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AESO 2019 Annual Market Statistic: a real world example of carbon pricing
In 2019, 194 participants in the Alberta wholesale electricity market transacted approximately $7 billion of energy. The annual average pool price for wholesale electricity increased nine per cent from its previous-year value to $54.88/megawatt hour (MWh). The average Alberta Internal Load (AIL) decreased by half a per cent over 2018 values. In 2019, coal fired generation set the system marginal price 78 per cent of the on-peak hours and 81 per cent of the off-peak hours. The high costs of coal-fired generation, driven in part by a shift in carbon pricing, contributed to the relatively high average pool prices in 2018 and 2019.
The next time someone tries to tell you that carbon pricing is good for the consumer or it incentivizes investment in renewable generation, show them this report from Alberta System Operator (AESO). Alberta has been trying to make carbon pricing work for years. Since 2015 Wind generation has remained flat at serving only 5% of total load, raising the question, does carbon pricing really incentivize renewable generation. Carbon pricing raised prices by 9% (ref page 15 of the report) at the same time load dropped by .5 of 1% and there has been very little growth in the amount of wind generation capacity between 2015 (1,463 MW) and 2019 (1,781 MW ) (see page 23).
There are better options than carbon pricing to achieve State Energy goals and ensure a reliable electric system that may be worth considering:
A capacity exchange that's modeled after Green Buyer exchanges at REBA and Level Ten
Detailed Overview of the prposed Capacity Exchange
Listing of essential Grid Services, that are purchased for reliability using the Capacity Exchange
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