Wind turbines at the Canadian Hydro wind farm east of Crowsnest Pass.
The UCP government has made good on its campaign promise to kill Alberta’s Renewable Electricity Plan, but local companies remain optimistic the province will remain an attractive place for wind and solar development.
The government informed the Alberta Electric System Operator — which manages and operates the provincial power grid — on June 10 that it will not continue with the Renewable Electricity Plan, implemented by the previous NDP government to help meet its goal of achieving 30 per cent renewable electricity by 2030. The province held three competitive auctions through the REP program, securing 1,360 MW of renewable capacity at record low prices.
Details of a fourth auction were originally expected to be released in mid-2019. But under Premier Jason Kenney, who campaigned against “subsidies” for renewable power, that auction will no longer happen. (The REP program as designed by the NDP included a guarantee that if electricity prices fall below the company’s contracted price, the government would backstop the difference.)
Samantha Peck, spokeswoman for Energy Minister Sonya Savage, said the UCP will respect the existing contracts reached as a result of the first three rounds of the REP program. But she said that in the future, Alberta will welcome “market-driven” renewables that can compete with other forms of power production.
The REP program was responsible for “really quick, unprecedented growth” in Alberta’s renewable energy sector, said Evan Wilson, regional director for the Canadian Wind Energy Association. He said while it’s unlikely that pace will continue without the program, growth is definitely not about to grind to a halt.
“Alberta remains the jurisdiction where we continue to see the most interest from our membership,” Wilson said. “We remain pretty confident we will continue to see interest and development moving forward.”
A NextEra Energy turbine at the company’s Jericho wind project in Lambton County.
Part of the reason for that is that the record low prices delivered by the REP auctions demonstrated to investors the feasibility of wind power development in Alberta, said Grant Arnold, CEO of Calgary-based BluEarth Renewables.
“There is a long-standing legacy from that program, and that is that it fundamentally showed to a lot of Albertans that wind power is a very low cost of energy,” Arnold said. “Wind power is cheaper than other sources of generation, and that’s a fundamental tenet that is very important today.”
Dan Balaban, CEO of Calgary-based Greengate Power, the beneficiary of an REP contract for its Stirling Wind Farm project near Lethbridge, set to begin construction soon, said the NDP’s program “changed the narrative” around wind power in Alberta and provided predictability around the pace at which renewables would come onto the grid. But he said the UCP’s market-based approach can work, too.
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“Renewable technology has continued to improve, costs have continued to come down and now renewables make sense on a market, subsidy-free basis,” Balaban said.
The industry is hopeful that the UCP’s proposed Technology Innovation and Emissions Reduction (TIER) program will offer opportunities for renewable power companies by allowing them to sell carbon credits to heavy emitters, Wilson said. He added the industry is also looking for investment and regulatory certainty when it comes to the future of the power market in Alberta. While the NDP had planned a shift in 2021 to an electricity capacity market — through which generators will no longer solely be paid for the power they produce and sell, but also for the electricity capacity they have available to the grid on demand — the UCP is currently conducting a 90-day review into whether that move should go ahead, or whether the province should stick with an energy-only system.
“The current energy-only market structure provides higher revenues for wind facilities, so we have actually been participating quite actively in the review,” Wilson said. “The combination of an energy-only market with carbon crediting is going to be essential for us. There are different factors that are going to determine how quickly wind comes online, but there is certainly a path forward for the industry here still.”