Published on December 2nd, 2014 | by Roy L Hales0
How Wind Energy Is Subsidizing Albertan Ratepayers
December 2nd, 2014 by Roy L Hales
A recent Pembina Institute fact sheet discusses how wind energy is subsidizing Albertan ratepayers. The author, Ben Thibault, said that during 2013 Alberta’s electricity was 65% less expensive when wind was generating over 600 MW than when production fell below 300 MW. He also had some interesting insights into other wind sector issues.
During 2013, the average price for wind energy was 5.5 cents in Alberta. This is lower than hydro (9.8 cents), natural gas (8.3 cents), coal (7.7 cents), and peaker (21.4 cents).
“When you build more wind into the market, it does look like it drives down the power pool price,” said Thibault. “That is not something that generators are too enthusiastic about. It undercuts the amount of revenue they’re able to bring in for their energy, which is why you’ll see a push back from generators on this issue, but it appears to benefit consumers.”
Though intermittency is a problem that will remain until the large-scale deployment of battery storage, it occurs with many energy sources. A large coal facility, for example, will be operating 75% to 80% of the time, but they go down very quickly without warning.
“A coal facility is a much larger energy capacity that will suddenly come down off the system, because of the size of these plants. Whereas if the wind stops, smaller chunks of energy are lost,” said Thibault. “The amount of wind that we currently have on the system doesn’t suggest there are necessarily any back-ups specifically for wind energy.”
He added that Alberta’s weather patterns are such that it is often easier to predict when wind energy will drop than when a coal facility’s power will drop.
Most of Alberta’s new generation comes from one of two fuel sources. Though wind is often as cheap, generators usually prefer natural gas because the profit margin is bigger and revenues are more certain.
“If we become very reliant on natural gas for our electricity, as we’re expected to, the volatile pricing of natural gas will dictate our electricity prices,” said Thibault. “This would be good for the natural gas generator, who sees higher revenues if their costs increase. But, if we spread out our reliance across a broad diversity of sources including wind, that would buffer the consumer against those energy price increases.”
It would also help Alberta’s emissions, which, due to the oil sands, are the worst in Canada.
“Coal is getting phased out very gradually over time. That is going to give us a small amount of emissions reductions through the late 2020s. From 2030 onwards emission rise consistently,” said Thibault. “By 2050 the electrical sector is expected to have the highest carbon emissions of any point in Alberta’s history. Alberta needs to use more non-emitting sources like wind, solar, geothermal and hydro.”
The Pembina Institute is aware that there have been many complaints about wind energy. Thibault was the lead author of the 2013 Pembina report, Survey of complaints received by relevant authorities regarding operating wind energy in Alberta. Almost all of the complaints they were made BEFORE the turbines were erected. They were made by people who were concerned about the impact wind farms would bring to their area. There were only three exceptions that had issues AFTER the turbines were built. There were not any post-construction complaints in the Alberta Utilities Commission’s (AUC) records of contacts, which has 31,000 letters on various utility issues.
“Complaints usually came from the proposal or construction phase, so there were definitely people who were concerned, before the projects were built,” Thibault said.
How is this possible when, for example, 86 Ontario municipalities declared they are no longer willing hosts to renewable energy projects?
“It might have something to do with the way the landowners interact with their land in Alberta. It is as a livelihood, not a vacation property for people fleeing the cities,” said Thibault. “Virtually all the windfarms in Alberta are going up on agricultural land, whether that’s farmland or ranching land. The land is a revenue source for the people that live there and wind energy is another new revenue source for those landowners.”
Unlike coal and natural gas facilities, which are major contributors to GHG, the vast majority of wind farms go through a public hearing process. The reason being that, in Alberta, only people living within two kilometers of the project automatically get standing. Anyone outside that distance has to explain why they should be allowed to speak. As most fossil fuel facilities are built in a strip mine area, this provision had allowed many to dispense with hearings. However, virtually every wind farm is within two miles of some dwelling.
Though municipal setbacks are often 500 meters to a kilometer from houses, depending on the municipality, Thibault has not heard many complaints. When Alberta’s winds are strong, the wind itself often drowns out other sounds. People are more likely to hear the distant wooshing of a turbines on milder days. Some Halkirk residents find the lights on wind turbines a useful substitute for street light.
“This certainly differs from what we hear from other jurisdictions,” said Thibault. “But it could be that there are plenty of other jurisdictions out there are just like Alberta, but you don’t hear about them.”
All photos courtesy David Dodge, The Pembina Institute. The graph was taken from the Pembina Institute Fact Sheet How solar and wind lower your power bill, by Ben Thibault.