Energy analyst says coal phaseout could mean steep hike in power bills
EDMONTON – Get ready to see your power bill triple by 2021. At least that’s the warning from one energy expert as the province pursues its plan to phase out coal power by 2030.
Alberta currently generates about 16,000 megawatts of electricity and coal accounts for between 7,000 and 8,000 megawatts of that supply. Under the coal phaseout plan, natural gas production will replace one third of that supply while renewable energy makes up the other two-thirds.
David Gray, president of Gray Energy Economics, offered his analysis of Alberta’s coal phaseout plan to Global News.
Global News: What should consumers expect from this energy transition?
David Gray: “Albertans should be prepared for higher power prices. Right now, they are lower than is sustainable. They’re going to have to go up one way or the other. The question is how much? There are tremendous costs on the wire side and the billing side that are getting increased every year. Between the two of them, we could see a perfect storm of energy prices triple in the next five years.”
GN: Two-thirds of the removed supply will be replaced with renewables. What kind of technologies are we looking at?
DG: “Right now, the only available technologies really are wind and solar, whether that’s small scale solar on rooftops or large industrial scale solar. The challenge that you’ve got with either of those renewable resources is that they’re not reliable. Sun never shines at night and wind often doesn’t blow during both the coldest and the warmest periods of the year. So there’s an engineering problem that needs to be solved first, which is, how do you keep the lights on?”
GN: Is it reasonable to expect those technologies to replace that much energy?
DG: “You need to have a system that is first reliable and second cost effective. Third, you get into how you want your generation mix to look like. The government now has the problem that the market, as we’ve designed it, has no levers for them to say what should be built or what should not be built. So I’m sure that’s the first task of their new advisor, is to let them know how you could possibly do that to start with. But the real interesting question for me is, can you bring in renewable energy and integrate it into our market such that it’s reliable power 24 hours a day, seven days a week?”
GN: Have you seen that in other jurisdictions?
DG: “We’ve seen in other jurisdictions where you have problems because of renewables. We’re seeing this all over the place – that either states or regulatory commissions are pushing back against the free allowance of solar on to people’s rooftops and things like that. The reason is that they’re becoming large enough players in the marketplace to actually start hurting the market and making it more difficult for people to build more reliable thermal generation. It really is a balancing act trying to bring on renewable generation at a pace and at a cost that makes sense for consumers. We don’t want to end up like Ontario where they’ve essentially quadrupled their cost of energy at a point of making themselves uncompetitive because of a hell-bent approach to trying to bring on renewables.”
GN: Natural gas will make up the majority of electrical production once coal is phased out. How does that work?
DG: “Natural gas energy production is going to be the dominant form of base load generation in Alberta. Natural gas plants have gotten far more efficient than they ever used to be. They’ve really done some wonderful things in terms of designing them such that you get the maximum amount of electricity out of any amount of gas. That combination with the really, really low price of gas right now has made natural gas fire generation the go-to generation in our market and other markets. I have seen natural gas prices bounce between $1 a gigajoule to $15 a gigajoule in my lifetime, and I do have a concern that we may end up with shortages in the mid-term that will drive our prices up again. The question becomes, at what risk do you put yourself at when you’ve selected one fuel type for your primary generation?”
GN: Are we nearing an age where hydrogen fusion or cold fusion is realistic by 2030?
DG: “Hydrogen fusion is always 50 years away. At some point, someone may make a breakthrough, and the Germans are doing an interesting job with a device called a stellarator. Ultimately, something like that would be ideal in that they’re completely reliable. They don’t rely on the wind to be blowing or the sun to be shining in order for you to get power out of them. My own expectation is that there will be some thermal storage technology that will be developed that would allow us to store the heat from the sun during the day, and use that to generate electricity at night.”
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