How wind and solar reduces the price of electricity in Alber

How wind and solar reduces the price of electricity in Alber

Postby Oscar » Sun Nov 30, 2014 8:47 pm

How wind and solar reduces the price of electricity in Alberta

[ http://www.pembina.org/blog/how-wind-an ... in-alberta ]

How renewable energy is lowering electricity bills in Canada's most fossil fuel dependent province

Published Nov. 25, 2014 by David Dodge and Duncan Kinney

***NUMEROUS LINKS at URL above ***

Have you ever heard the one about how renewables are too expensive and that they always need subsidies? Well, both wind and solar now compete with fossil fuel electricity generation purely on price, without subsidies.

But wind and solar aren’t just competitive and affordable options for generating electricity, in Alberta they’re actually driving prices down for consumers.

A study by our colleagues at the Pembina Institute confirms a direct relationship between wind and solar production and lower prices for consumers. And it’s all due to a couple of quirks in how Alberta’s electricity market is designed.

Alberta has the only deregulated electricity market in the country and in this market the wholesale price fluctuates hourly depending on supply and demand. Since the highest demand for power is during the day when people are working the price for electricity is highest exactly when solar panels are producing electricity.

But due to Alberta’s micro-generator regulation, small microgenerators (those under 150 kilowatts in size) get the retail price for any electricity they produce. That retail price is lower than the daytime wholesale price and as a result small solar generators have to sell their electricity at a discounted price.

That imbalance means people with solar panels on their roof are selling their electricity with anywhere from a 1.5¢/kWh to a 6¢/kWh discount.

To learn more we talked to Kyle Kasawski, the general manager of Landmark Power Solar. Landmark is an innovative homebuilder that we’ve featured on our series before and Kyle has been selling solar systems since 2002. They’re figuring out how to mass produce net-zero homes and Landmark itself has installed solar panels on 137 different homes.

“Once you clue in you go, ‘that doesn’t sound right’ and you realize there’s a fundamental disconnect. I’m sure economists would get around this and say markets shouldn’t work like this. So the market in this way is a little dysfunctional,’ says Kasawski.

He also believes that if solar producers got the full value for the electricity solar panels produce than the “economics for solar improve to the point where I think a lot more people would adopt it for purely economic reasons because it’s not only saving them energy, but it would be earning them money for the electricity they produce.”

Solar energy in Alberta is still a tiny fraction of the total electricity mix, only five megawatts, but it’s growing. Higher prices for solar electricity would certainly accelerate the process and get more clean solar energy on the grid more quickly, also helping Alberta with one of the biggest challenges it faces – reducing emissions in our fossil-fuel economy.

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[ http://www.pembina.org/blog/how-wind-an ... in-alberta ]
Oscar
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