Investment in renewable energy now exceeds investment in hydrocarbons globally.
With some of the best wind and solar resources, and the most carbon intense electricity grid in Canada, Alberta is a natural candidate to grow Canada’s renewable energy industry and diversify Alberta's energy mix.
The growth in the renewable energy sector is a reason for optimism about Alberta’s energy economy. The catalyst for success has been the introduction of the provincial Renewable Electricity Program (REP) that has sparked global interest in Alberta, bringing jobs, new renewable energy companies and international investment to Calgary.
Dan Balaban, President and CEO of Greengate Power, says there are five reasons that Alberta’s program has created a tremendous opportunity for renewables in Calgary and Alberta.
1. Competitive tension
Developers have long prospected for viable land positions with top-quality wind and solar resources in Alberta. This history of prospecting led to the first three rounds of REP being over-subscribed, forcing developers to sharpen their pencils and find clever ways to lower costs.
2. Creditworthy counterparty
The Alberta government is the ultimate purchaser of power produced by projects awarded to a REP contract. The signal this sends to global investors cannot be overstated. The government backing helped attract some of the world’s major players in renewable energy including Italy’s Enel Green Power, France’s EDF Renewables, and Spain’s EDP Renewables. Meanwhile local developers like Greengate Power have attracted interest from global investors.
3. Social engagement
The latest round of REP included projects with First Nations partnerships. In doing so, First Nations communities made meaningful investments in projects with long-term economic returns, while directly participating in renewable project development – an understanding that could lead to projects on First Nations land in the future. Greengate Power was awarded a REP contract in partnership with Potentia Renewables and Paul First Nation for the 113 megawatt Stirling Wind Project.
When Alberta announced the REP, wind and solar technologies had been on a long and steep decline in costs. Today – as evidenced by the REP – wind projects are economically competitive with traditional sources of power generation. The average price of REP contracts to date is about 3.8 cents / kWh, 25 per cent less than Alberta’s 2018 average wholesale power price of 5.0 cents / kWh. A program like REP could have been a net cost to government ten or even five years ago, but today the contracts are economically competitive with any other source of new generation. This ensures Albertans are not met with the same fate of past renewable programs in Ontario.
5. Customer interest
Due to the global interest in the REP, corporate buyers (think major retailers, hotel chains, tech companies etc.) are starting to look at Alberta as the place to procure renewable power for their business. Corporate procurement has grown steadily in the U.S. over the past five years, accounting for over 6 GW of renewable power in total last year. With Alberta’s highly competitive pricing, the province is poised to absorb Canadian demand from corporates for renewable procurement. Greengate Power is a founding member of the Business Renewables Centre Canada (BRC Canada), an organization developed to help corporate buyers procure renewables supported by Calgary Economic Development and led by the Pembina Institute. BRC Canada is launching in Calgary this spring.
Alberta is already known as a global energy centre and is ideally positioned to lead Canada in renewable development at a time when renewables are the global growth segment in energy. While 10 years ago the case for renewables was challenging, today renewables are providing solutions to more and more of our electricity challenges. Alberta’s future as a global energy hub will undoubtedly be boosted by renewables and the new jobs and investment it brings into Alberta.
Greengate Power is a Calgary-based company that has been leading the move to renewable energy. Over the past decade, Greengate Power has been responsible for the successful development of 450 MW of wind energy in Alberta, representing one-third of the wind energy produced in the province and an investment of approximately $1 billion. Going forward, Greengate Power is developing over 1 GW of wind and solar energy projects in Alberta, as the province continues moving into low-cost and emissions free sources of power. Greengate Power was awarded a REP contract in 2018 in partnership with Potentia Renewables and Paul First Nation for its Stirling Wind Project.