Want to know how electricity gets from generation plants to your home or business? Learn about Alberta's electricity industry and understand your options for buying electricity from Regulated or Competitive Retailers.
How the Electricity Market Works
Supply and Demand
The hourly price of electricity in the wholesale market is determined by supply and demand, which is affected by:
- Seasonal maintenance: generating plants come offline for annual maintenance
- Unplanned outages/breakdowns: generating plants occasionally come offline for unplanned repairs
- Wind speed: higher wind speed powers wind turbines creating more energy
- Price of fuel (natural gas, coal and biomass): higher fuel costs are passed through in the market price
- New generation projects: new generating plants increase the supply in the market and lead to competitive prices
- Season/Temperature: demand is highest in the winter and summer, and lower in spring and fall
- Time of day: demand is highest around 5:00 - 7:00pm, and lowest overnight
- Provincial growth: demand generally grows with the economy
Learn about the electricity industry's four key sectors.
In Alberta, electricity is supplied by a variety of generators that are powered by coal, natural gas, wind, hydro, and biomass, and the supply is supplemented by imported power from British Columbia, Montana, United States, and Saskatchewan. Each generator sells the energy they produce into the wholesale electricity market and the wholesale price of electricity is set each hour. View details about the generation fleet, the supply and demand system, and the hourly wholesale price at the Alberta Electric System Operator (AESO).
In Alberta, transmission systems are owned and operated by shareholder or municipally owned companies such as: AltaLink, ATCO Electric Transmission, EPCOR Distribution and Transmission Inc. and ENMAX Power Corporation. The Alberta Utilities Commission regulates these companies' transmission costs.
Once generated, electricity travels across Alberta over high-voltage transmission lines to local substations. High voltage transmission lines generally have large steel frame towers and transmit energy at 138,000 to 500,000 volts. The voltage is reduced at the local substations to levels that make it suitable for distribution to commercial and residential areas. The AESO works with the province's transmission facility owners (TFOs) to monitor the system and ensure it is stable and reliable. The AESO also plans upgrades and enhancements to the province's transmission system.
From the local substations, electricity travels over the lower-voltage distribution lines at 25,000 volts or less to your home or business. Before entering your home or business, the voltage is reduced to 240/120 volts to make it safe for typical residential and commercial use.
Distribution facility owners, which include private companies, some municipalities and Rural Electrification Associations and Co-ops plan upgrades and enhancements to the electric distribution system. The Alberta Utilities Commission (AUC) reviews and approves all upgrades and enhancements to the Distribution system.
4) End User (Retail)
Regulated Retailers or Competitive Retailers set retail rates for residential, farm and small business consumers.
Learn more about how the UCA Regulatory Affairs team represents consumers.
What are my choices for buying electricity?
You have many options when buying electricity. These fall into two basic categories: Regulated Retailers or Competitive Retailers.
A brief introduction to the history of electricity and alternative energies in Alberta.
Source: YourAlberta YouTube Channel