Expansion of wind power in Alberta, which relies on coal to generate about half its electricity, will slow in the coming years without incentives, according to the Canadian Wind Energy Association.
Alberta currently has 1,120 megawatts of installed wind capacity, the third most in Canada after Ontario and Quebec, Robert Hornung, president of the industry association, said in a briefing today in Calgary. The six projects planned in the province for 2014 largely rely on additional revenue streams such as sales of carbon offsets to help counter the low electricity price, he said.
“Wind energy faces unique challenges in Alberta,” Hornung said. “There’s an assumption in Alberta that wind will continue to be built out at the same pace, but without instruments that will not be the case.”
Residential electricity prices in the province averaged about C$0.08 per kilowatt hour last month, according to the Alberta Utilities Commission, less than in other jurisdictions including Ontario and Germany, which provide incentives to support renewable energy. The provincial government is considering ways to support the expansion of renewable energy and Premier Alison Redford recently created a new cabinet position to oversee electricity and renewable energy.
Alberta is struggling to convince policy makers in the U.S. and Europe that its environmental regulations are tough enough to address rising greenhouse gas emissions. At the same time, Redford has promoted TransCanada Corp.’s Keystone XL pipeline, which would ship oil sands bitumen to the Gulf Coast, to U.S. lawmakers amid opposition from environmental groups.
“Carbon politics in Alberta is complex,” said Hornung. The “real opportunity” for the Canadian province is to reduce emissions from the electricity industry, which accounts for half of Canada’s total carbon output from power generation, he said. Absolute emission reductions from the growing oil and gas industry as well as from transportation are more difficult, he said.
The price to install a megawatt of wind power in Alberta is between C$2.1 million ($2 million) and C$2.2 million, according to the industry association.
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