February 20th, 2019

Solar play would be private only

By COLLIN GALLANT on February 12, 2019.

Land between the northern end of Division Avenue and the CF Industries fertilizer plant is subject of a private-sector proposal to build a 1,000-acre solar energy field. City of Medicine Hat officials said Monday such a facility would provide an economic boost, but so far city hall has no involvement. NEWS PHOTO COLLIN GALLANT

cgallant@medicinehatnews.com @CollinGallant

City officials stress they are not behind a proposal to build a massive solar energy facility in Medicine Hat’s north end, but are generally hopeful the private sector plan will proceed.

On Saturday the News broke the story that Irish renewable energy company, DB Energy, had advertised its “Saamis Solar” project, outling plans to build the largest solar power facility in Canada inside city limits here on a former industrial site.

While their is no schedule for the project to place arrays on 1,000 acres of fallow land in Medicine Hat’s north end, DP Energy is advancing similar plans in Calgary, albeit on a smaller scale.

Almost immediately, comments on the News website questioned the logic of the plan, the economics of renewable energy, and cited mixed results from the city’s solar-thermal plant.

Mayor Ted Clugston told the News on Monday that at this point the plan is an entirely private sector endeavour, and the company and city have not discussed potential partnerships.

“Do we want it inside the city of Medicine Hat? Absolutely,” said Clugston following a committee meeting on Monday at city hall. “There’s linear taxation involved, but we have a (power marketing) exemption and that amount of power output couldn’t be (sold) inside the city…

“This would not be city generation, it would go straight to the grid. We might help them get to the grid, but we want the taxation, not the power.”

According to the company’s website, arrays spanning the huge site could provide a peak production of about 200 megawatts, equal to about 80 per cent of the City of Medicine Hat’s entire power generation.

None of the company’s projects have been formally submitted to provincial regulators, and the company has not responded to inquires from the News about the plan.

While some readers panned the plan, others were encouraged about the benefits to the environment and local economy.

Coun. Julie Friesen said during the 2017 municipal election that Medicine Hat was primed to benefit from renewable energy development and should consider potential projects in the sector through its power generation business.

She said Monday that elected officials haven’t been apprised of DP Energy’s plan. The News confirmed that business developers at city hall are in contact with the city’s direct investment team, but officials described the relationship as being in the early stages.

Friesen said the city should encourage solar and wind developers looking to set up in the city or region, but that needs to be prudent and strategically done.

“(Projects) have to be viable, and there’s a lot of things that swirl about renewable energy – not all bad and not all good,” she said. “I think we’re still learning about it.

“I’m sure there are things people want to know more about, and things we (councillors) want to know more about.”

The situation – building and operating a large, private-sector energy producer in Medicine Hat, where a publicly owned utility company has a sole power supply franchise – is somewhat nuanced.

Officials with the city utility state the company couldn’t market electricity inside the city’s protected distribution area, and could likely be forced by regulators to connect directly to the provincial grid.

Theoretically the city could enter into a power purchase agreement with the firm, but that would be a complex process, said Clugston, adding “there’s little appetite for more PPAs.”

In 2012 the city entered into a power purchase agreement with the Box Springs Wind Farm to take off production of the three turbines that were erected in northwest Medicine Hat. That company took over a city endeavour to erect the turbines in exchange for a set price on the power produced indexed to inflation.

Coun. Phil Turnbull, the chair of the council’s utility committee, has also said recently his position is the utility should avoid any long-term deals due to the rapidly changing nature of the sector.

This year the utility announced it would set aside $1 million to study and do initial engineering work to add new generation capacity. In late 2017, the division commissioned the 45 megawatt Unit 16 power station, but that production is mostly spoken for by new industrial customers Aurora Cannabis and Hut 8 data processing.

DP Energy applied to Calgary’s planning commission last week for land-use changes for a Viterra-owned dry pit in that city containing fertilizer byproduct. It will go for final approval in March.

DP Energy planning agents argued that passive use of the site – where most typical development is barred – is perfectly suited as land sits essentially unused during a lengthy reclamation process.

The same type of land is found north of 23rd Street N., where in 2006, Westco capped with earth a spagogypsum pond left over from fertilizer production of the Northwest NitroChemical facilities that was eventually bought by Western Cooperative Fertilizer.

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