Making Sense of Energy

Energy Market Update – February 2013

Alberta

Alberta’s wind-power generation capacity broke the 1,000-megawatt mark for the first time last year, but a national industry association warns there is work to be done if the province wants to continue to be a leader in the sector. According to 2012 market statistics supplied by the Canadian Wind Energy Association (CanWEA), Alberta added 225 MW of wind power capacity last year. The growth was due to the addition of two major wind farms – the Castle Rock Wind Farm near Pincher Creek and the Halkirk Wind Farm near Stettler. The developments bump Alberta over the 1,000 MW milestone, giving the province a total of 1,116 MW of wind generating capacity. (Source: Edmonton Journal)

Epcor has appointed David Stevens as the company’s new president and chief executive officer. Stevens is a 30-year veteran of the energy and utility industry with over 20 years of experience in executive leadership. His most recent positions were as the top executive of major energy and utilities providers in El Paso and Seattle. The appointment follows an extensive search for a candidate to succeed current president and CEO Don Lowry, who announced last May his intention to retire by December 2013. (Source: Edmonton Journal)

In Alberta and B.C. alone, more than 175,000 wells have already been fracked, according to numbers provided by the Canadian Association of Petroleum Producers (CAPP). The practice—which involves shooting water, sand and chemicals at high pressure thousands of metres deep underground to release and recover gas from tightly packed rock formations—is happening daily across Canada and the US (with the exception of provinces and states like Quebec and New York, which have banned it). The process of hydraulic fracturing (or fracking as it is more colloquially known) has been around since the 1940s. But new drilling techniques developed in 2005 have made fracking ubiquitous in the last decade, leading to questions about potential environmental and human health risks. (Source: Enviro-Consultant)

Electricity Prices for Alberta

  • The Alberta power pool price averaged 2.871 cents per kWh in February 2013. This price is 2.930 cents lower than last month’s average of 5.802 cents per kWh. The pool price has averaged 6.084 cents per kWh over the last 12 months.

    As of March 8, 2013, the forward market was predicting electricity prices for the calendar years of 2013, 2014, 2015, 2016 and 2017. These prices are 5.90, 5.00, 4.85, 5.20, and 5.55 cents per kWh respectively.

Gas Prices for Alberta

  • Direct Energy’s gas rate for February was $3.129 per GJ in the North and $3.253 per GJ in the South. The March rate has been set at $2.931 per GJ in the North and $2.844 per GJ in the South. Alberta gas prices have averaged $2.546/GJ over the last 12 months.

    As of March 4, 2013, the forward market was predicting gas prices for the calendar years of 2013, 2014, 2015, 2016 and 2017. These prices are 3.22, 3.65, 3.91, 4.09, and 4.36 dollars per GJ respectively.

British Columbia

The British Columbia Utilities Commission has approved the replacement of the John Hart generating station near Campbell River. The commission determined the project was the most cost-effective option to address the significant reliability, seismic, environmental and fisheries issues associated with the 66-year-old facility. Since most of Vancouver Island’s power supply comes from the Lower Mainland, the John Hart generating facility ensures the province’s second largest load centre has reliable power. The project will foster economic development in the region – creating about 400 jobs and sustaining them over five years of construction. (Source: BC Hydro)

FortisBC will operate a regulated utility within TELUS Garden that will help reduce carbon dioxide emissions by one million kilograms a year by capturing and re-distributing low-grade heat throughout the million square-foot development. Created in partnership with TELUS and Westbank, the innovative District Energy System (DES) is one of the first systems in Vancouver to use waste heat from a neighbouring site to heat and cool a new development. Heat from the existing TELUS data centre and the new office tower’s cooling systems will be harvested by the DES to provide heating and cooling for the office and residential towers, commercial spaces and amenities, and to heat domestic hot water for both towers. The DES is a major element of TELUS Garden’s sustainability strategy and contributes to the development’s approximate 80 per cent reduction in energy demand from conventional sources. (Source: FortisBC)

Ontario

The next 18 months will see a significant amount of renewable energy integrated into Ontario’s bulk power system, the Independent Electricity System Operator (IESO) says in its latest 18-Month Outlook. During that period, the IESO is expecting more than 3,200 megawatts (MW) of renewable capacity to be connected to the transmission system, including Ontario’s first two transmission grid-connected solar projects, located in Haldimand County and Elgin County. By August 2014, total wind and solar generation connected to the province’s transmission and distribution systems is expected to reach approximately 6,800 MW and produce approximately 14.9 terawatt-hours (TWh) of energy annually. (Source: IESO)

Royal Dutch Shell PLC is planning two small-scale projects that will provide cheap and abundant natural gas, in liquid form, to trucks and ships in the Great Lakes and Gulf Coast regions. The plants in Sarnia, Ont., and Geismar, La., will each produce 250,000 tonnes of LNG — natural gas that has been chilled into a liquid state — per year. (Source: Toronto Star)

Electricity Prices for Ontario

  • The weighted-average Hourly Ontario Energy Price (HOEP) was 2.931 cents per kWh in February 2013. This price is 0.228 cents lower than last month’s 3.159 cents per kWh. The weighted-average price has averaged 2.495 cents per kWh over the last 12 months.

    The Global Adjustment rate for March was set at 4.374 cents per kWh. This rate was 5.728 cents in February. The Global Adjustment is an additional charge paid by non-regulated customers. It has averaged 5.039 cents over the last 12 months. (Source: IESO)

Saskatchewan

There will soon be a new network for exporting Saskatchewan’s grain and oil into the United States. Two rail hubs will be built near the U.S. border in the community of Northgate, Saskatchewan. The agriculture company Ceres Global Ag Corp., has already bought more than 600 hectares in the area. The $90 million project will connect to a major network of rail lines in the U.S. Ceres said in a news release, “One loop will be dedicated to a grain handling and shipping facility, and the other to transloading and shipping oil.” The Saskatchewan oil shipping facility will be able to send about 70,000 barrels of oil per day to the U.S. Currently, Canada ships about the same number of barrels by rail per day. (Source: CBC)