All stick no carrot
With the new carbon tax rained down upon the Alberta populous, the new NDP Notley government needs less stick and more carrot. The party needs to realize, that new taxes in a recession is not the way to go, especially when the impact is directly upon the general public. Alberta is terminally dependent on the incineration of coal for 55% of its energy needs and has no hard plan to replace this.
If the new provincial government wants real energy diversity and change they need an incentive program. The new provincial climate change policy announcing a pledge, not legislation to eliminate coal-fired plants by 2030. This is too far away, not realistic, and is typical of parties that are seeking soundbites. BUT with an actual incentive program, one whose duration is short at 4 years could get us 20% of the way along. A program like this is long enough to know if it’s working, short enough to be accountable in the next election.
To put this into a world perspective as of 2016:
China has the most renewable power: 43,200 Megawatts
Germany: 38,400 Megawatts
United States: 27,800 Megawatts
Alberta’s goal is to achieve 22.5% of the United States 2016 total capacity by 2030. Lofty goal..
Right now Alberta has no incentives, no green programs and nothing in the works. It’s been 305 days since the NDP has been elected and nothing has been done, other than press releases. Its fair to say, the NDP is all easy tax increases but when it comes to real work to research these changes promised, they have been lacking.
These are some statistics pulled from the AUC and the AESO;
| Generation | Gigawatt Hour (GWh) | Generation Share By Fuel |
| Coal | 44,442 | 55% |
| Natural Gas | 28,136 | 35% |
| Hydro | 1,861 | 2% |
| Wind | 3,471 | 4% |
| Biomass | 2,060 | 3% |
| Others* | 373 | 0% |
| Total | 80,343 | 100% |
As above, 90% of Alberta’s energy comes from non-renewable sources. Also consider the majority of proposed alternative energy projects do not make it to market… How is the government going to replace at least the coal portion in 14 years, without an large incentive program? Even current imports of power are only a sixth of coal.
| Generation Capacity | Megawatt (MW) | Capacity By Fuel |
| Natural Gas | 7,080 | 43.6% |
| Coal | 6,258 | 38.5% |
| Hydro | 900 | 5.5% |
| Wind | 1,459 | 9.0% |
| Biomass | 447 | 2.8% |
| Waste Heat* | 98 | 0.6% |
| Total** | 16,242 | 100% |
| Source: AUC and Alberta Electric System Operator (AESO). |
Proposed Generation
As of August 2015
| Type | Number of Projects | Total Capacity (MW) |
| Renewables | 20 | 2,480 |
| Thermal and Other | 41 | 7,793 |
| Total | 61 | 10,273 |
Looks promising, but how many of these projects have been on the books for years? Or how many are just expensive brochures and never-never plans that will never come on line?
Customer Usage Estimates
| Number of Customers | Usage (GWh) | ||||||
| 2013 | 2014 | 2010 | 2011 | 2012 | 2013 | 2014 | |
| Residential | 1,373,960 | 1,405,894 | 9,071 | 9,333 | 9,412 | 9,678 | 9,927 |
| Farm | 83,369 | 83,816 | 1,708 | 1,828 | 1,800 | 1,836 | 1,865 |
| Commercial | 169,981 | 172,609 | 13,748 | 14,207 | 14,596 | 14,778 | 15,155 |
| Industrial | 37,807 | 37,607 | 27,076 | 27,294 | 27,474 | 27,838 | 28,432 |
| Total* | 1,665,117 | 1,699,926 | 51,603 | 52,662 | 53,283 | 54,131 | 55,379 |
The above chart suggests that a targeted incentive program to commercial and industrial customers, IE: building owners and commercial power generators would have to greatest impact and be the easiest to manage and monitor.
Propose the government focus on a small but achievable goal to add the equal to 20% of the current total coal capacity (6,258 MW).
Call the program
The Alberta Commercial Energy- Incentive Program (ACE-IP)
The incentive program would consist of a mix of grants, tax exemptions, rebates and low interest loans to business that install solar or other “green” energy or upgrade to more energy efficient systems. The rebates, grants, tax exemptions would equal 75-85% of the total cost. Similar to Colorado’s successful program. The NDP would finance this though a commercial bond offering. Solar costs have decreased exponentially over the last few years, that trend is expected to continue. See chart below of the decreasing costs per watt.
Source: Investor presentation nov 2015
The cost?
To hit this 20%, the total megawatts would have to be 1,251.
Assuming solar only, at $0.42 cents a watt, 1 million watts in a megawatt (MW), this would be $420k per MW times 1,251 = $525 million total 100% cost. OR at 85% incentive, $446m.
But this assumes full 100% efficiency at capacity. At 20% efficiency, a 85% incentive this would cost $2.23 billion. Cost would be over 4 years to just $557m. On a population cost, it works out to $557.00 per person, per year for 4 years. Not bad to replace 20% in four years, and probably less because solar cells are still decreasing in price.