Community renewable energy projects provide cheaper electricity and could be eligible for carbon offset payments
EDMONTON — Market forces should be allowed to guide the development of renewable energy projects rather than depend on government subsidies.
“We don’t need subsidies or complicated funding approaches. We just have to get the barriers out of the way and let these projects move forward,” said Sheldon Fulton of Forte Business Solutions, who has worked with energy industry stakeholder groups worldwide and is a strong believer in community-run projects.
Most recently, he has been working with Alberta stakeholders and government to develop a framework for community and co-operative owned renewable energy (CCORE).
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These projects are owned at the community level and generate one to five megawatts of electricity using wind or solar power for local use at a cost of $2 to $10 million. Fulton said it is a good rural development project that can make money, providing regulatory barriers and other obstacles are cleared.
“We don’t need to have complex applications systems for these projects,” he said at the Alberta Association of Municipal Districts and Counties fall meeting, which was held in Edmonton Nov. 15-17.
“If a community can meet a financial threshold or it can raise some money and it can demonstrate that project isn’t going to blow up the distribution system, the project should be able to go ahead.”
Alberta’s Climate Leadership Plan includes a commitment to reinvest all revenue from the carbon levy into Alberta’s economy. The plan promises to encourage local development and reduce greenhouse gas emissions.
Setting up a local power generator is one way to bring the carbon levy money back to a community. As well, electricity is generated where it is consumed so there are no transmission costs.
“It is your responsibility within your community to get your share of whatever is attracted by carbon levies,” he said.
There is no specific programming for this concept, but it has been tried in other jurisdictions and worked. The province could use money collected from the carbon levy to set up a loan guarantee program similar to the structure of the cattle feeder association loan guarantee. As well, Fulton said successful projects should be eligible for transmission and carbon offset payments.
Communities or municipalities that are considering a project need to calculate capital costs such as buying turbines or solar panels as well as costs of approval and environmental studies. The community would need to find a way to debt finance without losing everything if the market falls.
Communities also need to be cautious and realistic, said Paul McLauchlin, a councillor with Ponoka County who has completed a master’s degree this fall, in which he studied renewable energy projects for rural Alberta.
No community is going to go off the grid entirely, but smaller projects are achievable, he said.
“We are at an interesting time in human history in that the technology is such now we can become an independent power producer,” said McLauchlin.
His research found that these projects were motivated by the opportunity to make money. Saving the environment was far down the list of reasons supporting a community project.
“They wanted to have control and independence in their power supply.”
Interested communities need to become educated about the economics of a plan because the promised return on investment is not always true, he said.
“There is a lot misinformation out there right now, and there are a lot of snake oil salesmen out there.”
A community should do an energy audit to find out where power is being used.
The farming community is already fixing carbon and needs to take credit for doing something right. People are already using wind and solar energy and buying more energy efficient machines.
“We as Albertans are large energy producers and large carbon producers, but at the same time we do a lot of great things,” he said.
Provincial residents also tend to be late adopters, but that is not a bad thing because there is no need to invent things that have been done and tested elsewhere.
Starting a project may buffer the effects of the carbon tax and provide a hedge against increasing electricity bills.
“You will have large amounts of money leaving your community as of Jan. 1, and that money is going to go somewhere else,” he said. “Keep your tax in the community.”
McLauchlin said a community could look at projects that power public buildings such as rinks, pools or community halls.
The province has prepared a draft document that explains community operated power projects. It can be found at bit.ly/2foF6XH.
