Developers of wind and solar projects in Alberta are now facing the ultimate market test, with the province’s new conservative government having pulled the plug on a key subsidy for the fledgling green power industry in Canada’s oil-and-gas center.
Alberta’s United Conservative Party halted a program in June developed by the previous liberal government under which the province inked 20-year agreements to buy power at set rates from new renewable energy projects.
In 2015, the province had released a climate change plan that called for it to phase out coal-fired power plants and to draw 30% of power from renewable energy sources by 2030.
But UCP also ended a subsidy program for homeowners using solar panels. While it won’t move forward with any new deals, the government did agree to honor the series of 20-year power contracts Alberta had already inked with renewable energy developers.
When complete, the projects will produce 1,300 MW of new renewable power, doubling the amount now produced by wind power, says Evan Wilson, regional director of the Canadian Wind Energy Association.
“I certainly do see a lot of interest and a lot of ambition for continued renewable energy development here in Alberta,” he says. Developers continue to push plans for ambitious new wind and solar energy projects, betting there will still be enough private market demand.
In a big step, the Alberta Utilities Commission on Aug. 26 approved a plan by Greengate Power Corp. to build Canada’s largest solar energy project and one of the world’s largest, says CEO Dan Balaban. The firm will start construction next year on the $375.2-million, 400-MW project in Vulcan County.
When it goes online in 2021, the Travers Solar farm’s 1.5 million panels will generate enough electricity to power 100,000 homes.
“Given the fact that renewables make sense on a subsidy-free market basis, I think Alberta is primed for some pretty massive renewables growth over the next decade,” Balaban told Greentech Media, adding that the developer will sell project power "on a merchant basis into Alberta’s deregulated market, the only one of its kind in Canada."
When completed, the project will be four times the size of the two largest Canadian solar projects to date, both of which are in Ontario.
“We anticipate that Travers Solar will bring significant investment, employment and clean renewable energy to Alberta while strengthening the province’s position as a global energy and environmental leader,” Balaban said in a statement.
Greengate did not announce the name of its contractor.
The privately-owned firm says it also is a major onshore wind power developer in Canada, with close to 600 MW of operating or near-operating wind projects in Alberta and Ontario. These includes the 300-MW Blackspring Ridge wind project in Alberta, currently the country's largest.
As many as 15 to 20 other developers have laid out proposals or are drawing up plans for renewable energy projects in the province, industry executives said. One area of hope is demand from big oil, gas and manufacturing companies, who, under current regulations, need to offset excessive carbon emissions by buying cleaner energy, says Benjamin Thibault of the Solar Energy Society of Alberta
While the conservative government is expected to make changes in some regulations that penalize firms when their carbon emissions exceed certain levels, renewable energy advocates do not expect a radical revamp.
Supporters say they are encouraged by the growing affordability of solar and wind power over the past two decades, which makes it more competitive with natural gas, says Duane Reid-Carlson, president of Calgary energy consultant EDC Associates Ltd.
The cost of producing solar energy was several times that of natural gas a decade ago. Now, it is almost comparable: $50 to $70 per MWh compared to $50 to $60 per MWh for natural gas. For wind, the cost is $30 to $50 per MWh.
A nationwide phaseout of coal-fired power plants will provide another boost, with more electric generating capacity needed in the years ahead. “So far [developers] have maintained their applications,” Thibault says. “There are a lot of megawatts on the list going through the regulatory process.”