The Alberta government plans to shift the province’s energy dependence from mostly coal to a supply of 30 per cent renewable energy by 2030.
The move comes only a week after Premier Rachel Notley unveiled her government’s climate change strategy.
“Albertans are leaders. The plan we have put forward enables us to take real action on climate change, protect our electricity market and responsibly transition away from coal to up to 30 per cent renewable energy by 2030,” said Shannon Phillips, minister of Environment and Parks. “This is good for our environment, good for our image in the world and good for the health of families.”
The NDP government also said the transition would allow for development, creating new jobs and spurring “billions” in new investment.
“Transitioning away from coal creates a tremendous opportunity for new investment in Alberta,” said Margaret McCuaig-Boyd, minister of Energy. “Throughout the course of this phase-out, our province will see billions of dollars in new investments. While this transition takes place, our government is committed to working with the companies operating in our competitive market, as well as those looking to invest to ensure that everyone is treated fairly.”
A report from the Alberta Climate Change Advisory Panel defines renewable energy as “resources which are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat.” It also states that “Alberta has a significant potential for increased renewable energy development across the province.”
“The AESO is confident that by working closely with government and industry, we can reliably implement the transition away from coal,” said David Erickson, Alberta Electric System Operator (AESO) president and chief executive officer.
A stack of commitments
The province identified the following elements as key commitments of the plan:
- Diversifying the energy supply by replacing retired coal with at least two-thirds renewable energy sources.
- Appointing an independent facilitator and negotiator to aid in development and implementation of the plan to ensure the province transitions away from coal generation without endangering the reliability of its electricity system.
- Keeping the costs of renewables as low as possible by using market mechanisms, such as auctioning.
- Supporting workers employed in the coal electricity sector with opportunities to retrain for new jobs in a greener energy economy.
- Reducing greenhouse gas emissions from coal-fired electricity to zero by 2030, from current emissions of 40 megatonnes annually. That is the equivalent of taking eight million cars off the road.
Coal industry to face most impacts
A report delivered by the province’s Climate Change Advisory Panel describes four categories of potential impacts on new and existing power supply facilities.
Coal plants are expected to see the most adverse impacts as a result of the transition.
“A carbon price with output-based allocations provided based on a good-as-best-gas standard will erode the operating margins of coal plants, and will alter their dispatch decisions likely causing them to produce less through the year,” the report reads. “In addition, our recommendation that government actively pursue an accelerated coal phase-out, with a commitment to remove most or all coal power from Alberta’s system by 2030, may imply that lifespans of some coal-fired plants will be truncated.”
Gas plants are expected to become a more important part of Alberta’s electricity market under the proposed policies, according to the report. Though returns earned by new and existing gas generators are expected to be small, there will likely be more gas generation in the market over time as coal retirements create an added market for gas power.
The future of co-generation was harder for the panel to predict, with its link to the potential growth in oilsands production. According to the report, one does not happen without the other.
Finally, the report states the development of renewables will be challenged in Alberta’s market. This is in part because “renewables tend to lower their own market prices, and the low price gas prices will keep market prices from rising significantly.” The high costs of developing new projects will likely mean any substantial new renewable generation in Alberta will require some sort of incremental financial support.
Upon successful implementation, the climate change plan puts Alberta in a position to cut emissions by 20 megatonnes in 2020 and 50 megatonnes by 2030, as well as reducing methane emissions from flaring and leakage by 45 per cent, from 2014 levels, by 2025, according to the government.