The area for the eventual 1,600-acre Saamis Solar field sits south of the CF Industries fertilizer plant in north Medicine Hat.--NEWS FILE PHOTO
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The City of Medicine Hat is now closing a deal to buy one of the largest solar fields ever proposed in Western Canada, but when it might be built is still a work in progress, say city officials.
The deal between the city’s energy division and Irish renewables developer DP Energy was approved Tuesday by the Alberta Utilities Commission, though a new staged construction plan for the 1,600-acre site in north medicine Hat is needed.
As well, a final investment on a proposed one-quarter phase is needed from city council, and that finalized plan to stage phases of construction for the city’s needs will need to be drawn up and approved for regulators.
Energy division head Rochelle Pancoast has been adamant the city will only move ahead with construction when it makes sense as a way to strengthen the power business’s bottom line.
On Wednesday she said analysis is underway.
“We’ll revisit the business case because the outlook has shifted over the last year and a half since we entered the sales agreement process, just as we’ll continue to evaluate the business case during uncertain times,” she said.
“Secondly, before any build we need to redesign the project into a (staged) 75-megawatt (array) energy flowing into the city system.”
DP Energy earned regulatory approval last August to build a 325-megawatt project (slightly higher capacity than the city’s current gas-fired power plants), on vacant land north Crescent Heights, and export it to the provincial grid.
Division officials have also been adamant this fall that gas generation will remain in place as long as regulatory and economically viable, but adding a percentage of renewable energy supply would lower costs and offset provincial fees charged on carbon dioxide produced in gas-fired generation.
That’s as the city business faces a variety of challenges, including threats to export profits from lower-cost renewables in the province.
Clean energy regulations were announced last fall that increase the burden to reduce carbon dioxide emissions.
Both major federal parties have now made overtures that they plan to do away with a consumer carbon tax after this year’s federal election, but positions on the industrial carbon levy are unclear.
That could affect the Alberta provincial TIER levy, which captures power production in the province, and currently the province is also considering a number of changes to the Alberta power market, which could affect city income from export sales.
The city has updated forecasts on energy prices and carbon compliance costs, she said, but finer “refinement” is required.
“We are in a period of uncertainty, and my suspicion is that uncertainty isn’t going to disappear with any one thing or election,” said Pancoast.
“The reality is that these are long-life assets, even our natural gas fleet … so these decisions have an element of risk; we make the best decisions with the assessments we have at the time.”
Council approved $7 million for the sale in 2023.
Any additional funds required to advance engineering work would be requested at council, potentially within the month, said Pancoast.
Pancoast also confirmed that updating a lease agreement that DP Energy held with landowner Viterra will have to be updated and transferred, since Viterra was acquired by competitor Bunge recently.
That should be a matter of simple updates, she said.
