AESO's Recommendations on Renewable Electricity Program

On May 31^st, the Alberta Electric System Operator (AESO) made its recommendations to the Government of Alberta, based on the survey results it received on the Renewable Electricity Program (REP). The REP, a subset of the broader Climate Leadership Plan (summary here), focuses on the process that will be used to bring on renewable electricity. The Survey reached a diverse audience, including potential developers/investors, associations, and environmental public policy groups.

Although key findings from the Survey have yet to be disclosed, Michael Law, Vice President of Renewables Development & Sustainability at AESO, indicated in the recent Alberta and Saskatchewan Renewable Energy Finance Summit held in Calgary that, in making the recommendations, his team considered various international models and a diverse set of factors including the allocation of risks, current market design, revenue and risk certainty necessary to support financing, recovery of development costs, and the allocation of revenue from the proposed carbon tax levy to support renewables, all in an effort to support a competitive market for the REP. Further, they evaluated various mechanisms available to the Government including RECs, contracts for differences and feed in tariffs in the context of an energy only market. The AESO gave no indication that they would look at a market redesign to support the REP. Any proposed modifications and next-steps arising through the AESO process are contingent upon approval by the Government of Alberta.

The Government of Alberta is expected to release the details of the REP by Q3 2016, with the first REP bids to launch in Q4 (December) 2016.

More information on the Climate Leadership Plan can be found here.

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