By COLLIN GALLANT on February 20, 2019.
A major German energy firm has joined a stampede to build solar energy fields in southeast Alberta.
Innogy announced Monday it has acquired two solar energy projects from its Canadian development partner and plans to begin construction this spring.
The estimated construction value for the projects near Vauxhall is $80 million, all privately funded, and would represent only five per cent of the company’s stated goal to build one gigawatt of solar power production capacity in the province.
“It could be very busy, and it’s all southern Alberta,” said said Jeff Thachuk, the president of Calgary-based Solar Krafte, which designed and permitted the projects sold this month to Innogy. His firm will continue to develop the two projects with the major European power provider, which has 40,000 employees and operations in 16 countries.
“It’s without (subsidy) or government tender in any way shape or form,” said Thachuk. “Over the past seven, eight years, solar has become competitive with other forms of generation, specifically conventional generation.”
For several years industry observers and utility companies have advanced proposals for dozens of solar projects in Alberta, but until this year, few were given the final go-ahead.
Since 2015, Solar Krafte has signed lease agreements, completed design and planning and gained regulatory approval on about 10 potential solar fields, which it markets to utility firms.
On Monday, Innogy stated construction on the Prairie Sunlight II and III projects would begin this year.
Those plants are the fifth and sixth solar projects in the region to be greenlighted in the past three weeks, and bring the total approved cumulative construction value to an estimated one-quarter of a billion dollars.
Based on other construction estimates, developing one gigawatt of solar energy production capacity in southern Alberta could potentially involve an investment of $1.6 billion.
“Our first two projects in Canada are a perfect fit with our strategy to deliver utility-scale solar projects in promising markets,” said Thorsten Blanke, head of Innogy’s solar division, in a press release.
“And this is only the beginning. In 2017 we joined forces with Solar Krafte and they are the perfect partner to build up a substantial solar portfolio in Canada. Together, we aim to develop solar projects with a total capacity of up to 1GW.”
Alberta plants will fall under its overseas subsidiary, Belectric, which will complete the two announced plants in a development agreement with Solar Krafte, said Thachuk.
Prairie Sunlight II, now named “Hull,” is set on two quarter-sections of private land near Highway 36 and Township Road 122 in the M.D. of Taber. Construction to build a 23.5-megawatt facility there would begin in the spring, according to the company.
The second facility, Prairie Sunlight III, is now known as “Vauxhall,” would be built beginning in the fall of 2019 on land controlled by the Bow River Irrigation District, just north of the Town of Vauxhall.
That project would produce 22 megawatts from arrays on 180 acres.
Each has a projected construction budget of about $40 million, according to Solar Krafte, and would be operational for 30 years, during which time lease payments and municipal taxes would be collected.
Solar Krafte still owns seven other projects in southern Alberta, including Prairie Sunlight I, a massive 74-megawatt facility proposed near Enchant, and others in Newell, Warner, Wheatland and Cardston counties.
Last week, Ontario-based Canadian Solar was awarded a 20-year supply contract for the provincial government that will lead to plant construction in Tilley, Hays and Jenner in 2020.
The company previously announced the $45 million Suffield Solar project will go ahead next month. That project benefits from a $14-million innovation grant from the federal government, but three others are described as “subsidy free.”
Last week, Environment Minister Shannon Phillips hailed the power agreement and pricing as a signal to the sector that it was time to greenlight investment in Alberta.
“It’s the most-cost effective solar power in Canadian history,” said Phillips. “It’s only the beginning of large-scale renewable energy production in Alberta. We’ve been told that it can’t be done, but it’s clear that it can and should be done.”
Canadian Solar Association president John Gorman told a news conference last week that the capital costs of solar panels had dropped by 90 per cent over 10 years, reducing the effect of capital cost recovery on pricing.
The Alberta government contract is attached to an indexed price of 4.8-cents per kilowatt hour. The market price for consumers this month is 7.1-cents and the average grid price in 2018 was 5.5-cents.