March 28, 2025

IPPSA Intelligence

AESO

The Alberta Electric System Operator (AESO) had a number of updates this week.

It has observed a significant increase in data centre connection requests, with applications totalling approximately 11,834 megawatts (MW), nearly matching Alberta's peak electricity demand. These requests are concentrated around Calgary (3,533 MW) and Edmonton (3,161 MW), posing challenges to grid capacity and reliability.

To address these challenges, the AESO plans to implement several measures:

1. Immediate Measures (April 2025): The AESO will introduce additional facility and operational data requirements for data centre projects progressing through Stage 3 of the Connection Process. This initiative aims to ensure grid stability.
   

2. Near-Term Enhancements (Q2 2025): Functional specifications will be issued, focusing on mitigating reliability and power quality issues such as voltage and frequency ride-through, load ramping and variability, and harmonics. Additionally, a Load Capability Map will be published to provide locational signals to developers.
   

3. Industry Collaboration (Q4 2025): The AESO is participating in the North American Electric Reliability Corporation (NERC) Large Loads Task Force to develop industry standards for large load interconnections. Recommendations from this collaboration are expected to be published in the fourth quarter of 2025.
   

The AESO has also updated it's energization package requirements. The new updates ensure a smooth and reliable integration of new facilities into Alberta’s power grid. Key submissions include a 100-day package with preliminary designs, a 30-day package with final commissioning details, and post-energization reports. These steps help maintain grid stability and compliance with regulatory standards.

References:

1. Data Centre Updates
2. Energization Package Requirements
3. Stakeholder Engagement Calendar

Alberta Utilities Commission

The Alberta Utilities Commission (AUC) has proposed changes to Rule 007, aimed at enhancing the regulatory framework for facility applications related to energy projects. The draft version invites public feedback until May 23, 2025, which underscores the importance of stakeholder involvement in the regulatory process. Current interim requirements will remain until finalized changes are adopted, reflecting a transitional phase. Detailed information, along with proposed amendments, can be found in Bulletin 2025-02, which outlines the issues at hand. While the AUC has remained mum on the next Bond sequel, these regulatory updates are part of a broader trend towards adapting energy project assessment procedures, with significant implications for transparency and collaborative policymaking in the energy sector.

References:

1. Proposed Regulatory Changes to Rule 007: Impacting Energy Project Applications in Alberta

Market Surveillance Administrator

The Alberta electricity market has observed a notable decline in average pool prices, falling to $62.78/MWh in 2024, a 53% reduction from the previous year. This decrease is largely due to enhanced thermal generation, increased renewable energy contributions, particularly wind and solar, and a drop in natural gas prices. However, the market faced reliability challenges, signified by eight Energy Emergency Alerts within the year, most notably a Level 3 alert in October due to thermal outages. A major merger boosted the leading generator’s market share from 14.7% to 23.2%, indicating an increasing concentration that may impact competition and pricing strategies. Additionally, large thermal plants, such as Baseplant, expanded significantly, with capacity growing from 50 MW to 856 MW, playing a critical role in sustaining supply. Fluctuations in pricing were also observed, with a December low of $26.35/MWh following a high of $71.20/MWh in November, correlating to demand spikes driven by colder weather and thermal availability. Overall, the dynamics of Alberta's electricity market underscore the need for monitoring and potentially regulatory measures to ensure competitive balance amidst rising market concentration.

References:

1. Alberta's Electricity Market Trends: Insights from Q4 2024 on Prices, Supply, and Market Dynamics

Maxim Power Results

Maxim Power Corp's 2024 financial results highlight a significant increase in revenue to approximately $101.48 million from $41.46 million in 2023, despite a decline in net income and profitability metrics due to the ending of business interruption claims and operational challenges like an unplanned outage. Production reached around 1.73 million MWh, but adjusted EBITDA fell to $38.53 million from $50.69 million, reflecting ongoing market pressures. MAXIM has taken strategic measures, including the voluntary repayment of nearly $50 million in senior loans, distribution of a special dividend of $0.50 per share, and the sale of coal subsidiaries for $14.2 million while retaining royalty interests. Overall, these developments underscore the need for operational resilience and adaptability in a fluctuating energy market while balancing growth with profitability challenges.

References:

1. MAXIM Power Corp: Navigating Growth and Challenges in the 2024 Energy Market

Government of Alberta Announcements

The GoA announced the draft Upper Smoky Sub-Regional Plan, inviting public input from March 27 to June 25 to shape land use in a vital area rich in natural resources. The plan aims to balance economic activities with environmental preservation, highlighting the restoration of caribou habitats as a key conservation goal.

Alongside local engagement, Alberta's Minister of Jobs, Economy and Trade is leading a trade mission to Germany from March 28 to April 4, 2025. Participating in Hannover Messe 2025, one of the world's largest industrial trade shows, the mission underscores Alberta's strategy to diversify its market and strengthen relationships with key trading partners.

References:

1. Engaging Albertans: Shaping the Future of the Upper Smoky Sub-Regional Plan for Sustainable Development
2. Alberta's Strategic Trade Mission to Germany: Fostering Investment and Economic Growth in Advanced Manufacturing and Technology

Shepard Anniverary

The Shepard Energy Centre celebrates a decade of operation. As the largest natural gas-fueled plant in the province, it generates 860 megawatts, meeting nearly half of Calgary's energy needs. The centre is noted for its high efficiency and low carbon emissions, utilizing 100% reclaimed water for power generation, thus conserving potable water resources.

References:

1. Celebrating a Decade of Sustainability: The Impact of Shepard Energy Centre on Calgary's Power Landscape

IPPSA31 Highlights

Alberta's electricity market is undergoing transformative changes driven by the need for a restructured energy market (REM), highlighted at the IPPSA Annual Conference. Optimism surrounds progress on market and transmission policies by mid-2025, with a focus on balancing affordable electricity with reliability. Growing interest in energy-intensive data centers poses challenges for grid reliability, prompting the government to develop policies for effective management. Meanwhile, nuclear energy and carbon capture technologies are being explored to support Alberta's net-zero ambitions, though hurdles like regulatory approvals remain. As trade tensions with the U.S. rise, emphasis on interprovincial cooperation for energy security has intensified. Overall, robust policy development and strategic investments are essential to ensure Alberta successfully navigates these changes, positioning itself as a leader in the evolving energy landscape both nationally and globally.

References:

1. Transforming Alberta's Electricity Market: Regulatory Developments and Future Opportunities

Canadian Energy Security

The Business Councils of British Columbia, Alberta, Saskatchewan, and Manitoba have formed the Western Business Coalition to advocate for policies that unlock Western Canada's economic potential, particularly in natural resources and trade. Their initial focus includes enhancing the global competitiveness of the energy sector, which encompasses oil and gas, and ensuring access to new markets. While the coalition emphasizes streamlining project approvals and investing in trade-related infrastructure, including domestic electricity security.

References:

1. Unleashing Western Canada's Economic Power

Transmission Tension

Alberta's electrical grid requires over $3 billion in upgrades to support increasing renewable energy production from wind and solar. With a current capacity of 795 megawatts and additional requests exceeding 5,000 megawatts, urgent infrastructure improvements are essential, according to developers. Major funding initiatives include a $650 million project aimed at alleviating transmission congestion, alongside proposals costing up to $1.8 billion.

References:

1. Investing in Alberta's Future: Essential Upgrades for a Sustainable Electrical Grid

Federal Funding

The Government of Canada has announced over $8.3 million in federal investments to boost Alberta's clean technology sector, focusing on energy and natural resources. Key initiatives include funding for the Energy Transition Centre, hydrogen sector development, and renewable energy projects for Indigenous communities.

References:

1. Federal Investments Fuel Clean Technology Growth in Alberta: A Path to Sustainable Innovation and Job Creation

Stakeholder concerns

Community opposition to a recently approved 16-megawatt solar energy project near Caroline, Alberta, reflects rising tensions between renewable energy initiatives and local values. Residents are concerned about the project’s location on productive farmland and its efficiency, as solar panels have a low rate of energy conversion (15-25%). Many fear it could industrialize their community, disrupt local wildlife, and diminish the view. This situation mirrors broader trends of community pushback across Alberta regarding renewable energy projects.

References:

1. Community Outcry Against Solar Energy Project: A Battle for Farmland and Local Values in Alberta

Op-Ed on the Canadian Electricity Security

The need for a coordinated approach to electricity delivery in Canada has become increasingly urgent due to the fragmented nature of its electricity system resulting from provincial autonomy and inadequate planning. This inefficiency is costing the economy over $2 billion annually, as interprovincial barriers hinder the creation of a resilient national grid. Regional planning and enhanced coordination among provinces could mitigate these issues, allowing for better utilization of diverse energy resources and improved reliability of electricity supply. A cohesive strategy that draws from successful international models could transform Canada’s energy landscape into one that is more sustainable and affordable for all Canadians.

References:

1. Revamping Canada's Electricity Delivery: The Case for Coordinated Interprovincial Planning

IPPSA's Mandate

IPPSA's mission is to convene industry, providing information, resources, and a forum for knowledge sharing, and to create opportunities for dialogue, collaboration, and education. This newsletter is meant to inform members but not advocate for specific outcomes. We always appreciate your feedback at info@ippsa.com.