Alberta Looks at Renewable Energy Amid Push for Keystone

Date of Article: April 11, 2013

Source: Bloomberg

Author: Jeremy Van Loon


Alberta may boost the use of renewable energy to cut carbon dioxide emissions as the province lobbies U.S. officials to approve TransCanada Corp. (TRP)’s Keystone XL pipeline.

Officials are in talks with companies that produce power from wind and water turbines about the best way to spur more development, Energy Minister Ken Hughes said yesterday in an interview from his Edmonton office. Options include importing hydro-electric power from Manitoba as well as changing policy to increase hydro and wind-power development, he said.

“I’ve put the challenge out to the renewable industry to bring forward proposals and ideas that might help us continue to green the grid,” Hughes said. “We’ll be open to any specific suggestions” proposed, including policy that boosts the use of renewable power, he said.

Alberta is struggling to convince U.S. officials that its efforts to reduce carbon-dioxide output are making a dent in oil-sands emissions as Premier Alison Redford wraps up a trip to Washington this week to lobby for the Keystone XL pipeline, which would carry bitumen from the province’s oil-sands deposits to refineries on the U.S. Gulf Coast. The U.S. State Department is reviewing the $5.3 billion project because it would cross an international border.

The western province, Canada’s fourth-most populous, is responsible for a third of the nation’s greenhouse gas emissions and the oil sands are among the fastest-growing sources, according to the Calgary-based Pembina Institute, an environmental research group and consultancy.

Change Perception

Reducing emissions from Alberta’s coal power plants by boosting renewables would change the perception of the province’s efforts to tackle climate change, Matt Horne, Pembina’s director of climate change research, said in an interview.

“Certainly one of the motivators has been the pressure around Keystone XL” for the province to address carbon output, he said. “Coal is a big part of the emissions profile, with three of the biggest sources of emissions in Canada coming from coal-fired power plants in Alberta.”
“If there was action on the scale of what Ontario has done on its coal phase-out, that would definitely shift the conversation,” Horne said.
Alberta is the only province in Canada with a deregulated system of electricity generation, with companies such as TransAlta Corp. (TA) producing power and selling it directly to customers. Unlike Ontario, which implemented a feed-in tariff for renewable energy in 2009 and plans to eliminate coal for power generation, Alberta hasn’t provided any major incentives to spur development of wind farms, solar power arrays or hydro, according the Energy Ministry’s website.

Eschewed Subsidies

Alberta’s dependency on coal for electricity is down to about 40 percent, from 66 percent a few years ago, said Hughes. The province has traditionally eschewed policy that offers subsidies to renewable power generation.

“If they were really serious about environmental stewardship, then they would concentrate on keeping the oil underground,” said Daniel Kessler, a spokesman for, an environmental group that opposes the Keystone XL pipeline. “It’s tremendously important that they go after the coal industry because the coal industry is a huge problem, but you can’t go after one while facilitating the other.”
Alberta’s wind and solar resources are among the best in the country, and the region has the third-most installed wind generating capacity in Canada after Ontario and Quebec, according to the Canadian Wind Energy Association. Wind power accounts for about 6 percent of generation in Alberta.

Hydro Power

In addition, the province has the potential to add as much as 6 gigawatts of hydro output, according to a report published last month by the provincial government. That’s the equivalent of about half the current electricity production capacity in the province.

As part of its climate change policy, Alberta levies a fee of C$15 ($15) a ton of carbon emitted by the larger producers. The province is also spending C$1.3 billion on two carbon capture and storage projects, a technology that removes the gas during fossil fuel processing and buries it underground.

More action on climate change would allow Alberta to “earn its social license to operate so that we have the full confidence of our customers and have the opportunity to get our products to market,” Hughes said.
To contact the reporter on this story: Jeremy van Loon in Calgary at [email protected]

To contact the editors responsible for this story: Susan Warren at [email protected]; David Scanlan at [email protected]