A Canadian Perspective Cynthia Chaplin Executive Director, CAMPUT - - PowerPoint PPT Presentation

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A Canadian Perspective Cynthia Chaplin Executive Director, CAMPUT - - PowerPoint PPT Presentation

Electricity Market Reform: What still needs to be done? A Canadian Perspective Cynthia Chaplin Executive Director, CAMPUT Presentation to the ACCC/AER Regulatory Conference Brisbane, 1 August 2019 1 Overview Context Market Structures


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SLIDE 1

Electricity Market Reform: What still needs to be done?

A Canadian Perspective

Cynthia Chaplin Executive Director, CAMPUT

Presentation to the ACCC/AER Regulatory Conference Brisbane, 1 August 2019

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SLIDE 2

Overview

  • Context
  • Market Structures across Canada
  • Key Regulatory Issues
  • Lessons/Observations from Canada

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SLIDE 3

Context

  • Key Characteristics
  • Transmission
  • Generation Mix
  • Emissions
  • Key Factors
  • Provincial Jurisdiction
  • Limited Interconnection
  • Limited Competitive Markets
  • Politics

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SLIDE 4

Canadian and US Electricity Transmission

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345kV and higher

Source: Canadian Electricity Association

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SLIDE 5

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Canada’s Generation Mix (2017 – 650.2 TWh)

Hydro 60% Nuclear 15%

Natural Gas 9%

Coal 9% Wind 4% Biomass/Geothermal 2% Petroleum <1% Solar <1%

Source: National Energy Board

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SLIDE 6

Emissions in Canada

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Oil and Gas 26% Electricity 11% Transportation 25% Heavy Industry 11% Buildings 11% Agriculture 10% Waste & Others 6%

Source: Environment and Climate Change Canada, Air Pollutant Emissions Database (2016). Visual Created by the Canadian Electricity Association

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SLIDE 7

Market Structures Across Canada

  • Provincial Control
  • Vertically Integrated Crown Corporations
  • Limited Wholesale or Retail Competition
  • Alberta
  • Ontario

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SLIDE 8

Alberta

  • Market Liberalization
  • Energy-Only Market
  • Proposed Capacity Market
  • Competitive Renewable Procurements
  • Government Change…Policy Change?

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SLIDE 9

Alberta Renewable Procurements

Procurement Projects MW Average Price Round #1 3 wind 600 1 3.7 cents/kwh Round #2 3 wind 2 360 3.8 cents/kwh Round #3 3 wind 400 4.0 cents/kwh Round #4 CANCELLED

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1 200 MW more than planned 2 Minimum 25% Indigenous equity ownership

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SLIDE 10

Alberta

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Source: National Energy Board

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SLIDE 11

Ontario

  • Market Liberalization – and reaction
  • Off-Coal Policy – and reaction
  • Generation Siting – and reaction
  • Prices – and reaction
  • Latest Government Pledge

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SLIDE 12

Ontario Supply Mix: Then & Now

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51% 8% 22% <1% 19%

Coal Water Nuclear Electricity Production 156 TWh Natural Gas Solar/Wind/ Bioenergy

2005

58% 10% 23% 9%

Water Nuclear Electricity Production 160 TWh Natural Gas Solar/Wind/ Bioenergy

2015

Source: IESO

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SLIDE 13

Ontario Electricity Prices ($2016)

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$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 20 40 60 80 100 120 140 160 180 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average Unit Cost of Electricity Service Real $2016/MWh Ontario Demand (TWh)

Ontario Demand (TWh) = Grid Connected + Embedded Generation Unit Cost of Electricity Service

Source: IESO

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14 Doug Ford @fordnation

We promised the people of Ontario that we would lower their hydro rates and that started by addressing leadership at Hydro One. I was pleased to learn this afternoon that the CEO and all board members will be resigning.

5:25 PM · Jul 11, 2018 ·

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SLIDE 15

Ontario Supply Mix: Then & Now

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33% 25% 22% 18% 2%

Water Nuclear Installed Capacity 39 GW Natural Gas Solar/Wind/ Bioenergy

2015

Demand Response

37% 16% 26% <1% 21%

Coal Water Nuclear Installed Capacity 31 GW Natural Gas Solar/Wind/ Bioenergy

2005

Source: IESO

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SLIDE 16

Ontario Supply Mix: Grid Connected & Embedded

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91% 9% Grid-Connected Embedded

Existing supply at year-end 2015: 39.4 GW 0% 20% 40% 60% 80% 100%

Nuclear Natural Gas Waterpower Wind

Share of grid- connected resources

0% 20% 40% 60% 80% 100%

Waterpower Wind

Solar

Demand Response

Share of embedded resources

Source: IESO

Natural Gas Bioenergy Bioenergy

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SLIDE 17

Ontario Market Renewal Program

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  • Drivers
  • Changing Sector
  • Original Design Flaws
  • Energy Market Reforms
  • Single Schedule Market
  • Day Ahead Market
  • Enhanced Real-Time Unit Commitment
  • Capacity Market
  • Incremental
  • Transitional
  • Process
  • Stakeholder Focus
  • Issues
  • Decision-making
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Key Regulatory Issues

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  • Market Structure (Distribution)
  • DERs: Competition vs Regulation
  • Distributor Role
  • Ratemaking Framework
  • Pricing
  • Fixed Monthly Rates for Distribution
  • Time of Use Rates for Commodity
  • Pricing Pilots
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SLIDE 19

Ontario Pricing Pilots

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Proponent Price Plans Non-Price Tools London Hydro  Quick-ramping critical peak pricing (CPP) Real-time information application (RT) Alectra Utilities  Variable peak pricing (Dynamic)  Enhanced TOU with low overnight (Overnight)  Enhanced TOU (Enhanced) Behavioural communications provided through bill inserts (Nudge reports) Oshawa PUC  Super-peak TOU  Seasonal TOU with CPP Smartphone application and web portal engagement platform CustomerFirst group of six mostly northern utilities  Enhanced TOU (Enhanced)  Seasonal TOU Thermostats

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Ontario Pricing Pilots – the fine print

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Pricing Plans

Quick-ramping critical peak pricing (CPP) – provides customers with a 1 hour critical peak pricing window under 15 minutes advanced notice between 4pm and 9pm. Customers received a discounted off-peak rate and standard TOU time periods

  • applied. Customers received automatic load control devices to help manage demand.

Variable peak pricing (Dynamic) – A two-period price plan that features an on peak price (effective 3pm-9pm weekdays) that varies with system conditions – low, medium, high or critical peak.

Enhanced TOU with low overnight (Overnight) – An additional off-peak lower-priced period from 12am to 6am, coupled with higher mid- and on-peak rates with standard TOU time periods

Enhanced TOU (Enhanced) – 4:1 on-to-off-peak differential; time periods unchanged relative to status-quo TOU rates

Super-peak TOU– 3-period model with 4:1 super-to-off-peak ratio June through August (off-peak 7pm to 7am; on-peak 7am to 1pm; super-peak 1pm to 7pm); 2-period rate September through May (off-peak 7pm to 7am; on-peak 7am to 7pm)

Seasonal TOU with CPP – 2-period model June through August and December through February (off-peak 7pm to 7am; on- peak 7am to 7pm); flat rate for the remaining six months of the year; 20 CPP events scheduled throughout the year between 4pm and 9pm

All price plans charge off-peak prices on weekends and holidays Non-price Tools

Real-time information application (RT) – Allows customers to use a smartphone application to monitor their electricity consumption in real-time and turn off appliances in their homes remotely

Behavioural communications provided through bill inserts (Nudge reports) – Provides customers with on-peak electricity consumption feedback relative to historical benchmarks, as well as specific recommendations for how households can alter their behaviour to reduce on-peak usage

Thermostats – Examines the impacts of thermostats as enabling technologies

Smartphone application and web portal engagement platform – Provides personalized insights, recommendations and tools for managing electricity usage

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SLIDE 21

Lessons/Observations from Canada

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  • Same Issues – Different Accent
  • Is the Regulatory Process “Fit for Purpose”?
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Thank you

Cynthia Chaplin

Executive Director CAMPUT

cynthia@camput.org

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