By: Nick Clark
We want to show how you can shift your current reliance on fossil fuels. It's the Easy Power Launch. 1. Choose a retailer in your area 2. Request a quote 3. Select the amount of Green Power you want for your home or business. Click here.
Utility consumers are enjoying a massive windfall in savings today. Yet, we all must get ready for price increases in the future.
An independent energy-consulting firm based in Calgary, EDC Associates, published a report on the possible impact of the NDP government’s plan to phase out coal power by 2030. The report looked at sourcing 30 per cent of energy from renewable sources.
The highlights are interesting, especially when you compare the power pool prices from today with where they might go. The net result will be higher consumer prices for consumers. The current power market is oversupplied while demand—given the down turn in our economy—is sliding downwards. This increase in the gap between supply and demand results in windfall savings for consumers.
Where will prices go? EDC predicts:
However you cut the numbers, consumers need to get ready for price increases in the future.
Utility consumers are enjoying a massive windfall in savings today. Yet, we all must get ready for price increases in the future.
An independent energy-consulting firm based in Calgary, EDC Associates, published a report on the possible impact of the NDP government’s plan to phase out coal power by 2030. The report looked at sourcing 30 per cent of energy from renewable sources.
The highlights are interesting, especially when you compare the power pool prices from today with where they might go. The net result will be higher consumer prices for consumers. The current power market is oversupplied while demand—given the down turn in our economy—is sliding downwards. This increase in the gap between supply and demand results in windfall savings for consumers.
"Take the savings you get today and save for a rainy day."
Comparing megawatt hours
Let’s look at a base line for comparative purposes: The cost of a megawatt hour during 2015 was about $33 down from $50 in 2014. As we enter 2016, pool prices are hovering around $20 per megawatt hour. (Sidebar: This translates into a great opportunity for Micro Generation customers to switch over to the Floating Rate for the electricity they are importing.) The retail price for customers on the Floating Rate is currently in the range of 3.5 cents per kWh. If the fear of volatility is a concern to consumers, the fixed rate of 5.4 cents per kWh is a reasonable long-term guaranteed retail price. If, indeed, prices start to march upwards, it would be wise to take the savings you can get your hands on today – and save what you save for a rainy day. Or invest heavily in your own PV Solar system and reduce your dependency on higher electricity prices that definitely hit your pocket book in the future.Where will prices go? EDC predicts:
- Wholesale prices would have to be between $60 and $85 per megawatt hour to justify wind power construction. The wholesale price would translate into a consumer price of double what people are paying today.
- If solar power were to make up 50 percent of the renewables mix, “It would cost between $200 and $300 per megawatt hour,” the study found. What does a $200 to $300 per megawatt translate into at retail? Over 35 cents/kWh. Considering you can buy electricity today for 3.5 cents per kWh, this is a massive premium increase.
However you cut the numbers, consumers need to get ready for price increases in the future.