Good news for oil and gas rich Alberta. Having abundant, inexpensive and environmentally friendly energy will make any economy, future-proof, resilient and will be the foundation for well being of society for a long time.

While it is expensive at first, renewable energy generates electricity that has no cost of fuel, and with time will become the least expensive energy available. Even today, in jurisdictions with significant renewable energy, electricity cost dips close to zero at various times of the day when the sun is shining and/or wind is blowing, just look at Texas. The reality is that power over-generation is a curse when you have to pay for fuel and create emissions and air pollution. On the other hand, over-generation from renewables is a blessing to the economy as the cost of energy goes to zero. While dropping energy cost is bad news for traditional energy providers and distributors, make no mistake, it is very good news for the whole economy.

Powered by renewables, energy in the future will be close to free.  Countries and jurisdictions that get there first will have an incredible economic advantage. They will be able to create all the stuff we need less expensively as energy is a high manufacturing cost component. It will not be the cost of labour, it will be the cost of energy, that will make the difference between successful and dependent economies.

Oil-rich Alberta has plans for renewable electricity capacity deployment that could create an abundance of renewable electricity in Alberta setting the foundation for a more prosperous future. This includes producing and selling oil and gas to other jurisdictions during their transition to a low carbon future. And our oil and gas will have a lower cost of extraction, minimal upstream and midstream carbon footprint.

Alberta currently has over 16,252 MW of installed electricity capacity with about 6,258 MW (38% of Alberta’s total) from coal-fired electrical facilities and 2,914 MW (18% of Alberta’s total) from renewables. The majority of renewable energy comes from wind (1,459 MW) followed by hydro and biomass.

The coal-fired facilities (6,258 MW) will either be converted to natural gas or closed by 2030. Additionally, Alberta expects to add 7,474 MW of new renewable energy capacity from wind, solar and biomass in the next 15 years bringing total renewable energy capacity to 10,553 MW. The majority is expected to be wind capacity of over 8,300 MW. Very little (570 MW) solar PV capacity has been forecast by 2030 even though Alberta has considerable solar potential, much higher than Germany which has over 40,000 MW of installed PV solar capacity.

Combining natural gas and renewable energy electricity means that Alberta could have as much as 21,664 MW of installed capacity by 2030 of which nearly 50% could come from renewable energy.

We should note that in the case of renewable energy, such as wind and solar, not all of the capacity is available on a regular basis. For example, 2015 data shows that the net capacity factor for wind was 30.6% and 15.1% for solar PV. In comparison, the capacity factor for coal was 77%, 53% for natural gas, and 22% for hydro. By net capacity factor we mean the actual available electricity output during the course of a year from these sources as a percentage of what each source could be capable of if it were possible for it to operate at full nameplate capacity continuously over the same period of time.

Now here is the really good news: based on projected electricity generation capacity development, Alberta is expected to reach an important milestone: 50% of our electricity supply could come from renewable energy by 2030. In addition, with Energy Efficiency Alberta initiatives going forward, we can expect 1% per year energy efficiency improvement over the next 14 years throughout the province. A conservative 10% energy efficiency improvement over 2015 electricity consumption of 54,877GWh would reduce electricity consumption to 49,389GWh or 63% of expected generation by 2030. Alberta can be as much as 50% supplied by renewable energy by 2030. This will create momentum for the price of electricity to start the downward slide with abundance during sunny days and windy days and nights.

The additional 7,443 MW of renewable wind and solar energy capacity development will require an estimated capital investment of roughly $13.5 billion for the 6,872 MW of new wind energy capacity (based on costs of $2.00/W installed) and $1.4 billion for new solar capacity (based on $2.50/W installed).

Having abundant, inexpensive and clean energy will give Alberta an advantage to continue making abundant oil and gas resources available for all those jurisdictions which are behind in the transition to the low carbon economy. It will lower the costs in the manufacturing and technology based service sectors, diversify and make the Alberta economy future-proof and resilient. This will create tremendous economic and well-being value for all Albertans.

Mark Anielski is President of Anielski Management Inc. an Alberta-based economic advisory consulting firm focused on economic well-being. He is the author of award-winning book The Economics of Happiness: Building Genuine Wealth. In 2008 Alberta Venture magazine named him one of Alberta’s 50 most influential people.

Krzysztof Palka is a serial entrepreneur with a keen sense for innovation, process improvement and personal bias towards applying simple, knowledge based solutions to solve complex problems. He is currently pursuing business opportunities in clean technologies, carbon-negative plastics and energy efficiency to fulfill his passion for sustainable future

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