Alberta’s oil sands may have a reputation internationally for being one of the biggest carbon bombs on the planet, but less discussed in Canada is the degree to which coal-fired power generation in Alberta contributes to the country’s emissions profile.
A new study by the Pembina Institute and Clean Energy Canada brings needed clarity to the issue. It reports that fossil fuels power 85 per cent of Alberta, which has the highest polluting electricity in the country – representing more than half of the carbon pollution related to power generation in Canada.
Alberta’s 18 coal-fired plants “release nearly the same volume of greenhouse gases as the province’s oil sands sector,” according to the report. This equates to the emissions of roughly half the cars on Canadian roads.
True, the United States is also highly dependent on coal when it comes to electricity generation – a fact that Alberta politicians and oil executives like to point out when Americans get all preachy about the oil sands -- but our southern neighbour has nowhere close to Alberta’s current coal dependency.
Last year, for example, 39.1 per cent of the electricity in the United States came from coal compared to 63.7 per cent in Alberta. “For a given gigawatt-hour of electricity generated, Alberta’s grid emits about 800 tonnes of equivalent greenhouse gases,” the report reveals. That’s 60 per cent higher than what the U.S. national grid emits.
The report lays all of this out, of course, so it can strengthen its call for greening Alberta’s grid. Acknowledged is the fact that federal rules will soon kick in that requires the shutting down of old coal plants. The concern is that these rules will simply lead to increased reliance on natural gas as Alberta moves to fill its power demand-supply gap over the coming two decades.
Under this scenario, reliance on natural gas would grow from 20 per cent today to 64 per cent by 2033. This may lead to a reduction in greenhouse-gas emissions -- as the burning of natural gas results in roughly half the emissions of burning coal -- but it will heavily expose consumers and industry to the volatility of natural gas prices.
Two years ago, natural gas spot prices sat at around $2.50 per million British thermal units (MMBTU). Today they’re up 80 per cent to around $4.50, and this doesn’t reflect the fact that prices spiked to over $7 during the late winter. Just where they’ll go over the next decade or two is a matter of great uncertainty.
Alberta, the report argues, needs to think seriously about renewable power development as a way to transition the province away from coal if it’s serious about both emission reductions and power price stability. “An Alberta grid powered primarily by renewable energy could diversify the economy, buffer customers from future price shocks, provide rural economic development opportunities, and of course reduce pollution and greenhouse gases.”
Alberta has no shortage of renewable energy resources to harness. It has the potential to develop 11 gigawatts of hydroelectricity, enough to supply three-quarters of the province’s electricity needs. There’s the potential for 150 gigawatts of wind power and 120 gigawatts of geothermal power.
Solar could also contribute significantly to the province, which has arguably the best solar regime in the country. Capturing waste heat from industry and generating power from biomass – either on its own or co-fired within some of the newer coal plants in Alberta’s fleet – would also contribute to the greening of Alberta’s grid.
This is potential, mind you. But even if a small percentage of the most economically feasible projects were developed, renewables – with some assistance from energy storage technologies -- could easily perform the role that natural gas is currently expected to play as coal plants are phased out.
According to the study, an aggressive shift to renewables over the next 20 years could see a 69 per cent reduction in annual carbon emissions relative to business as usual. “It would also substantially decrease air pollution, improving public health outcomes and lowering healthcare expenditures.”
The report points out that solar PV prices have plunged 80 per cent since 2008 and the cost of wind power fell 23 per cent between 2009 and 2013. While heavy development of renewable power infrastructure as a coal-replacement strategy would modestly increase wholesale electricity prices between now and 2023, the report estimates that by 2033 power will be cheaper because much of the grid will be isolated from fossil fuel price increases.
So if it’s such a great idea, what’s the holdup?
The report says the biggest barrier is the difficulty of financing large-scale renewable energy projects in Alberta, and that’s mostly due to the challenge developers have of securing long-term power purchase agreements.
The province, the report argues, could put legal instruments in place that would make long-term purchase agreements a more standard offering. It could also create a “clean electricity standard,” which would essentially mandate utilities in the province to have clean energy represent a specific amount of their power mix.
To that end, Pembina and Clean Energy Canada are calling on Alberta to create an Alternative and Renewable Energy Policy Framework that would help the province overcome barriers that have to date held back the potential of renewable power.
