For those of us attending this week's Alberta Power Symposium in Calgary, we listened closely to the keynote address delivered by Alberta's Environment and Parks Minister, the Hon. Shannon Phillips. The title of the Minister's address was "Plans for Alberta Energy: Clarity and Direction in a Time of Uncertainty". The clarity and direction takeaways from her address that are noteworthy for market participants to know are:

  1. The Province of Alberta states that 30 percent of electricity used in Alberta will come from renewable sources by 2030. In fact, the Province appears to have put a tag line of "30 by 30" on this policy;
  2. To get there, the Province will provide financial support for 5,000 MWs of new renewable power projects to be constructed in the Province over the next 14 years. The 5,000 MWs is the first concrete number provided to date, as most of us have been assuming a number of 4,200 MWs. The Province estimates that building these new renewable projects will result in $10.5 billion of investment, and create 7,200 new jobs in Alberta;
  3. The support for renewables will come from a fair, competitive and cost-effective procurement run by the Alberta Electric System Operator (AESO). It will be coordinated with the phase out of the coal plants so as to not place undue pressure on Alberta's electricity market. The Province remains committed to achieving its policy objectives while still maintaining Alberta's merchant market. It is also not to affect grid reliability;
  4. To be eligible for support in the procurement, a renewable project will have to be (i) based in Alberta (ii) be new or be an expansion of an existing project; (iii) be 5 MWs or greater; and (iv) as the AESO previously announced meet the definition of renewable sources set out by Natural Resources Canada.

Minister Phillips stated that the procurement would provide certainty for developers and for consumers. However, she did not provide any details about how that certainty would be achieved. This will come later this year when the Province announces the details of its first ever renewable power procurement – the first of many more procurements if the 5,000 MW target is to be achieved by 2030. It is only then that we will know how far the Province is willing to go to provide developers and their financiers with certainty, especially the extent to which new renewable power developers will be expected to bear pricing risk in Alberta's electricity market. An electricity market that we note currently has more electricity supply than it needs and that is experiencing record low prices - one with a lot of uncertainty for the Minister to remove if she is to entice new renewable power development in Alberta.

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