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The Road to Renewable Energy in Alberta, Canada

It is well known in clean energy circles that Alberta, aside from the oil sands, has some of the best solar resources in North America. It also generates more emissions from coal-fired power plants than the rest of Canada combined, which amounts to about 51 percent of the country's power generation-based emissions. The road to bring more solar and renewable power online in the oil and gas province has proven to be a challenging one, given its lack of market incentives or favorable policies.

Shifting Landscape

Despite challenges, new installations for solar PV are roughly doubling each year. Gordon Howell of Howell-Mayhew Engineering estimates a 400 percent growth in the past five years.  Skyfire Energy, a 12-year-old company serving Alberta, British Columbia and Ontario says it has grown its workforce from three to fourteen in the past five years, along with revenues.

Overall, the level of solar in the wind-dominated Alberta renewable energy industry is a tiny fraction of what is possible, given its robust level of sun-hours per year (concentrated in the province’s southern region). But there are many examples of the changing energy landscape for solar and renewable power in Alberta. 

Its first-ever utility-scale PV plant is approaching construction in Brooks.  GTE Solar, a subsidiary of GTE Power, is developing the 15-megawatt project.  The Environment Canada building in Edmonton is finalizing its 300-kW PV system, one of the largest building-mounted systems in Western Canada. The 5-megawatt Lethbridge Biogas Cogeneration Facility has just completed construction and commenced operation.  A similar facility is planned for Lacombe, using abundant cattle industry feedstocks (Alberta is home to over 2 million cows).  And SAEWA (Southern Alberta Energy-from-Waste) coalition, now comprised of about 70 towns and counties, is moving forward on detailed engineering studies for a major facility in their region.

Market Challenges

Alberta's deregulated market has thus far not allowed for many targeted policies to support homeowners or businesses seeking to go solar, such as feed-in tariffs.  However, one opportunity did exist in micro-generation legislation (slated for renewal in 2014), which allows electricity retailers to offer a premium net-metering rate to "micro-generators" that generate their own solar or wind-driven electricity.  Established by SPARK, a cooperative based in Calgary, a growing group of retailers joined an independent market initiative called Light Up Alberta, offering micro-generators 0.15 CAD per kilowatt-hour. The initiative began in the fall of 2012, but was quashed by a regulatory change that closed the loophole in the summer of 2013. 

The provincial energy market heavyweight, Enmax Power, supported changes to the policy. This change removed language that provided for flexibility in pricing between retailers and customer-based solar power generation.  It also therefore released the provincial energy regulator from having to compensate its retailers at the higher rate. 

Enmax Power did not respond to requests for comment at the time of this writing. Recently, Enmax launched a home solar leasing program, GenerateChoice, which in the medium-term would have potentially benefited from the Light Up Alberta effort.

The crux of the challenge often cited by renewable energy developers is Alberta's open, deregulated market, relying on hourly pool pricing, which leaves clean power investments at a competitive disadvantage to conventional natural gas and thermal plants.  Due in part to increasing pressure to build the province's "social license" to market its oil sands bitumen, politicians and business leaders are now frequently discussing specific ways to enact support for more renewable energy generation; a rising carbon price under the Specified Gas Emitters Regulation (currently at $15 per ton), and a structure for longer-term pricing signals for cleaner power sources.

The Pembina Institute, an Alberta-based climate change and renewable energy think-tank, is the leading champion behind the push for a "Clean Electricity Standard", a made-in-Alberta market mechanism that would encourage a favorable free-market environment for lower emission energy sources going forward. Finally, KPMG recently released a report this year concerning market outlooks for wind power across Canada, and cited Alberta as a strong contender for investment, due in part to the scheduled closure of approximately 2,500 megawatts of coal-fired power plants over the coming two decades.

The next twelve months in Alberta will be very important for industry watchers and participants, as policy changes, investor attitudes, the dynamics of the underlying oil and gas industry and finally, climate change drivers, continue to evolve and shape the situation.  Actual climate change, not just the green image aspect, is potentially significant; the summer of 2013 witnessed record-smashing damage from floods across southern Alberta, and according to the Canadian insurance bureau, about half of damages related to extreme weather events in Canada occurs in Alberta.

Lead image: Alberta, Canada via Shutterstock

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