Bad news dominated energy headlines in 2015: Plunging oil prices. Oil and gas companies scaling back investment. Business and government books sliding from black deep into the red. Layoffs.
Albertans are all too familiar with this story. But there was a bright spot in global energy markets last year: clean energy. And it’s a glimmer of hope for economies like Alberta’s, which have abundant wind and solar resources and are taking steps to harness this renewable energy potential.
Clean Energy Canada’s latest global analysis found a record US$367 billion was invested in renewable power in 2015. That’s serious money, nearly 50 per cent more than was invested in power from fossil fuels. What’s driving this trend?
Before the year is out, Alberta’s renewable electricity sector will be poised for growth, attracting investment dollars and putting Albertans back to work.
For one thing, there’s money to be made and money to be saved. For big industrial electricity consumers, sourcing renewable power can lock in future savings from technologies whose fuel — wind, sun, water, biomass and the earth’s heat — is free. For renewable power developers, declining technology and financing costs mean the profits are getting fatter.
Meanwhile, the costs are dropping. In the U.S., the cost of generating clean energy has been falling steadily since 2009, thanks to improved efficiency and lower-cost components. Today, wind energy costs 61 per cent less than it did in 2009, and utility-scale solar PV costs are down 82 per cent.
The growing cost-competitiveness of clean energy makes it an increasingly attractive choice around the world. In fact, 2015 marked the first year that developing countries saw more money invested in clean energy than developed countries did.
The biggest players globally continue to be China, the United States and Japan, which collectively account for well over half of global investment. Yet India regained fifth spot for investment in 2015, and appears poised to rise in the ranks as a clean energy investment destination. (Canada, by comparison, holds eighth place.)
The business case for clean energy goes beyond competitiveness: In countries such as China and India, delivering more power without adding to the smog that already chokes big cities is paramount. In the United States, climate action is driving a shift from coal-fired power to clean energy. African countries, including South Africa, are delivering power to communities for the first time and want to avoid the expense of building a centralized grid.
And it’s clear clean energy’s going mainstream. In a move that would have seemed ‘fringe’ a decade ago, cities, states and entire countries are targeting 100 per cent renewable energy. Some of the world’s most-recognized companies — including Nike, Google, Coca-Cola and IKEA — have also committed to go 100 per cent renewable.
New prospects for clean energy technology are opening up on every continent. Yet clean energy investment within Canada dropped an unsettling 46 per cent in 2015 — from US$7.4 billion to US$4 billion. Why the drop in clean energy investment, particularly when others are scaling up?
For starters, Canada has a provincial patchwork of renewable power policies, which often have not provided the long-term certainty renewable energy developers need. A lack of overarching federal policy support is another barrier.
But that tide may be turning. As 2015 drew to a close, Alberta announced its intent to generate 30 percent of its electricity from renewable sources by 2030. The new federal government appears ready to help too, whether with supportive policy or infrastructure investments.
The Alberta government has tasked the Alberta Electric System Operator with delivering on this 2030 target, and a plan to get there is due in May. Come fall, the first competition to deliver new renewable power is expected to be launched.
Before the year is out, Alberta’s renewable electricity sector will be poised for growth, attracting investment dollars and putting Albertans back to work.
No one sector can, or should be expected to, replace the jobs and wealth we have come to rely upon from the oil and gas sector. But every little bit helps, and cleaning up Alberta’s electricity system with abundant, reliable and affordable renewable power presents an opportunity we can’t afford to overlook.
Written by Merran Smith and Dan Woynillowicz. Originally published in Edmonton Journal on March 27, 2016.
