En­vi­ron­men­tal frame­work leaves room for re­new­ables

Whether the city chooses to go that route in next power ex­pan­sion still TBD

Medicine Hat News - - FRONT PAGE - COLLIN GAL­LANT cgal­[email protected]­hat­news.com Twit­ter: CollinGal­lant

A new en­vi­ron­men­tal frame­work be­ing drawn up by the City of Medicine Hat will set new stan­dards for mu­nic­i­pal op­er­a­tions but might also mean a greater mix of re­new­able power in the city’s power pro­duc­tion busi­ness.

But, as elected of­fi­cials and top ad­min­is­tra­tors stressed Mon­day night, it might not in­flu­ence how the city’s power unit plots its next ex­pan­sion.

“We will make the de­ci­sion on what is most cost-ef­fec­tive for new gen­er­a­tion go­ing for­ward,” said Mayor Ted Clugston fol­low­ing Mon­day’s meet­ing, re­fer­ring to how to con­trol cap­i­tal costs while still meet­ing peak power de­mand by cus­tomers.

“And that might be so­lar. If we need to shave our peak in the sum­mer, so­lar is most ef­fec­tive ... but there will be a full cost-anal­y­sis.”

The en­tire is­sue arose as coun­cil­lors de­bated a new round of re­bates in the HatS­mart pro­gram that aims to help util­ity cus­tomers re­duce en­ergy use and their bills.

Coun. Kris Sam­raj un­suc­cess­fully ar­gued that since goals in the 2008 Com­mu­nity En­vi­ron­men­tal Roadmap are no longer con­sid­ered at­tain­able, HatS­mart should be halted un­til a new frame­work is de­vel­oped later this year.

That plan could fo­cus on con­ser­va­tion ef­forts, but may also set new tar­gets for re­new­able en­ergy use just as the city’s power plant is ex­plor­ing best op­tions for fu­ture ex­pan­sion. It plans to spend $1 mil­lion in 2019 eval­u­at­ing op­tions and do­ing ini­tial de­sign work for adding new gen­er­a­tion af­ter the ca­pac­ity of the yearold Unit 16 gen­er­a­tor was locked up by huge in­dus­trial con­tracts this year.

Util­ity com­mis­sioner Cal Lenz told the News he wouldn’t prej­u­dice the process, but he favoured sta­ble cost and pro­duc­tion, though eco­nom­ics of sev­eral sce­nar­ios will be taken into ac­count. Such a rec­om­men­da­tion is ex­pected be­fore the en­vi­ron­men­tal plan is de­cided.

Util­i­ties com­mit­tee chair Phil Turn­bull said dur­ing the HatS­mart de­bate that a new frame­work will be key as the city’s power com­pany ad­justs to home-based so­lar sys­tems, also known as mi­cro­gen­er­a­tion, adding power to the lo­cal grid.

As well, the cap­i­tal costs of con­struct­ing large-scale wind and so­lar are drop­ping to the point where re­cent con­tract awards by the prov­ince are at­tached with kilo­watt sup­ply prices com­pa­ra­ble to nat­u­ral gas-fired plants.

“We want to make sure that any re­new­able re­source (large in­vest­ment) has to be fi­nan­cially re­spon­si­ble,” he said. “We don’t have the deep pock­ets to sub­si­dize it.”

“The pro­vin­cial gov­ern­ment does, but I must say they’re get­ting a pretty good price,” said Turn­bull.

“We want to look at it, where are we go­ing and what’s in the best in­ter­ests of the city.”

The city’s pre­vi­ous en­vi­ron­men­tal goals called for 25 per cent of Medicine Hat’s power to be sourced from re­new­able sources by 2025.

When a city com­mit­tee re­vis­ited the re­port in 2016, it found green en­ergy ac­counted for only 6.7 per cent. That, com­bined with other fail­ing re­sults in other ar­eas, led coun­cil to al­low that plan to ex­pire.

Most of that power comes from a sup­ply-pur­chase agree­ment the city signed with the three-tur­bine wind farm in the city’s north end. Orig­i­nally a city-led project that pro­posed nine tur­bines, it was handed to pri­vate de­vel­op­ment com­pany, WindRiver, which pays lease and taxes on the es­sen­tially bar­ren land in the far north­west of the city.

The im­pe­tus in 2012 for aban­don­ing the project was a po­ten­tial $24-mil­lion price tag.

Since then how­ever, the tech­nol­ogy in­volved and the costs have dropped sig­nif­i­cantly. Re­cent pro­vin­cial gov­ern­ment con­tracts place a break-even plus small re­turn power price of un­der 4 cents per kilo­watt hour, less than the grid mar­ket price on many days this year. The city’s con­tract price to Windriver was said at the time to be in the 10-cent range, and that has since been in­dexed to in­fla­tion.

At the time it was said for the city to meet the tar­get would re­quire nine ad­di­tional tur­bines or in­stal­la­tion of so­lar pan­els on 8,600 homes, equal to about onethird of the res­i­den­tial cus­tomer base.

Those es­ti­mates are also based on the city’s power de­mand in 2016. It has since risen dra­mat­i­cally with new in­dus­trial con­tracts for Hut 8 data pro­cess­ing and the com­ing Au­rora Cannabis pro­duc­tion fa­cil­ity.

The city’s gen­er­at­ing ca­pac­ity has in­creased by one-fifth with the new Unit 16 gas-fired com­plex.

When that $55 mil­lion was planned, of­fi­cials said the ob­vi­ous next step would in­volve adding a sec­ond LM-6000 gas gen­er­a­tor (Unit 17), then en­clos­ing both en­gines to re­cover heat in a com­bined cy­cle op­er­a­tion.

NEWS FILE PHOTO

In the shadow of wind tur­bines, mu­nic­i­pal of­fi­cials break ground at the site of the city's Unit 16 gas­fired power plant in this June 2016 file photo. One year af­ter the $55-mil­lion power plant was com­pleted the city is study­ing po­ten­tial ex­pan­sion op­tions that could in­clude re­new­ables, which are de­creas­ing in cost.

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