How Alberta’s Clean Energy Transition May Actually Benefit Big Coal and Oil Players Over Small Renewables

Alberta’s plan for the replacement of coal energy with natural gas and renewables was announced in 2015, but still questions as to who will provide the new power remain unanswered.

Walter Hossli, who has been working with solar panel manufacturers, potential investors, and green energy groups to promote community energy projects, says they want the government to move much more quickly on that sector than it has.

“Everyone is sitting on their hands not knowing what the rules will be…maybe the government just doesn’t know what it’s doing on this file,” said Hossli. “There’s this go big or go home mentality because the system has been geared to larger scale electricity producers.”

The phase-out of coal-generated electricity by 2030 is a main pillar of the Alberta government’s Climate Leadership Action Plan. If the government operates according to plan, in 13 years natural gas will account for 70 per cent of the province’s electricity, while generation by renewables — mostly wind and solar — will have increased significantly to make up the remaining 30 per cent.

Currently, coal accounts for 50 per cent of electricity generation, the highest of any province.

Overabundance of Interest from Renewable Producers

A government request for proposals for renewable projects aroused a lot of interest; a total of 400 megawatts of electrical power were on the table for this round of contracts. Bids amounting to ten times that much were received.

Four hundred megawatts is only about 1.5 per cent of total electricity generation in Alberta, so many more renewable projects will have to be integrated into the system if the government’s goal is to be reached.

But there are still lots of questions about the NDP government’s policies designed to achieve that goal: Will the renewable sector be turned over to the corporations that dominated the coal era? Or will they lose out to international players?

Will there be room for smaller scale community renewable energy that gives people more control of their electricity usage and costs?

Those are some of the key issues arising as the government is set to announce in December the first batch of successful bidders for renewable energy projects.

“There’s this go big or go home mentality because the system has been geared to larger scale electricity producers.” https://t.co/2A5nGVJC7Q

— DeSmog Canada (@DeSmogCanada) December 4, 2017

Patchwork of Electrical Companies

To fully understand the switch that the government is attempting, it is important to remember that unlike other provinces, Alberta’s power generation and transmission is not owned and managed by a crown corporation.

Instead, mostly private, for-profit companies provide electricity to Albertans. Government appointed agencies oversee their operations and ensure generating plants and transmission lines keep up with demand for electricity.

The main agency is the Alberta Electric System Operator (AESO) which now manages the bidding process for renewable projects.

According to spokesperson Erin Powell, the system operator will rank the proposals and then turn the list over to Alberta’s minister of energy who will make the final decisions next month.

The agency wouldn’t disclose what companies entered the bidding competition. But there’s no question that big players from the coal era that now have to transition to natural gas and renewables — notably TransAlta and ATCO — are among the bidders.

Suncor, the biggest oilsands producer, is also investing in wind projects. Municipally-owned power companies such as Calgary’s Enmax are developing wind and solar projects along with their natural gas powered generating stations.

“Incumbents definitely have an advantage,” said Binnu Jeyakumar, electricity program director at the Pembina Institute.

“They are familiar with the system in place and know the province. But there are also lots of international companies that have a great deal of expertise with renewables.”

Wind projects will likely be awarded the lion’s share, said Jeyakumar.

“Wind is by far the cheapest renewable in Canada, only natural gas is cheaper right now but we don’t know what will happen with the price of natural gas in the future. It could go up,” she added. “Proponents of solar projects may get a share but wind will dominate.”

And there’s plenty of wind in southern Alberta which is already home to a few wind farms.

One of the key factors Jeyakumar says Pembina will be watching is how winning bidders plan to engage communities that will be affected by wind farms.

“They will be in rural areas, and it’s important that not just the owners of the land where the wind farm is located, but other people close to the project share in the benefits,” said Jeyakumar.

Small-Scale, Community Energy Not a Priority for Government

There’s another piece that is part of the push for renewable energy in Alberta that’s fallen under the radar.

Plans for community energy and micro-energy which could see solar and wind power produced for the benefit of small groups of local investors — neighbourhoods, towns, farms, First Nations or large institutions such as a universities—  are not being developed by Alberta Energy, one of the most dominant government ministries, but by the environment ministry.

That seems to indicate that those sorts of projects are not high on the government’s agenda because all the expertise in the electrical energy field is concentrated in Alberta Energy.

So it’s not surprising that stakeholders in the community renewables sector are still waiting for the government to come up with policy and regulations so they can move ahead with projects.

“Ideally, we would like to see about 20 per cent of the renewable pie go to community energy,” Hossli said.

In Germany, where renewable energy accounts for 35 per cent of all energy produced, most of the solar and wind projects are owned by citizen cooperatives, Hossli noted.

The Alberta Green Economy Network is also pushing for more community energy and would like to see the government implement a feed-in tariff for the projects, which would guarantee a price for energy produced and sold to the grid to encourage up-front investment.

It could be difficult for community groups to raise the necessary funds for local renewable energy projects without this kind of program in place.

Last summer the government conducted a survey of 158 stakeholders asking for input on community energy generation; 54 responded.

According to the final report, “Many participants believe the market currently favours traditional players who generate electricity using coal and gas. They perceive an unlevel playing field that advantages large scale, incumbent producers of energy.”

The government followed up the survey with a one-day symposium for stakeholders and experts last July. But to date no further steps have been taken to advance community energy or micro-generation projects in Alberta.

Meanwhile, large scale renewable energy projects are moving ahead, with the first batch expected to be operational by 2019.