Province has ‘best solar resource in Canada,’ industry group says
EDMONTON – Alberta needs to act now to take advantage of its huge, free, clean and largely untapped solar resource, an industry group says in a new report to the provincial government.
According to the Canadian Solar Industries Association, there is a perfect solar storm in this province right now: Electricity demand is rising sharply, coal-fired power plants are being phased out and prices of solar-electricity equipment are falling — all at the same time that the provincial government is developing a renewable energy framework.
CanSIA’s report, released Monday, calls on the government to set a goal of meeting 1.5 per cent of all of Alberta’s electricity demand with solar photovoltaics by 2022.
“Alberta has the best solar resource in Canada,” CanSIA president John Gorman said in an interview. “It has a population that understands the value of an energy resource, and solar electricity has the ability to give residents and businesses and farmers a choice for their electricity and how they generate it and consume it.
“They’re going to embrace it if they’re given the opportunity.”
A goal of less than two per cent might sound rather small, yet currently, solar electricty makes up only 0.02 per cent of the province’s generation capacity — a system that is dominated by gas-fired and coal-fired power plants. To put it into context, Alberta has four megawatts of solar electricty capacity; the entire system is 15,900 MW.
The 1.5-per-cent goal “is what we think is required to get an efficient industry going,” Gorman said. “It has quite a powerful impact. Even 1.5 per cent of the electricity supply coming from solar actually means many hundreds — if not thousands — of people and business owners who have got solar on their rooftops, and farmers who are using excess land for larger solar installations. And so involvement in solar goes beyond just phasing out a coal plant.”
Alberta can learn from other jurisdictions that are doing more to embrace solar, Gorman said.
“Germany, over the last few years, has installed enough solar so that during peak periods of the day, on some days, it’s generating 50 per cent of its electricity needs from solar.
“In the United States last year, one-third of all new electricity generation that was installed was solar.”
CanSIA, which represents 500 solar energy companies across Canada, promotes industry growth and develops policy options for governments. Its report to the Alberta government comes as the province promises to announce a renewable and alternative energy framework sometime in 2014 — currently, Alberta is the only province without such a strategy.
“It is now time to take action,” the report says. “Solar energy is a meaningful part of Alberta’s electricity mix, reducing (greenhouse gas) emissions; diversifying supply; and maintaining a social licence.”
Among its recommendations, CanSIA calls for Albertans to get “fair value” for excess solar electricity they export to the grid when the sun is shining. Currently, smaller contributors often get only seven or eight cents per kilowatt/hour they export, even though in 2013 the average daytime electricity price was 13 cents/kWh, Gorman said.
CanSIA also recommends a fund to support speeded-up deployment of solar generation, and for the government to introduce a demonstration pilot for large-scale solar development.
Currently, Alberta doesn’t have any large-scale facilities that generate electricity using solar photovoltaic technology.
One 15-megawatt utility-level facility proposed for a 65-acre site near Brooks won regulatory approval in 2012, but construction hasn’t started. Ian Rogers, president and CEO of GTE Solar Inc., said financing is the holdup.
The project can be built for less than $30 million, but investors have been hard to find, in part because it’s a trail-blazing project that some view as risky. But another factor is that investors can make more money in the oil and gas sector than the Brooks project can offer, Rogers said.
“In the end, you have to have somebody who is backstopping the price tag of these facilities, and we don’t have that yet,” he said.
Rogers said government help for the industry would be welcome, but he doesn’t favour a feed-in tariff program like those used in other jurisdictions. Under such programs, owners of solar PV systems are paid a set price over a fixed period for electricity they send to the grid, thus guaranteeing a return on the owners’ investment.
But Rogers argues such programs aren’t fair to other renewables like wind and biomass — he would prefer an increase in the carbon tax charged to heavy emitters of greenhouse gases.
CanSIA estimates that if Alberta set a target for 1.5 per cent of electricity demand to be met by solar, it would ultimately lead to the development of more than one gigawatt (1,000 megawatts) of solar facilities. Other benefits the group predicts: Greenhouse gas emissions would be reduced by 625,000 tonnes each year; the industry would provide more than 24,000 direct and jobs and 9,500 indirect jobs; the diversity in electricity sources would reduce consumers’ exposure to the volatility of energy prices; and private sector investment would top $3.2 billion.
Solar could also help increase the province’s electricity generation capacity.
The Alberta Electric System Operator predicts Alberta’s electricity consumption will grow by 2.5 per cent each year over the next two decades, due primarily to oilsands development and the strong economy. Much of the new generation required to meet the demand will be gas-fired, as coal-fired plants are being phased out under federal regulations introduced in 2012.
The CanSIA proposal is being welcomed by groups such as the Pembina Institute and Clean Energy Canada, which earlier this year issued a joint report on the potential of renewable energy in Alberta.
Dan Woynillowicz, Clean Energy Canada’s policy director, said that as coal-fired electricity generation gets phased out, the best replacement will be a mix of gas-fired generation and renewable sources.
Steep declines in the costs of solar equipment are making both small-scale and utility-scale solar electricity generation more attractive, Woynillowicz said.
“Solar plays an interesting role,” he said. “We’re seeing a really steep decline in the price of solar panels, largely driven by China’s interest in being a manufacturer of solar panels and a consumer of solar panels. We’re going to continue to see price decreases.
“That empowers individuals to put solar on their rooftops … and it starts making utility-scale solar possible.”
Coming on Tuesday
Our special report on the solar energy potential in Alberta continues on Tuesday with these stories:
How it works: Learn how a Camrose arts centre was designed specifically for solar.
Success stories: Looking for solar leadership? Try Germany.
Report recommendations
The Canadian Solar Industries Association’s report, From Proven Reserve to Developed Resource: Realizing the True Value of Solar Energy in Alberta, makes these recommendations to the government:
1. Introduce a renewable and alternative energy framework that charts the path for a minimum of 1.5 per cent of Alberta’s electricity demand to be met by solar in 2022. The framework should address investor financial return and stability for small-scale to utility-scale applications. It should include a renewable portfolio standard or clean electricity standard.
2. Increase the price paid for exported solar electricity under Alberta’s Micro-Generation Regulation to reflect “an appropriate market value” for solar power. CanSIA recommends a minimum 15 cents/kWh, and a minimum term of 15 years to “provide the required investor stability.” The micro-generation rule, in place since 2009, allows Albertans to get credit for electricity they send into the grid from renewable or alternative sources. In 2013, Albertans who exported solar electricity to the grid typically received 8.5 cents/kWh, CanSIA says.
3. Introduce a program, funded by the Climate Change and Emissions Management Fund, targeting accelerated deployment of solar. Residential micro-generators would get a top-up of 10 cents/kWh on solar electricity they export to the grid, for a fixed term of 15 years. Non-residential micro-generators would get a top-up of 15 cents/kWh. The program would have benefits of a feed-in tariff but would avoid “many of the potential issues that could arise from introducing one in Alberta’s deregulated market,” CanSIA says.
4. Bring in a demonstration pilot for large-scale solar generation. The aim would be to spur construction of 150 MW of large-scale solar facilities between 2015 and 2017, CanSIA says. It would be an interim measure that would build capacity and expertise while a longer-term renewable energy strategy is devised and introduced.
