With respect to peak prices, the removal of coal generation and increases in renewable energy and natural gas generation have made the hourly price much more volatile and sensitive to subtle demand changes due to intra-day ramping, weather conditions and seasonal changes. Early 2014 saw severe weather conditions drive up natural gas prices. By contrast, summer and fall 2014 market prices were lower than expected due to mild weather. Since renewable energy supplies tend not to function at full capacity during peak hours, this means more reliance on natural gas generation, thereby increasing power prices. The gap between peak and off-peak prices widens as a result.
In the LTEP forecast, the annual average market price is expected to remain in the range of $20-$30 between 2015-2019 due to flat demand and forecast abundant base load and renewable energy supplies. The price is expected to rise in 2021 when the Pickering nuclear plant goes offline, but to flatten out again in the later years of the forecast period.