By: Ahmed Selim
PDF Version: Energy Storage, Definition and Ownership Between Alberta and Texas
Policy Commented On: Alberta Electric System Operator’s (AESO) Energy Storage
Alberta has the least regulated electricity market in Canada (see generally Natural Resources Canada, “About Electricity”). The Alberta market is an energy-only market where electricity generators are paid solely based on the amount of electricity they produce. In 2020, wind and solar power accounted for 11% and 1% of the installed electricity generation capacity in Alberta, respectively (AESO 2020 Annual Market Statistics at 13).
At the same time, the Alberta Utilities Commission (AUC) acknowledges how energy storage could potentially disrupt the wholesale energy market (Distribution System Inquiry: Final Report, at para 225). Gird-scale energy storage may be able to mitigate the intermittency of wind and solar power. However, as Eeles et al note, it is uncertain where energy storage stands in Alberta’s utilities legal framework (David Eeles et al, “Energy Storage: The Regulatory Landscape in Alberta” (2021) [unpublished, archived at Norton Rose Fulbright Canada LLP]). This blog post summarizes the four main types of energy storage and discuss uncertainties around the definition and ownership rules of energy storage in Alberta and Texas. Both the Alberta and Texas electricity markets are energy-only markets as opposed to capacity markets. Electricity producers are solely paid base on how much electricity they generate. In capacity market jurisdictions, electricity producers have a second revenue stream based on how much of their production capacity is made available to the grid, regardless of whether the whole capacity is utilized or not.