BC and Alberta – Coal and Hydro

Canada has a lot of hydro power. BC (on the west coast) has about 14GW of capacity and Alberta has about 0.9GW.

Alberta gets 65% of its power from coal. Coal power plants do not easily change power output. Hydro can. And does.CHA-map-CapacityPotential-2015-940px

So there are some interesting power trading going on. And things will change if the Alberta NDP succeeds in its plan to shutdown all of Alberta’s coal power plant.

The following is some excerpts for an interesting insight into power trading (a little over a year old). Yes it is an ad for software … but it is darned interesting.

A major obstacle for power traders is the inability to store generated power. However, hydro power has a unique flexibility that most other power producers do not: operators can turn these facilities on and off in the blink of an eye. This practice can turn hydro dams into huge storage facilities.

Ninety percent of British Columbia’s power comes from hydro dams, and the aforementioned “power storage” ability of these units gives BC Hydro greater flexibility when deciding to sell or buy power. As in every business, in the power industry energy producers want to sell their final products at the highest possible rate. At night, power demand, and therefore cost, is low, making energy producers less profitable.

On the other hand, more than 50% of the power generated in Alberta in 2013 came from coal-powered plants. The major downside of this type of power production is the long and costly shut down procedure. This makes the export of surplus power mandatory, since production cannot be tailored to consumption, as is the case with hydro-produced power. Alberta’s unused production is exported to other provinces (mostly to British Columbia: 87%),[1] and mostly in off-peak hours when there is a surplus of production. This power is being exported at unfavorable terms for Alberta plants, given that they need to get rid of the power they cannot store. Prices of exported power are therefore much lower than prices of power imported during peak hours.

1

In the graph above, the dark blue strip represents traded (flow) power between British Columbia and Alberta. As we can see, there is a trough that starts at 1 a.m. on January 2 and ends at 7 a.m. At the same time, the red stripe represents the difference between production and consumption in Alberta. The graph clearly shows that abundant power is being exported to British Columbia, given that it cannot be consumed or stored in Alberta. After 7 a.m., though, the opposite occurs. The difference between production and consumption becomes negative, meaning that Alberta needs to import the shortfall amount of power. As the red stripe becomes negative, the blue stripe becomes positive—a mirror image. This is just one example how imports from British Columbia grow in proportion to the gap between production and consumption in Alberta.

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