This article was published by the Canada Energy Regulator on Feb. 9, 2022.
Alberta has seen significant changes to its electricity supply mix over the past decade. In 2005, electricity generated from wind and solar made up less than 1 per cent of total generation. By 2020, wind and solar made up close to 8 per cent of Alberta’s electricity generation. Compared to the rest of Canada, Alberta has the third highest non-hydro renewable generation (6 000 gigawatt hours (GWh) in 2020) after Quebec and Ontario.
Corporate power purchase agreements (PPAs) are emerging as a leading source of new renewable additions in Alberta. Under corporate PPAs, companies agree to buy their power directly from producers, allowing purchasing companies to secure a negotiated price for electricity and producers to secure financing for their projects.
Many global corporations are committing to reducing their carbon footprints by using energy from renewable sources. These commitments are driving more projects using corporate PPAs. According to the International Energy Association (IEA), in 2015, about 5 GW of new renewable capacity was added worldwide through corporate PPAs. In 2020, new additions increased almost fivefold, reaching 24 GW. This developing trend has made its way to Alberta.
Over the next few years, Alberta producers could add about 900 megawatts (MW) of wind and solar capacity driven by corporate PPAs. In the past ten years, wind has been the dominant renewable capacity addition in Alberta. Recent PPAs are shifting this trend; by 2023 over 500 MW of new utility scale(1) solar capacity is expected to come online. These new additions will complement wind projects that are currently under development. With these additions and the retirement of coal capacity, Alberta’s electricity system will look very different in the coming years.