Alberta’s electricity generation is about to become more environmentally friendly over the next couple of years, with projects adding more electricity to our grid that move Alberta towards its 2030 goals of eliminating emissions from coal-powered generation.
Let’s explore these new power projects over the next couple of years, and discuss the impact these additions may have on the electricity grid and potentially your power bill.
Genesee – late 2023, early 2024
Upgrades are currently underway on the three stations of the Genesee Generating site, which is an hour southwest of Edmonton.
Two sites, Genesee 1 and 2, are in the process of becoming repowered as natural gas combined cycles (NGCC) units. With the addition of two Mitsubishi M501JAC gas-fired combustion turbines and Vogt triple-pressure heat recovery steam generators, Capital Power heralds Genesee 1 and 2 as “the most efficient NGCC units in Canada”, eliminating the use of coal by early 2024. In this process, the repowering of the units will add 518 Megawatts (MW), bringing the net capacity up to a total of 1,338 MW.
Work on a third site, Genesee 3, is currently on track to complete a similar coal-to-gas upgrade by the end of 2023. However, this upgrade will not add any further electricity to the grid.
Cascade Power Project – early 2024
The Cascade Power Project, a new plant southwest of Edson, is projected for completion in early 2024.
The Cascade Power Project will be a combined cycle generating facility powered by locally produced natural gas. The project, developed by Kineticor Resources in partnership with several other backers and contracted by BPC Constructed, is being developed in two phases, each of which will result in a 450 MW combined-cycle unit. The 900MW capacity is enough to provide over 8% of the province’s average electricity demand, with enough electricity to power 900,000 Albertan homes.
Genesee and Cascade are not the only projects in development. Since 2019, more than 4.3 Billion dollars worth of renewable energy projects have been announced for Alberta.
Another big project of note is the Suncor Coke Boiler Replacement project, which will bring about 800 MW of additional capacity due for 2025.
Alberta’s Energy Grid Going Forward
So how will the increase in energy availability – an additional 1,418 MW added to our electricity grid by early 2024 – impact our electricity costs going forward? That is ultimately to be determined. However, we can make some inferences about how more electricity might impact you – the consumer.
Unfortunately, it’s hard to answer that inevitable first question: “Will this make my electricity bill cheaper?” While the relationship between supply and demand might suggest that prices will go down with an increase in supply, the reality is not that simple.
While the supply of electricity that Albertan generators create can be measurable and forecastable for the most part, the demand for electricity is not easily so. The butterfly effect is a real phenomenon in the energy market, as even minor events can change the market in unforeseen ways. Weather and climate, the state of our generators, increases in population are just three things of many that can impact peak demand and pricing, making predicting the future prices of our electricity not a feasible task.
Another aspect that might have a big impact on prices after the operation of these plants begins is the price of natural gas. These new and modernized power projects are NGCC plants, replacing coal-generated plants. Since natural gas is already such a high-demand resource because we use it for heating our homes, the price of natural gas will now be a contributing factor to our energy prices.
Due to changes in the cost of production, unpredictable demand for electricity, and unforeseen developments, we simply do not know how the markets will respond to this additional energy on the grid. While supply will increase, demand could easily increase similarly and not change the amount you pay on average for your power bill.
A more tangible benefit of the introduction is the increase of the Supply Cushion, or the province’s ability to meet peak demand. As there is more power on the grid, there is more to meet the peak demand each day, reducing the frequency that our peak demand exceeds what we have available on the grid and we have to purchase electricity from outside the province. The benefits we can see from this would be a reduction of volatility in the market and likely mean more reliable, consistent pricing – so we don’t see rapidly changing markets as we saw in December of 2022.
Overall, more reliable, lower-emitting electricity is certainly something everyone should be excited about. However, we cannot predict the price of electricity and will only have a better understanding of the impacts of this extra electricity on the grid by the time these sites are active.