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System Marginal Price electricity, explained

System Marginal Price

In the context of the electricity market in Alberta, Canada, the System Marginal Price (SMP) represents the price at which the last unit of electricity supply is dispatched to meet the demand on the grid. It is the price that all electricity market participants receive for their generation or supply of electricity.

The SMP in Alberta is determined through a competitive wholesale electricity market called the Alberta Electric System Operator (AESO) Market. The AESO operates a real-time market where electricity supply and demand are balanced every five minutes. The SMP is set at the bid price of the marginal (or last) unit of electricity dispatched to meet the demand.

The SMP is a crucial price signal in the market, as it reflects the short-term supply and demand dynamics at any given moment. It helps determine revenues for electricity generators and market participants and can influence investment decisions in the sector. The SMP can fluctuate based on factors such as fuel prices, availability of generation resources, transmission constraints, and overall electricity demand.

Where can I find the System Marginal Price?

To obtain the most up-to-date System Marginal Price (SMP) in Alberta, you can visit the website of the Alberta Electric System Operator (AESO), the organization responsible for managing the province’s electricity system. The AESO provides real-time and historical market data, including the SMP.

Here’s how you can find the SMP on the AESO website:

  1. Visit the AESO website at
  2. Navigate to the “Market & System Data” section, which is typically located in the main menu or the homepage.
  3. Look for options such as “Market Prices,” “Real-Time Market,” or “Market Data.”
  4. Click on the relevant option to access the market data section.
  5. Within the market data section, you should find information on current and historical market prices, including the SMP.
  6. Look for specific data related to the SMP, which may be presented in the form of tables, graphs, or downloadable files.
  7. Depending on the website’s layout, you may be able to filter the data by date, time, or other parameters to access the SMP for a specific period.

Please note that the AESO website may have updated its design or navigation since my last knowledge update in September 2021. Therefore, the exact steps and location of the SMP information may have changed slightly.

How is power regulated in Alberta?

In Alberta, the regulation of power and the electricity industry is overseen by several entities and governed by various laws and regulations. Here’s an overview of how power is regulated in Alberta:

  1. Alberta Utilities Commission (AUC): The AUC is an independent, quasi-judicial regulatory body responsible for ensuring that the delivery of electricity and natural gas in Alberta is fair, reliable, and in the public interest. The AUC grants and regulates licenses for power generation, transmission, and distribution, and approves utility rates and tariffs.
  2. Alberta Energy Regulator (AER): The AER is responsible for regulating the development of energy resources, including oil, gas, and coal, in Alberta. While the AER does not directly regulate the power sector, its oversight of resource development plays a role in ensuring a stable supply of fuel for power generation.
  3. Market Surveillance Administrator (MSA): The MSA is an independent agency responsible for monitoring and ensuring fair competition within Alberta’s wholesale electricity market. It oversees compliance with market rules, investigates potential market misconduct, and promotes market transparency and efficiency.
  4. Alberta Electric System Operator (AESO): The AESO is the independent system operator for the province’s electricity system. It is responsible for the reliable operation of the grid, managing electricity supply and demand balance, facilitating the wholesale electricity market, and planning the future development of the transmission system.
  5. Government of Alberta: The provincial government sets policies, establishes regulations, and enacts legislation related to the energy sector, including electricity. It provides oversight and direction to the regulatory bodies mentioned above and has the authority to make changes to the regulatory framework as needed.

The regulation of power in Alberta is based on a competitive market framework, known as the “Alberta Electric System Operator (AESO) Market.” This market facilitates the trading of electricity among market participants, with prices determined through supply and demand dynamics. The regulatory bodies mentioned above play essential roles in ensuring fair competition, reliability, and the public interest in the electricity sector.

It’s important to note that regulations, laws, and entities involved in power regulation can evolve over time, so it’s recommended to refer to the websites and official sources of these organizations for the most up-to-date and detailed information on power regulation in Alberta.

Where does Alberta get its power from?

Alberta obtains its power from a mix of energy sources, including the following:

  1. Natural Gas: Natural gas is a significant source of power generation in Alberta. The province has abundant natural gas reserves, and gas-fired power plants play a crucial role in meeting electricity demand.
  2. Coal: Historically, coal has been a significant contributor to Alberta’s power generation. However, the province has been transitioning away from coal-fired power plants due to environmental concerns, and many coal plants are being phased out or converted to alternative fuel sources.
  3. Renewable Energy: Alberta has been actively expanding its renewable energy capacity in recent years. Wind energy is a prominent renewable source, with several wind farms operating across the province. Solar power is also gaining traction, although it currently represents a smaller share of Alberta’s power mix.
  4. Hydroelectric Power: While hydroelectric power does not contribute significantly to Alberta’s own generation, the province imports hydroelectric power from neighboring provinces, such as British Columbia and Manitoba, through power purchase agreements.
  5. Other Sources: Alberta also utilizes small-scale biomass, landfill gas, and geothermal energy to a limited extent for power generation.

It’s worth noting that the specific energy mix in Alberta can vary over time due to factors such as market conditions, government policies, technological advancements, and environmental considerations. The provincial government has set targets to increase the proportion of renewable energy and reduce greenhouse gas emissions in the power sector, which may further impact the energy sources used for electricity generation in the future.



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