Alberta Takes Small Steps Toward Micro-Generation

Micro-generation should appeal to Albertans' sense of themselves as an independent, entrepreneurial breed of Canadian. A creative, out-of-the-box energy source that's clean and sustainable, small-scale renewable energy projects can provide heat and electricity to Albertans who want to reduce their carbon footprints and take responsibility for their own energy production.

It "provides another option for Albertans in managing their electricity needs," says Kristin Stolarz, public affairs officer for Alberta Energy. "The Government of Alberta is confident that micro-generation will increasingly become one of the options customers consider."

Almost 90 per cent of Alberta's electricity is generated at large, coal- and natural gas-burning power plants located far from the urban centres that consume it. Another seven per cent of our electricity comes from large-scale hydro projects on Alberta's rivers.

Although installed wind capacity in Alberta accounts for four per cent of the province's 12,000 MW total power generation, it, too, needs to be transported to consumers via an aging transmission system that is reaching capacity. Experts agree that Alberta's electricity challenges will only increase as demand increases by an estimated 5,000 MW in the next decade.

The Alberta government passed a micro-generation policy and related regulations in early 2008 to encourage Albertans to use small-scale solar, wind, hydro, biomass and other renewable or alternative energy to generate energy for their homes and businesses. The micro-generation policy is part of the government's recently announced Provincial Energy Strategy, aimed in part at increasing and diversifying electricity generation, building new transmission lines and power plants, and reducing greenhouse gas emissions. The new regulations make it easier for small-scale electricity generators to hook-up to the grid and get credit for excess electricity they generate.

But most experts agree that encouraging Albertans to embrace micro-generation will take more than simply allowing them to hook up to the grid. While the new regulations will help remove a significant hurdle to making micro-generation a common site on Alberta's farms and city streets, they don't address the biggest barrier: cost.

"Most provinces have had such a law for several years and are considering or have implemented additional policies," says Yuill Herbert, director with Sustainability Solutions Group, a consulting cooperative that focuses on renewable energy. "The net-metering policy alone fails to create an economically viable environment for micro-generation, clearly a fundamental condition to meaningfully supporting micro-generation."

Micro-generation technologies like wind turbines and solar panels require a significant up-front capital investment, which can be a real disincentive at current energy prices. Government incentives similar to the $2 billion being invested in carbon capture and storage technology is also required. Capital grants, low-interest loans or other financial incentives would accelerate the adoption of micro-generation technologies by Albertans.

Micro-generation can work on a meaningful scale. The United Kingdom, for instance, has developed a comprehensive micro-generation policy that has captured the imagination of both the public and the politicians, says Herbert. A 2005 study by the Energy Savings Trust suggested that by 2050, micro-generation could provide 30 to 40 per cent of the U.K.'s electricity need while reducing household carbon emissions by 15 per cent annually.

"The contribution in Canada may be smaller, since a greater proportion of Canada's electricity generation is already non-emitting," he says. "But it is likely that cost-effective micro-generation (both heat and power) could provide a small but significant proportion of Canada's energy."

Closer to home, Ontario implemented a micro-generation policy that included feed-in tariffs that pay micro-generators significantly more than market rates for the electricity they sell back to the grid. This strategy has encouraged 330 MW of new renewable energy generation capacity.

Other barriers to the proliferation of micro-generation include building codes and zoning requirements that do not support, and in some cases discourage, the installation of micro-generation technologies. In Ontario, for instance, higher municipal property taxes for residences that incorporated micro-generation installations offset some of the incentives provided by the feed-in tariffs.

There are also too few standards for the installation of micro-generation technologies, which leaves consumers who want to install a system scratching their heads about how to proceed - and who to trust. A proactive educational program would increase levels of awareness of the benefits of micro-generation and encourage more Albertans to use it.

Experience in the United Kingdom, Ontario and numerous other jurisdictions indicates that micro-generation can work at a meaningful scale in Alberta and the rest of Canada. Although they will never by themselves provide all of our energy needs, small-scale sources of renewable energy can play a significant role in reducing Alberta's greenhouse gas emissions and creating a robust and sustainable energy system.