New low-cost wind energy AB contracts reduce greenhouse gas emissions

The Canadian Wind Energy Association (CanWEA) commends the Alberta Electric System Operator (AESO) and the Government of Alberta for its continuing success in attracting some of the lowest prices ever seen for wind energy generation in Canada, as revealed just before Christmas with the announcement of contracts for Rounds Two and Three of the Alberta Renewable Electricity Program (REP). The AESO will secure power from five new wind energy projects representing 763 megawatts (MW) of capacity at an average weighted price of $39 per megawatt-hour.

Since REP was originally announced in 2016, the AESO has awarded contracts to projects that will nearly double Alberta’s installed wind energy capacity, positioning Alberta as the leading province for wind energy investment in the country today. These commitments will result in a 10 per cent increase to Canada’s installed wind energy capacity, which currently sits at just under 13,000 MW.

The companies behind the projects announced recently have each signed a 20-year Indexed Renewable Energy Credit (IREC) agreement with the AESO, providing predictable revenues while protecting Albertans against increases in the price of power. Under the IREC, when the market price is lower than the contracted price, the generator will be paid the difference; and when the market price is higher, generators will be required to pay back the difference to the government.

As mandated by the procurement process, all of the projects providing power through REP Round 2 (363 MW) meet the required minimum 25 per cent equity partnership with Indigenous communities. Such partnerships have also been seen in other jurisdictions across Canada and have proven to provide training opportunities, jobs, revenue sharing and other economic benefits to participating communities.

The projects announced are expected to be operational by mid-2021.

The wind energy industry looks forward to details about the schedule of future procurements for new renewable energy and will be active participants in the process.

“By attracting investment in the wind energy projects announced today, Alberta is diversifying its economy, driving economic growth and creating muchneeded jobs in multiple sectors such as engineering, construction and local services. Indigenous and rural communities around the province will benefit from the employment opportunities, and income streams associated with ownership, municipal taxation or lease payments for landowners. We are pleased that these competitive renewable electricity procurements are resulting in very low costs for the non-emitting electricity that Alberta needs,” said Robert Hornung, President, Canadian Wind Energy Association in a statement.

“The competitive nature of these procurement processes made it possible to secure low-cost power for the Alberta grid. That in turn provides an incredible opportunity for significant and sustainable greenhouse gas reductions in the electricity sector while also presenting Albertans, particularly Indigenous and rural communities, with new job and economic opportunities,” added Evan Wilson, Regional Director – Prairies, Canadian Wind Energy Assoc.

The Alberta government has committed to phasing out 6,300 MW of coal-fired electricity generation by 2030 and replacing two-thirds of it with renewable energy. The percentage of demand met by renewable sources is expected to triple from nine per cent today to as much as 30 per cent by 2030.

Alberta has taken strides in the development of its abundant wind energy resource. In December 2017, Alberta achieved record-low auction prices for wind energy in the first phase of its Renewable Electricity Program (REP). Today’s announcement reveals that these prices are here to stay. For more insights, read the CanWEA blog: Made-in-Alberta Procurement Process Harnessed Competitive Market Forces Getting Best Deal for Consumers.

The Alberta Wind Energy Supply Chain Study provides an analysis of the economic opportunities driven by Alberta’s Renewable Energy Program including; an estimated $3.6 billion in local spending on project development and construction; an estimated $137 million in annual operations and maintenance spending in Alberta; 28,100-person years of employment; and $25.5 million in annual property tax payments and $13.5 million in land lease payments to Alta. landowners annually.

Alberta has 1,483 MW of wind energy, the third largest installed capacity among Canadian provinces. Wind currently supplies about eight per cent of the province’s electricity demand, and Alberta’s target of 30 per cent renewable electricity by 2030 has made it the leading market for new wind energy development in Canada. A 2016 technical study prepared by GE Energy Consulting with the input of grid operators in Canada found Alberta’s electricity system can accommodate wind energy penetration equivalent to 50 per cent of electricity demand without compromising grid reliability. Read CanWEA’s blog: Wind Energy – A reliable part of the energy mix to learn more.