Traditional power generation often takes the form of large generators far from the cities and towns that ultimately consume the electricity. Renewable power technology, on the other hand, is more flexible and has a range of possible applications in Alberta. Wind turbines and solar PV panels can be aggregated into large blocks that can be deployed quickly and replace traditional generators on the grid, with cost savings that exceed the best natural gas power plants. But as non-emitting facilities, renewables can also be placed closer to communities or on individual homes and businesses, with smaller-scale operations producing electricity in a distributed way right where its needed. Thanks to economies of scale, a utility-scale project can realize cost savings in the wires required to move electricity. However, community- and micro-scale generation projects can engender greater social benefits, like resilient decentralized supply and larger job benefits with 2.8 times more employment than larger-scale renewable-energy projects.
The size of community- and micro-scale generation projects possible with renewable generation also allow Albertans to participate in power generation in way that is not possible with traditional generation. Citizens and businesses can take ownership or invest directly in projects and realize the returns. That means more money flows back to the community instead of leaving our province. These projects build capacity for further community economic development by retaining capital, training local workers and inspiring entrepreneurship — all ingredients for a sustainable and vibrant Alberta economy.
A combination of utility, community and micro-scale renewable energy projects in Alberta can deliver the maximum benefits to the province as it works towards the goal of 30 per cent renewable generation by 2030.
The Microgeneration Regulation governs how Alberta residents and businesses can generate their own electricity and sell this power to the grid. The regulation expires at the end of the year, and a refreshed set of rules will shape the way we invest in, produce and use energy from renewables. Community energy projects will be supported by carbon-levy revenue through Energy Efficiency Alberta, a newly created agency.
Albertans are being asked to provide input on both the regulation and carbon-levy support. Energy-industry stakeholders have until July 10 to submit feedback, and a roundtable discussion is set for the end of the month. Meanwhile, all Albertans are invited to comment on support for community energy via the Energy Efficiency Advisory Panel website.
Options for microgeneration and community-scale energy
Local generation includes microgeneration, where individuals produce renewable energy at the point of consumption, such as on top of a home or business, as well as community-scale energy, where multiple citizens and businesses can support a grid-connected project in their community by investing in it or sharing in the benefits.
Microgeneration and community-scale energy can be done in many ways. Around the world, there are examples of rooftop solar, community co-operatives, limited partnerships and businesses with options for community shares, utility and retailer options, investment funds, and public-private projects led by municipalities. Removing key roadblocks — such as microgeneration size constrained to the meter load — will allow Albertans to choose the best model and technology for their particular situation.
Rooftop solar: Homes and businesses can put solar panels on their own roof. They can purchase the panels outright, or companies like SolarCity provide options that include loans and leases — a model that has unlocked solar in the U.S. residential market, which has seen nearly 10-fold growth since 2011.
Community co-operatives, limited partnerships and businesses: A group of citizens can pool community capital for a project and offer shares or bonds, creating a leverage point for further institutional lending and project developer equity while building energy literacy and capacity. Community members can invest in a limited partnership or business set up by a developer with some or all of the project’s shares set aside for community members, which requires less community co-ordination and volunteer hours.
Utility and retailer options: Local energy utilities or energy retail companies in competitive markets can deliver community-scale energy by using virtual net metering (VNM). Utilities in Colorado, Massachusetts and California — to name a few markets — all successfully use VNM to allow customers to invest in community-scale energy projects. This approach uses existing customer bills to credit a part of production from a community-scale energy project to their bill. Without moving around electricity metres, or adding up customer loads, customers can help invest in a project via their retailer or local energy utility company, opening up opportunities for those who don’t have a suitable rooftop. Multi-unit residential buildings can also use VNM to share production from a single system without complicated rewiring of electricity metres.
Investment funds: Community energy can offer an alternative to the stock market with a local renewable-energy investment opportunity that puts returns into Albertans’ pockets. Nova Scotia’s Community Economic Development Investment Funds (CEDIF) give local citizens an easy way to invest in renewables with Tax-Free Savings Accounts and RRSP-eligible options and a 35 per cent tax credit when you hold on to the investment for several years.
Public-private projects: Municipalities, universities, schools and hospitals (the MUSH sector) are public institutions that can take a leadership role. By investing in community energy, they help establish a local renewable-energy industry and investment options for citizens and business, as well as deliver the benefits of renewables to the citizens they serve.
Different models will work best for different situations and there is no need for a one size fits all solution. By enabling different options for community-scale energy and microgeneration we can deliver maximum opportunities and benefits for all Albertans.
Originally published July 7, 2016 on the Pembina Institute’s blog
Barend Dronkers is a consultant who works on corporate, government and community-based sustainability projects. He’s based in Calgary.
Sara Hastings-Simon is an expert on the clean economy and works with the Pembina Institute in Calgary