The Government of Alberta (Alberta) has made significant advancements in its Renewable Electricity Program (REP) over the past few months, including recently announcing the results of REP 1 and the details for the upcoming REP 2 and REP 3. As described in our prior bulletins, the REP is Alberta’s plan to accelerate the development of renewable power generation through a competitive bid process to assist in reaching its target of 30 percent renewable energy by 2030.
Results of REP Round 1
On December 13, 2017, Alberta announced that four projects were chosen in the opening round of the REP. Edmonton-based Capital Power and two large international companies, EDP Renewables Canada Ltd. and Enel Green Power Canada Inc., proposed nearly 600 MW of wind generation in southern Alberta at a weighted average bid price of $37/MWh. REP 1 set a new Canadian record for the lowest renewable electricity pricing. In exchange, the project proponents will receive support from an Indexed Renewable Energy Credit. Each project will connect to the existing transmission system.
Kick-Off of REP Rounds 2 and 3
On February 5, 2018, Alberta announced Rounds 2 and 3 of the REP, which will run in parallel with the same key features as REP 1.
REP 2 will have a procurement target of 300 MW, and will include a requirement for Indigenous equity ownership. For the purposes of REP 2, “Indigenous” is defined to include First Nation communities, Métis Settlements, the Métis Nation of Alberta, and Indigenous community-owned organizations or businesses. Accordingly, a community or group component is necessary, and an equity investment by an Indigenous individual (or private Indigenous-owned business) would not meet the requirements. The definition of “Indigenous” for REP 2 also expressly includes the Aseniwuche Winewak Nation (AWN). The AWN is a non-status Indigenous group with a traditional area that straddles British Columbia, Jasper National Park, and the coal-rich Grande Cache and Hinton areas in Alberta.
REP 3 will have a procurement target of 400 MW. Eligible projects in both REP 2 and REP 3 must meet the following criteria:
- limited to new or expanded renewable electricity generation projects located in Alberta;
- able to connect to the existing distribution or transmission systems;
- greater than 5 MW;
- compliant with Alberta’s definition of renewable energy resources, as defined in the Renewable Electricity Act; and
- compatible with Alberta’s evolving power market construct.
Alberta has proposed an ambitious timeline for completion of REP 2 and 3, with auction-style competitions to be opened in Spring 2018 and successful bidders announced by the end of 2018. These approaching deadlines will undoubtedly favour more advanced projects and, given that 12 proponents submitted bid prices for 26 projects in REP 1, many of the same projects may be re-submitted.
In addition to these developments on REP 1, 2, and 3, Alberta has tasked the Alberta Electric System Operator (AESO) with assessing how dispatchable renewables and electricity storage could benefit the electricity system in Alberta as it transitions towards a new market structure and increases its share of renewable electricity generation. Because electricity that can be stored and dispatched according to market needs may require the development of hydroelectric facilities and other long-lead time capital intensive projects in Alberta, this review will help determine market mechanisms necessary to encourage such investment.
Specifically, Alberta has requested that the AESO consider:
- whether any additional products or services are required;
- if so, whether they may be procured using existing market mechanisms, or whether discrete competitions would be required; and
- if discrete competitions are required, a proposal as to the structure and timeline of such competitions.
The AESO has invited interested stakeholders to provide their views in a questionnaire available on its website. Responses are requested by February 14, 2018. Alberta has indicated that the AESO’s review should be completed by May 2018.