Renewable power would cost Alberta $1.4B per year, Fraser Institute says

The Fraser Institute has published a paper indicating that if Alberta converted its power generation away from fossil fuels, it would result in huge added costs. (File)

A new report published Thursday says a move to convert Alberta's energy grid to renewable power would result in "substantial costs" for taxpayers.

The Fraser Institute, an independent Canadian public policy group, says data they've examined shows that if Alberta shut down its coal-fired power plants, which account for about 40 per cent of the province's energy generation, it would have a marked effect on greenhouse gas emissions. It estimated they would drop by between 26 and 40 per cent.

However, the costs of operating a green energy grid would add $1.4 billion in costs.

"Despite what advocates claim, renewable power—including wind and solar—isn't free and forcing a transition on Alberta’s electricity grid would have substantial costs for Albertans,” said G. Cornelis van Kooten, economics professor at the University of Victoria, senior fellow at the Fraser Institute and author of the study.

The document, titled Canadian Climate Policy and its Implications for Electricity Grids, explained that part of the higher costs comes from the requirement to build and maintain backup power from natural gas sources when wind and solar are not available.

When the same principles are applied on a nation-wide level, van Kooten says it would cost Canadians much more.

"Based on cost estimates from Alberta, and Ontario's experience with subsidies to renewable energy, the costs of relying on changes to electricity generation (essentially eliminating coal and replacing it with renewable energy sources and gas) to reduce national CO2 emissions by about 7.4 per cent range from some $16.8 billion to $33.7 billion annually. This constitutes some one to two per cent of Canada’s GDP."

That's even with the knowledge that that reduction in emissions is below the federal government's target of 40 to 45 per cent below 2005 emissions by 2030, the group says.

"This is a huge challenge that, when considered on a global scale, will do little to stop climate change because emissions by developing countries are rising faster than emissions are being reduced in developed countries," van Kooten said.

Late last month, ATCO announced it would be building two solar power generation projects in the city of Calgary.

The Barlow and Deerfoot installations would generate 27 and 37 megawatts of power, enough to power more than 18,000 homes for a year.

Construction is expected to commence next year.

ATCO did not reveal how much it would cost to build the projects, which would be the largest in a major urban centre in Western Canada once completed.