Wind energy has market no matter what: industry

By Collin Gallant on July 25, 2018.

cgallant@medicinehatnews.com @CollinGallant

While politicians tussle over the future of carbon pricing and the fate of renewable energy projects in southeast Alberta, industry observers say the sector will continue to grow after the next election.

That’s due to innovation making wind energy more economical, according to a policy director with the Canadian Wind Energy Association, though some charge on pollution is required.

“Over the coming years, Alberta will continue to be a place where people want to invest,” said Evan Wilson, a prairie region director for CanWEA.

That’s evidenced by record-low pricing at a government supply auction last year, he said, plus innovation, support from government and strong winds in the southern region.

“The price for wind (power production) really makes it attractive and makes it the lowest cost new build electricity generation in Alberta.”

Last week, Environment Minister Shannon Phillips blasted United Conservative MLA Drew Barnes over his party’s plan to scrap a carbon levy that in part supports green energy purchase prices.

Citing two new wind farms within a two-hour drive from Medicine Hat, with a combined $800-million construction budget, Phillips said Barnes isn’t talking about the potential pitfalls of ending the levy.

Barnes believes the carbon tax is a net loss for consumers, hurts businesses and would be on the chopping block if the UCP gains power in 2019.

Wilson also said current government policy has sped large projects along, but the government isn’t the only customer for green energy.

Alberta has for a decade charged a levy on large emitters, which are shielded from the carbon levy.

Those heavy industries, said Wilson, could seek out private power purchase agreements to lower their levy costs, which were revised by the NDP this year. UCP leader Jason Kenney has derided the carbon levy, but has hinted at support for the industry levy.

“There will be opportunities for wind contracts among commercial interests to lessen their obligations,” said Wilson. “We have statements of support from both major parties for either a carbon levy or a levy on large emitters. That option will remain on the table for years.”

Barnes said this week that if technology and market forces are making renewable energy cheaper, then the market, not government, should support it.

“And why, then, is the NDP planning on raising the carbon tax? It’s a disguised sales tax,” he claimed.

“If Albertans grant us government and renewables show they are most competitive, absolutely we’d consider continuing (green energy supply contracts). Until I have the ability to see the contracts, I’m not taking a position.”

Phillips believes the UCP carbon levy position is causing uncertainty in the utility sector.

“If they cancel the program, they’re putting billions of dollars of investment at risk,” said Phillips. “That’s what they’re offering Albertans and they’re not being honest about it because they know (the UCP plan) would be unpopular.”

Phillips said the current levy returns cash to Albertans in rebates and grants for upgrading homes and equipment, and underwrites energy development.

The government’s Climate Plan — including a 10-year plan to award supply contracts as renewables and natural gas plants replace coal by 2030 — is leading to new investment now.

Relying solely on market forces without restructuring the market or pricing carbon, Phillips said, would put major projects at risk.

“Wind is becoming more economical, there’s no question,” said Phillips. “But in the structure of the market, you won’t even see new natural gas (generation plants) coming online without a capacity market restructuring.”

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