Renewables cheaper than rebates -- A long term energy policy

A respected environmental consulting group based in Alberta is calling on the provincial government to implement six new energy policies. These include the introduction of a renewables portfolio standard, a production incentive for green power producers, a net metering program and financial incentives for consumers who reduce their power consumption.

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Introduction of a renewables portfolio standard (RPS), a production incentive for green power producers, a net metering program, and financial incentives for consumers who reduce their power consumption would together provide a long term solution to Alberta's electricity supply woes. So says the Pembina Institute for Appropriate Development, a respected environmental consulting group based in the Canadian province. Pembina has released a report calling on the Alberta government to implement all six policies.

Alberta, which moved to a competitive electricity marketplace in January, is struggling to keep up with growing demand. With not enough power to go around, market forces have pushed prices up to five times what they were three years ago, and prompted the provincial government to ante up C$2.3 billion in electricity rebates to consumers during 2001. "While consumer rebates provide short term relief and are politically expedient, our proposed measures will reduce consumers' long term vulnerability to high electricity prices," argues Pembina's Tom Marr-Laing.

The measures would also help reduce the province's heavy reliance on coal fired generation, the use of which appears set to increase even further with recent announcements of 1700 MW of planned new coal plants. "While Alberta has positioned itself as a leader in electricity policy, in truth, we are far behind other jurisdictions in designing an electricity policy that manages both economic and environmental risks," says the report's lead author, Andrew Pape-Salmon. He estimates the environmental liability of Alberta's coal fired electricity supplies could be between C$400 million and C$1 billion a year by the end of the decade for greenhouse gas emissions alone.

In the report, Pape-Salmon argues that although high electricity prices have created a 200 MW boom for wind power in Alberta, this market pales alongside those created in competitive jurisdictions, like Texas, that have comprehensive legislative support. An RPS mandating a minimum standard in the supply portfolio of 5% renewables by 2005, rising to 10% by 2010, will result in at least 800 MW of new renewable capacity in Alberta, the report says, while the proposed production incentive of C$0.03/kWh helps ensure consumers are not affected. The Pembina Institute's suggested efficiency incentives will also result in at least 800 MW of energy savings.

All of this could be done, says Pape-Salmon, at a fraction of what the Alberta government has already spent on energy rebates. The report estimates all six policies could be implemented at cost of C$170 million in the first year, dropping to C$70 million in subsequent years. Efficiency savings to consumers could reach half a billion dollars a year.

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