Kineticor understands the significance of the changing energy landscape across North America. Efficiency and optimization of resources is critical to reduce operating costs and compliance liabilities.
Regulatory and market landscapes are changing. With emerging climate change policy, market restructuring, and rising electricity rates, the way we create and utilize energy is shifting. Companies, system operators, and governments are focused on clean energy generation, with the aim to reduce emissions and costs from the value chain.
Reducing emissions is seen as a priority in many jurisdictions, resulting in the introduction of carbon taxes or cap and trade programs, as well as legislation to limit emissions from industrial operations. These changes result in a cost of compliance that can alter the economics of a project, creating either liabilities or opportunities for consumers.
Unregulated electricity markets are transitioning to regulated structures to support policy direction, accommodate renewable energy targets and ensure reliable capacity for future demand. Significant changes to market structures result in noteworthy consequences on margins, future generation resource development, total delivered energy prices, and emissions.
Investment in electricity generation and transmission infrastructure along with energy conservation programs are increasing the delivered price of power in jurisdictions across North America. Utility costs typically account for a significant portion of a company’s operating expenditures; therefore, these rate increases will have a considerable impact on individual projects and companies overall.
Under Alberta’s Climate Leadership Plan, all coal-fired generation will be phased out by 2030 and 30% of the province’s electricity will come from renewable sources. A capacity market has been introduced, with procurement expected to begin in 2019. The transition to a capacity market amid changes to Alberta’s generation sources has introduced complexity and uncertainty in future power prices.
In Ontario, one of the main challenges of the province’s power system is ensuring reliable delivery of electricity to users. Unplanned power interruptions are prevalent in several areas of the province resulting in disruptions to operations at many industrial facilities.
The Ontario government’s strategy to address reliability issues is focused on conservation potential, essentially reducing power demand versus investing in generation and transmission capacity. This strategy can be seen through the province’s Global Adjustment rate, a charge administered for energy used during peak hours that contributes up to 46% of the industrial customer rate.
Investment in on-site gas to power generation, a form of decentralized energy, is increasing across North America as a means to avoid these uncertain utility and increasing compliance costs. More facilities are relying on on-site generation to meet facility power and heat needs. By controlling your own generation of heat and power, companies can reduce their energy costs by avoiding transmission fees or peak demand charges, reduce unplanned power interruptions, ensure stable operating costs, and minimize the emissions intensity of their facilities.
Kineticor understands the significance of the changing energy landscape across North America. Efficiency and optimization of resources is critical to reduce operating costs and compliance liabilities. Whether through behind-the-meter generation or more efficient heat and power production, Kineticor develops customized and reliable solutions to allow companies to remain competitive in this new landscape.