Alberta Carbon Tax Funds (Some) Renewables

Alberta is stuck on tar sands — a well-known final destination for dinosaurs. So should it pivot faster to renewables like solar?

Yes please, say those concerned that Alberta, “the carbon emissions capital of Canada” is restricting its mandated flow of investment and support to renewables. Specifically, revenues from the $15 carbon levy Alberta demanded, along with emissions reductions, from large emitters coughing up over 100,000 tons of greenhouse gases annually. These levies, managed by the Climate Change and Emissions Management Corporation (CCEMC), have reportedly pulled in nearly $400 million since 2009, with nearly $100 million of that funneling toward renewables so far. But even the Alberta carbon tax revenue CCEMC has diverted to solar is running into controversy.

“It’s basically a money-laundering scheme where they wash the carbon dioxide out of [the cash] and give it back to the large emitters,” SkyFire Energy CEO David Kelly recently argued, pointing to Calgary’s much larger solar player Enmax, which reportedly landed nearly $15 million, as an unfairly unsubsidized hog. “It’s frustrating having a city-owned utility trying to put small tax-paying businesses out of business. It damages our business and other businesses in Alberta.”

“First, the CCEMC is supporting many ideas led by smaller businesses,” spokesperson Celia Sollows countered to SolarEnergy. “Twenty-eight projects of the 58 we have announced to date are small and medium enterprises. I know one of our projects was led by a one-person business, a guy who developed his idea working out of his garage. Second, the CCEMC uses a competitive process to select projects and we are committed to selecting the best proposals that reduce greenhouse gas emissions in Alberta.”

Third, Sollows added to me, the CCEMC’s nearly $100 million invested so far has a current project value of $945 million, and more is coming. CCEMC recently announced $65 million, $25 million max per project, was available for new international submissions. That’s compounded with $35 million from the CCEMC’s international Grand Challenge, which is looking to fund projects promising greenhouse gas reductions in the megatons.

“Renewable energy is a really important part of our portfolio,” Sollows said. “In fact, right now renewable energy is the largest part of our portfolio.”

Yet disconnects remain. CCEMC’s solar portfolio places it in the context of Alberta’s Climate Change Strategy, which lumps renewables under “Greening Energy Production” alongside biogas, biorefineries and other waste-to-energy projects that provide less return on investment, as far as emissions reductions are concerned. (For example, a 300-MW wind project awarded $10 million by the CCEMC has reportedly shouldered over 40 percent of its portfolio’s emissions reductions.)

These economic and environmental achievements deserve their own focus areas in Alberta’s Climate Change Strategy as well as the CCEMC. If “it’s about transforming the way we produce energy,” as Sollows explained to SolarEnergy, then both are going to have to admit, sooner or later, that some ways we produce energy are just cleaner and less deadly than others — and they deserve more proportional funding and support than waste mitigation and carbon capture.

But as the Climate Change and Emissions Management Corporation is not officially part of the Canadian government, “we operate at arms-length from government,” Sollows reminded, and “regulations do not specify which technologies the CCEMC should invest in … to fund projects that reduce greenhouse gas emissions and help Alberta adapt to climate change.”

Until these gaps are bridged, Alberta’s reputation for solar support will show cracks. Especially from forward-thinking parts of the U.S., which are none too pleased with the huge amount of Alberta oil-sands money flowing into Koch Industries’ coffers and from there into the American political system. Not while Alberta’s provincial neighbor British Columbia enacted the most effective carbon tax in North America, simply by slapping a more realistic $30 carbon levy on emissions from coal and gas.

“Renewable energy and energy efficiency is an important part of the equation for the CCEMC, and so are transformative technologies that will reduce emissions as fossil fuel production increases to meet growing global demand,” Sollows explained. But fossil fuel production must decrease to meet global demand for power, which must be renewable. Especially if humanity wants to dodge the environmental horrors of the Intergovernmental Report on Climate Change’s recent report. It’s a simple equation.

This article appeared at Solar Energy