Earth, Wind, and Fire: Power Infrastructure in Alberta’s New Age

Abstract

In the wake of dramatic policy changes commencing in late 2015, including the Government of Alberta’s announcement of the Climate Leadership Plan, the Renewable Energy Program, and the decision to introduce a parallel capacity market into Alberta’s previous energy-only market, the future of Alberta’s electricity market is uncertain. However, regulatory intervention in an attempt to improve the function of electricity markets and encourage renewable generation is not a new concept.

Other jurisdictions, including the United Kingdom, Germany, and jurisdictions in the United States, have used regulatory intervention to address issues in energy markets and to drive renewable generation. Regulatory intervention in these jurisdictions has not always achieved the intended consequences. In some cases, regulatory intervention has exacerbated issues it intended to solve, or created new problems. In other cases, regulatory intervention has relatively improved the function of electricity markets and incited renewable generation. This paper considers the evolution of energy policy and competing policy drivers, including system reliability, use of sustainable fuels to generate electricity, and price surges. The paper will discuss the success and failure of regulatory intervention in select jurisdictions, and how these lessons might apply in the new age of Alberta’s electricity market.