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Electricity Market Design with Increasing Renewable Generation: Lessons From Alberta

Author

Listed:
  • Brown, David P.

    (University of Alberta, Department of Economics)

  • Olmstead, Derek E. H.

    (University of Calgary)

  • Shaffer, Blake

    (University of Calgary)

Abstract

The electricity sector is going through a period of rapid transition with increasing decarbonization through the growth of renewable energy. In this paper, we consider the case of Alberta which has observed considerable growth in wind and solar generation capacity. We summarize the attributes of Alberta’s energy-only market design and how it interacts with increasing renewable output. We highlight emerging challenges that need to be addressed through careful market redesign and provide a summary of key market design changes that can help more cost-effectively and reliably integrate the growing renewable resources. We discuss ongoing policy developments related to Alberta’s market design. The experiences in Alberta can serve to inform market design in other jurisdictions as regulators work to enact policies to facilitate a higher renewable energy future.

Suggested Citation

  • Brown, David P. & Olmstead, Derek E. H. & Shaffer, Blake, 2024. "Electricity Market Design with Increasing Renewable Generation: Lessons From Alberta," Working Papers 2024-3, University of Alberta, Department of Economics.
    • Handle: RePEc:ris:albaec:2024_003
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    File URL: https://sites.ualberta.ca/~econwps/2024/wp2024-03.pdf
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    More about this item

    Keywords

    Electricity Markets; Regulatory Policy; Renewables; Reliability;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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