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Wind power making gains as competitive source of electricity

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It’s taken a decade of technological improvement and a new competitive bidding process for electrical generation contracts, but wind may have finally come into its own as one of the cheapest ways to create power.

Ten years ago, Ontario was developing new wind power projects at a cost of 28 cents per kilowatt hour (kWh), the kind of above-market rate that the U.K., Portugal and other countries were offering to try to kick-start development of renewables. 

Now some wind companies say they’ve brought generation costs down to between 2 and 4 cents — something that appeals to provinces that are looking to significantly increase their renewable energy.

The cost of electricity varies across Canada, by province and time of day, from an average of 6.5 cents per kWh in Quebec to as much as 15 cents in Halifax.

Capital Power, an Edmonton-based company, recently won a contract for the Whitla 298.8-megawatt (MW) wind project near Medicine Hat, Alta., with a bid of 3.9 cents per kWh. That price covers capital costs, transmission and connection to the grid, as well as the cost of building the project.

The Halkirk Wind project in east-central Alberta, which began operating in 2012, was built by Capital Power. The company’s Whitla project near Medicine Hat is still under development. (Jimmy Jeong/Capital Power)

Jerry Bellikka, director of government relations, said Capital Power has been building wind projects for a decade, in the U.S., Alberta, B.C. and other provinces. In that time the price of wind generation equipment has been declining continually, while the efficiency of wind turbines increases.

Increased efficiency

“It used to be one tower was 1 MW; now each turbine generates 3.3 MW. There’s more electricity generated per tower than several years ago,” he said.

One wild card for Whitla may be steel prices — because of the U.S. and Canada slapping tariffs on one other’s steel and aluminum products. Whitla’s towers are set to come from Colorado, and many of the smaller components from China.

“We haven’t yet taken delivery of the steel. It remains to be seen if we are affected by the tariffs.” Belikka said.

Another company had owned the site and had several years of meteorological data, including wind speeds at various heights on the site, which is in a part of southern Alberta known for its strong winds.

But the choice of site was also dependent on the municipality, with rural Forty Mile County eager for the development, Belikka said.

Alberta aims for 30% electricity from wind by 2030

Alberta wants 30 per cent of its electricity to come from renewable sources by 2030 and is encouraging that with a guaranteed pricing mechanism in what is otherwise a market-bidding process.

While the cost of generating energy for the Alberta Electric System Operator (AESO) fluctuates hourly and can be a lot higher when there is high demand, the winners of the renewable energy contracts are guaranteed their fixed-bid price.

The average pool price of electricity last year in Alberta was 5 cents per kWh; in boom times it rose to closer to 8 cents. But if the price rises that high after the wind farm is operating, the renewable generator won’t get it, instead rebating anything over 3.9 cents back to the government.

On the other hand, if the average or pool price is a low 2 cents kWh, the province will top up their return to 3.9 cents.

(AESO)

This contract-for-differences (CfD) payment mechanism has been tested in renewable contracts in the U.K. and other jurisdictions, including some U.S. states, according to AESO.

Competitive bidding in Saskatchewan

In Saskatchewan, the plan is to double its capacity of renewable electricity, to 50 per cent of generation capacity, by 2030, and it uses an open bidding system between the private sector generator and publicly owned SaskPower.

In bidding last year on a renewable contract, 15 firms submitted bids, with an average price of 4.2 cents per kWh.

One low bidder was Potentia with a proposal for a 200 MW project, which should provide electricity for 90,000 homes in the province, at less than 3 cents kWh, according to Robert Hornung of the Canadian Wind Energy Association.

“The cost of wind energy has fallen 70 per cent in the last nine years,” he says. “In the last decade, more wind energy has been built than any other form of electricity.”

Ontario remains the leading user of wind with 4,902 MW of wind generation as of December 2017, most of that capacity built under a system that offered an above-market price for renewable power, put in place by the previous Liberal government.

In June of last year, the new Conservative government of Doug Ford halted more than 700 renewable-energy projects, one of them a wind farm that is sitting half-built.

The feed-in tariff system that offered a higher rate to early builders of renewable generation ended in 2016, but early contracts with guaranteed prices could last up to 20 years.

Hornung says Ontario now has an excess of generating capacity, as it went on building when the 2008-9 bust cut market consumption dramatically.

But he insists wind can compete in the open market, offering low prices for generation when Ontario needs new  capacity.

“I expect there will be competitive processes put in place. I’m quite confident wind projects will continue to go ahead. We’re well positioned to do that.”

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Federal Budget 2021: Ottawa adds $1B to broadband fund for rural, remote communities

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The federal government will add $1 billion to a fund for improving high-speed communications in rural and remote areas of Canada, bringing the total to $2.75 billion by 2026, the Liberals said Monday in their first full budget since the pandemic began last year.

The money is going to the Universal Broadband Fund, which is designed to support the installation of “backbone” infrastructure that connects underserved communities to high-speed internet.

It’s one of many government and private-sector initiatives that have gained urgency since the pandemic began, as Canadians became more dependent on internet service for applications ranging from e-learning to daily business operations.

Ottawa says the additional money will keep it on track to have high-speed broadband in 98 per cent of the country by 2026, and 100 per cent by 2030.

Money spent on high-speed communications will be good for a recovering economy, said Pedro Antunes, chief economist at the Conference Board of Canada, a non-partisan think-tank.

The latest data from Statistics Canada says there were about five million people working from home during the pandemic, up from about two million prior to that, Antunes said in an interview.

“That’s a quarter or so of the workforce,” he added. “And I think a fair number of those people are going to continue to work from home, at least in some part-time way.”

Improved connections to high-speed broadband and mobile communications will add to the productive capacity of the economy overall, especially as it reaches beyond Canada’s cities, Antunes said.

He said there’s been a “real issue” with economic growth outside major urban centres and the improved connectivity “is something that can help stimulate that.”

The Universal Broadband Fund was initially mentioned in the 2019 budget, though specifics were not available until last November’s fiscal update.

The $1-billion top-up to the broadband fund announced today is in addition to $1.75 billion promised to the fund by the federal government’s November fiscal update.

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COVID-19: What you need to know for April 19

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Provincewide

  • Per today’s government report, there are 4,447 new cases in Ontario, for a total of 421,442 since the pandemic began; 2,202 people are in hospital, 755 of them in intensive care, and 516 on ventilators. To date, 7,735 people have died.
  • According to data from the Ministry of Health and Long-Term Care, there are 40 outbreaks in long-term-care facilities, 36 confirmed active cases of positive residents, and 127 confirmed active cases of positive staff. To date, there have been 3,755 confirmed resident deaths and 11 confirmed staff deaths.
  • Per the government’s report on Ontario’s vaccination program, as of 7 p.m. yesterday, Ontario has administered 66,897 new doses of COVID-19 vaccines, for a total of 3,904,778 since December 2020. 3,212,768 people have received only one dose, and 346,005 people have received both doses.

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Federal budget 2021 highlights: Child care, recovery benefits, OAS increases – everything you need to know

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The federal government’s first budget in more than two years certainly looks the part: At 739 pages, it is a hefty document chock full of billions in new spending.

Those funds will be spread among a number of key groups – students, seniors, parents and small-business owners, to name a few – as Ottawa looks to bolster Canada’s recovery from COVID-19 but also plan for life beyond the pandemic.

To that end, the deficit is projected to hit $354.2-billion in the 2020-21 fiscal year, which just ended – better than expected about five months ago, given the economy’s resilience over the winter months. It is estimated to fall to $154.7-billion this fiscal year, before dropping further in the years to come as pandemic spending recedes from view.

Here are some of the highlights from Monday’s budget.

The budget outlines tens of billions of dollars in federal subsidies for a national child-care program, a promise the Liberal Party has made in some form since the early 1990s. Child-care supports became a point of national debate during pandemic lockdowns as parents with young children struggled to juggle work and family responsibilities.

In total, the government proposes spending as much as $30-billion over the next five years, and $8.3-billion each year after that, to bring child-care fees down to a $10-a-day average by 2026. The proposal, which requires negotiation with the provinces and territories, would split subsidies evenly with those governments and targets a 50-per-cent reduction in average child-care fees by the end of 2022.

The federal program is largely modelled on Quebec’s subsidized child-care system, implemented in the 1990s in an effort to increase women’s access to the labour market. Since then, labour participation rates for women aged 25 to 54 in the province have grown to exceed the national average by four percentage points.

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