Renewable electricity auction brings in record-low prices for AlbertansDecember 16, 2017
Renewable electricity in Alberta, often criticized for being too expensive, will be very affordable thanks to record-low auction prices and strong investor confidence at the recent auction for green power generation.
Three companies have been chosen in the opening round of the Renewable Electricity Program, which will result in about $1 billion of private-sector investment in green power generation in Alberta. The successful bids have set a record for the lowest renewable electricity pricing in Canada.
The successful bidders will add approximately 600 megawatts of renewable power, or enough to power up to 255,000 homes, through wind projects throughout the province. This amount represents 200 megawatts more than what was originally planned. The exceptionally competitive response from investors means that even with the added power, the entire auction still comes in under the original budget.
The following companies were successful bidders in round one:
- Capital Power, which will build the 201-megawatt Whitla Wind project 60 kilometres southwest of Medicine Hat.
- EDP Renewables Canada Ltd., which will build a 248-megawatt wind farm at their Sharp Hills project east of Hanna, roughly 50 kilometres north of Oyen.
- Enel Green Power North America, Inc., which will build two projects – the 115-megawatt Riverview Wind Farm and the 31-megawatt Phase 2 of Castle Rock Ridge Wind Power Plant just outside of Pincher Creek.
The weighted average price of the successful bids is 3.7 cents per kilowatt-hour. This compares to a 2016 Ontario procurement that had a weighted average price of 8.5 cents per kilowatt-hour.
The Alberta prices are the lowest ever recorded in Canada and are among the lowest prices in North America and around the world. This means affordable electricity prices for consumers will continue as renewable power generation grows in the province.
Support for the Renewable Electricity Program is made possible by the Climate Leadership Plan and is not funded by consumer electricity charges. In total, the program will support the development of 5,000 megawatts of renewable electricity capacity to reach a target of 30 per cent renewable energy by 2030. Development of the next rounds of the program is underway with more details expected in early 2018.
The first round attracted investment from both international and Alberta-based companies and is expected to create approximately 740 jobs. By 2030, the program is expected to attract at least $10 billion of investment into the Alberta economy and create more than 7,000 jobs for Albertans.
“The great interest in this competition, and the record-low prices secured, positions Alberta well as it works to meet its renewable energy objectives in the Climate Leadership Plan. Our industry looks forward to working collaboratively with communities across the province to deliver significant local economic benefits as Alberta capitalizes on its untapped potential to deploy clean, reliable and affordable wind energy.”
Robert Hornung, president, Canadian Wind Energy Association (CanWEA)
“Today’s announcement sends a strong market signal that Alberta’s energy sector is open for business. We’re encouraged by both the extremely low cost of this renewable power and the competitive market opportunities our energy evolution presents to companies from around the globe. Our team is at the forefront of marketing Alberta’s energy story to the world, and we look forward to continuing to work with these organizations as they grow their presence in the Alberta market.”
Mary Moran, president and CEO, Calgary Economic Development