A Restructured Market for Alberta

As more renewables come online and power demand evolves, Alberta’s grid must become more responsive and flexible. The REM improves reliability through:

• A new real-time ramping product that rewards flexible resources for balancing supply and demand.
• Better congestion management and real-time operational control enabled by a more sophisticated dispatch solution (security-constrained economic dispatch).
• Higher offer and price caps to attract electricity from neighbouring jurisdictions and encourage Albertans who can adjust their usage to reduce demand when supply is limited.
• An enhanced reliability unit commitment process to ensure additional power is online if needed.

The REM is designed to ensure electricity remains affordable while enabling necessary investments by: 

• Encouraging competition and innovation among market participants
• Supporting greater opportunities for demand response and for consumers to take part in new market opportunities
• Fairly sharing the cost of grid reliability between consumers and generators that contribute to system instability
• Implementing strong market power mitigation measures, including:
  • A scarcity pricing curve that allows prices to rise beyond offer caps only when dispatchable supply is limited.
  • A lower secondary offer cap of $400/MWh for companies with ≥5% market share which is triggered when market pricing has allowed fixed costs of a hypothetical unit to be recovered.

These measures increase market efficiency and balance consumer protection with long-term reliability.

The REM supports Alberta’s growing and changing grid by creating stronger investment signals and market opportunities. Key measures include:

• Introducing a new ramping service product which increases revenue available to flexible resources.
• Implementing locational marginal pricing to show where new investment is most valuable.
• Adjusting market price caps and floors to better reflect the real-time value of electricity.

These enhancements align Alberta’s market design with other jurisdictions familiar to investors, helping attract investment in needed technologies.