A proposed layout of the Saamis Solar to accommodate an initial 75-megawatt phase of a 32 MW plan in north Medicine Hat. Roadway and housing in the lower right corner are Parkview Drive and the Northlands and Terrace communities. "Division Avenue" as noted is the undeveloped road allowance extending north from 23rd Street. Blue portions represent solar arrays, pink denotes wetlands and the light blue line as the boundaries of a capped phosphogypsum deposit where permanent development is prohibited.--Image Supplied
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The City of Medicine Hat’s purchase of the largest solar power field proposed for a Canadian urban municipality has been approved by Alberta utility regulators.
The Alberta Utilities Commission issued its decision Tuesday on a transfer of ownership application to buy the Saamis Solar Park from Irish renewable developer DP Energy.
They approved the deal in a decision that requires the city to reapply with a new layout and phased construction plan likely before a council decision on whether to proceed to construction.
Administrators with the city’s power division celebrated the announcement that was expected this week, and reiterated a general schedule of next steps.
“The city would like to thank DP Energy, the AUC and directly impacted stakeholders for contributing to the regulatory due process,” said energy division managing director Rochelle Pancoast in a statement.
“Now that the City of Medicine Hat owns the project, we can properly pursue more detailed analysis that will inform how to optimize the value of this new asset, taking into consideration customer and community interests, as well as changing market and regulatory conditions.
“(That) will be shared with city council for their consideration before confirming next steps.”
Administrators have said the project is an economic way to shield the city from rising carbon levies, add lower cost production and, specific to the Saamis project, gain control to scale the project inside city limits to boost power production.
Energy chairperson Coun. Darren Hirsch has called the purchase a strategic move to secure access to the vast 1,600-acre site in the city’s north, which could be the only suitable land for solar production inside city limits.
Opponents however, have attacked the economics of renewable energy, which they say is unstable, and have questioned potential costs.
City elected and power officials have said they are limited in discussing some matters while the AUC was considering the purchase, but one group suggests public outreach is required.
“This is a monumental decision, which we feel should be given to the public to decide,” Medicine Hat Utility Ratepayers Association head Sou Boss told the News last month when the group was denied standing to take part in the AUC ownership issue.
“If they do the economics on it, they’ll see it’s not a money maker.”
The group has now begun a letter-writing campaign to council members, hoping to halt the project, which could cost $100 million for the initial phase. City council approved $7 million toward the purchase in the spring of 2023.
The city announced its conditional deal to acquire the array from DP Energy in August, shortly after the entire project was approved by the AUC to be built to export the power to the provincial grid.
Now, required updates are needed as power would flow into the city’s internal grid, along with a new construction plan to the AUC that encompasses staging.
The city’s plan, according to its application, is to build in phases and use the power in its franchise area, augmenting the existing gas-fired power complex.
Administrators have said lower-cost solar power would reduce operating expenses, and carbon credits from Saamis would offset compliance costs on gas-fired generation under the provincial carbon levy, which totalled $11 million last year.
The city estimates about $7 million per year in new carbon credit revenue from a proposed 75-megawatt phase, not including production revenue.
In the application, the city also requested a legal opinion of how the intermittent nature of solar power production should be considered against a production cap written into its franchise agreement with the province.
The commission found the city could reliably depend on an amount of power from the solar field during its peak demand period in the hottest days of summer.
An independent opinion also certified the city’s assessment that its peak demand could grow to 250 megawatts by 2027, thereby putting it in jeopardy of falling behind a reliability metric if capacity increase was not approved.
The News revealed in 2019 that DP Energy was planning a large array for the former tailings pond of the WestCo fertilizer facility north of Crescent Heights.
The company was simultaneously seeking to build two facilities at similar sites in Calgary. It has since sold the facilities, known as Barlow and Deerfoot Solar, to Atco, which has built and is now operating them.
Those sites were also leased from Viterra, which is now owned by agri-food giant Bunge. A transfer of an existing lease between Viterra and DP Energy is also likely required.
