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Alberta’s electricity market
In Alberta, electricity is a commodity
with prices set by supply and demand.
It is very costly to store electricity, so
generation facilities produce it in
real-time.
The Alberta Electric System Operator
(AESO) is responsible for monitoring
the power grid and balancing supply
and demand. As such, the AESO directs
generation facilities on and off to meet
demand for electricity as it is needed.
ENMAX QUICK BITES
Alberta’s electricity market
Every hour, electricity generators offer
a price to the AESO for the electricity
they produce. Prices are set per
megawatt hour (MWh). The AESO
accepts the lowest price of electricity
to meet demand and those generators
offering at that price then produce
and provide their electricity. This
system marginal price is posted on the
AESO website as updates occur.
ENMAX QUICK BITES
Alberta’s electricity market
The demand for electricity varies
depending on weather, temperature,
time of day, time of year and other factors.
The amount of electricity supply is affected
by events such as generation facilities
experiencing a planned outage
for maintenance, or an unplanned outage
due to unforeseen circumstances.
ENMAX QUICK BITES
Alberta’s electricity market
Electricity used by industry accounts for
approximately 65 per cent of demand in
Alberta.
Residential demand for electricity peaks
between 4 p.m. and 8 p.m. daily as
Albertans return home from school or
work.
Electricity prices tend to increase as the
demand for electricity grows in the late
afternoon and early evening hours, then
tend to fall off in the late evening and
early morning hours.
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Alberta’s electricity market
Electricity generators can offer to sell their
electricity between $0 to $1,000 per MWh.
Base load generators, such as coal-fired
plants, tend to run continuously as they
can take several hours, or even days, to
start-up. Peaker facilities are often natural
gas-fired and have the ability to come on
for short periods of time – typically during
peak demand for electricity – as they can
start-up in a matter of minutes.
ENMAX QUICK BITES
Alberta’s electricity market
Rendering of the National Music Centre
Wind electricity is a price taker as it can
only be generated when the wind blows.
For this reason, wind electricity is offered
into the market at $0 per MWh. This
means that if the hourly price of electricity
is $40 per MWh, wind power generators
will also receive $40 per MWh. The result
is that wind energy is used as it’s
produced.
ENMAX QUICK BITES
Alberta’s electricity market
Periods of very high electricity demand
are usually associated with extreme hot
and cold temperatures, typically experienced
in July and January.
Electricity prices near the $1,000 per MWh
cap can occur during very high electricity
demand, usually for very short periods of
time, and typically in circumstances where
there’s also unplanned generator outages.
ENMAX QUICK BITES
Alberta’s electricity market
Generators sell their electricity to the AESO
where electricity retailers can purchase it
as required to meet customer demand.
Although electricity retailers have the
option to purchase electricity as required,
many purchase electricity through other
market transactions including long-term
contracts and short-term purchases with
generation companies.
ENMAX QUICK BITES
Alberta’s electricity market
Residential and small business customers
are charged for their electricity in kilowatt
hours, which are one-thousandth of a MWh.
Customers who’ve not entered into an
electricity contract with a retailer are subject
to fluctuating electricity prices through the
default Regulated Rate Option (RRO).
Customers can avoid fluctuating electricity
rates by entering into a fixed rate* energy
agreement such as one offered through
EasyMax® by ENMAX Energy Corporation.
Note: You can choose any retailer listed at
www.ucahelps.alberta.ca or at 403-310-4822.
Electricity delivery to your home or business isn’t
affected by your choice of retailer.