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Province “rewiring” Alberta’s electricity grid for growth

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Rewiring Alberta’s electricity market

Alberta’s government is making changes to the province’s electricity market rules to restore the balance between affordability, reliability and sustainability.

Alberta’s government is modernizing the province’s electricity system to put Albertans first, restoring the balance between affordability, reliability and sustainability. To achieve this, Alberta’s government continues to work with its partners on power market reforms.  Alberta’s transmission policies are also being updated to improve reliability, increase efficiency, protect ratepayers, and align Alberta with other jurisdictions. Alberta’s government is committed to the province’s unique competitive electricity market, which provides consumers with choice and makes the province a premier destination for investors.

Alberta’s electricity system was designed for a small number of baseload power plants generating reliable electricity. In 2016, Alberta’s accelerated coal phase out was rushed through without proper due diligence. With a growing supply of intermittent renewables instead of natural gas, the province’s power grid and prices can become as volatile as the weather.

The thousands of kilometres of new transmission lines that were required to connect renewables added costs for Albertans, and back-up sources are required to keep the lights on. As demand for electricity only continues to increase, it’s expected that Alberta’s need for electricity could more than quadruple in the coming decades. It is critical that Alberta’s government make changes now to ensure the affordability, reliability, and sustainability of the provincial grid in the decades to come as demand surges.

“Albertans deserve a modern electricity system that prioritizes affordability and reliability. As our electricity supply mix evolves so should our policies, and these updates to transmission policies are essential to ensuring Albertans are well-served by our electricity system for years to come.”

Nathan Neudorf, Minister of Affordability and Utilities

Following three years of engagement with industry, Alberta’s government is making changes to ensure the province’s ratepayers are no longer burdened with the full costs of building new transmission lines. Instead, costs for new transmission infrastructure will be assigned on a cost-causation basis going forward. This will incentivise new power plants to be built in optimal locations that take advantage of existing infrastructure, saving costs for both Alberta ratepayers and job creators. As a result of engagement with industry, Alberta’s government is aligning the province with other jurisdictions by giving the Alberta Electric System Operator (AESO) more market-based tools to increase the efficiency of the province’s grid, prioritizing the use of pre-existing infrastructure.

Updating Alberta’s Transmission Regulation is a significant and necessary step in modernizing the province’s electricity system. To enhance grid reliability, Alberta’s government is also making changes to streamline the process to build and maintain connections between our electricity grid and other jurisdictions. This will reduce red tape and enable critical improvements to happen more quickly. This will also help improve reliability by restoring the electricity grid connections between Alberta and British Columbia, as well as expanding the connections between Alberta and Saskatchewan.

“This is a positive milestone borne out of significant engagement and consultation with industry stakeholders, our partner agencies and the Government of Alberta. We appreciate the tremendous investment of time and effort that everyone has put into this process to reach this point, and we look forward to additional engagement in 2025 to further the detailed market design.”

Aaron Engen, President and CEO, Alberta Electric System Operator

Over the past year, the AESO has engaged extensively with industry on the technical design of a Restructured Energy Market with direction from Alberta’s government. A key aspect of these market reforms includes moving to a day-ahead market, where power generators will be required to commit their power on the previous day, rather than a couple of hours beforehand, making the system better positioned to respond to power fluctuations. This will increase reliability and stability, helping reduce the risk of potential grid alerts. With these changes, Alberta’s government is ensuring that reliability is prioritized, strengthening the grid so that Albertans can get the power they need regardless of the weather.

“Market design features like a day ahead market can help significantly reduce the likelihood of future grid alerts and will ensure that all necessary generators needed to meet electricity demand are online to provide power.”

Derek Olmstead, Administrator & CEO, Market Surveillance Administrator

Minister of Affordability and Utilities Nathan Neudorf has sent a letter to inform the AESO of the government’s latest decisions on changes to the Transmission Regulation and further guide the ongoing technical design of a Restructured Energy Market. Alberta’s government intends to bring forward legislation to support these changes in the new year. In the meantime, the temporary measures enacted by Alberta’s government on July 1, 2024 will continue to protect Albertans, ensuring reliable power and predictable utility bills.

Quick facts

  • The Alberta Electric System Operator (AESO) manages and operates the provincial power grid on behalf of Albertans.
  • The Market Surveillance Administrator (MSA) is a public agency that protects and promotes the fair, efficient and openly competitive operation of Alberta’s electricity and retail natural gas markets.

Alberta

The beauty of economic corridors: Inside Alberta’s work to link products with new markets

Published on

From the Canadian Energy Centre

Q&A with Devin Dreeshen, Minister of Transport and Economic Corridors

Devin Dreeshen, Alberta’s Minister of Transportation
and Economic Corridors.

CEC: How have recent developments impacted Alberta’s ability to expand trade routes and access new markets for energy and natural resources?

Dreeshen: With the U.S. trade dispute going on right now, it’s great to see that other provinces and the federal government are taking an interest in our east, west and northern trade routes, something that we in Alberta have been advocating for a long time.

We signed agreements with Saskatchewan and Manitoba to have an economic corridor to stretch across the prairies, as well as a recent agreement with the Northwest Territories to go north. With the leadership of Premier Danielle Smith, she’s been working on a BC, prairie and three northern territories economic corridor agreement with pretty much the entire western and northern block of Canada.

There has been a tremendous amount of work trying to get Alberta products to market and to make sure we can build big projects in Canada again.

CEC: Which infrastructure projects, whether pipeline, rail or port expansions, do you see as the most viable for improving Alberta’s global market access?

Dreeshen: We look at everything. Obviously, pipelines are the safest way to transport oil and gas, but also rail is part of the mix of getting over four million barrels per day to markets around the world.

The beauty of economic corridors is that it’s a swath of land that can have any type of utility in it, whether it be a roadway, railway, pipeline or a utility line. When you have all the environmental permits that are approved in a timely manner, and you have that designated swath of land, it politically de-risks any type of project.

CEC: A key focus of your ministry has been expanding trade corridors, including an agreement with Saskatchewan and Manitoba to explore access to Hudson’s Bay. Is there any interest from industry in developing this corridor further?

Dreeshen: There’s been lots of talk [about] Hudson Bay, a trade corridor with rail and port access. We’ve seen some improvements to go to Churchill, but also an interest in the Nelson River.

We’re starting to see more confidence in the private sector and industry wanting to build these projects. It’s great that governments can get together and work on a common goal to build things here in Canada.

CEC: What is your vision for Alberta’s future as a leader in global trade, and how do economic corridors fit into that strategy?

Dreeshen: Premier Smith has talked about C-69 being repealed by the federal government [and] the reversal of the West Coast tanker ban, which targets Alberta energy going west out of the Pacific.

There’s a lot of work that needs to be done on the federal side. Alberta has been doing a lot of the heavy lifting when it comes to economic corridors.

We’ve asked the federal government if they could develop an economic corridor agency. We want to make sure that the federal government can come to the table, work with provinces [and] work with First Nations across this country to make sure that we can see these projects being built again here in Canada.

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2025 Federal Election

The High Cost Of Continued Western Canadian Alienation

Published on

From EnergyNow.Ca

By Jim Warren

Energy Issues Carney Must Commit to if He Truly Cares About National Cohesion and be Different From Trudeau

If the stars fail to align in the majority of Western Canada’s favour and voters from Central Canada and the Maritimes re-elect a Liberal government on April 28, it will stand as a tragic rejection of the aspirations of the oil producing provinces and a threat to national cohesion.

As of today Mark Carney has not clearly and unequivocally promised to tear down the Liberal policy wall blocking growth in oil and gas exports. Yes, he recently claimed to favour energy corridors, but just two weeks earlier he backtracked on a similar commitment.

There are some promises Carney hopefully won’t honour. He has pledged to impose punitive emissions taxes on Canadian industry. But that’s supposedly alright because Carney has liberally sprinkled that promise with pixie dust. This will magically ensure any associated increases in the cost of living will disappear. Liberal wizardry will similarly vaporize any harm Carbon Tax 2.0 might do to the competitive capacity of Canadian exporters.

Carney has as also promised to impose border taxes on imports from countries that lack the Liberals’ zeal for saving the planet. These are not supposed to raise Canadians’ cost of living by much, but if they do we can take pride in doing our part to save the planet. We can feel good about ourselves while shopping for groceries we can’t afford to buy.

There is ample bad news in what Carney has promised to do. No less disturbing is what he has not agreed to do. Oil and gas sector leaders have been telling Carney what needs to be done, but that doesn’t mean he’s been listening.

The Build Canada Now action plan announced last week by western energy industry leaders lays out a concise five-point plan for growing the oil and gas sector. If Mark Carney wants to convince his more skeptical detractors that he is truly concerned about Canadian prosperity, he should consider getting a tattoo that celebrates the five points.

Yet, if he got onside with the five points and could be trusted, would it not be a step in the right direction? Sure, but it would also be great if unicorns were real.

The purpose of the Build Canada Now action plan couldn’t be much more clearly and concisely stated. “For the oil and natural gas sector to expand and energy infrastructure to be built, Canada’s federal political leaders can create an environment that will:

1. Simplify regulation. The federal government’s Impact Assessment Act and West Coast tanker ban are impeding development and need to be overhauled and simplified. Regulatory processes need to be streamlined, and decisions need to withstand judicial challenges.

2. Commit to firm deadlines for project approvals. The federal government needs to reduce regulatory timelines so that major projects are approved within 6 months of application.

3. Grow production. The federal government’s unlegislated cap on emissions must be eliminated to allow the sector to reach its full potential.

4. Attract investment. The federal carbon levy on large emitters is not globally cost competitive and should be repealed to allow provincial governments to set more suitable carbon regulations.

5. Incent Indigenous co-investment opportunities. The federal government needs to provide Indigenous loan guarantees at scale so industry may create infrastructure ownership opportunities to increase prosperity for communities and to ensure that Indigenous communities benefit from development.”

As they say the devil is often in the details. But it would be an error to complicate the message with too much detail in the context of an election campaign. We want to avoid sacrificing the good on behalf of the perfect. The plan needs to be readily understandable to voters and the media. We live in the age of the ten second sound bite so the plan has to be something that can be communicated succinctly.

Nevertheless, there is much more to be done. If Carney hopes to feel welcome in large sections of the west he needs to back away from many of promises he’s already made. And there are many Liberal policies besides Bill C-69 and C-48 that need to be rescinded or significantly modified.

Liberal imposed limitations on free speech have to go. In a free society publicizing the improvements oil and gas companies are making on behalf of environmental protection should not be a crime.

There is a morass of emissions reduction regulations, mandates, targets and deadlines that need to be rethought and/or rescinded. These include measures like the emissions cap, the clean electricity standard, EV mandates and carbon taxes. Similarly, plans for imposing restrictions on industries besides oil and gas, such as agriculture, need to be dropped. These include mandatory reductions in the use of nitrogen fertilizer and attacks (thus far only rhetorical) on cattle ranching.

A good starting point for addressing these issues would be meaningful federal-provincial negotiations. But that won’t work if the Liberals allow Quebec to veto energy projects that are in the national interest. If Quebec insists on being obstructive, the producing provinces in the west will insist that its equalization welfare be reduced or cancelled.

Virtually all of the Liberal policy measures noted above are inflationary and reduce the profitability and competitive capacity of our exporters. Adding to Canada’s already high cost of living on behalf of overly zealous, unachievable emissions reduction goals is unnecessary as well as socially unacceptable.

We probably all have our own policy change preferences. One of my personal favourites would require the federal government to cease funding environmental organizations that disrupt energy projects with unlawful protests and file frivolous slap suits to block pipelines.

Admittedly, it is a rare thing to have all of one’s policy preferences satisfied in a democracy. And it is wise to stick to a short wish list during a federal election campaign. Putting some of the foregoing issues on the back burner is okay provided we don’t forget them there.

But what if few or any of the oil and gas producing provinces’ demands are accepted by Carney and he still manages to become prime minister?

We are currently confronted by a dangerous level of geopolitical uncertainty. The prospects of a global trade war and its effects on an export-reliant country like Canada are daunting to say the least.

Dividing the country further by once again stifling the legitimate aspirations of the majority of people in Alberta and Saskatchewan will not be helpful. (I could add voters from the northeast and interior of B.C., and southwestern Manitoba to the club of the seriously disgruntled.)

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