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Edmonton Mayor Amarjeet Sohi is seen at City Hall in Edmonton on June 29.Megan Albu/The Globe and Mail

The City of Edmonton is taking a novel approach to lowering its emissions, inking a deal with Ontario-based Capstone Infrastructure Corp. to buy up wind power and help decarbonize city operations in an Alberta first.

The city’s decision reflects the stunning surge in a niche renewable-power business sector that was, until a few years ago, all-but non-existent in Canada. Over the past two years, the growth in corporate renewable-power purchase agreements (PPAs) has led to two gigawatts of new clean energy feeding into Alberta’s grid – more than enough electricity to power all the homes in Calgary, Lethbridge, Medicine Hat and Red Deer combined.

Under a corporate renewable PPA, a company or institution agrees to purchase electricity directly from a green energy generator. Power generated on the site feeds back into the grid, offsetting the amount of electricity consumed by that company.

The deals are often favoured by the likes of banks and companies in the fossil-fuel and technology space as a tool to lower their emission footprints.

But the City of Edmonton’s agreement with Capstone to buy 78 megawatts of green power from the company’s 192 MW Wild Rose 2 Wind Farm is the largest long-term procurement of renewable energy by a Canadian city to date – and those in the sector expect more municipalities to follow in the footsteps of Alberta’s capital.

Capstone isn’t new to the world of corporate renewable PPAs, including a deal with Pembina Pipeline Corp. for 105 MW from the Wild Rose 2 facility.

But chief executive David Eva told The Globe and Mail in an interview that adding a municipality into the fold was “a very exciting evolution.”

“I think what’s unique with the City of Edmonton was the willingness to just get out there and do it, and that’s what’s giving them a bit of a leadership position in this regard,” he said.

“It’s always the hardest for someone to go first,” he said. But if Edmonton can demonstrate that a corporate PPA works for a city by offsetting emissions while hedging some protection against future energy costs – which he believes it will – then he foresees more municipalities coming to the table.

Edmonton has an ambitious energy-transition strategy in place, and ultimately wants to bring per-person greenhouse gas emissions to zero by 2050.

Mayor Amarjeet Sohi said in an interview that the city favoured the PPA route in pursuit of that goal because it’s simple, helps green the entire power grid and will reduce corporate emissions by around 30 per cent.

“I hope that by stepping up to take action on climate change we will lead by example, and I hope that encourages other municipalities and residents within the municipalities to do their part. We all need to show leadership on this,” he said.

The Business Renewables Centre (BRC) tracks corporate renewable PPAs in Canada, and helps companies and groups that want to reduce their carbon footprint by pursuing a deal.

Its director, Nagwan Al-Guneid, has already noticed a trend toward aggregation, in which several towns or cities with smaller power loads team up to sign a joint PPA with a single developer. She said several such arrangements are in the works in Alberta, though none have been publicly announced.

“We’re seeing cities, towns, corporations – it’s really a mix right now,” she said.

The breakneck pace of growth of corporate renewable PPAs in Canada is being driven by two main factors: More companies looking to decrease their carbon footprint, and a rapid drop in the cost of wind- and solar-power technologies.

The expansion is for now confined to Alberta, which has a unique deregulated power market that allows a direct connection between buyer and seller, and avoids third parties such as Crown electricity providers.

Ms. Al-Guneid said while other provinces have launched various renewable-power incentive programs, they’re not as simple as Alberta’s direct seller-buyer transaction.

“I think it’s promising for our province. It’s showing Alberta as a leader in that energy space in different ways. It’s not just oil and gas, it’s other parts of the energy system too,” she said.

BRC was formed in 2019 under the umbrella of the Pembina Institute, a think tank. It hoped to see two additional gigawatts of green power added onto Canada’s grid by 2025 – a target it blew past three years early.

“We wanted that goal to be ambitious and bold, but we also wanted it to be realistic. But what we’re seeing right now, we did not expect this growth,” Ms. Al-Guneid said.

The group’s analysis shows that the renewables boom is primarily being driven by corporations coming to Alberta and signing PPAs, supporting $3.75-billion in investment and 4,500 jobs.

The time it takes to complete a deal has also dropped from four years down to 12 to 18 months, which Ms. Al-Guneid said has been driven by sharing the experiences and lessons learned by PPA early adopters.

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