March 31, 2017
Alberta

Competition will be ‘fierce’ for green contracts

By Collin Gallant on March 31, 2017 | Medicine Hat News | medicinehatnews.com

The man behind a 12-year-old plan to build a major wind farm near Medicine Hat says he expects competition to be “fierce” as the province prepares to open a process to award green power contracts.

At the same time, Naturener CEO Jose Maria Sanchez Seara tells the News e expects his company’s planned 210-megawatt Wild Rose Wind Farm to garner serious consideration in the process that officially begins today.

By the end of the year, the province plans to enter agreements with lowest-cost renewable power producers – contracts the government and industry officials say will draw investment and greenlight construction.

“I expect it to be fierce,” said Seara. “There will be a lot of competition but Wild Rose is a good project, and we’re confident we have a good proposal. We’ll certainly have the best project in the province, but there will be serious competition.”

Bids will be accepted starting today for projects that could supply up to 400-megawatts of power to the gird in 2019.

Naturener’s project, located 22 km south of Medicine Hat, has been approved for construction since 2014, after an approval process began May 12, 2005.

That makes it the second oldest outstanding project on the books at the Alberta Utilities Commission.

Seara said one of the largest reason behind delays has been the changing technology in the sector, resulting in changed costs and the need for new approvals.

“By the time you have the new permitting done, most of the time the technology in the wind sector has changed,” said Seara. It’s been tremendous over the last five years.”

His company operates three wind projects in Montana, with a total capacity of 400-megawatts that can access the Alberta-Montana Tie-line between the two jurisdictions.

“The other challenge has been to find the right revenue stream,” he said. “(These upcoming) renewable contracts will be bankable and will enable the investment.”

There are about 10,000 megawatts of green energy projects filed with the AUC, but a much lower amount has advanced to final stages of planning, with construction as the next step.

— Pteregen’s Peace Butte Wind Farm, a two-phase 300-MW wind farm near Seven Persons;

— Capital Power’s Whitla Wind Farm, a two-phase 300-MW proposal by the Edmonton-based utility;

Early stage projects include proposals for Oyen, Forty Mile county, and solar projects in Brooks.

A recent report into the renewable energy sector in southeast Alberta states that 35 of 83 current applications for green utility projects are located within the southeast corner.

In late 2016, the provincial electricity regulator and the Ministry of Energy outlined a process in which they would take bids in order to award long-term supply contracts to companies.

The idea is that set pricing, and therefore a reliable rate of return, will attract institutional investment required.

The province estimates that up to $10 billion will be needed to construct 5,000 MW of power production capacity over the next 12 years.

The government’s goal is to have 30 per cent of Alberta’s power needs supplied by renewable sources by 2030.

With the phasing out of coal over the same time, another 7,000 MW of traditional generation will also be required to secure the system and ensure constant supply.