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A record amount of new natural gas-fired power is set to come online in Alberta next year, providing relief for consumers but making the province’s electricity grid even more reliant on unabated fossil fuels.

More than 2,700 megawatts of new gas generation will fire up in 2024, according to most recent long-term adequacy report by the Alberta Electricity System Operator (AESO), which manages and operates the provincial power grid. The increase amounts to just over a quarter of Alberta’s current generating power being added to the grid in a single year.

The bulk of the new electricity coming online is from three projects: The 900-megawatt Cascade plant in Edson, about 200 kilometres west of Edmonton; an 800-MW cogeneration project at Suncor Energy’s oil sands Base Plant; and the repowering of Genesee 1 and 2, a coal-to-gas conversion plant southwest of Edmonton, bringing just over 930 MW to the grid.

It’s the largest addition of natural gas-fired power to the province’s grid in a single year, according to the AESO. And it is set to help Alberta consumers who have faced crippling increases in their power bills over the past two years, said Blake Shaffer, an associate professor at the University of Calgary’s Department of Economics and School of Public Policy.

Dr. Shaffer, a former energy trader with TransAlta Corp., said in an interview that prices will likely drop substantially come March, when Cascade and Genesee come online. Retail prices have recently hit $0.32 per kilowatt hour in Alberta, but he said the additions will see that plunge to around $0.10/kwh, or even into single digits.

Lower prices will also be bolstered by the fact that much of the new supply won’t be owned by Alberta’s three big electricity generators, which tend to exercise their market power and increase prices because they have more dominant positions, Prof. Shaffer said.

“It’s going to be owned by others who don’t have that same incentive, because this is kind of all they have,” he said.

Premier Danielle Smith has repeatedly lamented a lack of natural gas-fired power in the queue for Alberta’s grid, largely blaming Ottawa’s draft clean electricity regulations for creating an uncertain investment climate. She has said that achieving net-zero grid by 2035 per the regulations could lead to blackouts because her province wouldn’t have a reliable source of baseload power, such as natural gas.

But the coming influx of natural gas-fired power shows those warnings are “completely overblown,” said Simon Dyer, deputy executive director of the Pembina Institute, a think tank.

“There’s enough existing and developing capacity for Alberta to fully meet its needs out to 2035,” he said in an interview.

Even so, Mr. Dyer said the province needs to decarbonize its electricity grid as quickly as possible, using more renewables and natural gas plants with integrated carbon capture technology.

“There is a risk that by locking in to what is polluting, unabated gas, Alberta’s ratepayers are going to be left with costly stranded assets in the future.”

Alberta, like most jurisdictions, is set to see an increase in power demand, as industry and transport turn to electrification to reduce emissions. The AESO’s 2024 long-term outlook update, issued last month, forecasts that energy consumption will increase by about 28 per cent in 2043, compared with 2022. Alberta’s extreme temperatures mean that peak demand will likely be in winter, with expected demand around 32 per cent higher in 2043 than in 2022.

But Prof. Shaffer said that the oversupply about to hit Alberta means it’s simply not economically viable for companies to invest in large gas plants.

“If you’re a commercial operator, it doesn’t make any sense to bring more gas online after these large plants come on because prices are expected to be very low for the next several years,” he said.

“It will take a while before we actually need more gas plants online.”

Utilities and Affordability Minister Nathan Neudorf said in an e-mailed statement that the new natural gas generation in 2024 “marks an important milestone” by bringing dispatchable power back to 2015 levels. And that, he said, is critical to keeping Alberta’s lights on.

The province is undergoing a market design review, including how older, less-efficient generation can be replaced by new lower-emission technologies that keep pace with growing demand. Mr. Neudorf said a robust market will ensure “the most reliable and affordable electricity for all Albertans.”

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