By Collin Gallant on July 19, 2018.
Alberta’s environment minister says a promise by conservatives to repeal the carbon levy would put billions of dollars in windfarm investments in southern Alberta at risk.
Last week, Ontario’s new Conservative government announced an abrupt end to that province’s cap-and-trade carbon pricing system and cancelled wind-energy contracts they say have driven up prices.
Last year, the Energy Alberta ministry awarded three major electricity supply contracts to wind farms proposed near Bow Island, Oyen and Pincher Creek in a system partly underpinned by the carbon levy.
Those projects are attached to $1 billion in construction budgets, and then will provide jobs, local taxes and lease payments for decades, the government has stated.
Phillips told the Medicine News that would be in jeopardy under a United Conservative government.
“We intend to keep our promises,” said Phillips, saying that Ontario Premier Doug Ford has “thrown a bunch of people out of work, and rendered a number of investments worthless.”
“That’s not the guarantee you’ll get from a Notley government … We’re open for business, and we don’t intend to slam the door on investments as conservatives would do.”
The statement comes with the 2019 provincial election about 10 months away, in which UCP leader Jason Kenney has promised he would “scrap the carbon tax” and fight against a national carbon price.
Before then however, another round of supply contracts will be awarded this fall, and those awarded last year will need to be well underway to meet contract deadlines.
Cypress-Medicine Hat MLA Drew Barnes, the UCP finance critic whose current riding is home to the proposed Capital Power Whitla Wind Farm, has railed against the carbon levy.
He said the charge on gasoline and natural gas adds costs to individuals and businesses, and makes investing in the province less attractive.
“I’m glad that Doug Ford has made life more affordable for Ontario families,” he told the News on Wednesday, saying his party’s policy will be laid out in the UCP campaign platform due next year, and did not confirm any plan to cancel the carbon tax.
“The NDP has been trying to buy off Albertans with their own money … We haven’t said we’ll cancel anything. In 10 months, if we’re lucky enough to be in government, we’ll look at everything.”
Edmonton-based Capital Power is scheduled to begin construction at its 201-megawatt facility this fall in Whitla, near Bow Island, ahead of an in-service deadline of late 2019.
Company officials told the News they would not comment on the political situation.
Near Oyen, EDP Renewables plans to build a $500-million wind farm over the next year, and two other, smaller projects are planned for the southern foothills.
Medicine Hat MLA Bob Wanner told the News that comparing Ontario’s power market to Alberta’s isn’t factual, and that renewable energy is “a good investment that will pay off in the long run.”
“There are opportunities in our region to diversify on what we have,” Wanner said. “When you add research and development to that, our section of the province will be the place to invest over the next 20 years.”
In 2016, the province announced the goal of having 30 per cent of power supply come through renewable sources by 2030.
They pledged to award supply contracts for about 4,000 megawatts to new projects over 10 years while phasing out coal-produced power. Conservatives have railled against the carbon tax, claiming it reduces Alberta’s competitiveness and adds costs to businesses and consumers.
However, last year’s auction, which sought the lowest price, returned a megawatt supply price averaging $37 per megawatt hour, a record low.
If the commodity price on the grid sinks below that mark, funds from the carbon levy make up the difference to the operators.
It is also lower than current grid prices, meaning had the plants been in operation now, the owners would be refunding the difference to the balancing pool.
But, said Phillips, the carbon levy is a crucial factor, and to cancel the levy would undermine the system that provides stable profits, helping developers secure financing.
“It’s quite clear that when someone tells you who they are, you should believe them,” she said of UCP’s position on carbon pricing.
“They won’t have a mechanism to continue the contracts unless they want to debt finance it.”