Alberta’s power grid to get green Increase as auction bidders revealed

Alberta is set to unveil successful bidders for 400 megawatts of renewable energy projects in a significant step by the oil-rich state toward changing its power grid.

The state will announce results of a contest under its marquee renewable-energy program as early as Wednesday in Calgary, in the first of many such auctions intended as part of a large overhaul of its power system.

The additional capacity marks a significant leap for a state keen to jumpstart investment in up to 5,000 megawatts of renewable energy by 2030, and shift away from its long reliance on coal-fired electricity.

NDP Premier Rachel Notley is particularly excited to spur investment in solar and wind resources as the state emerges from a three-year rout in crude prices which has plunged it into deficit and contributed to thousands of job losses in the oil market.

One year ago, Alberta introduced sweeping changes to the grid — such as supply contracts backstopped by the authorities — in an attempt to make it easier for such irregular capacity to compete.

Suncor Energy Inc., TransAlta Corp. and BluEarth Renewables Inc. were among dozens of national and international businesses that submitted expressions of interest to the Alberta Electric System Operator for the application.

Other interested parties included EDF EN Canada, Algonquin Power Corp. and Capital Power Corp.. A total of 29 projects qualified for the request for proposal phase, representing 10 times the target capacity of 400 megawatts, according to the province.

The outcome of the market will be closely parsed for insight to the quality of Alberta’s renewable resources and current costs for renewable energy development in the state, said Kent Howie, a partner at Borden Ladner Gervais LLP in Calgary.

Contracts awarded by the authorities will effectively lock at a set price the successful bidder will get for all of the electricity generated by its own project more than 20 years, ” he said.

“This will basically be the latest cost discovery of what the cheapest renewable energy costs in Alberta, so a great deal of people are watching to see what the rates will be,” he said by telephone.

“I believe they’re going to be watching closely to see who wins this, and if it has generators together with existing facilities in the state, or whether there’ll be new entrants to the marketplace.”

Alberta, known more for its enormous oil-sands deposits, is trying to lure billions in investment required to meet an ambitious goal of producing one-third of its power from renewable energy by 2030, with the remainder from natural gas.

To accelerate the change, the state last year dedicated to $1.36-billion in reimbursement for major power producers in exchange for mothballing coal units years ahead of schedule. Meanwhile, a provincewide carbon tax will jump to $30 a tonne beginning Jan. 1.

Changes also have toughened rules targeting heavy emitters from the oil sands, stoking concerns about the province’s overall competitiveness. Nevertheless, some firms are poised to reap rewards.

Last week, TransAlta stated it would accelerate, by annually, plans to convert some of its coal-fired producing units in the state to operate on natural gas. The business is also studying a $2.5-billion hydro-storage job at its present Brazeau complex southwest of Edmonton.

Chief executive officer Dawn Farrell praised the new rules and stated that the firm stands to create annual carbon credits worth $30-million to $50-million from its current fleet of renewable assets, helping offset compliance costs during its natural-gas and coal-fired units.

Wind developers state such tradeoffs provide opportunities to associate and trade credits with big emitters, especially as prices for new generation decrease.

“I think people are going to really be surprised at how competitive end is with everything else, especially here in Alberta,” said Evan Wilson, a Calgary-based regional manager for the Canadian Wind Energy Association.

Courtesy: The Globe And Mail

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