Canada announces first unsubsidised solar parks

GlobalData Energy 27 March 2019 (Last Updated March 27th, 2019 18:11)

The Canadian province of Alberta has announced two unsubsidised solar parks with a combined capacity of 57 megawatt peak (MWp).

Canada announces first unsubsidised solar parks

The Canadian province of Alberta has announced two unsubsidised solar parks with a combined capacity of 57 megawatt peak (MWp). German renewable energy company Innogy SE, a subsidiary of RWE has taken the final investment decision (FID) for the two solar parks. The planned investment is in the mid double-digit million euro range. The projects were developed by the Canadian company Solar Krafte Utilities and the project rights have been transferred to Innogy in February 2019. Prairie Sunlight projects will be Canada’s first photovoltaic (PV) plants developed without public subsidy or procurement.

The two large-scale solar farms Hull (Prairie Sunlight II, 30 MWp) and Vauxhall (Prairie Sunlight III, 27 MWp) will be located in Southern Alberta, near the town of Vauxhall. According to current plans, construction for both projects could begin in Q2 2019. It is anticipated that commercial operations will begin by the end of 2019. After full commissioning, the solar plants will produce enough green energy to supply the equivalent of around 12,500 Alberta homes.

PPAs and O&M

Innogy’s subsidiary BELECTRIC is responsible for all construction and will also take on operation and maintenance of the solar farms as a service provider. BELECTRIC is an experienced company in the global solar market with nearly 2GW of completed projects globally, and ranks among the world’s leading operation and maintenance service providers in the sector.

Innogy aims to sign long-term power purchase agreements (PPAs) for the planned projects and is in talks with potential local off-takers. The possibility of selling power to the spot market is being considered as a fallback option if private PPAs do not materialize. The company will review all options regarding the future ownership and financing structure of the projects in order to maximize value for the company and its shareholders.

Solar Krafte was an early entrant into Alberta renewable power market in the southernmost communities of Spring Coulee, Raymond, Stirling, Warner, Wrentham, Taber, Vauxhall, Enchant and Brooks. It joined hands with Innogy in 2017 to build substantial solar portfolio; together they plan to develop up to 1,000MWp capacities of solar projects.

Solar rivalry

Alberta is emerging as a rival to Ontario in the bid to be the nation’s leading solar province. Southern Alberta is the most solar intense region in Canada. The government of Alberta has a mandate to phase-out coal-fired power by 2030 and solar is the largest viable energy source available. In February this year, the Alberta government announced the selection of three solar power projects with a combined capacity of 94MW with an average final electricity price of $0.048/kWh (US$0.036) in its public power auction. This price is less than average historical wholesale power pool price paid for natural gas fired electricity in the province during the period 2008 to 2018. These projects will supply approximately 55% of the provincial government’s annual electricity needs. The three utility scale projects to be built at Hays, Tilley and Jenner, were awarded to Chinese-Canadian manufacturer Canadian Solar.

In June 2017, the Alberta government launched a new Residential and Commercial Solar Program, which made $36 million available in the form of solar rebates, planned to support the deployment of around 50MW of PV power through 2019. The aim of the program is to support job-creation in Alberta’s solar industry, cut solar installation costs by up to 35% for residences, businesses and non-profits, and reduce greenhouse gas emissions in the province by about half a million tonnes—the equivalent of taking 70,000 passenger vehicles off the road. Last year, spurred by the success of the program, the government increased the solar rebate levels for residential projects from $0.75 per watt to $0.90 per watt, and for non-profit organizations, from $0.75 per watt to $1.00 per watt. The incentive for commercial and institutional customers is $0.75 per watt.