Alberta’s NDP government says it’s committed to having 30 per cent of the province’s electricity supply come from renewables by 2030, but opposition parties are taking aim at what they say is a vague plan that could leave taxpayers on the hook.
The NDP’s climate change strategy, released last fall, set a target of 30 per cent power from sources such as wind, solar and hydro to accompany the plan’s accelerated phase-out of coal power by 2030.
Environment Minister Shannon Phillips says that target is now “firm” and the province will support the creation of an additional 5,000 megawatts of renewable power that will bring in at least $10.5 billion in investment.
“Alberta will lead forward, not go backwards,” she told reporters Wednesday after speaking at the Alberta Power Symposium at the Telus Convention Centre.
But details on how the province will reach its target — and the financial cost to the province — remain sketchy.
The province’s climate change panel called for an auction system where producers will bid for contracts that will include government support for the development of new renewable capacity.
The government’s website says that $3.4 billion out of the nearly $10 billion expected to be collected from the incoming broad-based carbon tax over the next five years will go toward “large scale renewable energy, bioenergy and technology.”
But Phillips said the province can’t yet put a price tag on how much it will spend to subsidize renewable development.
And while there will be an auction system, how it will function is still being developed by the Alberta Electrical System Operator, which will oversee the program.
“There are many different ways to structure renewable procurement,” said Phillips.
“We are currently examining how that looks in Alberta so that we get the least-cost procurement. What we know about renewables is they lower the price for consumers.”
About half of Alberta’s power came from coal-fired plants in 2015. Alberta Energy estimates that as of June, about 39 per cent of the provincial capacity of 16,300 MW came from coal and 44 per cent from natural gas. Phillips said Alberta expects about 70 per cent in 2030 will be generated by natural gas.
Patrick Bateman of the Canadian Solar Industries Association said he anticipates the cost to the province will ultimately be low because of the competitive bidding process.
But he said there needs to be revenue certainty for potential producers, perhaps through mechanisms such as contracts that would see the province top up revenue if it dropped below a certain level, for projects to go ahead.
“We’ve got a situation where investment in any generation technology is a challenging prospect … for any new generation we’re going to need to see the new policy certainty the minister has been describing today,” he told reporters.
Proponents say that wind projects that would produce about 6,800 megawatts and solar projects responsible for 600 megawatts are already being proposed for development in Alberta.
“We’re not looking at getting government subsidies necessarily for all of these 7,000 megawatts in the queue to come online,” said Evan Wilson, regional director for the Canadian Wind Energy Association.
“It’s waiting to see what the system is going to look like, waiting to see what the policy will look like and how that will shape the market moving forward.”
While the government’s announcement was hailed by companies such as TransAlta, it was met with skepticism by opposition parties.
In a news release, the Wildrose Party said the NDP should release the full economic costing of its plan, including the impact of the early shut down of coal-fired power plants and the increase in natural gas generation.
“Today’s announcement doesn’t provide any more certainty for Albertans,” said Wildrose Leader Brian Jean. “The minister should release her government’s own internal analysis today.”
The Progressive Conservatives questioned how the government expects to attract private sector investment after launching a legal battle with three power companies over their relinquishment of power purchase arrangments for coal-fired electricity.
Liberal Leader David Swann said he supported the government’s initiative but said the NDP had left Albertans in the dark over its plan.
“Until we know how it’s going to work, all those investment dollars are going to be on the sideline,” added Alberta Party Leader Greg Clark.
In an updated report Wednesday, the Pembina Institute estimated that an accelerated phase-out of coal generation in Alberta could result in 600 fewer premature deaths, 500 fewer emergency room visits and save nearly $3 billion in socio-economic value of avoided health outcomes linked to coal pollution between 2015 and 2035.
— With files from The Canadian Press