the Global Adjustment rate for December 2016 was set at 7.87 cents per kWh. This actual rate paid was 8.71 cents in December 2016. The Global Adjustment is an additional charge paid by non-regulated customers. (Source: IESO)

 

Saskatchewan 

SaskPower has paid over $1.2 million in penalties to Cenovus this fiscal year. A contract between the two parties specifies that SaskPower will sell carbon dioxide captured by its Carbon Capture and Storage (CCS) facility at Boundary Dam Three to Cenovus, and must pay a shortfall penalty to Cenovus when the CCS facility is unable to meet demand. The facility is also facing cost overruns for amine, a chemical solution used in the carbon capture process.  Amine costs were $18.5 million this year and are expected to grow to $20 million next year. SaskPower CEO Mike Marsh has said issues like this are common in new technology, and expects the facility to be operating smoothly within the next few years. (Source: Global News)

 

Manitoba 

Prime Minister Justin Trudeau has signed a pan-Canadian framework designed to fight climate change and meet the country’s 2030 emissions reduction target with all but two provincial premiers. Saskatchewan Premier Brad Wall and Manitoba Premier Brian Pallister were the only two to refuse to sign onto climate change framework. Manitoba has an aging population and Pallister has indicated that he is holding out to get additional federal healthcare funding for his province. (Source: CBC News)

 

New Brunswick 

The New Brunswick government has released its new climate change action plan that will phase out coal powered electricity generation and put a price on carbon. The plan seeks to phase out the province’s only coal fired power plant by 2030, however this target date could be delayed by up to 10 years. The plan also includes a “made-in-New-Brunswick” price on carbon and caps on greenhouse gas emissions that will be tailored to the provinces economic and social circumstances. (Source: Global News)

 

Prince Edward Island 

The Climate Change Secretariat of Prince Edward Island (PEI) has calculated that the province’s carbon pricing plan will lead to increases of 12 cents per litre of gas and 14 cents per litre of fuel oil. The calculations are derived from the maximum level the carbon price is slated to reach, which will be $50 a tonne in 2022. By that point the province will generate $55 million per year from carbon pricing. Critics and provincial government opposition members say that the people of PEI can’t afford the carbon price on top of the harmonized sales tax already levied on the province. (Source: CBC News)

 

 

Québec 

Innergex Renewable Energy and the three Mi’gmaq communities of Quebec have begun commercial operation of the Mesgi’g Ugju’s’n (MU) wind farm in Gaspésie, Quebec. The MU wind farm is estimated to have a capacity of 150 MW, which is enough to power 30,000 households per year. The MU wind farm has a 20-year fixed price power purchase agreement with Hydro-Quebec that covers all electricity the wind farm will produce. (Source: Wind Power Engineering)

 

Newfoundland and Labrador 

Source: Globe and Mail

Costs continue to increase for construction of the delayed Muskrat Falls hydro project in Labrador. Stan Marshall, CEO of Nalcor Energy, said the new deal with contractor Astaldi to finish the project is now worth over $1.8 billion, up from the original deal with Astaldi of $1 billion. Muskrat Falls will also generate power for Nova Scotia through the use of subsea cables. The dam is expected to generate its first power in 2019 and be fully operational by 2020. (Source: Globe and Mail)

 

Nova Scotia 

A wind turbine in Brenton, Nova Scotia, is now officially connected to the province’s energy grid. The turbine was originally erected in July and Nova Scotia Power gave final approval for grid connection in mid-December. The single turbine will generate 1.99 MW, which is enough to power around 700 Nova Scotian homes. (Source: The Vanguard)

 

Nunavut 

Qulliq Energy Corporation of Nunavut says there will be new diesel power plants in Cape Dorset and Grise Fiord by 2019. CEO of Qulliq Energy, Bruno Pereira, says a majority of the territory’s power plants were built prior to 1980. A 2015 senate committee found that over a dozen power plants are being operated beyond “the end of their useful lives”. Replacing all the diesel plants operating past their life expectancy is expected to cost more than $250 million. (Source: CBC News)

 

Northwest Territories 

Northwest Territories Power Corporation (NPTC) has issued an expression of interest in a new wind and/or solar project for the North Slave region. The region is usually provided power from hydroelectricity, but low water levels in lakes and rivers have caused an increased reliance on diesel power plants. NPTC is seeking companies or a joint venture who can provide a solar and/or wind project that has the capacity to provide 1 to 10 MW of electricity. (Source: CBC News)

 

Yukon 

Yukon Energy says the territory broke its record for daily power consumption three consecutive days this month. The territory consumed 84.33 MW on December 12th, 84.57 MW on December 13th, and 85.03 MW on December 14th. Janet Patterson of Yukon Energy cited the combination of cold temperatures and electric heating in newer homes as the main reason for the increased consumption. Yukon Energy can generate up to 130 MW of power per day. (Source: CBC News)

Photo credit: Mike Rudyk