Alberta to double solar power capacity with 20-year deal

Calgary The Alberta government has awarded one of the world’s largest solar companies a 20-year deal to provide electricity to government facilities, a move that will double existing solar-power capacity in the province.

The contract will go to Ontario-based Canadian Solar Solutions Inc., which has over 12,000 employees worldwide and revenues of $3.4 billion in 2017. It will replace expiring wind-power contracts to supply approximately 55 per cent of the government’s annual electricity needs. At an average price of 4.8 cents per kilowatt hour, the new contract will save the Alberta government $3.9 million per year compared to the expiring contracts and represents the most cost-effective government procurement of solar power in Canadian history, said Environment Minister Shannon Phillips on Friday.

“This was a process where we went out and said to the market, ‘What can you bring us?’ And the market returned with something historic,” Phillips said. “I believe that this is only the beginning for large-scale solar electricity production here in Alberta.”

To deliver on the procurement, Canadian Solar Solutions — along with Conklin Métis Local 193, which has a 50 per cent equity stake in the project — will build three new solar farms (a capital investment of approximately $100 million) near the communities of Hays, Tilley and Jenner in southeast Alberta. The facilities — which will have a combined capacity of approximately 100MW, about what it would take to power 20,000 homes — will double the province’s existing solar capacity.

The facilities are expected to begin construction in the spring of 2020 and come online in 2021. Canadian Solar Solutions director of business development Ryan Tourigny said 270 jobs will be created in southeast Alberta during the construction phase.

The Alberta government has been using 100 per cent renewable electricity to power its facilities since 2009 although, until now, all of that power has been generated by wind.

In 2016, the NDP government — which has set the goal of having renewable power make up 30 per cent of electricity generation in Alberta by 2030 — issued a request for information to see if solar companies could replace some of the soon-to-expire wind contracts.

Phillips said while the government was interested in boosting the profile of the solar industry in Alberta, it wanted to do it without the use of subsidies or carbon tax revenue.

“I said directly to them, if it turns out that you guys can’t compete, and it’s too expensive, we won’t do it,” Phillips said. “Well, it turns out they can compete and it’s not more expensive.”

The record-low average price that Canadian Solar Solutions will provide under the terms of the contract means that wind and solar are now the two lowest-cost sources of electricity in the province, said John Gorman, president and CEO of the Canadian Solar Industries Association.

While wind is still the cheapest source of renewable energy, he said, solar has an advantage in that it feeds into the power pool during daylight hours when prices are the highest.

“So the impact of low-cost solar coming in during these heavy use times is to help bring down the cost of electricity for Albertans,” Gorman said.

He added that since 2007, the global cost of solar panels has come down more than 90 per cent — meaning the price of equipment is no longer a barrier for solar electricity.

“What it comes down to is how good a province is, how good a region is, at running a competitive procurement and how good they are at managing the soft costs and making it easier for the developers to bring the resource online,” Gorman said.