Alberta: A Renewable Energy Super Power?

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1 Alberta: A Renewable Energy Super Power? Patrick Bateman, Policy & Market Development Director, CanSIA Evan Wilson, Prairies Regional Director, CanWEA Calgary & Edmonton SESA Seminars, September 26 & 27,

2 About Us 2

3 Paris Agreement Paris Agreement (COP 21, Dec 2016) to combat climate change and accelerate actions and investments for sustainable low carbon future. For the first time, brings all nations into a common cause to undertake ambitious climate mitigation and adaptation efforts. Charts new course in global climate effort to limit global temperature rise to 2⁰C above pre-industrial levels (aspiration of <1.5 ⁰ C). 60 countries and counting have formally joined the Paris agreement (representing ~47.7% of global emissions). 3

4 Vancouver Declaration The Vancouver Declaration on Clean Growth and Climate Change resulted from First Ministers' Meeting in March, 2016: 1. Increase the Level of Ambition. 2. Promote Clean Economic Growth to Create Jobs. 3. Deliver Mitigation Actions. 4. Increase Action on Adaptation and Climate Resilience. 5. Enhance Cooperation. To create the national strategy, F/P/T working groups were created in 4 areas: Carbon Pricing; Mitigation; Adaptation; Cleantech and Jobs. 4

5 Pan-Canadian Climate Change Framework The (PCCCF) now in final stages of development following significant consultations throughout summer. All Federal Government departments and activities are within scope (i.e. how to incorporate PCCCF in Infrastructure, Budget, Procurement etc). Some early announcements have begun to emerge: Carbon-Pricing in every Canadian province and territory. Emissions reductions floor of 30% by

6 Alberta s Climate Leadership Earlier this month, Shannon Phillips, Minister of Environment & Parks and Minister Responsible for the Climate Change Office announced that the Government of Alberta will: Target a minimum of 30% of Alberta s annual electricity demand being met by renewables in Support the deployment of the first 5,000 MW of renewable generation capacity in the province. In addition, a new policy and regulatory framework is under development for small-scale renewable electricity generation (i.e. residential, commercial and community market sectors). 6

7 Alberta Climate Leadership Milestones November 22, 2015: Climate Leadership Plan Announced Ending Coal Pollution. Carbon Levy and Rebates. Capping Oil Sands Emission. Reducing Methane Emissions. 2016: March 3: AESO engages on Renewable Electricity Program. March 16: GoA announces Coal Phase-Out Facilitator. May: AESO makes recommendation to Government of Alberta.

8 Alberta Climate Leadership Milestones 2016: June 9: Energy Efficiency Advisory Panel announced. September 14: Renewable Electricity Targets announced: 30% of electricity used will be generated by renewables. Government to support 5000 MW of additional renewables. 2017: January 1: Carbon levy applied to fuels - $20/tonne Q1: Energy Efficiency Alberta programs to commence. End of 2017: Specified Gas Emitters Regulation expires, transition to product and sector-based performance standards 2018 January 1: Carbon levy increase to $30/tonne

9 Our Key Message Today 30% renewables by 2030 is achievable in Alberta both cost-effectively and without compromising reliability of supply 9

10 Myths about Wind & Solar Electricity Is there some place where we can get the best of these three things the lowest cost, the lowest emissions and the highest reliability because you re not going to get them all at once, you re going to trade off between them, - Calgary Herald (January, 2016) 10

11 Myths about Wind & Solar Electricity Is there some place where we can get the best of these three things the lowest cost, the lowest emissions and the highest reliability because you re not going to get them all at once, you re going to trade off between them, - Calgary Herald (January, 2016) 11

12 Cost Effectiveness 30% renewables by 2030 is achievable in Alberta cost-effectively 12

13 Overview of Cost-Effectiveness Discussion 1. How much wind and solar do we already have today? 2. What are the future cost and pricing trends? 13

14 (MW) Wind Installed Capacity in Alberta Alberta currently has ~1,500 MW of wind installed capacity in operation today. 3,000 2,500 2,000 1,500 1, Alberta Wind Cumulative Installed Capacity 14

15 (MW) Solar Installed Capacity in Canada Alberta represents a fraction of Canada s solar (>2,500 MW): However, 600 MW in AESO Connection Queue (projects >5 MW) and significant potential for projects < 5 MW. 3,000 2,500 2,000 1,500 1, National Solar Cumulative Installed Capacity 15

16 Cost Trends for Wind and Solar Source: Lazard Levelized Cost of Electricity Analysis 9.0,

17 Pricing Trends for Wind and Solar Since 2015 competitive procurements have contracted utility-scale wind and solar without subsidy at low levels. Solar Wind Jurisdiction Cost (US$/MWh) Jurisdiction Cost (US$/MWh) Dubai 30 Morocco 30 Mexico 39 Mexico 43 California 41 Quebec 63 Peru 48 US (2015 avg) 61 Sources: Bloomberg New Energy Finance; Berkeley Lab; Canadian Wind Energy Association 17

18 Myths about Wind & Solar Electricity Is there some place where we can get the best of these three things the lowest cost, the lowest emissions and the highest reliability because you re not going to get them all at once, you re going to trade off between them, - Calgary Herald (January 2016) 18

19 Myths about Wind & Solar Electricity Is there some place where we can get the best of these three things the lowest cost, the lowest emissions and the highest reliability because you re not going to get them all at once, you re going to trade off between them, - Calgary Herald (January 2016) 19

20 Ensuring Reliability 30% renewables by 2030 is achievable in Alberta without compromising reliability of supply. 20

21 Reliability Section Overview How does 30% by 2030 compare with other jurisdictions? What changes will this bring for our electricity system? What are the myths about variable generation? How can variable generation be reliably integrated? 21

22 Comparison to other jurisdictions Canada leads in renewable electricity globally (>65% in 2016). Wind meets ~5% of annual demand. Solar ~0.3% but growing rapidly. It will not be uncommon for global jurisdictions to be meeting annual electricity needs with >20% wind or with >2% solar by

23 Comparison to other jurisdictions Global leaders already passing these milestones in 2015: Denmark: 42% wind (target of 50% by 2020, 84% by 2035). United States: 8 states met >15% from wind (Iowa #1 at 31%). Germany: 33% renewable (wind ~12%, solar ~6%, 35% by 2030) countries meet >1% with solar energy (Italy #1, 8.5%). Every jurisdiction has different resource availability, supply and demand outlook, need for infrastructure investment etc. 23

24 Comparison to other jurisdictions Alberta s 30% by 2030 target is being demonstrated as possible by global leaders today. Alberta has the benefit of learning from these experiences and lessons learned (and from the cost declines). The degree of the success in meeting the 30% by 2030 target will be driven by approaches to system integration. 24

25 Changes for the electricity system As the penetrations of variable generation on a system increase: Demand: Load patterns shift (i.e. net load decreases). Distribution: Grid stability and interface flows. Balancing: Increased generator cycling. The most common misconception related to reliability concerns is that variable generation is intermittent. 25

26 Myths About Variable Generation Solar and wind electricity are variable not intermittent: Variable: Adj. apt or liable to vary or change. Intermittent: Adj. alternately ceasing and beginning again. The key difference between centralized generation and solar and wind is that instead of one power plant you have many: Variability is smoothed by: Geographic dispersion of resources (in same way as for load). Diversity of variable and non-variable renewables. 26

27 Solar and Wind are Complimentary Generation profiles of solar and wind in Alberta are very complimentary, combination smoothes variability. 27

28 Pan-Canadian Wind Integration Study The Pan-Canadian Wind Integration Study involved CanWEA, NRCan and TFO s from across Canada and the United States: Developed wind data database for potential sites across Canada. Explored operational challenges and opportunities. Defined operational and production costs and benefits. A key finding of the study was that for scenarios with 1,500 to 18,000 MW of installed capacity in Alberta: Only 1.5 to 2.4% of installed wind capacity would be needed as additional regulating reserve to firm-up wind. 28

29 The Solar Eclipse in Germany On March 20 th 2015, Germany experienced the extreme stress-test for solar electricity generation with a solar eclipse. Blue skies were forecast thus the maximum loss of solar generation was possible (i.e. 18 of a total load of 72 GW). Accurate forecasting and planning ensured no critical events: Imbalances were no greater than during normal operation. Deviation from nominal frequency remained within range. Primary reserves barely used. 29

30 Solutions for reliable integration Balancing Supply and Demand: Increase reserves and margins. Improve inter-jurisdictional interties. Accurate forecasting. Storage and load flexibility. Grid Stability: Smart Inverters and Smart Grid. Accurate forecasting. Storage and flexible loads. Other Considerations: Market design. 30

31 Attracting Utility-Scale Investment Currently, it is challenging to finance electricity generation in Alberta: Revenue Uncertainty. Unprecedented lower pool prices. Energy only market requires companies to make informed projections about the future evolution of the market and its impact on electricity supply / demand / prices: Requires information regarding phase out schedule for coal as well as the GHG performance standard for the electricity sector.

32 Attracting Residential, Commercial and Community Investment The existing policy and regulatory framework does not enable small-scale renewables to realize their true value: Electricity. Environmental Attributes. System Benefits. Also, ability to achieve economies of scale are limited. Modern regulatory frameworks are moving to include more Distributed Energy Resources (DER) in the electricity system. 32

33 Conclusion 30% renewables by 2030 is achievable in Alberta both cost-effectively and without compromising reliability of supply. 33

34 Upcoming Wind & Solar Events CanSIA: Solar West 2016, Edmonton, Oct. 5 7 Solar Canada 2016, Toronto, Dec. 5-6 CanWEA: Annual Conference & Exhibition, Calgary, Nov

35 Contact Patrick Bateman Director of Market Intelligence Canadian Solar Industries Association (CanSIA) Evan Wilson Regional Director, Prairies Canadian Wind Energy Association (CanWEA) 35