A renewables rush is in high gear in Alberta as the province better known for oil and natural-gas resources formally pushes to up its wind, solar and hydro power capacity.
By the end of the year, the province will have completed the first in a series of annual competitions that sees companies bidding to provide renewable electricity into the power market. The agency overseeing the contest says it has already had formal expressions of interests for dozens of projects to supply the first 400 megawatts – enough to power about 170,000 homes. More than 200 people are signed up for the Alberta Electric System Operator's information session on Tuesday, some travelling from as far afield as Scotland and Spain.
"The biggest opportunity in Canada is what's going on in Alberta, for renewables," said Gordon Potts, director of business development at Toronto-based Northland Power Inc. – a firm developing wind and solar projects in Alberta with the hope of winning a part of this year's action.
It won't mean the end of the province's economic focus on the wealth and jobs created by the production of hydrocarbons, and the success of the strategy will be assessed on how many additional costs power consumers, industry and citizens face in the years ahead.
But Premier Rachel Notley's government hopes the push to phase out coal-fired power in the next 13 years – and the resulting decrease in carbon emissions – will help Alberta's environmental image across Canada and abroad, and diversify the province's energy-focused economy. The plan is to double Alberta's renewable-energy capacity by 2030, to an eventual 5,000 megawatts of renewable electricity capacity.
Powerful gusts are a frequent feature of the foothills and prairie, and turbines have figured as part of Alberta's windswept landscape for more than two decades. Canada's first commercial wind-power facility was built near Pincher Creek, Alta., in 1993. The province already gets almost 10 per cent of its power from wind.
However, coal still makes up about 50 per cent of electricity generation. Developers tout wind as a competitive source of clean power that can make a reliable contribution to a grid – especially when complemented by natural gas, and other renewable sources.
The New Democrat government estimates that construction of the new renewable projects will create at least 7,200 new jobs. Any business activity, however small, is welcomed in a province where low global oil prices have hammered employment and investment. There are hopes Canadian or global renewable-energy firms will establish roots in the province – by setting up offices in one of Calgary's partially vacant office towers, giving the province's struggling industrial manufacturing sector around Edmonton a boost, or hiring employees and consultants.
Alberta has abundant wind, and solar, resources, and will also benefit from a sharp decline in the cost of wind-turbine manufacturing in the past five years.
"We have some of the best onshore wind resources in the world. We have the best solar resources in Canada," said Calgary-based Greengate Power Corp. chief executive Dan Balaban, whose company has a 10-year history of developing renewable projects in the province.
"This is not something that is that well-known. But Alberta truly is an energy-rich province. It's energy-rich in terms of our fossil fuels. But it's also energy-rich in terms of our renewable energy."
The proponents bidding in this year's first power competition have their act together – successful projects in this 400-megawatt contest must be operational by the end of 2019, and have to come in with lower costs. The agreements with winning bidders will be supported with fixed, market-insulated prices for two decades.
The cost of that certainty will be subsidized using carbon revenues from large industrial emitters. Duane Reid-Carlson, president of energy consultancy EDC Associates Ltd., estimates those payments could equal $4-billion to $8-billion over the next 13 years – and that doesn't include other billions that the government is spending in Alberta's massive electricity redesign. He cautions the system put in place today will have an impact, and costs, for decades to come.
"There are many unintended consequences," Mr. Reid-Carlson said, advising, "go slow and don't jam this down peoples' throats."
There are already worries about the costs of renewables, and the phase-out of cheap and abundant coal. Jason Kenney – the frontrunner to lead the province's yet-to-be-united conservative parties, and a vocal opponent of the province's new carbon tax – has described Ontario's power system as a "disaster, now being inflicted on Alberta by the NDP."
Both Alberta and Saskatchewan – which has a goal of 20 per cent of electricity generated from wind energy by 2030 – have learned from costly errors made in Ontario, which paid large feed-in-tariffs (FIT) to establish a renewables industry and attract manufacturing. Consumers and critics often blame the FIT program for steep increases in electricity costs, though there were many factors that contributed to power price increases.
Robert Hornung, president of the Canadian Wind Energy Association, insists it was not the renewable program that was primarily responsible for higher prices – citing instead expensive nuclear refurbishments, investments in transmission and new natural-gas plants.
"Ontario's experience is not being replicated in either province," Mr. Hornung said. "We're very confident that when you look at Alberta and Saskatchewan, which have stronger wind resources than Ontario or Quebec, we're anticipating a very high level of competition in these processes."
Alberta's program will also be judged on whether it creates significant supply chain and maintenance jobs.
Helmut Herold, of Germany's Senvion S.A., a top global wind-turbine supplier, said manufacturers tend to look for local suppliers for key components, including the steel towers – which are large and bulky to transport but relatively uncomplicated to manufacture. He said it's important that provinces have a steady, multiyear procurement program so local companies can gear up to provide content to the projects.
"We need to see consistency, not just one year of this current tender for megawatts," said Mr. Herold, the chief executive for Senvion's North American subsidiary. "If you are able to create a three- to five-year program with consistency, then you will see people settle down and use this advantage."
He noted Senvion began sourcing a sensor for particulate matter from a small Ontario company that now supplies the component for its project worldwide. He said the energy industry in Alberta is well-suited to turn its skills to production and maintenance of wind turbines.