Indigenous investors required in next Alberta renewable power auction
Process is designed to boost economy and training of Indigenous people
The Alberta government says it will require Indigenous equity investment from proponents in its second round of bids to build renewable energy projects in the province.
Environment Minister Shannon Phillips says the province is targeting projects producing 300 megawatts of electricity in a program designed to boost the economy and training of Indigenous people.
"Beyond the potential for our economy, this is an important step in the long path toward reconciliation," Phillips said Monday.
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Chief Roy Fox of the Blood Tribe in southern Alberta said they're ready to go.
"We have been in discussions with the premier, various cabinet ministers. Some of us are shovel ready to become definitely involved in all aspects of an alternative energy project," he said.
Each bid will have a minimum Indigenous equity component, which can include an ownership stake in the project or land-use agreement between the company and the community.
Though the size of the equity component isn't yet determined, it's recommended to be 15 to 25 per cent, according to an official with the Alberta Electric System Operator (AESO).
"It will ensure that Indigenous participation is part of Alberta's overall competitive advantage," Phillips said.
She says a third round will follow the same rules as the first in targeting 400 MW of output from any proponent, with details of both to be established by the AESO.
$10 billion by 2030
In December, the province announced it had chosen three companies that are to spend about $1 billion to build four wind power projects in southern Alberta capable of generating 600 MW of new generation, 50 per cent higher than its goal.
Under its agreement with the companies, the province will subsidize the plants using funds from its levy on heavy industrial emitters if the power price falls below the average bid price of $37 per MW-hour — if it's higher, the companies are to pay the difference to the province.
The province wants to add up to 5,000 MW of renewable energy through private sector investment of about $10 billion by 2030.
It will announce the winning bidders for the second and third rounds of the renewable energy program by the end of 2018.
Predictable cash flow
The province made the announcement at the opening of the Alberta and Saskatchewan Renewable Energy Finance Summit.
Chris Moscardelli, director of Societe Generale's energy group, said the financing sector is optimistic about how the renewable energy program is rolling out in Alberta.
"The reason it's so bullish is the contracted nature of this," Moscardelli said.
"The fact that the REP [renewable energy program] is intended to create a long-term contract, which generates cash flow certainty, that makes us bullish as lenders because we can see predictability of cash flows for the next 20 years."
Moscardelli also welcomed news of Indigenous involvement in the second round.
With files from The Canadian Press