Government of Alberta Announces New Rounds of Renewable Electricity Program

February 07, 2018

Written By David J. Macaulay, Thomas W. McInerney, Duncan M. McPherson, Jana Prete and Kay She

On February 5, 2018, the Government of Alberta announced information on the second and third rounds of its Renewable Electricity Program (REP).

What is the REP?

The REP is a series of competitions held by the Alberta Electric System Operator (AESO) for companies to bid on building renewable energy projects in Alberta (see Renewable Energy Progress: Alberta's proposed Renewable Electricity Act and Key Provisions of the REDA). Winning bidders are paid the difference between their bid price and the pool price if the pool price is lower than their bid price. Conversely, they are also required to pay the difference if the pool price is higher than their bid price. REP Round 1 delivered nearly 600 MW of wind generation, exceeding its goal of 400 MW, at a weighted average bid price of $37/MWh.

REP Rounds 2 and 3

REP Rounds 2 and 3 will run concurrently, and have the procurement target of 300 MW and 400 MW respectively. Projects eligible for either Round must:

• be new or expanded renewable electricity generation projects located in Alberta;
• be able to connect to the existing distribution or transmission systems;
• be greater than 5 MW;
• use eligible fuels that meet Alberta’s definition of renewable energy resources as defined in the Renewable Electricity Act; and
• have a compatible payment mechanism with Alberta’s evolving power market construct.

Indigenous Equity Ownership

While REP Round 3 will be largely identical to REP Round 1, REP Round 2 will have an additional Indigenous equity ownership requirement. The threshold of Indigenous equity ownership will be in the range of 15 to 25 percent of the project.

The government has defined "Indigenous" as one of a combination of the following:

• First Nation communities, Metis Settlements, Metis Nation of Alberta, the Aseniwuche Winewak Nation; or
• Indigenous-community owned organizations and/or businesses.

Timeline

The AESO will provide competition proposals on REP Rounds 2 and 3 to the Minister of Energy at the end of February 2018. Once approved, the AESO will publish specific dates and further details for each competition. The announced timeline anticipates REP Rounds 2 and 3 awarded by December 31, 2018.

Bennett Jones has extensive experience navigating the REP's process and a strong track record of building partnerships with Indigenous communities.

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