Alberta Looks East as it Develops New Energy Policies

Coal Mine

By Jonny Wakefield

June 11, 2015

For inspiration on how to wean her province’s coal-hungry, oil-based economy off fossil fuels, newly minted Alberta Premier Rachel Notley is turning east.

According to a report in Bloomberg, Notley is looking at Ontario’s coal phase-out, along with the province’s energy efficiency incentives, as potential centrepieces of her government’s renewable energy policy. During the election campaign, Notley and the NDP made commitments to reducing the province’s carbon footprint—a tall order in a province that contributes around one-third of Canada’s carbon emissions.  

Ontario in some ways provides a roadmap. Unlike Quebec and B.C., both Alberta and Ontario have limited hydroelectric resources, making them more dependent on coal and gas-fired electricity. A shift away from coal is “low-hanging fruit” when it comes to reducing emissions, Pembina Institute director Ed Whittingham told Bloomberg.

Coal currently accounts for nearly 43 per cent of Alberta’s power generation and most of its greenhouse gas (GHG) emissions, while physicians have pushed a coal phase-out for health reasons. While Ontario shuttered its last coal plant in 2014, Alberta has decommissioned only four coal plants since 1998. Last year, the province even grew the number of megawatts of coal in production.

How Alberta might follow Ontario remains to be seen. Notley pushed a timeline similar to Ontario’s as opposition leader urging, then Premier, Jim Prentice to move the province away from coal by 2030. Ontario’s electricity prices have nearly doubled since the province began phasing out coal in 2003, underscoring the political costs of going coal-free.

Bumping the province’s $15-per-ton tax on carbon on large polluters is a likely first step. Since the election May 5, even energy sector leaders have agreed that something should be done to reign in emissions, with Suncor CEO Steve Williams telling the business community that a reformed carbon pricing regime would improve the province’s image abroad. When it comes to filling the gap left by coal, the NDP government is reportedly looking at Ontario’s energy efficiency incentives, as well as reviewing policies to bring more biomass, wind and solar to the province.

As for the planned review of oil and gas royalties, Notley’s government is faced with an even bigger challenge. University of Alberta analyst Andrew Leach called the royalty review the elephant in the room, noting it’s unclear how the province can grow new industrial sectors like oil refining while cutting carbon. 

“There’s a lot left to the imagination here, not the least of which is the question of how NDP commitments to reduce emissions square with a pledge to add incremental refining and other industrial sectors in the province,” he wrote in Macleans.