THE WIND’S IN THEIR SAILS
NDP plan excites industry
Wind power companies eager to participate in the province’s first auction for renewable power contracts say Alberta is about to become the most attractive jurisdiction in the country for renewable energy investment.
Environment Minister Shannon Phillips’ announcement that the provincial government will launch a competitive bid process in early 2017 to add 400 MW of new renewable power capacity in Alberta was met with a standing ovation at the Canadian Wind Energy Association conference in Calgary on Thursday.
Industry representatives said the move is exactly what is needed to kick-start a new wave of wind power development in the province.
“This has been a long time coming — it’s really what we’ve been hoping for as an industry,” said Dan Balaban, president and CEO of Calgary-based Greengate Power Corporation, the developer behind Alberta’s two largest existing wind farms. “My company’s excited about competing with others to fill this demand, and I’m confident that as a result of this structure that was announced today, we’ll see some of the lowest cost renewables we’ve ever seen in this country.”
Alberta currently has 1,500 MW of installed wind power capacity, with proposed projects totalling 7,000 MW already in the queue. But wind power projects have high upfront capital costs and electricity prices are currently low, meaning developers have been hesitant to move ahead with projects without further details around how renewable energy fits into the government’s sweeping climate leadership plan. They got that answer Thursday. The bid process launching in 2017 — the first of what is expected to be several competitive auctions as the province seeks to add a total of 5,000 MW of renewable electricity capacity by 2030 — aims to make renewable energy cost-competitive with other sources of power by reinvesting a portion of revenues from the existing carbon levy on large industrial emitters into the successful bidders’ projects.
This “renewable energy credit” mechanism will pay the difference between the bidders’ cost of production and the pool price for electricity.
“It was concluded that this would provide the most predictability for the province, and the lowest cost of procurement,” Phillips said, adding the first competition will be awarded solely on the basis of who can offer the lowest price.
Alberta was the birthplace of Canada’s wind energy industry, and a decade ago led the country in installed capacity, said Canadian Wind Energy Association president Robert Hornung. But since then, the industry’s growth in Alberta has been outpaced by Ontario and Quebec — both of which have offered subsidies for renewable power development — and Alberta has dropped to third place.
Hornung said wind-energy investors from across the country and around the world have been eyeing Alberta with interest ever since the provincial government announced its climate leadership plan. Now that a procurement framework for renewables has been made public, he said, the competitive process will likely be “over-subscribed.”
“Today’s announcement does provide more certainty for investors, which should mean lower costs to access financing for projects, which will mean lower-cost projects,” Hornung said.
“It clearly does make Alberta the leading jurisdiction for new wind energy investment in Canada.”
Kelly Matheson-King, chief operating officer with Calgary-based BluEarth Renewables, said her company plans to participate in the competitive process. Its proposed 75 MW Hand Hills project near Delia, Alta., has already been approved by the Alberta Utilities Commission and could be a good fit for the auction.
“It’s been a long time coming to hear this kind of leadership from the Alberta government,” Matheson-King said. “They’ve really listened to stakeholders, and from what I’ve heard today, proposed a solution that is tailored to the Alberta market and has all the right pieces to provide a competitive procurement process that will drive costs down for the ratepayers.”
Trevor Martens, vice-president of Airdrie-based Evolve Surface Strategies Inc., a land acquisition company that helps wind power companies acquire options from landowners for turbine placement, said Thursday’s announcement will eliminate some of the “on again, off again” uncertainty that has plagued a number of proposed wind projects across the province.
It clearly does make Alberta the leading jurisdiction for new wind energy investment in Canad.