NOTE: Any info about the power grid from here and older is out of date :). Lot’s has changed since this was written.
To illustrate how the price is determined, it is most simple to use a line graph of the cumulative sum of bids, and the price they are bid in at. This illustrates that in order for the price to go up alot, all the easy sources of power must be exhausted. Currently there are lots of low cost sources of power in Alberta.
To generate that I take the average bids of each generator, which is complicated because they sometimes change the from/to amounts location where the bid is placed. Ie. they will bid from 250MW to 300MW instead of 200MW to 300MW. Once I have that for a period of time such as 6 months, I export that, we will call that the merit order.
Then I take out all the units which are offline, or wind/hydro powered from that merit order (I account for those later). Then I take the current price and calculate where in the merit order that lands us (in terms of cumulative load). The difference between that load, and the current load in the province I call the balance, and I add that to all the cumulative loads on the merit order. This “balance” will account for generation that was not bid into the grid, and wind/hydro. That gives us roughly where we are in the merit order.
When looking at the load at which the power price really shoots up, bear in mind that the total Maximum Continuous rating of all the generators in the province is 16409MW.