Alberta’s generation-demand gap presents the province with an unprecedented opportunity to seriously slash greenhouse gas emissions, lower public healthcare costs, and create new business and investment opportunities.
Around the world, a number of economic, environmental, and security imperatives are accelerating the global adoption of renewable energy. Last year, investors poured $254 billion into solar, wind, and other clean power sources. (Pew/ Bloomberg New Energy Finance, 2014). In large part due to massive and ongoing clean energy investments in China, wind and solar—once expensive boutique technologies—are now competitive with fossil fuels in many jurisdictions.
Solar module prices have plunged about 80 per cent since 2008. Total system costs for global best-in-class utility-scale solar installations now run $1.55 per watt, and are expected to continue falling. Meanwhile, global wind turbine prices dipped roughly 35 per cent between 2009 and 2013—a 23 per cent decline in the levelized cost of electricity for wind (Business Council for Sustainable Energy/Bloomberg New Energy Finance, 2014).
Though total worldwide investment in renewable energy declined last year, it continued to grow in Canada—45 per cent, in fact, from 2012, to reach $6.5 billion in 2013. This made Canada the second-fastest growing market for clean energy investment in the G-20 (Pew/Bloomberg New Energy Finance, 2014). Unfortunately, as one of the very few jurisdictions in North America to lack a renewable energy policy, Alberta received very little of this new investment.
This amounts to a tremendous lost opportunity. Alberta’s abundant renewable energy resources offer not only a potential multi-billion dollar investment, but also—when combined with energy efficiency measures—some of the most cost-effective pollution reduction opportunities available. With projected growth in carbon pollution from other sectors, the province cannot leave electricity sector greenhouse gas reduction opportunities on the table. As demonstrated by this analysis, transitioning Alberta’s electricity supply to clean and renewable sources offers the province substantial and much-needed carbon pollution reductions.
As noted above, however, Alberta does not yet offer a competitive renewable energy investment climate under the current market design. Wind and solar power developers—including some based in Alberta—pursue more attractive investment opportunities elsewhere, including in other Canadian and U.S. jurisdictions. To grasp this opportunity, the province needs to take concerted action.
An Alternative and Renewable Energy Policy Framework could set the stage for the clean power transition and transformation outlined below. Provincial leaders have been mulling such a framework for many years. We trace its origins to the Clean Air Strategic Alliance’s Alternative and Renewable Energy Project Team—a multi-stakeholder group formed in 2002 that included representatives from industry, government, and civil society.
As early as 2005, the team recommended that the province develop just such a framework—advice the team reiterated in its 2007 final report (Clean Air Strategic Alliance, 2007).
In the years since, the government committed—and recommitted—to the framework, and did some work on it. But the project largely sat on the back burner until this past December, when the province appointed its first associate minister of electricity and renewable energy—a position since vacated. Several months later, the March 2014 Speech from the Throne reiterated the government’s intent to introduce the renewable energy framework.
Though the appetite for leadership on reducing fossil-powered electricity and increasing renewable energy remains uncertain, the opportunity for Alberta to diversify its energy mix and reduce pollution is as clear as ever.