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The weekend read: Solar shines in Canada’s oil patch

From pv magazine 09/2020

Greengate Power, a Canadian company based in the energy hub of Calgary, Alberta, is the developer behind the massive 400 MW Travers project, set for construction in the province’s Vulcan County. It will utilize southern Alberta’s high levels of visible sunlight to generate power from solar PV modules on a ground-racked array, consisting of approximately 1.5 million panels.

Originally targeting construction last year, Greengate Power gave an update in July, announcing that design work was nearing completion. It stated that ground would be broken before the end of 2020. The project marks a milestone for the versatile developer, which has previously constructed the Blackspring Ridge 300 MW wind project, located in the same county – it eventually sold the array to giant multinational Enbridge Inc.

The power generated at Travers –expected to be roughly 800 million kWh per year – will flow into a provincial grid in a period of great growth and flux. Unlike Quebec, British Columbia, and other Canadian provinces, Alberta’s electricity market isn’t dominated by a large public-owned entity. Specific power purchase deals are set up and rates are negotiated in an open system. Solar’s presence in the power market has skyrocketed in recent years, with the period from 2015 to 2020 seeing solar capacity increase more than tenfold across the province.

Prior to this spate of projects in western Canada, large-scale Canadian PV projects largely consisted of sites in the 20-80 MW range in sunny southern Ontario. The Alberta Electric System Operator’s (AESO) August report lists 72 utility-scale solar projects as up and coming, 20 of which are rated as in Process State 5 – all but ready for connection in the coming months.

Last year was a watershed moment in the development of utility-scale PV. Three publicly supported solar projects were constructed to supply government buildings with power to cover 55% of their needs, at a price of CAD 0.048 (US$0.036)/kWh. They were built under 20-year contracts, and they have helped to convince many other companies to push forward with projects.

Political landscape

Alberta’s surge in solar generation is all the more remarkable considering the political sea change the province has experienced. In April 2019, an oil and gas-focused United Conservative Party won a majority of seats in the province. In Canada, provincial governments largely call the shots on energy policy. This signaled that the vast majority of the province’s subsidy programs would likely not be renewed, as the government puts its weight behind building pipelines to carry Alberta’s heavy bitumen oil abroad.

With years of low oil prices already impacting the province, Alberta Premier Jason Kenney nonetheless criticized the concept of a large-scale energy transition as an “ideological scheme” earlier this year. The new provincial government took steps, including the opening of a CAD 30 million ($22.7 million) public relations center to focus media and business community attention on “traditional” energy sources.

This policy change has fostered a widening division in the province’s solar sector, with small-scale home and business installations slowing as provincial incentive programs have become fully subscribed or have run out. Meanwhile, utility-scale projects continue to be developed, powered by foreign capital rather than taxpayer dollars.

The ambitious Travers project won major investment of CAD 500 million from Danish investment firm Copenhagen Infrastructure Partners last February. And demand for large-scale solar projects is a bright spot in the economic storm hitting Alberta, as the global pandemic continues.

In July, Royal Bank of Canada, one of the country’s major banks, announced a deal to purchase 80,000 MWh per year beginning in April 2021, from two solar power plants already under construction in the province. Innogy SE, part of major multinational RWE, also has plans for two large-scale facilities in Alberta.

Brownfield and under-utilized, urban-adjacent sites are proving ideal for solar projects in the province. Germany-based Alpine Sun recently announced a 120 MW solar project outside Edmonton International Airport, while Irish developer DP Energy is building a 55 MW joint facility in metropolitan Calgary, located on lots currently used for the storage of waste phosphogypsum. Long-term power purchase agreements remain the likely business model that Alberta’s new facilities will utilize.

Distressed oil

This expansion in the solar sector comes as Alberta’s traditional oil and gas sector has contracted in recent months. In July, Statistics Canada reported Alberta’s overall economic activity in March declined by 30.1% to 68.7% (depending on the metric), compared to March 2019. In the wake of negative oil prices and attendant industries in Alberta cutting staff, unemployment in the province hit 12.3% in June 2020, contrasting with 5.6% in June 2019.

In July, French multinational Total canceled its membership in the Canadian Association of Petroleum Producers and began the process of writing off $9.3 billion worth of assets in Alberta. It described the Canadian oil sands as “stranded” amid current market conditions and sharpening environmental concerns – potentially for many years.

Until demand rises to make oil processing truly profitable again, renewables such as solar look likely to represent the growth sectors of the province’s energy makeup. The thin silver lining to the economic storm in Alberta is that the solar sector can now turn to a surplus of local, highly skilled, and technically experienced workers, especially during the labor-intensive construction phase of new projects.

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Redeploying workers

The Travers project alone is expected to require hundreds of full-time workers to create roads, install transformers, and set up interconnection facilities.

Lliam Hildebrand – executive director of Iron & Earth, a Canadian organization founded to help former oil and gas workers transition to the renewables sector – notes that workers can transition with as little as five days of specialized training. “It’s an incredible thing that an electrician can take a five- to 10-day program and then be completely competent to be able to work in the solar industry,” says Hildebrand. “What we really advocate as an organization is diversification of employment. It’s quite possible that they’ll need to continue working in the oil and gas industry as well to a certain extent.”

She says solar firms actively seek experienced people with hands-on experience working on large projects. They also look for people who have been trained in Canada’s health and safety requirements.

With so many new solar projects coming online, Hildebrand sees opportunities, but is conscious of the scale of employment oil and gas has provided to the region over the years. In May, figures showed employment in the oil and gas sector fell by 14% from May 2019, but it still employed more than 160,000 workers.

“Solar jobs are not the silver bullet to ensure that every fossil fuel industry worker is going to be able to get a local job,” says Hildebrand. Instead, Iron & Earth envisions workers transitioning between energy sectors more seamlessly. For example, working on oil infrastructure one month, and then concentrating on rooftop PV installations in another part of the province the next.

This year, the organization has been urgently focusing on creating in-house training programs, with three different upskilling programs being developed. “We will be starting to deliver these programs, and streamline the process of companies being able to hire people out of the fossil fuel industry.” Smart government funding for training individuals so they can seek out new work is key to this vision.

Federal inaction

A distinct policy to spur national growth in the solar sector from Canada’s governing Liberal party has so far not been forthcoming, and this has left industry voices perplexed. Canada’s government has remained firmly committed to its 2030 climate goals, including reducing greenhouse gas emissions by 30% below 2005 levels by 2030. A stimulus based around a green recovery has been framed as an avenue towards that goal.

A recent report indicated the federal government has spent approximately $16 billion to support the oil and gas industry, compared with only $300 million for the renewable energy sector. “The sense on the ground here is that more must be coming,” states Benjamin Thibault, executive director of Calgary-based advocacy organization Solar Alberta. “There’s been a lot done for certain industries, including oil and gas. There’s been very little done across the country related to renewables.”

“There had been a lot of hope that the federal government would be packaging any measures for higher emitting industries [with green initiatives]. There’s been next to nothing applicable.”

In Alberta, the winding-down of microgen installation and efficiency programs dating from the previous government leaves it as one of the few jurisdictions in the United States or Canada without programs of this nature – a policy that will likely continue to widen the gap between micro- and utility-level activity.

For many small communities, the municipal taxes brought in by new solar facilities will provide much needed revenue, as the tough months and potentially years ahead unfold. Jason Schneider, Reeve (an elected regional leader) of Vulcan County, points out that the Travers project will allow the county to retain services, and employ workers from the locality and beyond. “From a county perspective, it’s investment, and that’s a hard thing to find these days in Alberta. There’s a lot of interest from local people.”

“The unfortunate thing is that oil and gas has declined at such a rapid rate that even once this comes [onstream], it’s just replacing revenue that’s left,” Schneider continues. “That’s not a bad thing. It sure beats the alternative – having to raise taxes to make up for the decline. We’re excited to see the shovel hit the ground this fall, hopefully.”

By Lorcan Archer

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Source: pv magazine