Alberta Renewables Shift Seen as Premier Looks to Ontario

(Bloomberg) — Perched on the edge of a turquoise-colored
Lake Erie, the Nanticoke, Ontario coal plant that was once
Canada’s largest polluter sits idle, surrounded by rolling hills
dotted with wind turbines and solar-paneled barn roofs.

A few thousand miles west, Alberta’s coal-fired generating
stations and oil-sand operations spew a third of the country’s
carbon emissions, while a solar-power potential similar to
northern Spain remains largely untapped.

Alberta Premier Rachel Notley now wants to bridge the gap
in energy policies between the two Canadian provinces. Notley,
elected in a surprise vote last month, is leaning on advisers
from Ontario and the federal wing of her New Democratic Party to
outline a shift in Alberta’s energy policy, according to people
familiar with discussions who asked not to be identified because
plans aren’t public. The shift includes phasing out coal plants
and offering subsidies for solar and wind, the people said.

“Alberta is increasingly unusual in deriving such a high
percentage of its electricity from coal,” said Rick Smith,
executive director of the Broadbent Institute, an Ottawa-based
policy think tank affiliated with Notley’s party. “There are so
many cost-effective alternatives these days. You see the
tangible, measurable results of this in the greater Toronto
area, where the air is cleaner.’”

Campaign Platform

While Notley’s government has yet to present any concrete
plans, her campaign platform pledged a coal phase-out, an
expansion of cleaner energy, as well as loans to families, farms
and small businesses to retrofit buildings to reduce energy use.

“Failing to deal with climate change issues creates
uncertainty,” Notley told reporters in Calgary on May 27. “To
suggest that we never change anything ever, ever, ever going
forward is not particularly responsible, given the worldwide
conversation around climate change.”

Alberta Environment Minister Shannon Phillips said Tuesday
that new climate-change regulations will be in place by the end
of this month, and that public consultation on the province’s
renewable energy and energy efficiency strategies will be held
in coming months.

Alberta’s possibilities include an accelerated coal phase-out beyond a federal goal of shutting or refitting plants after
50 years of operations, as well as raising the C$15-per-ton
price on carbon for large emitters and expanding it to a broader
range of sources, said Ed Whittingham, executive director at the
Pembina Institute, a Calgary-based environmental research group.
Eliminating emissions from coal plants is the “low-hanging
fruit,” he said.

Biomass Option

Though Alberta is Canada’s main oil and gas producing
region, the province relies on coal for almost half its
electricity generation. The per capita emissions of 60 metric
tons a year are about five times the rate for Ontario. TransAlta
Corp.
and Capital Power Corp. are among the biggest operators of
coal plants in Alberta.

The Shepard natural gas-fired power plant in Calgary, a
joint venture between ENMAX Corp. and Capital Power that started
operations last month, was the largest step so far in the
province to replace coal with a cleaner source. It has the
capacity to meet almost half the city’s electricity demand and
emits less than half the carbon per megawatt of coal plants,
according to ENMAX.

Alberta’s coal plants could follow in the footsteps of
Ontario Power Generation Inc., which converted two stations near
Thunder Bay, in the province’s north, to burn wood. The biomass
is considered carbon-neutral because the trees capture the gas
when they’re growing. Alberta, like Ontario, has ample swaths of
Boreal forest.

Conversion Cost

“The closer you are to the forests, the cheaper the fuel
is going to be,” Mike Martelli, vice president of the
provincially-owned generator, said by phone from North Bay.

Converting one plant cost as little as C$5 million ($4
million), mainly to change safety equipment, and some Alberta
coal generators have already reached out to OPG to learn from
its experience, he said, declining to identify them.

Ontario’s phase-out, completed last year, and policies to
boost the use of renewables resulted in a 19 percent reduction
in emissions since 2005, according to a report by the Pembina
Institute. The province now plans to lower emissions 37 percent
by 2030 from 1990 levels, the most ambitious proposal among
Canadian provinces.

“What’s really important is that we take on the next
steps,” Ontario Premier Kathleen Wynne said at the Bloomberg
Economic Series summit in Toronto on May 21. “We know that
there’s serious work to do. If we get it right we’ll provide
opportunities for innovation.”

Abundant Sunlight

Alberta gets 20 percent more solar radiation than Ontario,
John Gorman, president of the Canada Solar Industries
Association, said in an interview from Ottawa. Notley’s first
task should be to overhaul rules for small-scale solar and then
move to encourage development of utility-scale projects because
of the province’s availability of land, he said.

Alberta’s transition from coal will be slower than
Ontario’s as the western province needs to strike a balance
between environmental progress and economic growth, TransAlta
CEO Dawn Farrell said in an e-mail.

By 2030, more than half of the province’s coal plants will
be retired, will meet new emission standards, or will be
replaced by renewables, gas or coal plants that capture and
store carbon, Farrel said.

Not everyone is happy with Ontario’s approach. Electricity
prices have risen to about 16 Canadian cents a kilowatt-hour,
from less than 10 cents in 2009, according to the Ontario Energy
Board. And the pace of change has been rapid in places like
Haldimand Country, home to the Nanticoke plant, which employed
600 workers before it was shuttered.

Culture Shock

“They just shut off the switch,” said Bernie Corbett, a
councilor and former mayor of the county. “It has been a
culture shock for us.”

The town of 40,000 about 115 kilometers (70 miles)
southwest of Toronto is becoming a retirement community. Schools
are closing and it’s struggling to navigate a decline in
manufacturing in the province. Closing the coal plant didn’t
help, Corbett said.

Still, opportunities have also arisen. Instead of hundreds
of workers clocking in at the plant, renewable-energy developers
employ technicians like Duke Tombia, a 34 year-old engineer who
oversees operations at the Grand Renewable Solar LP site about a
25-minute drive along the Lake Erie shore from Nanticoke.

Bet on Solar

“I’ve really made a bet on the solar industry,” said
Tombia, who previously worked in the construction industry. The
thousands of solar panels in the site generate 100 megawatts of
emission-free power when the sun is shining.

Alberta has the opportunity to tread a similar path, the
Broadbent Institute’s Smith said.

“If this were 50 years ago and Alberta didn’t have options
in terms of other cost-effective forms of electricity
generation, it would be a different story,” he said. “But
times have changed.”

To contact the reporter on this story:
Jeremy van Loon in Calgary at
jvanloon@bloomberg.net

To contact the editors responsible for this story:
David Scanlan at
dscanlan@bloomberg.net
Carlos Caminada

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