Capture Price of Solar vs Wind in Alberta

November 8, 2013

Positive correlation between Alberta hourly pool prices and hourly solar generation results in solar capturing higher prices than an average power pool price. In fact, the power pool naturally observes higher power demands from businesses during a daytime. Also, air conditioning load increases during hot summer days. These are the hours when solar tends to generate most of the power.

Unlike solar, wind generation in Alberta currently has a negative correlation with hourly pool prices. The main reason is that wind constitutes 6% of the total installed capacity and most of wind capacity is concentrated in Southern Alberta. If it is windy in Southern Alberta, over 1,000MW of wind tend to supply the grid at the same time. With Alberta power prices determined by a supply-demand, that means lower capture prices for wind.

Based on our analysis, a solar power array installed at 45 degrees tilt without shading and facing South captured 174% of the average pool price in the last 12 months. In other words, for an average annual power price of $0.085/KWh, our solar generation captured $0.149/KWh on average.

The best wind farms in Alberta are reporting 73% capture factors in 2013. Each KWh produced by solar has now a higher value than an average power price and a higher value than a wind capture price.

Unfortunately, this higher value is currently not recognized for small scale solar micro-generators. As Alberta is slowly becoming the leader in renewable energy, it will be a matter of time when this value of solar will be acknowledged for all solar power producers. Larger commercial and industrial consumers who qualify for interval meters, are currently in more advantageous position as they can benefit both from the higher solar capture price and economy of scale on larger solar power installations.

The Alberta Electric System Operator (AESO) forecasts lower reserve margins in 2014 and 2016 onwards, which means higher volatility for power prices. For renewables in Alberta, that means that we shall expect lower wind capture factors and higher solar power capture factors in the future. However, if Alberta solar installed capacity rapidly increases from under 2MW today to over 1,000MW, as wind, capture price factors for solar will decrease.

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