In early 2024, Alberta is set to overhaul its electricity market and regulatory framework due to a series of reviews. While the province’s power grid usually operates in the background, recent challenges in 2023, including escalating consumer bills and grid instability, prompted a freeze on renewable energy project approvals and a thorough market review.
Not all reports due in 2024 will be public, but Utilities and Affordability Minister Nathan Neudorf highlights their crucial role in ensuring affordable and reliable power amid the global shift to cleaner energy. The reviews, expected to conclude by February 1, aim to guide the development of a future power grid that balances the transition to cleaner power with affordability.
The Alberta Electric System Operator (AESO) and Market Surveillance Administrator are tasked with recommending incentives and legislative changes to enhance grid reliability, including nuclear, hydrogen, energy storage, and hydro solutions. The accelerated timeline, surprising to experts, may lead to significant changes in the power market, ranging from tweaks to a potential move towards re-regulation.
Alberta’s unique private-sector-driven power market lacks a centralized planning mechanism, prompting discussions about potential government control. Premier Danielle Smith contemplates establishing a Crown corporation if the market falls short in meeting long-term baseload power needs. Despite reforms targeting long-term reliability and price stability in 2024, immediate impacts on lower power prices are expected in March due to increased natural gas-fired power.
Simultaneously, Alberta is reassessing transmission-system policies to align with emerging technologies and emission reduction goals. Diverse perspectives beyond natural gas providers must be considered to navigate the evolving energy landscape. The government’s commitment to a natural gas-dependent grid has led to conflicts with federal clean electricity regulations, adding complexity to the energy policy landscape.
In 2023, Alberta witnessed significant growth in renewable energy capacity, adding more projects than any other province or territory. However, a temporary halt on renewable project approvals raised industry concerns, leading to a review by the Alberta Utilities Commission. The AUC’s report, due by the end of March, is expected to bring about changes reshaping Alberta’s renewables landscape in 2024 and beyond.