Western Canada sets ambitious growth plans

CANADA: Prospects for growth in installed wind power has received a boost of some 5GW from Alberta's plan to phase out coal, and another 2GW from Saskatchewan's greenhouse gas reduction target.

Alberta premier Rachel Notley presented a transition plan to move from coal to renewables
Alberta premier Rachel Notley presented a transition plan to move from coal to renewables

Plans by Alberta and Saskatchewan to dramatically increase wind energy on their grids, driven by the need to cut electricity sector emissions, opens thousands of megawatt of new opportunity for a Canadian industry that has been rationalising plans in the face of a fast-approaching market cliff.

As manufacturers look outside Canada as growth prospects wane in the original wind powerhouses of Quebec and Ontario, new pockets of opportunity may develop further west.

Alberta’s long-anticipated climate change plan pledges to phase out the province’s 6.3GW coal fleet by 2030, replacing two-thirds of the electricity with renewable energy and one-third with gas.

The percentage of demand met by renewable sources will triple from 9% today to 30% within 15 years.
The Canadian Wind Energy Association expects it will translate into a minimum of 5GW of new wind energy capacity in the province.

Implementation details have yet to be worked out, but the new renewable energy capacity is likely to be brought online using annual reverse auctions that award government-backed, long-term contracts for the renewable energy credits generated by the facilities.

"I think you’d probably see wind outcompeting some of the other forms of renewable generation for most of that capacity," said Bloomberg New Energy Finance (BNEF) head of wind, Amy Grace.

Producers will still have to sell the energy from their projects into Alberta’s volatile wholesale spot market, leaving them with merchant risk on a large portion of their revenues. But the proposed model is one that has been used before in Alberta and fits within its unique competitive market structure.

"I think why it was included in the proposal is that this was a good compromise," Grace said.

Meanwhile, neighbouring Saskatchewan has released a long-term energy plan that aims for a ten-fold increase in wind energy capacity from 221MW today to more than 2GW by 2030.

The province, like Alberta, is one of the few Canadian jurisdictions that relies on fossil-fuel generation for the bulk of its power supply.

Saskatchewan’s planned wind expansion is part of a broader strategy that will see renewable energy sources make up 50% of generating capacity in the province within 15 years, cutting electricity sector greenhouse emissions 40% below 2005 levels.

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