The Challenge of Integrating Renewable Generation in the Alberta Electricity Market

Renewable electric generation is forecast to enjoy an increasing share of total capacity and supply regimes in the future. Alberta is no exception to this trend, having initiated policy incentives in response to calls for increasing the fraction of wind and solar energy available to the province over the next decade.This call is coming from various sectors including advocacy groups, the provincial government and some utilities. The University of Calgary’s School of Public Policy convened a roundtable discussion on Sept. 15, 2015. Given the wide-ranging aspects of increased renewables integration (for example the policy options, economic forces and engineering/technical issues) the topic demands attention from a wide range of experts and stakeholders. To that end, we endeavoured to group expert panellists and representatives of utilities, public agencies, academe and consumer groups to consider the planning necessary to integrate new renewable capacity into the existing and future grid system in the province and its potential impact. The purpose of the roundtable was to facilitate and foster a knowledge exchange between interested and knowledgeable parties while also aggregating this knowledge into a more complete picture of the challenges and potential strategies associated with increased renewables integration in the Alberta electricity grid. The topic for discussion was broadly framed as “meeting the challenge of integrating renewable-energy generation into the Alberta Grid.” The symposium took the form of a keynote address, followed by two structured panel discussions and an open session during which questions were posed both directly to panellists and to the attendees at large. All sessions were conducted under the Chatham House Rule,and were attended by 40 stakeholders including panellists. The first panel, titled “Collision or Co-operation, the outlook for meeting policy goals,” examined whether public policy objectives designed to develop new renewable capacity in electric markets have, or are likely to be, proven successful. The second panel, titled “Reality versus Aspiration and Expectation,” discussed the technical aspects of performance involved in integrating renewables over the past 10 years in North America.The panel presentations were followed by an open discussion session focused on many of the core elements presented by the panellists. The discussion on issues and strategies was quite nuanced, and in many of the specific elements differences of opinion persisted across the various participants. However, through the course of the roundtable, a near consensus emerged on several elements. The general premise of the roundtable, that increased integration of cost-effective renewable generation is desirable, was shared by all participants. But all participants recognized that integration of this type of generator poses clear engineering and economic challenges. In defining strategies to deal with these challenges, the panellists indicated that a better respect for the costs and benefits of potential technologies is needed to promote effective policy. A common sentiment among participants was that any serious achievement in further integrating renewables into the Alberta electricity grid would likely best be driven by some degree of market restructuring. However, careful attention must be paid to this restructuring. In particular it was generally agreed that “technology-neutral” modifications to the existing electricity market should be favoured. That is not to say that any market restructuring should ignore the difference between renewables and non-renewables; quite the opposite. Policy should be constructed to encourage those aspects of renewable generation that we find beneficial (sustainable, low- or zero-carbon emissions, etc.) without presupposing a need for any specific generation technology or ignoring the historically critical role of traditional thermal generation in maintaining grid stability. This means that designing a market that will price in important aspects like stability, environmental damage and ramping, is critical to balancing the goals of renewable integration and an adequately functioning electricity grid. Geographic and technological diversity were raised and supported as likely components of a successful path to increased renewables integration. Since generation in different regions and across different technologies can act as complements (rather than substitutes), they reduce the risk of grid failure and can increase the stability of an integrated Alberta electricity grid. Beyond the use of different generation technologies, the panellists also raised the concept of non-generating assets (energy storage, demand-side management and expanded interties) as ways to bolster and overcome the shortcomings of renewable-generation assets. However, these assets, if they are to be a useful part of the electricity grid, must be able to produce an effective return where appropriate.