This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Brattle Economists Confirm Alberta's Electricity Market Is Sustainable From A Resource Adequacy Perspective

CAMBRIDGE, Mass., March 21, 2013 /PRNewswire/ -- Economists at The Brattle Group have released an update to a 2011 report for the Alberta Electric System Operator (AESO) that reviews the long-term challenges to resource adequacy in Alberta's electricity market and assesses the sustainability of the energy-only market design from a resource adequacy perspective. The updated analysis confirms the conclusions drawn from the 2011 review and finds that the Alberta electricity market is generally well-functioning based on current market conditions and policies.

The updated report analyzes the recent changes to the market fundamentals and resource adequacy challenges facing Alberta, many of which were present during the 2011 review. They include: (1) low gas prices; (2) the expiration of purchase power agreements (PPAs); (3) previously impending environmental regulations that could lead to the accelerated retirement of aging coal plants; (4) increasing wind penetration; and (5) expanded interties with neighboring markets.

"To maintain resource adequacy and keep pace with plant retirements and load growth, the Alberta market will require generation investments of approximately 530 MW per year between 2013 and 2029," noted Brattle principal Johannes Pfeifenberger, a co-author of the study. "Although an investment of this size is a challenge for smaller markets, Alberta has successfully attracted enough merchant investment to sustain resource adequacy over the past decade.  Our review of the current and projected market conditions documents continued favorable investment conditions for natural gas-fired power plants."

While the updated report reiterates the conclusions drawn from the 2011 review, the authors note that because Alberta's power market is an energy-only market, it cannot guarantee that a specific reserve margin will be maintained in the short or long term. This lack of a reserve margin requirement means that Alberta will likely have periodic shortage events, where the market may experience lower reserves, lower reliability, and higher prices, leading to renewed interest in investment.

The report contains several recommendations to ensure the continued stability of Alberta's market from a resource adequacy perspective, including: (1) monitor physical resource adequacy metrics; (2) monitor the market's ability to attract needed investments; (3) evaluate whether the province's regulated rate option results in inefficiently low levels of forward contracting; (4) avoid policies that could create large simultaneous generation retirements; and (5) increase the price cap, reduce the price floor, and introduce more gradual scarcity pricing during operating reserve depletion events.

The report, "Evaluation of Market Fundamentals and Challenges to Long-Term System Adequacy in Alberta's Electricity Market: 2013 Update," was authored by Mr. Pfeifenberger, senior associate Kathleen Spees, and research analyst Michael DeLucia. It is available for download at

The Brattle Group provides consulting services and expert testimony in economics and finance to corporations, law firms, and public agencies worldwide.   Areas of expertise include antitrust and competition, valuation and damages, utility regulatory policy and ratemaking, and regulation and planning in network industries.  For more information, please visit

SOURCE The Brattle Group

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 -1.04%
FB $118.06 0.54%
GOOG $695.70 0.48%
TSLA $222.56 -4.20%
YHOO $36.00 -0.03%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs