The Business Renewables Centre Canada forecasts that by 2023 developers in Alberta will have constructed $3.7 billion in renewable energy facilities and created 4,500 jobs. The prediction derives from past and ongoing investment in the industry in Alberta. Since 2019 investment spending is expected to add 2 gigawatts to the province’s supply. That amount is more than double the supply increase from renewables in the 2010 – 2017 period.
Analysts point to the market-based structure of the province’s electricity system as a catalyst for the increased growth rate. The province is also advantaged with wind and sunlight that sustain renewables’ operation. At the core of the system are power purchase agreements (PPAs). These are concluded directly between individual buyers and sellers.
The important characteristic that makes PPAs useful for renewable energy is the dual source of value they provide for the purchaser. The buyers of electricity can either receive all or part of the energy arising from their investment; however, they can also use the investment as an emissions credit offset. For the sellers, the guaranteed financing provided by the PPA allows them to build facilities with minimal financial risk. Until 2019 the government offered renewable electricity fixed-price contracts. If the market price exceeded the contracted price the generator would pay the difference to the government. Conversely, with a lower than market price, the government would compensate the producer.