The extreme cold that pushed Alberta’s grid to its limit this month is a reality check that the politics of electricity is much more than an overblown federal-provincial spat.
Alberta’s governing United Conservative Party, through its much-criticized “Tell the Feds” advertising campaign launched last fall, is correct that the risk of rolling blackouts and no electricity in the depths of a Canadian winter is daunting. That point was driven home Saturday when an emergency alert blasting on Albertans’ cellphones prompted households to reduce their electricity use, a move the Alberta Electric System Operator (AESO) said helped ward off rotating power outages.
However, the electricity pinch this month is first and foremost a message to the province that it must get its own house in order. Even before Ottawa has any chance to implement its Clean Electricity Regulations – the federal policy which has become beef No. 1 for Alberta Premier Danielle Smith – the province is having problems in the here and now.
“Is our operating procedure really to rely on the goodwill of consumers to prevent blackouts?” Calgary energy consultant Sheldon Fulton commented this week.
Alberta’s renewables pause implemented in August has galvanized the UCP’s political critics, who called it blatant coddling of the province’s fossil fuel sector and an appeal to a renewables-skeptical rural base. But in reality, it was more about the Smith government awkwardly trying to get a handle on a competitive wholesale electricity market that has outgrown its original design.
Mr. Fulton said the main problem is a system that was created 25 years ago to dispatch coal units. (Hopefully coal will be phased out this year, leaving renewables and growing natural-gas capacity in its place.)
Today, the electricity market is in a rapid state of change and growth. The United Conservative Party might be cool to renewables. But given the wind and solar resources here, the deregulated market, the lack of transmission costs for producers, and an industrial carbon pricing system that benefits renewables, those green investors are likely to continue to come to Alberta. Even the Smith government’s pause on renewables, set to lift next month, hasn’t snuffed out all the enthusiasm.
Mr. Fulton added that while there were periods during this chilly month without much sun and wind, renewables helped lower emissions and kept costs low for Albertans.
Alberta Affordability and Utilities Minister Nathan Neudorf is in the midst of a revamp of the system. Changes coming in the weeks and months ahead could include everything from tweaks to the current market design to re-regulating the system. Despite the constant political bluster around this issue, Mr. Neudorf said the province’s slate of changes isn’t some ideological power play. “This is responsible government saying people need electricity and they need it affordably.”
The incumbents, those natural-gas producers competing against low-cost renewables that will continue to be a major part of the system, need to make a profit, he argues. All those new wind turbines and solar panels in rural southern Alberta need to be connected to where the demand is. “Are we just going to build transmission lines everywhere?” Mr. Neudorf said.
The federal government’s Clean Electricity Regulations are not off the hook in this cold mess. Right now, they’re only in draft form. But there are still questions on whether Ottawa should be meddling in provincial electricity markets in such a direct way from both a constitutional and practical point of view.
Electricity is generally considered to be the purview of the provinces. But even on the ground, there should be recognition that Alberta has legitimate concerns about costs and grid reliability, and deep skepticism about whether Ottawa can get the details right in a province where the federal Liberals have little skin in the game.
Getting the details right is important. Electricity demand everywhere is set to grow. In Alberta, peak demand periods have traditionally been lower in the warm months than the cold ones, but a changing climate is turning that truism on its head as people get air conditioning and run it on increasingly hot summer days.
Even though residential power consumption makes up only 20 per cent of the electricity pie, the province’s monumental population growth – the fastest in the country – could greatly increase demand. Nuclear, solar and wind, and more interprovincial electricity sharing could help ease the situation in periods when the provinces faces an electricity crunch.
In reality, the province’s electricity system probably needs a pretty significant overhaul. The AESO will be conducting an internal review of the causes that led to the cold-weather grid alerts this month, looking at the actions taken and lessons learned. Hopefully politicians will be doing the same.
Kelly Cryderman