A Promise to be Broken? Alberta Government Announces Long-term Renewables Plan
On February 26, 2019, the Alberta Government announced a long-term plan to achieve its legislated target of 30 percent renewable electricity by 2030. As part of this Plan, the Alberta Electricity System Operator (AESO) was directed to develop recommendations for Round 4 of the Renewable Electricity Program (REP).
AESO Evaluates REP
Prior to the announcement of the REP Round 2 and Round 3 results in December 2018, the Minister of Energy (Minister) requested that the AESO prepare recommendations on how to ensure the REP continues to secure lowest cost outcomes. Specifically, the Minister directed the AESO to assess potential approaches, including bid selection criteria and payment mechanisms (which recognize the various system benefits of different renewable projects), to minimize market distortion and continue to deliver the benefits of competition and lower pricing. The AESO is also considering the potential benefits and drawbacks of any such alternative approaches. These recommendations and the AESO’s evaluation of REP are due to the Minister by March 29, 2019.
Development of REP Round 4
In conjunction with its evaluation of REP, the Minister also directed the AESO to develop a new program proposal. REP Round 4 will procure 400 megawatts (MW) of renewable electricity to promote large-scale renewable electricity generation.
The key features of REP Round 4 include:
- Minimum 25% Indigenous equity ownership per project;
- Indigenous community must be located in Alberta;
- Eligible projects must be greater than 5 MW and are limited to new or expanded renewable electricity generation projects in Alberta; and
- Eligible fuels must meet Alberta’s definition of renewable energy resources as defined in the Renewable Electricity Act.
For the purpose of REP Round 4, Indigenous is defined as one of a combination of:
- First Nation communities, Métis Settlements, Métis Nation of Alberta, and the Aseniwuche Winewak Nation; or
- Indigenous community-owned organization and/or business.
The AESO’s REP Round 4 proposal must be submitted to the Minister no later than June 3, 2019.
What is the Future of REP Round 4?
Alberta is gearing up for an election this spring. Although one-term governments are rare in Alberta, a united conservative party (UCP) threatens the second term of Premier Notley’s New Democratic Party (NDP). Jason Kenney’s UCP publicly stated that it does not intend to cancel awarded power contracts. However, the UCP also stated that it supports renewables but without government funding, incentives or long-term contracts. If the Alberta election results in a change of government, it could be the end of REP.