By Lethbridge Herald Opinon on August 26, 2020.
Alberta is in desperate need of economically viable energy construction projects.
Clean energy sources, such as solar and wind, have absolutely cratered in price over the past decade. Prices for on-shore wind have come down 70 per cent and prices for photovoltaic solar have come down 90 per cent, both compared to 2010. Low wind prices now make it the lowest cost source of new electricity in Alberta, as of 2018, shown by the Canadian Energy Research Institute. Canada has not traditionally been a hot spot for solar projects but low prices have allowed new solar projects to smash through predictions for installs. In 2019, the Alberta Electric System Operator predicted that roughly 500 megawatts (MW) of solar would take until 2040 to be installed. Now, in 2020, there is currently already more than 500MW of unsubsidized solar under construction or operating in Alberta, with 84MW already active. Clean energy has become shockingly cost effective and is arriving at scales decades ahead of predictions.
In looking to kickstart our economy in a post-COVID world, we need to follow the market and think about future risks to see where our investment can have the best bang for our buck. The market is showing us that this is in clean-energy projects. Even better, the domestic and global movement for climate action shows us that these projects are not risky and will not face the severe legal and social headwinds that other energy projects have faced over the past two decades.
A 2019 poll by Abacus Data found that 81 per cent of Canadians, and a whopping 75 per cent of Albertans, support transitioning clean energy. Even during the tough economic times Alberta has faced since 2014, international investment has continued to flow into clean-energy projects in Alberta and the public is overwhelmingly interested in accelerating this trend.
But if solar and wind are already so economical, what more can the government do to help the projects? We need to put the pedal to the floor and simplify financing for clean energy. Wind and solar projects are still relatively new in the financing world and the contract world is still catching up to the technological progress. In the 2014 report, Alberta’s future energy mix: exploring the potential for renewables, KMPG found that the price uncertainty found in Alberta’s market made financing solar, wind, and gas projects difficult. The AESO previously had a program called the Renewable Electricity Program (REP) which provided price certainty for renewable projects to simplify project financing. The contract prices were records for North America, as low as 3.1 cents per kilowatt-hour. The REP brought in roughly $2 billion in project investment, such as the Whitla project near Medicine Hat and the Riverview Wind project near Pincher Creek. Jason Kenney and the UCP cut this program in 2019.
There is an additional $2 billion worth of clean-energy projects in the pipeline in Alberta and reviving the REP can resume the speedy activation of these projects, bringing construction jobs with them. The REP’s mandate should also be expanded to include all clean-energy projects, such as carbon capture installation on existing gas plants, emerging small nuclear schemes, or geothermal wells.
Unfortunately, the ideological blinders on both the UCP and NDP leave them to miss these investment opportunities that we need so badly in our province. The UCP is allergic to any action that acknowledges the need for climate action, and the NDP is overly picky in limiting their focus only on renewable energy, instead of all forms of clean energy.
The Alberta Party shuns ideology and tries to be radically reasonable. It is extremely reasonable to see that clean-energy projects are a good deal now, and going forward, and that they have overwhelming public support. An Alberta Party government will seek out all clean-energy projects and accelerate their development in order to bring as many private sector construction projects into Alberta as soon as possible. We cannot afford to do any less.
Robert Tremblay is Associate Shadow Minister – Natural Gas and Renewable Energy and president of the Calgary-Currie Constituency Association for the Alberta Party.