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A Vision of Renewable Power in Alberta by 2020
Proposed by
Alberta Renewable Energy Alliance
May 5, 2015
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Website: http://www.abrenewableenergy.ca
VISION
AREA envisions an Alberta where power is supplied entirely by renewable and ecologically sound sources.
MISSION
AREA advances the deployment of renewable power through educational events, political advocacy, and support for installations.
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AREA OBJECTIVES
• Integrate renewable energy with hydrocarbon energy, establish thousands of local diversified jobs, reduce health costs, and improve Alberta’s energy leadership on the world stage.
• Increase current renewable power generation to reduce cumulative GHG emissions by 46 megatonnes CO2e by 2020
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AREA GOALS BY 2020 Goal #1
• Power generation in Alberta provided by renewable energy should be increased from the current 10% to 25%.
Goal #2
• Coal power should be reduced by 2,982 megawatts by closing 40 year old units.
Goal #3
• 3,650 Megawatts of Renewable Energy, Energy Efficiency, and Energy Storage should be added to the electricity system.
Goal #4
• 20,000 rooftop solar photovoltaic systems should be installed across Alberta.
Goal #5
• Electricity generated via renewable energy systems within Alberta should receive differential offset prices in addition to the Alberta Pool prices. Renewable energy should be awarded an offset of at least that of coal ≥ 1.0 tne CO2e/MWh.
Goal #6
• The levy on final emitters should be escalated annually at $3.00 above the current value of $15/tne CO2e and 3% beyond the current 12% reduction below the 2003-2005 baseline emission intensity.
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Goal 1 Objective By 2020, power generation in Alberta provided by renewable energy (including energy efficiency) should be increased from
the current 10% to 25%
Coal 20%
Gas 55%
hydro 3%
wind 7%
bioenergy 3%
Geothermal
1%
Solar 1%
Efficiency 8%
Energy Storage
2%
2020 Proposed Generation 25% Renewable Energy
(Total Generation 95,000 GWh / year)
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Coal 55%
Gas 35%
hydro 3%
wind 4%
biomass 3%
2014 Generation Mix 10% was Renewable Power
(Total Generation 80,000 GWh / year)
Source: 2014 AUC data
Goal 1 Benefit More than 46,000 local diversified jobs will be created in a sustainable energy sector across Alberta.
(*estimated applying data from the National Renewable Energy Laboratory) 6
Technology Investment $ Millions
Job Years per $ Million
Job Years* by 2020
Wind $3,000 4.9 14,700
Solar Electricity $2,000 7.2 14,400
Energy Efficiency $400 17.7 7,080
Bioenergy $600 8.5 5,100
Energy Storage $500 6.1 3,050
Geothermal $500 2.6 1,300
Small Hydro $500 2.3 1,150
TOTAL $7,500 46,780
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6271 6271
5402 5247
4885
4479
4073
2509 2509
2119
1719
1329
929 929
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Max
imu
m C
apab
ility
(M
We)
The 2012 Federal Coal Regulation
Sanctioning 50 year 'Useful' Lifetime allows Alberta Coal Power to operate
until 2061 Battle River #3 (1969)
Sundance #1 (1970)
H.R. Milner (1972)
Sundance #2 (1973)
Battle River #4 (1975)
Sundance #3 (1976)
Sundance #4 (1977)
Sundance #5 (1978)
Sundance #6 (1980)
Battle River #5 (1981)
Keephills #1 (1983)
Keephills #2 (1984)
Sheerness #1 (1986)
Genesee #2 (1989)
Sheerness #2 (1990)
Genesee #1 (1994)
Genesee #3 (2005)
Keephills #3 (2011)
All 18 units are permitted to generate 6271 megawatts until 2020
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6271
5834
5402
4885
4479
4073
3684
3299
2904
2509
2119 2119
1719 1719
1329 1329
929 929
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Max
imu
m c
apac
ity
(Mw
e)
All Coal Units should be closed by 2030
(2 supercritical units should be converted to low carbon fuels in 2031)
Battle River #3 (1969)
Sundance #1 (1970)
H.R. Milner (1972)
Sundance #2 (1973)
Battle River #4 (1975)
Sundance #3 (1976)
Sundance #4 (1977)
Sundance #5 (1978)
Sundance #6 (1980)
Battle River #5 (1981)
Keephills #1 (1983)
Keephills #2 (1984)
Sheerness #1 (1986)
Genesee #2 (1989)
Sheerness #2 (1990)
Genesee #1 (1994)
Genesee #3 (2005)
Keephills #3 (2011)
2,972 MW
Goal 2 Objective By December 2020, coal power should be reduced by 2,972 Megawatts by progressively closing ten coal units that have been operating for 40 years.
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52.2 53.1 54.3 55.4 56.7 54.9 50.2 49.8 48.9 46.8 44.8
40.1
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2015 2016 2017 2018 2019 2020An
nu
al G
HG
em
issi
on
s (m
ega
ton
ne
s C
O2
e/y
r)
2012 Federal Regulation 50 year coal lifetime (total emissions = 327 MT)
If coal units are closed after 40 years and renewables are deployed (total emissions = 281 MT)
Goal 2 Benefit Shuttering ten coal units by 2020 will reduce cumulative GHG grid emissions from 327 megatonnes to 281 megatonnes.
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Goal 2 Benefit Progressively shuttering coal units and adding renewable energy will reduce power generation GHG intensity 75% by 2030
670
170
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kg C
O2
e p
er M
Wh
Recommended GHG Target for Alberta Electricity Generation by 2030
(170 kg CO2e/MWh)
Current Canadian Average GHG Grid Intensity is 170 kg CO2e/MWh
Goal 2 Benefit (continued)
Reducing coal power capacity by 50% by 2020:
will yield a significant reduction in impacts to health from criteria air contaminants NOx, SOx, mercury, and particulate matter; (and a toxic mixture of elements and compounds of lead, cadmium, dioxins and furans, hexachlorobenzene, arsenic, PAHs, and ground-level ozone)
*Coal emissions are estimated to cause more than 100 premature deaths and more than 4,800 asthma symptom days in Alberta annually. Models estimate that total economic damages in Alberta associated with the health impacts of air pollution from coal plants are in the range of $300 million annually. *Source: Canadian Association of Physicians for the Environment Asthma Society of Canada The Lung Association (Alberta and NWT)
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Goal 3 Objective 3,650 Megawatts of Renewable Energy, Energy Efficiency, and Energy Storage should be added to the electricity system to
replace ten coal units which should be decommissioned by 2020.
Technology Capacity (MW)
*Investment ($ millions)
Wind 1,500 $3,000
Energy Efficiency 800 $400
Solar Electricity 800 $2,000
Energy Storage 200 $500
Bioenergy 150 $600
Hydro 100 $500
Geothermal 100 $500
TOTAL 3,650 $7,500
*estimated applying capital cost per MW information from NREL 12
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2.0 3.3
5.3
8.6
11.8
14.8
0.0
5.0
10.0
15.0
2015 2016 2017 2018 2019 2020
mill
ion
to
nn
es C
O2
e p
er y
ear
GHG reductions if coal units are decommissioned after 40 years as opposed to 50 years
(MT CO2e per year)
Alberta Government GHG Reduction Target below Business As Usual for 2020 = 50 MT/year
Goal 3 Benefit Replacing ten coal units with zero emission renewable energy by 2020 will achieve cumulative CO2e reductions of 46 megatonnes.
Goal 4 Objective 20,000 residential and commercial rooftop solar photovoltaic
systems should be installed across Alberta by 2020.
700 1,200
1,900
3,100
5,000
8,100
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2015 2016 2017 2018 2019 2020
Nu
mb
er
of
Syst
ems
Inst
alle
d p
er
year
Number of rooftop PV systems installed annually (Average system capacity = 3 kWdc)
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2.2 3.5 5.7
9.3
15.0
24.3
3.5 5.7 9.3
15.0
24.3
39.3
63.5
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10.0
20.0
30.0
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50.0
60.0
70.0
2014 2015 2016 2017 2018 2019 2020
Meg
awat
ts
Rooftop PV Capacity by 2020 (Megawatts)
new PV capacity added each year cumulative PV Capacity
Goal 4 Benefit
By 2020, 60 Megawatts of highly visible solar photovoltaic capacity will have been added to rooftops across Alberta.
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Goal 4 Benefit continued The programme should be supported by the government via a $1.00 per installed watt rebate (up to 3 kWdc) and a 10 cents per kWh generation payment premium, in addition to the energy retail price of electricity.
The rebate should apply to PV systems up to a maximum capacity of 3 kWdc
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$2.2 $3.5 $5.7 $9.3
$15.0
$24.3
$0.3 $0.6
$0.9
$1.5
$2.4
$3.8
$2.5 $4.1
$6.6
$10.7
$17.4
$28.1
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2015 2016 2017 2018 2019 2020
$ M
illio
n p
er
year
Total Programme Cost = $69 million Annual payments for generation premium of 10 cents per kWh
Annual rebate at $1.00 per watt
Goal 5 Objective Electricity generated via renewable energy systems within
Alberta should receive differential enriched Offset Prices in a ten year PPA , in addition to the Alberta Pool price.
1 MWh of renewable energy (e.g. wind power) generates 0.59 tne CO2e grid emission offset.
At $15 /tne CO2e the maximum value per MWh of renewable power = 0.59 x $15 = $8.85 per MWh, or
a minimal incentive of
$0.0089 per kWh for all renewable power technologies
Enriched Offset prices are needed
The current single SGER offset price is not high enough to incent investment in renewable energy in Alberta.
Differential increased offset prices, fixed in the form of a ten year PPA, would encourage investment in varying renewable energy projects within Alberta.
Renewables should be awarded offsets ≥ coal of 1.0 tne CO2/MWh
Current SGER offset is too low
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TECHNOLOGY
Added Capacity
(MW)
Capacity Factor
Capital Cost
$ / Watt
Differential Offset Prices
($/MWh)
Wind 1,500 30% $2.00 $30
Energy Efficiency 800 100% $0.50 $10
Solar Electricity 800 16% $2.50 $70
Energy Storage 200 20% $2.50 $80
Bioenergy 150 50% $4.00 $20
Hydro 100 35% $5.00 $70
Geothermal 100 70% $5.00 $30
Goal 5 Benefit
Enriched and differential offset prices should be paid via a ten year PPA (Power Purchase Arrangement), in addition to the Hourly Wholesale Market Price (pool price). Offsets should be purchased by the AEOR.
PPA Offset Premiums should be set to enable equity payback on technology investment in less than 10 years, or yield an internal rate of return ranging between 6% to 10%;
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Goal 6 Objective The levy on power generation emissions should be escalated annually until 2020 as follows: $3.00 above the current value of $15/tne CO2e;
and 3% beyond the current 12% reduction below the 2003 to 2005 baseline emissions intensity.
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$15 $18
$21 $24
$27 $30
$33
12% 15%
18% 21%
24% 27%
30%
0
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10
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30
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2014 2015 2016 2017 2018 2019 2020
AREA Recommends an Annual $3 by 3% Change to SGER Levy
$/tne CO2e % reduction below baseline
Goal 6 Objective continued
The annual $3.00 and 3% increase to the current $15/tne CO2e and the 12% reduction below baseline SGER levy should be applied as well to final emitters exceeding 50,000 tonnes CO2e per year. Currently, the levy is applied only to emitters exceeding 100,000 tonnes CO2e per year. Emitters exceeding 50,000 tonnes CO2e per year have been required to report annual emissions since 2010. These emitters should be required to participate in the SGER GHG reduction protocol, using their reported emission intensities since 2010 as baseline. 20
Goal 6 Benefit
An annual ‘three by three’ progressive levy will lessen the impact of the GOA draft 2014 ‘double double’ option of $30 /tne CO2e and 24% reduction below baseline which would immediately quadruple the current levy.
AREA proposal $/tne CO2e % Reduction below Baseline
Effective Levy on all GHG emissions ($/total tonnes)
2014 $ 15.00 12% $ 1.80
2015 $ 18.00 15% $ 2.70
2016 $ 21.00 18% $ 3.78
2017 $ 24.00 21% $ 5.04
2018 $ 27.00 24% $ 6.48
2019 $ 30.00 27% $ 8.10
2020 $ 33.00 30% $ 9.90
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Goal 6 Benefit continued
An annual $3 by 3% SGER increase will progressively raise the amount of funding to $1,093 Million from coal power levies that should be appropriated to incent an investment of $7.5 Billion for proven, renewable and ecologically sound power generation technologies.
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$80
$115 $138
$154
$180 $202
$224
$-
$50
$100
$150
$200
$250
2014 2015 2016 2017 2018 2019 2020
An
nu
al S
GER
levy
($
Mill
ion
s)
Annual Fees on Coal Emissions above Baseline
Total of $1,093 million for period 2014 to 2020
RECAP OF AREA GOALS BY 2020 Goal #1
• Power generation in Alberta provided by renewable energy should be increased from the current 10% to 25%.
Goal #2
• Coal power should be reduced by 2,982 megawatts by closing 40 year old units.
Goal #3
• 3,650 Megawatts of Renewable Energy, Energy Efficiency, and Energy Storage should be added to the electricity system.
Goal #4
• 20,000 rooftop solar photovoltaic systems should be installed across Alberta.
Goal #5
• Electricity generated via renewable energy systems within Alberta should receive differential offset prices in addition to the Alberta Pool prices. Renewable energy should be awarded an offset of at least that of coal ≥ 1.0 tne CO2e/MWh.
Goal #6
• The levy on final emitters should be escalated annually at $3.00 above the current value of $15/tne CO2e and 3% beyond the current 12% reduction below the 2003-2005 baseline emission intensity.
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