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New energy costs have been lower than traditional energy - What does that mean for Canada?

NOTE: The original text of this article is in Chinese (Mandarin or
Cantonese) and translated into English. 

Not only has a long-awaited recovery in oil prices been slow to materialise, but two recent
announcements have raised big questions about the world's future demand for oil.

Oil demand is a problem


One is the rapid spread of electric cars, which the main car markets outside North America have
devised strategies to ditch the internal-combustion engine and embrace fully, even for
long-distance freight trucks.


The second is the falling cost of non-conventional power generation, which is now cheaper than
conventional power generation.

According to CBC's Pittis Don Pittis, Italian green energy company ENELGrenn Power offered 1.7
cents per kilowatt-hour when bidding for electricity on the Mexican grid in early November,
which it claims is the lowest price on earth for electricity generated by solar Power.



Green energy costs are lower

With such good prices, Mexico's government agency, which regulates wholesale electricity
prices, has naturally given power procurement contracts to ENEL, an Italian firm.


Experts believe the world's lowest electricity prices are headed for 1 cent per kilowatt-hour,
expected by 2019 or even earlier.

True enough: there are no lows, only lows.


What about alberta

But rather than cling to the tar sands, alberta's energy industry is aggressively developing
new energy sources.


Alberta Electric System Operator (AESO), the Canadian Operator of the Alberta power grid, will
publish a tender process for Alberta's electricity grid to receive 5 gigawatts of renewable
energy capacity from wind power by 2030. The price may be twice as high as Mexico's 1.7 cents
per kilowatt-hour (3.4 cents is about $5), but this open-market bidding model has proven
effective and competitive in other parts of the world, leading to falling wholesale prices.


It depends on market competition

Compared with the alberta, Ontario, Canada's largest province no wholesale market for bidding
price model, but the government for solar power generation from the start, set the purchase
price is $0.8 per kilowatt-hour of policy, then decreases, while the purchasing price but has
led to the back of the Ontario government heavy electricity, Ontario, also let consumers
complained bitterly for electricity is too high.


Compared with green power generation, traditional thermal power stations are losing their cost
advantages, hydropower stations are losing their advantages due to huge construction costs and
difficult environmental approval, and nuclear power stations are at a competitive disadvantage
due to huge construction costs and huge cleaning costs when nuclear power stations are
scrapped.


The trend is that as green energy becomes more widespread and costs significantly lower, the
grid's electricity procurement costs will gradually decline, which should help reduce
consumers' electricity bills.


However, consumers don't expect they will soon be able to see very cheap electricity bills,
because new regional power grid purchasing cheap green energy to electricity grid of existing
hydropower and thermal power electricity cost proportionally mixed calculating average
electricity wholesale cost, plus the average degree of electricity transmission and
distribution costs, is the consumers to pay the electricity bills.