Alberta, Canada’s oil and gas heartland, is on the cusp of getting 30 per cent of its total annual electricity from wind and solar power plants. But if the wind doesn’t always blow and the sun doesn’t always shine, can Canada’s fossil-fuel dependent grids integrate variable renewable generation? Yes, by using the existing natural gas generation that can balance variable generation in the interim on a path to deeper decarbonization.
To keep the necessary capacity online now and into the future, professors Blake Shaffer and Frank Wolak propose a change to the current market design that adds mandated levels of forward contracting. This differs from a capacity market, and would not restrict this capacity to gas only—any firm dispatch such as geothermal and energy storage can compete.