Alberta could be a global leader in renewable energy
Posted June 12, 2010
OPINION
By Marlo Raynolds and Tim Weis
Imagine Alberta as a world leader in renewable energy. While it may seem far-fetched at the close of a decade in which our province became infamous for the pace and scale of environmental impacts from the oil sands, a different energy future for Alberta is entirely possible within the next 20 years.
That’s because oil and natural gas are not the only natural resources this province has in abundance. The winds that sweep across our vast prairies hold the potential to turn our electricity future upside down in just two decades. And Albertans’ entrepreneurial spirit and expertise can aid us in tapping into huge gains in efficiency and cogeneration technology.
While Alberta swelters under the heat of international scrutiny targeted at the oilsands industry, let’s remember that it is electricity generation that accounts for more than 40 per cent of the province’s greenhouse gas emissions.
What’s more, Albertans currently rely on coal for at least 70% of the power they consume at home, making Alberta’s electricity system the most polluting in all of Canada and per capita amongst the dirtiest in the world. The Alberta Electric System Operator is forecasting the growth of the oil sands will cause the demand for electricity to rapidly grow in the next 20 years, so the picture could get even worse. When you include the true costs of coal, including all the health impacts and pollution costs, it makes questionable sense economically.
We have other options. Greening the Grid, a study by the Pembina Institute, shows how Alberta’s grid could go from relying on coal for 70% of its electricity to 70% or more from clean energy sources in just 20 years.
The study looks at two different scenarios for Alberta’s electricity future that will steer the province away from its business-as-usual reliance on coal-fired power plants. In the first scenario (a very conservative approach, dubbed the “Pale Green” scenario), investments in a portfolio of cleaner options using technology that is proven today –-mainly efficiency, wind and natural gas cogeneration – could meet the gap in Alberta’s growing demand over the next 20 years without having to resort to building new coal or nuclear plants.
The second, more aggressively green scenario (dubbed the “Green” scenario) shows that if Albertans set their sights higher, the province could generate so much energy from existing renewable and transitional technologies that it could begin to phase out existing coal generation, and potentially fit any remaining coal plants with carbon capture and storage technology if the costs can be dramatically reduced. To do this, we have to be committed to deploying today’s technologies at rates that leading jurisdictions around the world have already demonstrated are possible.
In both scenarios, reducing our reliance on coal will be achieved through a portfolio of technologies already being used in Alberta. The three keys ones include: 1) significant increases in the cogeneration of heat and electricity with natural gas; 2) wind power; and 3) major investments in improving the efficiency of how we consume energy in Alberta.
Cogeneration gets the most out of every unit of energy it uses. Cogeneration can result in significant cost-savings as well as up to a 75% reduction in pollution compared with coal. The Southern Alberta Institute of Technology in Calgary recently installed a cogeneration unit that will result in savings of approximately $1 million over the next 10 years. And the University of Calgary has implemented a campus-wide energy performance program that will convert its aging heating and cooling plant into a 12- to 15-megawatt cogeneration facility. The $48-million project will result in an estimated $3.5 million in operating cost savings per year and reduce the U of C’s carbon dioxide emissions by 80,000 tonnes per year when it comes online by the end of 2011.
To capitalize on industrial cogeneration opportunities, the government needs to help ensure that all new major industrial facilities generate their own electricity and heat using high-efficiency cogeneration. Further gains can be made if we encourage all new buildings to be linked to district energy systems when possible, have onsite power where sufficient thermal load exists and offer incentives for new cogeneration projects in existing buildings.
Alberta’s wind potential is enormous – and enormously underutilized. Indeed, our province used to be the country’s leading wind energy producer, but was surpassed by both Quebec and Ontario in 2008. Despite 15 years of wind development, Alberta still takes advantage of less than 1% of its total estimated 64,000-megawatt wind energy potential. The potential surpasses our needs by almost five times – our current electric grid’s maximum capacity is about 13,000 megawatts (MW), while on average Alberta uses 8,000 MW.
The untapped potential in wind extends to monetary gains, as well as jobs. The Germans earned approximately $10 billion in export revenue from wind energy technology alone in 2007. In Pincher Creek in southwest Alberta, wind farms generate more than one-quarter of the municipal district’s annual revenue and have become a significant employer in the area. In the last five years, Germany has installed more wind power than twice Alberta’s total electricity load. Denmark generates more than 20% of its electricity from wind while closer to home, the largest wind farm in the world is in Texas – the state with the most developed wind energy policies and installed wind power in the U.S.
Alberta could take much better advantage of its tremendous wind potential by following Texas in developing supportive policies and investment climates for wind power, while developing new transmission exclusively for renewable energy projects.
Moreover, Canada’s federal government has ended its ecoENERGY for Renewable Power program, which provided a production incentive (one cent per kilowatt-hour produced for 10 years) to help close the gap between the cost of wind energy and the cost of conventional electricity generation. The program stimulated the deployment of more than 4,000 MW of renewable energy, and utilized its entire $1.48 billion budget more than a year ahead of the program’s scheduled end.
In comparison, when the comparable program in the U.S. expired, the Obama Administration renewed and expanded its Federal Production Tax Credit for wind energy that offered investors more than three times the value of Canada’s now defunct ecoEnergy incentive. The U.S. federal administration also allowed the tax credit to be received as a grant toward capital expenditures – making the incentive available to Canadian companies for the first time.
In July 2008, the Canadian premiers, including Alberta Premier Ed Stelmach, committed “to achieving a 20% increase in energy efficiency (including electricity) by 2020.” To achieve that target, smart policies need to be implemented in all sectors, and will involve investments in hardware, marketing campaigns, education initiatives, improved standards and regulations, and other incentives. In other words, achieving this target will require strong government vision and commitment. The good news is, these investments all turn around and make or save money – which just so happens to be the common thread in all jurisdictions that have successfully begun to “green their grid.”
Our analysis in Greening the Grid outlines three near-term steps that Alberta’s government can take to get us on track to improve the environmental performance of our grid:
1) Given the enormous renewable potential in Alberta, a panel, such as a renewable electricity task force, should be appointed to examine the most effective policies to take advantage of renewable energies. The panel’s first step would be to assess the scale of the potential for renewable electricity. Based on the assessment, the panel should recommend a renewable electricity policy framework to take full advantage of the opportunity. Alberta has already appointed expert panels to examine the potential role of nuclear power and carbon capture and storage in the province. A renewable electricity task force would complement the work done by the current task forces. A number of municipalities across Alberta have expressed support for this approach.
2) A comprehensive energy efficiency and conservation strategy should be developed. The Alberta government has committed to passing an Energy Efficiency Act, which is an opportunity to show bold leadership in making Alberta a leader in energy productivity. In addition, Alberta can promote a culture of smart energy users through training and outreach programs, low-interest loans and regularly updated efficiency regulations.
3) In the short term, funds need to be earmarked for renewable energy. Numerous jurisdictions in Canada and the U.S., including Ontario, Texas and Alaska, are actively investing in renewable energy. Alaska is using its fossil fuel revenues to create a $250- million Renewable Energy Fund. We cannot afford to fall behind in the rapidly growing renewable energy sector. Right now, investments are going elsewhere.
While Alberta’s government has already committed $2 billion to carbon capture and storage – a technology that may one day help to reduce the province’s greenhouse gas emissions but not in the near future – employing renewable energy and energy efficiency technologies would not only help to diversify the economy, create jobs, reduce air pollution, strengthen energy autonomy and help Alberta reach its greenhouse gas emission-reduction goals, but we also know they already work today and can be built as soon as tomorrow.
Marlo Raynolds is the executive director of the Pembina Institute. Tim Weis is the director of renewable energy and efficiency policy at the Pembina Institute. The Greening the Grid report they refer to can be downloaded at http://re.pembina.org/pub/1763 This column first appeared in the June 2010 edition of EM magazine, published by the Air & Waste Management Association.
The Pembina Institute is a national non-profit think tank that advances sustainable energy solutions through research, education, consulting and advocacy. It promotes environmental, social and economic sustainability in the public interest by developing practical solutions for communities, individuals, governments and businesses. For more information, visit www.pembina.org
