Saamis Solar field viability. Yay or nay?

By Collin Gallant on February 6, 2025.

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Supporters and opponents of the now city-owned Saamis Solar park project said Wednesday that a thorough airing of the project’s economic case will prove their points to either halt or accelerate building the array on the city’s north end.

“We’ve asked for it and they’ve promised it, so we hope they (the city) will move forward with it,” said Sou Boss, head of the Medicine Hat Utility Ratepayers Association.

Her group questions the economic viability of renewable energy and says the potential price tag to the publicly-owned utility company is too much of a risk.

It applied but was denied standing at the Alberta Utilities Commission level to provide comment opposing the purchase approval that was decided this week.

On the other hand, Scott Alexander develops green power projects in southwest Alberta and still owns property in Medicine Hat.

He argues the base case makes sense, and Hatters should be objective when analyzing the opportunity, despite a likely “bias” in favour of using natural gas.

“The more I look at it the better it looks,” said Alexander, further stating that carbon-credit income is only one benefit, alongside actual energy sales, decreased operating costs and extending the working life of the gas plants, by lengthening operational maintenance periods.

“People don’t consider all the factors … It’s very complex, but these things start to add up pretty quickly,” he said. “I’d be amazed if it doesn’t pay for itself in three to four years.”

City councillors, who in the spring of 2023 approved $7 million for the purchase that was announced last August, have largely reserved comment on the project while the sale was before regulators.

In that application, the city outlined its plan to tackle the project in phases, with a proposed layout for an initial 75-megawatt array that would comprise about one quarter of the total 325-MW capacity project.

Industry estimates peg the cost of building 1-megawatt of capacity at about $1 million, and the city estimates that a 75 MW array would result in about $7 million in carbon credits at 2027 rates.

The Alberta Utilities Commission certified a city estimate that new green power would help the city better meet peak demand during the summer months.

Carbon levies at the gas power plant totalled $11 million in 2024, and recent analysis states that could triple by 2030 – a situation officials say could either raise prices or cut income to unsustainable levels.

Last fall, energy division officials presented a detailed outline to council on how it is planning to manage a potential transition to a “net-zero” landscape for carbon emissions.

That includes potential carbon capture and abatement at the power plant, fuel blending, importing more low-cost power from the grid and maintaining gas production while adding renewables at a “scalable” pace, depending on economics and financial capacity.

Boss said this week there are too many variables in play – like a provincial review of the power market outside Medicine Hat – to make long-term decisions on major projects.

“There’s a lot uncertainty, so to forge ahead … and say it’s going to benefit us? Let’s see the numbers,” said Boss

Alexander says analyzing the Saamis business model through the same lens as other solar projects in the province is not accurate, because Medicine Hat has a franchise market to supply, rather than bidding into the Alberta market.

Production could be exported at a large markup, but in the end it will lower local costs to operate and improve margins, he said.

“It’s what farmers do – they look at their costs, and that might not affect their output, but there’s more left at the end of the day,” said Alexander.

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