Insights
Regulatory/Market Insights
Ontario's Green Energy Act: A Major Shift
May 2009
The Ontario Government's stated intention of the Green Energy Act, 2009 is to encourage the development of renewable energy sources and a culture of energy conservation. The initiatives outlined in the Act and intended to achieve these objectives represent a major shift in policy. This shift has given rise to considerable debate and this is likely to continue. Read more >>
Coal Phase-Out: What's the Net impact on Costs?
May 2009
Generation supply contracts falling under the Global Adjustment will moderate the net impact of spot price increases arising from the phase-out of coal-fired generation. Over 70% of spot price changes will be dampened. Once coal is completely phased out, the net impact of a $6 to $13/MWh spot price increase will be $2 to $3/MWh on the bottom line. Read more >>
Coal Phase-Out: Its Impact on the Global Adjustment
April 2009
Natural gas-fired generation plants have the same attributes as coal-fired generation facilities and so will be counted on by the Ontario Power Authority to replace coal. The estimated impact of almost 6,500 MW of natural gas-fired generation replacing an equivalent amount fo coal-fired is an increase of approximately $6/MWh in the Global Adjustment. This is in addition to the effect of the phase-out on spot market prices. Read more >>
Negative Hourly Electricity Prices - Who Pays in the End?
April 2009
The Ontario electricity market has seen negative hourly spot prices before, but the notable feature of recent experience is how often they occurred from March 28 to April 17. Although persistent negative or otherwise low prices may appear to be a bonanza, they may lead to increased costs for consumers in the longer-term. Read more >>
Impact of Coal Phase-Out on Ontario Consumers
March 2009
Ontario Power Generation's almost 6,500 MW of coal-fired generation is scheduled to be phased out by the end of 2014. The impact on electricity consumers will be driven by a number of factors. The first is an upward pressure on spot prices as a result of coal-fired generation being replaced with natural gas-fired generation. Read more >>
Do Price Spikes Really Affect Electricity Consumers?
March 2009
On Februart 18, 2009 Bruce Power had to take one of its generators offline, creating a supply/demand imbalance for a three-hour period. Over this period, prices averaged $1,030/Mwh with the peak being $1,891. Such spikes can often cause alarm but unless sustained, the impact is not as severe as one would expect. Read more >>
Decline in Drilling and Demand Recovery: How Will They Impact Prices?
March 2009
Typically there is a lag in drilling activity relative to movements in natural gas prices. Current levels of drilling activity may not be sufficient to accommodate the expected increase in demand when the economy recovers. What will be the effect on prices? Read more >>
Beware of News Reports When Assessing the Forward Market
February 2009
Over the past year we have seen two ends of a market cycle - a bull and a bear. News reports have provided explanations for price behaviour that have run the full gamut. But lessons learned suggest energy buyers should not be carried away by sensationalism in the press, and should not overlook their business objectives. Read more >>
End of OPG Rebate Is Approaching - How Will Consumers Be Affected?
January 2009
The OPG Rebate is scheduled to end on April 30, 2009. When the rebate ends, consumers will see their net cost of electricity rise as will their exposure to spot market prices. Revisiting hedging strategies will be the order of the day. Read more >>
Ontario's Near-Term Electricity Shelf Well-Stocked
September 2008
The supply-demand picture for electricity is a key consideration for those thinking about hedging their future price for power. For 2009, the Ontario picture is much more favourable than it has been in the past. Read more >>