Quote:
Originally Posted by Bring_Back_Shantz
2) Explain to me how the NDP proposing a change to the market, not actually changing the market, but proposing one, is the reason things have gone off the rails 4 years later?
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I did, but maybe we were taking past each other.
1) NDP changing regs/advancing coal retirements.
2) Changing market design. (I honestly believe the NDP weren't fully aware of the chaos this would cause.)
Number 2 necessitated a bunch of things PPA elimination being one of them. The uncertainty about the market design fundamentally changed the value/risk of the PPAs, triggering the out clause in the contracts.
The PPAs obligated the generators to produce. Price doesn't matter, just output. The penalties for not meeting the PPAs were so bad it affected how they were bidding into the merit order. Coal units (and cogen FWIW) are basically on or off. Max output or zero. Shifting to gas fired steam allowed for more output flexibility and fundamentally changed how they bid into the merit order. They are able to bid smaller blocks at different prices. This is economic withholding.
How this shows up 4 years later? If I had to point to only one reason, it would be that it took time for the generators to convert to gas and for enough of them to switch to gas to flip the market. That probably didn't really start to get wierd until late 2021 or early 2022.