Renewable Energy in Alberta

 
 
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 About the Farmers' Advocate Office (FAO)
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The mission of the FAO is to create value for rural Albertans and our stakeholders by:
  • empowering rural Albertans through awareness on key issues;
  • providing objective, unbiased ideas and advice for resolving disputes;
  • representing the rural Alberta perspective on matters of concern;
  • and facilitating interaction on strategic matters among key stakeholders.
The Farmers’ Advocate Office (FAO) was established in 1973 by the former Minister of Agriculture as a resource for Albertan farmers and ranchers. Today the FAO remains within the Ministry of Agriculture and Forestry, and works to ensure the rights and interests of rural Albertans are recognized, understood, and protected.

Negotiating Renewable Energy Leases was first released in February 2017 in response to requests from Albertan landowners for additional resources to aid in the negotiation of wind and solar leases. This publication collects the relevant information from the different regulators, departments, and agencies within the province to help landowners ask informed questions and evaluate the opportunity of having a power plant on their land or within their community. As an advocate, the FAO does not create policy, but will provide comment on existing laws and policies and work as a liaison between landowners, industry, government, and regulators.

Note: The recommendations in this document are targeted towards lease agreements where the renewable energy developer owns and operates the technology and infrastructure, connects into the grid, and compensates the landowner for the use of the land. This guide is not intended for micro-generation (landowners who are purchasing and installing wind or solar power generation infrastructure for their own personal use). Landowners wishing to install micro-generation infrastructure to meet their own electricity needs may want to contact the Alberta Utilities Commission (AUC) for additional information.

Background

In 2015, the Government of Alberta released the Climate Leadership Plan. The plan articulated a goal of phasing out coal fired emissions and moving towards having 30% of Alberta’s energy coming from renewable sources by 2030. The Government of Alberta directed the Alberta Electric System Operator (AESO) to develop and implement a program to meet the goal of 30% by 2030.

Designed and administered by AESO, the Renewable Energy Program (REP) will add 5,000 megawatts (MW) of renewable energy capacity to the grid by 2030, starting with the first procurement process for 400MW in spring 2017. The intent of the program is to keep costs as low as possible through a competitive process and operate the program concurrent to the retirement of coal generation.

Developers who hope to secure a REP contract must participate in a fair and transparent competitive bidding process managed by the AESO. This process has three stages, which will take a total of 7-11 months to complete:

1.Request for Expressions of Interest (REOI) | 4-6 weeks.
The purpose of this stage is to gauge the level of interest. Developers have no obligation to participate in subsequent stages after they submit an Expression of Interest.
2.Request for Qualifications (RFQ) | 4-6 months.
During this stage, the eligibility requirements of developers wishing to bid during the RFP stage are assessed. Developers must submit their project proposals at this stage. Only qualified bidders can move on to the RFP stage.
3.Request for Proposals (RFP) | 2-3 months.
The RFP stage determines which developers bidding to receive support payments will be entered into a Renewable Electricity Support Agreement (RESA).

For landowners, the significance of this process is in the timelines developers are facing. It is important to understand that not all options to lease will result in a renewable energy development being constructed. Additionally, a landowner should be aware that if the developer is successful in their bid to the AESO, the developer may opt to sell the package to a more financially able company for construction and operation. This means that the developer you negotiate with may not be the same company that operates the site.

Projects submitted to the program must meet certain eligibility requirements, including being 5 MW or greater in size and, for the first round of REP, they must be able to be operational by December 1, 2019. Successful applicants (“proponents”) will receive a 20-year contract. Proponents will be paid a certain $/megawatt per hour payment that reflects the difference between their bid price and the Alberta pool price, which helps provide stability for the developer.

In addition to the 30% by 2030 goal, Alberta’s electricity market is moving towards a capacity market, where generators will be paid for having generation available to supply, whether or not any energy is actually being generated and supplied. Alberta presently has an energy-only market, where generators are paid are paid for the electricity they generate. The movement towards a capacity market has the objective of providing greater certainty for all Albertans. The details of the capacity market structure have not yet been established.

As a result of REP, a greater number of landowners are being approached by renewable energy developers for wind or solar leases. This guide is designed to assist Albertan landowners who have been approached by a renewable energy developer seeking to lease land for the development and construction of a solar or wind energy power plant.

For the full report, the complete Renewable Energy in Alberta publication is available as a downloadable PDF - 711K

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Source: Agdex 817-15. June 2017
 
 
 
 
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For more information about the content of this document, contact Ag Info Centre.
This information published to the web on February 2, 2017.
Last Reviewed/Revised on August 31, 2017.