| ||What Is the Power Pool of Alberta?
All electric energy bought and sold in Alberta must be exchanged through the Power Pool of Alberta. The Power Pool does not buy or sell electric energy. It is an independent, central, open-access pool that functions as a spot market, matching demand with the lowest supply to establish an hourly pool price. An independent Transmission Administrator ensure that access to the Power Pool of Alberta is provided in a fair, open, transparent and non-discriminatory manner and that the transmission system is reliable.
Who Is Involved?
|Power Purchase Arrangement (PPA)||The PPA is very similar to a contract. The contract is a long-term arrangement (maximum 20 years) between the regulated generating unit and the buyer. The PPAs were developed to allow the owner of generated units to recover investments made in a regulated environment. The concept is to have more players to increase competition within the electrical industry, producing the best electricity price for the consumer.|
|Balancing Pool||The Balancing Pool is a financial account created by the Electric Utilities Act and managed by the Balancing Pool Administrator. The Balancing Pool was established to collect the proceeds from the PPAs auction. They are responsible for managing the financial flows into and out of the account for the benefit of consumers.|
|Pool Participant||In order to sell or buy power through the Power Pool, a customer must become a Power Pool Participant. To become a Pool Participant they must sign an agreement to abide by the Pool Rules and the Pool Codes, meet the Power Pool’s prudential, technical control, and communication requirements, pay an annual Participant fee of $150 plus GST, and arrange transmission or distribution access.|
|System Controller||The System Controller keeps supply and demand in balance by giving instructions to the power suppliers and purchases about the amount of energy to be supplied to or taken out of the system.|
How Does the Power Pool Work?
The Power Pool works by having all generators and importers submit their offer/bids, by 10:00 am, to supply energy through the Pool, for each one-hour periods for the next seven days. Offers are structured in incremental MWh/hour volume blocks, with each increment being offered at the same or higher price than the previous block. Offer prices are fixed for the next day and not subject to revision. All other offer prices for the next six days can be revised as necessary. This is the same for bids.
The System Controller develops a merit order of the offers and bids. Scheduling is a day-ahead operation. The merit order also takes into consideration factors such as constraints and unit operating constraints. The System Controller dispatches the required generation and import offers to service the actual system demand and exports. This is a real time operation.
How Is the Price Determined?
The Pool Price is determined by taking the time weighted average of the system marginal price over 60 minutes. All power producers receive the hourly Pool Price for power generated and all purchasers pay the Pool Price for power received.
|Bid||Remove (buy) energy from the Power Pool This includes distributors, exporters, retailers, self-retailers, and direct access customers.|
|Offer||Supply (sell) energy to the Power Pool This includes Power Purchase Arrangement buyers, generators, and importers.|
|Merit Order||Is an hourly operation schedule for meeting the forecast pool demand by ranking offers and bids from the least expensive to the most expensive. The scheduling is done a day ahead.|
|System Marginal Price||The system marginal price is the up-to-date change in demand and price of energy during each hour.|
For more information
Agricultural Technologies Section
Agriculture and Rural Development
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