Winds of change blowing into Alberta
Big winds of change will roar through Alberta in 2018.
They won’t be metaphorical winds either. They will be real winds from the Rockies spinning giant wind mills to generate electricity on a large scale.
This is a huge turn of events for a province that for decades has relied on fossil fuels to power its economy and keep the lights on — mostly coal and natural gas.
The province’s economy was so invested in fossil fuel production that to suggest that wind, solar, geothermal or hydro could be used to generate electricity instead of coal and natural gas was tantamount to treason.
But times have changed. And renewable energy developers are lining up to get in on Alberta’s electricity markets.
They are so eager to get in on the action that when the government agency that manages Alberta’s electrical grid put up for auction 400 megawatts of renewable power, bids by 12 companies totalled 10 times that much. In the end, 600 megawatts were given approval.
The bids also revealed keen competition when it comes to getting a foothold in Alberta’s renewable energy market. The successful bidders will be producing wind power at the lowest price in Canada — 3.7 cents per kilowatt hour — much lower than Ontario, lower even than natural gas-powered plants.
No wonder Premier Rachel Notley, Energy Minister Margaret McCuaig Boyd and Environment Minister Shannon Phillips could hardly contain their glee as they announced the auction results to the news media in mid-December.
“The naysayers predicted that the price of this renewable energy would probably come in high, about eight cents per kilowatt hour,” Notley said. “In fact, our process was so competitive and so many companies wanted to invest we got a 20-year price of 3.7 cents per kilowatt hour.” The winning bids came from Edmonton’s Capital Power, which was a big player during the coal era with a 201 MW project; Portugal-based EDP Renewables with a 248 MW project; and ENEL Green Power Canada, a division of a Rome-based global power company with projects of 115 MW and 31 MW.
The three companies will spend $1 billion on the projects, which will have the capacity to produce electricity for 255,000 homes.
And as a bonus to the government, if the pool price for electricity from all sources is higher than what the wind producers contracted for, the government gets the difference. However, if the pool price goes lower, government must subsidize the contract. The price is so low the odds are good that the government will not be on the hook.
The auction of renewable energy projects is part of the Notley government’s Climate Leadership Plan, which will see all coal-fuelled generating plants phased out by 2030. They now produce about half of the province’s electricity. They will be replaced by renewables (30 per cent) with natural gas powered plants picking up the rest.
Wind projects were the big winners in this auction — in total 5,000 MWs of renewable energy will be up for grabs. But solar is also gaining ground. Just two weeks ago, the largest solar project in Western Canada and the first utility- scale solar project launched just outside of Brooks, a ranching and oil well hub on the TransCanada Highway in the southeastern corner of the province.
The 50,000 solar panels cover 30 hectares and will collect enough sunlight to power 3,000 homes. More large-scale solar projects are expected to follow especially since sunny days in southern Alberta are plentiful.
But the recent focus on renewable energy projects distracts from the fact that by 2030, 70 per cent of Alberta’s electricity grid will be fuelled by natural gas. Natural gas is a fossil fuel that produces carbon emissions and who knows how stringent the world will become about those emissions as climate change progresses.
Given the interest in renewable energy and the developers wanting to get in on the game, maybe the Notley government should raise the share of renewable energy for the electrical grid to 50 per cent.
Especially if it means the price of powering all those light switches and refrigerators will come down.
Solar is also gaining ground. Just two weeks ago, the largest solar project in Western Canada launched