Long Term Adequacy Metrics - May 2010

The New Generation Projects and Retirements Metric is a summary of generation at various stages of development in Alberta and is shown in Tables 1 to 5 below. In Alberta’s deregulated electricity market competitive forces determine the location, magnitude and timing of new generation additions. Information on prospective generation additions and retirements provides context for the future market in Alberta.  The information is drawn from a variety of public sources and includes new generation, changes to existing generation and retirement of generating units. While the metric includes new wind generation projects that are under construction or have applied to the AUC, a list of all new wind projects is available in the AESO Generation Connection Queue.

Projects in the deferred category (Table 4) will be removed after four quarters.

Table 1: Generation Projects under Active Construction

Table 2: Generation Projects with Regulatory Approval

Table 3: Generation Projects that have been Announced, Applied for AESO Connection, and/or Applied for Regulatory Approval

Table 4: Generation Projects that have been Deferred

Table 5: Generation Projects that have Announced to Retire

2.  Reserve Margin Metric:

The Reserve Margin Metric, shown in Figure 1, presents a comparison of generation supply and demand in Alberta.  It is a calculation of the firm generation capacity at the time of system peak that is in excess of the system annual peak demand, expressed as a percentage of the system peak.  Firm generation is defined as installed and active construction generation capacity, adjusting for seasonal hydro capacity and behind the fence demand and generation and excludes wind capacity.  The forecasted reserve margin shows a decline from historically high margins. The Reserve Margin Metric does not include the numerous projects that are approved or announced, providing a view of the minimum reserve margin that can be expected with certainty.  The information on approved or announced projects in the New Generation Projects and Retirements Metric provides context on future generation in Alberta and can be used to further interpret the reserve margin by allowing individual assessments of future generation developments to be incorporated.    The reserve margin is graphed with and without intertie capacity since full import capability may not always be available at the time of system peak demand.

3. Supply Cushion Metric:

The Supply Cushion Metric provides visibility of the Alberta Interconnected Electric System’s ability to meet peak demand on a daily basis.  The supply cushion is the difference between the daily available firm supply minus daily peak demand.  The supply cushion refines the reserve margin calculation by using daily system peak rather than annual.  Figure 2 presents the estimated daily supply cushion for the next two years.  Figure 3 presents daily peak demand and firm supply by fuel type, as well as interties, wind and back up generation (Rainbow) which are not included in the supply cushion calculation due to the intermittent or uncertain nature of the supply.  When the supply cushion is negative in Figure 2, there is an increased level of reliance on interties, wind and back up generation, as indicated in Figure 3.

4.  Two Year Probability of Supply Adequacy Shortfall Metric:

The Two Year Probability of Supply Adequacy Shortfall Metric is a probabilistic assessment of encountering a supply shortfall over the next two years. It builds on the Supply Cushion Metric by incorporating the probability of wind production, forced generation outages and generation derates into the calculation of hourly firm supply. The calculation estimates, on a probabilistic basis, how much load may go without supply over the next two year period. Based on extensive consultation with stakeholders, when this unserved energy exceeds 1,600 MWh in any two year period (equivalent to one hour 800 MW shortfall in each of the two years), the AESO may take certain actions to bridge the temporary supply adequacy gap without impacting investor confidence in the market. The total energy not served shown in Table 6 does not reach the threshold.

Table 6: Two Year Probability of Supply Adequacy Shortfall

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