Capital power became the first major utility company to say it will enter next year’s Alberta renewable energy auction, leading to the possibility its planned 150-megawatt wind farm near Bow Island could be operating in 2019.
However, with only 400-megawatts of contracts available for the entire province, and more than twice that amount proposed by major corporations in the southeast alone, there’s no certainty any local project would win the low-cost competition.
It could however, result in the trigger being pulled on one or more long-talked-about regional projects.
Each would bring hundreds of millions of dollars in construction, support and logistics contracts – leading local economic developers to say that 2017 will be an interesting year.
“It’s really a lot of work right now to stay ahead of the curve,” said Teresa Hardiker, executive director of the Economic Development Alliance of Southeast Alberta.
Her group represents smaller and rural municipalities around Medicine Hat.
This week, County of Forty Mile Reeve Bryne Lengyel said local government can do only so much, and the go-ahead mostly relies on corporate and provincial-level decisions.
“The biggest growth will be in construction and induced jobs,” Hardiker said. “Our task is ‘How do we ensure that local workers are attached to green energy jobs?’”
The EDA and Alberta Labour will co-sponsor a local industry conference in March, though eyes will also be on next year’s supply auction.
Edmonton-based Capital Power stated Thursday that with coal-plant phase-out settlement in place, it will move to add gas-fired and renewable capacity. It’s bullish to put Whitla into the Alberta Electrical System Operator auction next year.
“The timing of construction depends on whether the proposed project is successful in the AESO’s first competition,” company officials told the News this week.
Also competing will be other projects across Alberta planned by North American and global utility firms. Naturener, Renewable Energy Systems group and Renovalia all have significant proposals for the Forty Mile or Cypress County.
Those have been on the table for years however, with observers saying further developed had staled while Alberta’s support apparatus was developed.
“There’s been lots of activity but not much progress,” said Ryan Jackson, head of Invest Medicine Hat, the city’s contracted economic development provider.
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He said the region’s green energy potential is evident, and estimates local projects, totalling 2,000-megawatts, would have a combined budget value of billions of dollars.
However, he said, in the near term, the initial award of 400-megawatts could be covered by three major facilities while four or five times that many are being proposed around Alberta by large industry players.
“That doesn’t even touch on medium-sized projects,” said Hardiker, who says the EDA has been in contact with several dozen companies with community-scale projects on the drawing table.
The Alberta Renewable Energy Program would award some cost-recovery certainty via long-term purchasing contracts awarded to new major projects that have lowest bid.
Essentially, producers would be paid the difference between the market pool price at any given time and the cost of production with funds collected from the Heavy Emitters Levy. Since 2007 Alberta has charged the largest carbon emitters on a per-tonne basis.
Cypress-Medicine Hat MLA Drew Barnes was named the Wildrose energy critic on Friday. He represents the area where Whitla-1 would be built.
“As long as (the government) can come up with a situation where bids are competitive and the consumer can continue to get electric generation, transmission and distribution at the most competitive rates, I’m all in favour of this kind of development.”
Barnes, though, has been critical of the change to a capacity market as well as carbon charges.
“There is potentially a huge cost to consumers,” he said. “It’s crucial that we ensure for families that industry prices stay low and stable.”
The eventual goal is to add 5,000 megawatts of renewable power supply by 2030, requiring about $10 billion in private investment.
The province estimates that 7,200 jobs would be created via renewable projects. Another 7,000 megawatts or more in new mostly gas-fired generations required to safe-guard supply.
Minister of Energy Margaret McCuaig-Boyd says investors have avoided Alberta’s current open energy market, and transition to a capacity market, which pays to book production, is needed.
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