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Electricity - Where are Prices Going?
Ontario's Hourly Spot Price - Driven by weather, economic activity and generation available.
Electricity is priced each hour in Ontario based on supply and demand. The hourly demand is based on business and home use, driven by economic activity and weather. Supply is based on available generation, imports and mechanical breakdowns in the system.
Factors affecting prices
The result is that base load generation, which is on 24/7, is increasing while peaking capability is decreasing. It is likely that this will cause off peak prices to be lower, but peak prices to be more volatile.
We've seen gas prices a Dawn (Ontario's main gas trading hub) increase substantially during the winter of 2018/2019, this has pushed the wholesale electricty rates up about 30%. This is becuase gas is used to satify the demand for peak electricity generation.
Global Adjustment. The GA is forecasted to drop about 3.3 c to 7.05 cents/kWh for the next year. About half of this drop is due to the governments recently implemented Fair Hydro Plan. The rest is due to higher forecasted wholesale electricity rates driven by higher natural gas rates and lower financing costs of the old hydro assets. In general higher HOEP prices result in lower a GA's'.
If you're interested in talking to us about your electricity use, click here
If you're Interested in talking to us about your gas use, click here