North American Leaders’ climate plan strengthens Alberta’s renewables path

Blog - July 4, 2016 - By Sara Hastings-Simon

The "Three Amigos" announced the North American Climate, Energy, and Environment Partnership on June 29, 2016. Photo: Global Affairs Canada.

Last week’s announcement of the North American Climate, Clean Energy, and Environment Partnership Action Plan by Prime Minister Justin Trudeau, President Barack Obama, and President Enrique Peña Nieto has reaffirmed the importance of Alberta’s Climate Leadership Plan. It has never been more clear that Alberta — alongside the rest of North America — is on a strong path towards realizing the value of renewable energy.

The new continental action plan includes a commitment to achieving an electricity supply that is at least 50 per cent non-emitting. This commitment is built on the strong progress already made in Canadian provinces as well as across the U.S. and Mexico, recognizing the value in renewables. Notably, Alberta has already committed to achieving 30 per cent of its electricity generation capacity from renewable resources by 2030.

More than 25 U.S. states have implemented renewable energy generation targets similar to Alberta. Using market-based targets has been tried and tested with many policies in place for a decade or more, and the results show it’s working. Targets have been reached — and in many cases were exceeded and set higher — and the impact on consumer bills has been positive. A recent study showed that in states with these targets, consumer bills were reduced by as much as 10 per cent, made possible by falling costs for renewables.

Mexico is also moving ahead with the first ever non-monopoly auction for renewables completed in the country in March 2016. Projects approved represent US$2.1 billion in investment expected by 2018. The solar now scheduled to be built in Mexico is a stunning 3.4 GW between 2016 and 2018 — equivalent to the capacity needed to power a million homes in Alberta.

Our two southern neighbours are acting because they see the value in renewables — and value can be measured in several ways. For example, New Jersey turned to renewables to help improve grid resiliency in the face of extreme weather events that have led to blackouts. California, meanwhile, will rely on solar electricity this summer to provide power when natural gas is expected to be unable to meet demand in the wake of a failure at the natural gas storage facility. New York is looking to avoid increased spending on infrastructure by meeting growing electricity demand through a combination of distributed renewables as well as demand response and energy efficiency measures that will cost $200 million and save over $1 billion dollars.

Renewables also serve as a price hedge for consumers because they have no fuel costs. As such, they can deliver electricity cost certainty, with protection from volatile commodity prices and potential increases in the cost of fuels such as natural gas. This price advantage is a key part of the underlying motivation for Mexico’s electricity system reforms. Mexican policymakers are working to ensure the manufacturing sector can benefit from low electricity prices and they see renewables as a means to get there.

Alberta’s commitment to renewables will bring us in line with our North American neighbours and allow us to realize the multitude of benefits that accompany a diversified grid with a strong renewables component.

Sara Hastings-Simon

Sara Hastings-Simon is the director of the Pembina Institute’s clean economy program in Alberta, and is based in Calgary.


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