For the second time this week, the Alberta Electric System Operator issued a grid alert for the province on Friday, and the provincial capital briefly faced rotating power outages — and it isn’t the first time this year Albertans have faced shortages.
Just before 7 a.m., the AESO declared a grid alert due to tight supply.
“Generation is slowly coming online, and we expect conditions to return to normal by 10 a.m.,” the non-profit organization posted on social media.
Utility provider Epcor said around 9 a.m. that AESO had directed it to “help manage power consumption in the province” so rotating outages were rolling across Edmonton.
Half an hour later, the outages stopped as the directive to conserve power had ended, but not before about 20,000 customers in Edmonton lost power at some point.
Enmax Power also tweeted that a number of Calgary neighbourhoods could see power disruptions as a result of the AESO directive.
Supply not matching demand: Utility advocate
Alberta’s electricity market is unique in Canada in that it is a for-profit, deregulated system.
It pays generators only for the power they actually dispatch onto the grid and pays nothing for standby generating capacity.
David Gray, former executive director of the Utility Consumer Advocate, said because Alberta operates as a real-time market, anything out of the ordinary brings the risk of knocking the system offline.
“There’ve been a number of the thermal plants — either the refired coal plants that are now running on gas and the coal plant that’s left at Genesee — that have been having outages. But the real the core problem is that we just don’t have enough backup power.”
“We have a problem that supply and demand aren’t matching well.”
Gray said the province ran out of reserves Friday morning and that resulted in rolling blackouts.
“If you’ve run out of other ways to add generation, the only thing you can do is drop load. And that’s what they had to do this morning. But the reason we don’t have that backup power that we used to have is that they haven’t changed the price for peak power since 1999.”
The current market’s rules were designed 25 years ago, when the bulk of Alberta’s power was generated by coal-burning plants.
Today, the rapid phase-out of coal combined the astonishing growth of renewable power — in 2023, Alberta accounted for over 90 per cent of Canada’s total deployment of new wind and solar facilities — means the old rules are no longer optimal.
Under former Premier Rachel Notley’s NDP government, there had been a plan to transition from an “energy-only” to a capacity market, but the UCP later scrapped it.
Speaking at the industry conference earlier this year, Utilities Minister Nathan Neudorf said the UCP government remains committed to an energy-only model on the grounds that it encourages competition in the market.
Gray said that isn’t happening.
“The way this market is designed, really no one has responsibility for reliability — that’s the biggest issue.”
“It’s pretty clear that we’re getting ripped off, isn’t it?”
What happened on Friday?
The AESO said it was a perfect storm of issues that led to the power shortages on Friday.
“We are back into a tight supply situation this morning due to multiple generators being offline, low wind generation, and solar not yet producing any significant megawatts this morning,” Diane Kossman, a spokesperson for AESO, wrote in an email to Global News. “We have thermal generation coming online but it is slower than anticipated.”
Thermal generation includes both natural gas, which fuels over half of the province’s grid, and coal power from the Genesee power plant southwest of Edmonton near Warburg.
There were planned outages across Alberta due to spring being the shoulder season when maintenance occurs, but also an unplanned one.
The 420-megawatt Keephills 2 natural gas power plant near Wabamun Lake in Parkland County went offline unexpectedly just before 9 a.m., but the AESO was not able to say why. Global News has submitted a request to operator TransAlta for more information.
“What exacerbated the issue and resulted in the fact that we had to rotate outages was the fact that a thermal unit that was already at full capacity tripped off,” said Marie-France Samaroden, the vice-president of grid reliability operations with AESO.
“So it is truly a combination of many things that occurred that got us into the new rotating outage situation.”
The AESO’s website showed in the 24 hours before Friday’s grid alert, generating was disrupted at various points at the Cascade, Genesee and Keephills power plants. Earlier in the week, operations also went offline at the Sheerness power plant and Battle River Generating Station.
Friday’s grid alert came two days after another alert was briefly issued Wednesday evening.
“We had a large thermal generating unit unexpectedly drop off during evening peak, which meant we had to go into emergency reserves to meet demand and maintain system reliability,” Kossman said.
They added there multiple generators were returning to service Friday, “which should alleviate any ongoing concerns.”
Is there a solution?
Gray said the good long-term news is two new sources of power are coming online this year.
“The prices will crater once these new generators are online because that’s the way our market also works, it’s really bad for capital formation. But, if TransAlta is allowed to purchase Heartland Generation, then they’ll be in a position to use economic withholding to drive the prices up again.
“So I don’t know how long the low prices will last.”
The AESO also said Friday some energy reforms are coming this summer, including unit commitments ahead of time that would provide a greater supply of cushion.
Another idea being looked at is the creation of a “day-ahead market” which will allow power producers to offer their electricity for the next day’s use rather than the real-time market the AESO currently operates.
Alberta also has a price limit of $1,000 CAD per megawatt hour when buying power from other jurisdictions, but that is also being looked at, AESO said.
“All of those together should help to provide both the reliability and the stability that’s required, as well as the affordability that Albertans need,” Samaroden said.
Albertans are paying astronomically high power prices right now and Gray said the province does have the power to help if it wanted to.
“The answers are really pretty easy but they have to be brought in by a government that is not in the pocket of the utility sector,” he said.
Premier Danielle Smith responded to the situation by saying Neudorf was working closely with the AESO to understand the situation and ensure appropriate measures are taken.
“This is the second grid alert issued in recent days, and while contributing factors vary, we recognize this may be alarming to some Albertans,” she tweeted.
“Our government is committed to protecting Alberta’s grid and ensuring our province continues to generate reliable baseload power both now and in the future.”
The Opposition NDP called on the UCP to do a better job of managing the critical infrastructure.
“For months, Danielle Smith and the UCP have tried to shift blame of their failures onto whomever they can think of, but after five years in government, they need to take responsibility for their fumbling of our energy grid while making Albertans pay some of the highest electricity prices in the country,” energy critic Nagwan Al-Guneid said in a statement.
Alberta was forced to declare an emergency grid alert in January when the system — under pressure from a number of natural gas plant outages as well as wind that was not blowing — came close to buckling.
The province also found itself having to offer temporary electricity rebates last summer to help residents with dramatic spikes in their power bills.
On its website, AESO offers energy conservation tips for Albertans, especially for peak hours of consumption. The organization says it issues grid alerts “when the power system is under stress and we’re preparing to use emergency reserves to meet demand and maintain system reliability.”
When that happens, Albertans are asked to reduce their electricity use to help reduce the chance of more serious action being taken in response to a grid alert, such as a rotating power outage.
— with files from Amanda Stephenson, The Canadian Press