Canada's budding cannabis cultivation business, electricity-hungry cryptocurrency miners and an unexpected boom in solar projects all provided new elements in a long-term power-generation forecast prepared by Alberta's grid operator.
The Alberta Electric System Operator, known as the AESO, said it expects moderate load growth in the next two decades, albeit at half the rate of the last 20 years. Development of the oil sands in the northeastern portion of the province and shale gas reserves in the northwest are expected to be the largest drivers of demand early in the "high-growth" scenario in the forecast, although at a much slower pace than in previous years because of production constraints and transportation challenges.
"High growth is predominantly in the northeast," Lars Renborg, a load forecast analyst at the AESO, said Oct. 3 at a Calgary, Alberta, conference to discuss the outlook. "We also see the growth in the northwest part of the province in relation to unconventional oil and gas development."
AESO analysts had to contend with a change in provincial government less than six months before the 20-year forecast was issued. The new government overhauled much of its predecessor's electricity policy by scrapping a planned shift to a capacity market, canceling a wide-ranging carbon tax and abandoning a plan to get 30% of the province's power from renewables by 2030. More changes could come in the wake of a federal election slated for Oct. 21, where an upset in the tight race could see changes in climate policy.
Natural gas-fueled generators are expected to provide the bulk of Alberta's power throughout the forecast period as the giant coal-fired plants that were once the dominant provider are phased out or refitted to burn gas. The AESO's so-called reference case calls for generation capacity of 22,815 MW by 2039 compared with existing capacity of 16,106 MW. The high-growth scenario foresees 26,881 MW of capacity at the end of the period. Natural gas and cogeneration would make up 17,036 MW of the capacity in the reference case, with wind generation providing 3,931 MW, or about 17% of the total. Hydro, solar and other power sources would make up about 4% of 2039 capacity.
Cannabis, cryptocurrency, solar
The projections could be upset by Canada's nascent cannabis and solar energy industries, both of which see favorable conditions in Alberta for their business due to abundant sunshine and open space in the flat, mostly treeless portions of the province. Cryptocurrency providers could also be drawn to Alberta to take advantage of low natural gas prices that have kept electricity costs down. "Cannabis load" is forecast to reach nearly 200 MW at peak demand by 2039 and cryptocurrency miners could absorb almost 100 MW under the high-growth scenario. Depending on government policy, electric vehicles could add 200 MW of demand under the same circumstances.
The Sheerness coal-fired power plant, formerly operated by ATCO Ltd., is one of several facilities where units are being converted to natural gas fueling. Source: ATCO |
The outlook considered two types of cannabis-growing operations — warehouse and greenhouse — both of which have been in use since Canada legalized recreational marijuana consumption about a year ago, Renborg said. Cryptocurrencies have a relatively flat baseload in the AESO assumptions.
"Warehouse load, where it's in a warehouse and they don't get any sunlight through the walls, that has a pretty flat profile," Renborg said. "For the greenhouse you have to factor in sunlight, so when the sun comes out the load decreases."
In the high-growth case solar generation is estimated at 481 MW by 2039, a figure that is thrown into question by Greengate Power Corp.'s announced 400 MW Travers Solar Project that was approved in August. The AESO does envision as much as 3,231 MW of solar capacity in its diversification scenario, under which electricity storage technology advances to the point that 500 MW is available in reserve.
"With Travers it was something that was recently announced and we will determine at the appropriate time how we may include it," Dave Johnson, manager of forecasting and market simulation with the AESO, said at the conference. "But we have to be really careful with long-term outlooks because it takes a certain amount of time to create them and there's always going to be these" developments.
Coal conversions shuttered
All of the scenarios anticipate that existing coal-fired units that are being converted to natural gas and co-fueling will be shut by 2039 in accordance with federal government policies. TransAlta Corp. and Capital Power Corp. have announced plans to convert newer units to run on gas. ATCO Ltd. had similar plans before its Canadian Utilities Ltd. unit sold its fossil-fuel plants to an affiliate of Energy Capital Partners LLC at the end of September.
"We based our assumption of the life of coal-to-gas on the federal regulation," said Noeline Kanagalingam, the AESO's senior generation forecast analyst. "It ranges from zero years to a maximum of 10 years. We believe that in aggregate most supercritical units will get a maximum of eight years and subcritical units will get a maximum of five years."

