By Darcy Henton, Calgary Herald – Oct 09, 2015, Page:A4
The biggest barrier to replacing coal-fired power plants with wind and solar energy in Alberta can be overcome with a simple government policy that’s working successfully in dozens of American states, say proponents of renewable energy.
Groups calling on the NDP government to more than quadruple the province’s wind energy capacity to reduce greenhouse gas emissions are urging it to set renewable energy requirements – known as renewable portfolio standards – that create an incentive for building wind farms.
“It certainly seems to be one of the most elegant and rigorous ways for them to go about it, and it has a bit of a track record,” said Pembina Institute director Simon Dyer.
In its submission to Alberta’s Climate Change Panel, the institute says renewable portfolio standards are “widely and successfully used” in 29 states and three provinces.
But without legislation making it necessary that a set percentage of electricity generation be provided from renewable energy sources, wind farmers in Canada’s only fully deregulated electricity market can’t borrow the money they need to construct their facilities, said Canadian Wind Energy Association president Robert Hornung in an interview Thursday.
“The biggest challenge in the Alberta market is you have very little certainty about what your revenue stream will be,” Hornung explained. “Wind projects are particularly challenged.” In regulated markets, power generators receive a set margin of profit on the electricity they produce. But prices in Alberta’s market are linked to supply and demand at any given minute.
“For that reason Alberta is in many ways from the perspective of renewable energy investors a less competitive destination for renewable energy investment,” he said. Hornung said most of the 1,500 megawatts of wind energy built in the province so far was financed through creative means with federal financial incentives and renewable energy credit programs that have since been curtailed.
“The result is there has been a gradual waning of interest in the Alberta market,” he said. “As recently as three years ago, if you went to the website of the Alberta Electrical System Operator you would have seen that there were over 6,000 MW of wind energy projects that had made applications to connect into the grid … that number is now down to 2,000 because people have made the decision that they will take their resources and put them elsewhere.”
Alberta ranks third in the country in wind energy capacity, far behind Ontario and Quebec, and generates about nine per cent of its electricity from renewable energy sources, Hornung said.
Both the Pembina Institute and the Canadian Wind Energy Association have urged the Alberta Climate Change Panel, headed by University of Alberta energy economist Andrew Leach, to advise the government to legislate a renewable portfolio standard.
Pembina is calling for a standard requiring 20 per cent renewables by 2020 and climbing to 50 per cent by 2030. The Canadian Wind Energy Association proposes 15 to 20 per cent by 2020 and 30 to 40 per cent by 2030.
Dyer said if the provincial government doesn’t legislate a requirement for renewable energy sources for the electricity sector, industry will replace its greenhouse gas-emitting coal-fired plants with natural gas facilities that also emit greenhouse gases, although on a much lower scale.
“If we just phase out coal and we don’t have specific targets for renewables, what will happen is companies will build the most profitable thing for them – and the most profitable thing in the absence of any other policies will be natural gas,” he said. “It will lock us into another fossil fuel infrastructure for the next 40 years.”
The NDP has stressed a desire to dramatically increase the amount of renewable energy sources in the province and has vowed to accelerate the phase-out of coal-fired power plants.
Environment Minister Shannon Phillips said Thursday she thinks the province has the potential to expand all kinds of renewable energy – not just wind.
“There’s tremendous potential for renewables across the province,” she said. “That’s why we asked the panel to examine the matter and they will be reporting back to us.”
Phillips said the panel has received more than 400 submissions so far.
Premier Rachel Notley said Wednesday the panel needs to consider all the submissions and report to the government on the best options for Alberta.
“There’s no question that our government is committed to enhancing the degree to which our energy needs are met through renewable energy, but we haven’t set any targets or any directions,” she said. “We’re still waiting to hear back from the climate-change panel.”
Courtesy: Calgary Herald