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Kenney's pledge to end wind and solar subsidies would 'roll back the clock,' says energy expert

cbc.ca logo cbc.ca 2019-02-22 Helen Pike
a group of people posing for the camera: Jason Kenney addresses a crowd of about 500 UCP members at an event in Edmonton on February 16, 2019. © Scott Neufeld/CBC Jason Kenney addresses a crowd of about 500 UCP members at an event in Edmonton on February 16, 2019.

Jason Kenney wants to avoid the mistakes made by a liberal Ontario government when it comes to subsidizing renewable energy by getting Alberta out of the power contract game.

But according to an expert, he's talking about a problem that doesn't really exist.

On Saturday, at the election readiness conference, Jason Kenney rattled off a few campaign platform hints to party faithful during a 40-minute speech. 

He touched on how he wanted to rewrite the curriculum, that his party is interested in repealing the carbon tax and that a United Conservative Government wouldn't be subsidizing wind or solar power.

"We have no intention of retroactively cancelling good faith contracts," Kenney told reporters on Sunday. "My commitment last night was for a future United Conservative government to no longer provide subsidies to uneconomic wind and solar power generation, because every additional kilowatt-hour of higher uneconomic wind and solar generated power raises the rates for Albertans."

Warren Mabee, the director of the Queen's Institute for Energy and Environmental Policy, said compared to most wind and solar projects Alberta has managed to grab a cheap price for the energy.

Renewable energy getting cheaper

"He's talking about cutting subsidies to wind and solar, which he is, you know, considering to be expensive forms of energy," Mabee said. "The actual experience with wind in Alberta has been quite the opposite."

In 2017, the province announced a plan to add 5,000 megawatts of renewable electricity by 2030. That kicked off three rounds of contracts for companies to bid and build renewable energy projects in Alberta. 

Some of these projects will be operational by the end of 2019, while others are coming online mid-2021.

And, between those three rounds of contracts, the province says power will cost between 3.7 and 4.0 cents per kilowatt-hour, weighted, on average.

"You're trying to go back to the glory days of the fossil fuel industry where there's a cheaper alternative in front of you."  - Warren Mabee

For comparison, a 2016 Ontario procurement was 8.5 cents per kilowatt-hour.

Mabee said ending low subsidies, particularly wind power would be detrimental.

"For a potential premier to say that, you know, we're just going to end any support for this sort of an industry I think you're really trying to roll back the clock," he said. "You're trying to go back to the glory days of the fossil fuel industry where there's a cheaper alternative in front of you." 

Mabee said Ontario did make contract mistakes, especially with wind companies, and were overpaying for energy and locked into multi-year contracts at those inflated prices. 

'In the end, it ends up costing'

But, he believes Alberta learned from the mistakes Ontario made. And, Mabee says as technology improves and policy gets better, generating renewable energy becomes more affordable.

What's more, he says stopping the support could end up costing taxpayers in the long run.

"We've seen governments do that in the past where they basically stopped investment to try to save the taxpayers a few bucks, and in the end, it ends up costing," he said. "You end up not only with deferred maintenance, you end up with plants that no longer can really operate efficiently. And a lot of money has to be spent all at once to replace that infrastructure."

Alberta has always done well on the wind front, according to Evan Wilson, the Canadian Wind Energy Association's regional director for the prairies. Wilson says the Renewable Electricity Program (REP) has helped build on the foundations of entrepreneurs in the province.

He says wind energy accounts for around 10 per cent of the province's electricity capacity.

And, the province's contracts operate very differently from the ones drafted in Ontario.

"All of these generators are going to the market, and they're selling their electricity as part of the auctions on the market," he said. "What we're seeing here is a system that is designed to provide a stable level of revenues from the market that does provide a top up from time to time."

When he looks at the numbers, Wilson said for the most part electricity generators are returning money to the system operator because of how the contracts were structured, and he expects those numbers to hold when the wind farms are operational.

Funded by the carbon tax

The current government is subsidising renewable energy through the Climate Leadership Plan — funded by the carbon tax.

Kenney has already stated that he plans on repealing the carbon tax if the United Conservative Party are elected in 2019. He's also said that the projects funded by the levy are part of a "political accounting gimmick."

At the weekend press conference, Kenney told reporters he's open to wind and solar energy coming online in Alberta — if it can compete. 

"If more wind and solar can come on to the grid by competing on a market basis with other forms of power production, we will absolutely embrace that," said Kenney. "We are in favour of choice and competition in the power markets."

He said in New Zealand wind farms receive no subsidies, and Alberta too should get out of the subsidy business to "keep the door wide open" for increasing wind and solar energy projects where they're affordable.

Wilson said moving forward, he believes no matter the approach from the government, there are opportunities for wind farms in Alberta.

"We have the wind resource that has attracted people here for decades to build wind," he said. "Regardless of the policy measure in place to make it happen — Renewable Energy Program is certainly the most cost effective way to get low cost wind." 

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