Bill McKibben calls the Alberta tar sands a “carbon bomb.” Not only does it require huge quantities of energy to separate the oil from the sands, the oil produced creates more carbon emissions than other types of oil. Think of it as liquid coal. But wind power may change all that.
Thanks to the imperative of capitalist theory, however, producing oil from tar sands has become an integral part of Alberta’s economy, providing employment for many workers and filling the provincial coffers with cash. But now even Alberta, the poster child for dirty fossil fuels, is being prodded to move in the direction of renewable energy. The reason? Low prices. Ah, capitalism giveth and capitalism taketh away.
The Alberta provincial government asked for bids to build 400 MW of wind power. 29 companies responded. When the dust cleared, the bids were so low, the government decided to increase its RfP by 50% to 600 MW. Premier Rachel Notley said the average of 3.7 cents per kilowatt-hour bid by the 3 winning companies is the lowest price for electricity from wind power ever recorded in Canada.
Robert Hornung, president of the Canadian Wind Energy Association, says not only did this latest auction set a record low wind power price, it also means wind is now competitive with natural gas–fired generation facilities. He notes the cost of wind power has fallen by 67% in the past 8 years. “That’s a product of technological change, larger turbines, lighter materials. It’s also a product of improved financing. You have a lot more people who want to invest in wind now, who don’t see it as risky … and in this particular case, Alberta does have a very good wind resource.”
Alberta has selected three companies to construct four wind turbine facilities within the province. Capital Power, based in Edmunton, will build a 201 MW facility. EDP Renewables, based in Lisbon, will build a 248 MW wind farm, and Enel Green Power Canada, a division of the giant Italian utility company Enel, will build two systems, one of 115 MW and another of 31 MW. All four are scheduled to begin operating in 2019 and will cost nearly $1 billion.
Alberta has set a goal of 5,000 megawatts of renewable energy through private sector investment by 2030. Reaching that goal will require an investment of about $10 billion. The agreement between the wind developers and the province requires the Alberta government to subsidize the plants using funds from a tax on heavy industrial emitters if the power price falls below the bid price. If it’s higher, the companies are to pay the difference to the province.
The idea that Alberta is looking beyond further development of its tar sands to promote more renewable energy within its borders is good news for local utility customers and the environment.