Alberta's installed capacity is expected to jump by about 44% to 23,400 MW in the next 15 years on load growth and a shift in generating sources, according to a report from the province's grid operator.
At the same time, Alberta's generation mix will likely be overhauled because of a provincial plan requiring that coal-fired emissions cease in 2030, the Alberta Electric System Operator said in a long-term outlook report.
The AESO said it developed the biennial report during a period of "unprecedented uncertainty" for the province's power sector, driven by low oil prices, low load growth and new governmental policies.
Load growth in Alberta largely hinges on oil sands development, which has been slowed by low oil prices.
"The restoration of oil prices to levels that support oil sands investment and expansion is key to future economic and load growth for the province," the report said, noting that while prices are expected to rebound it is unclear when that will happen.
In the near term, the AESO expects Alberta's relatively robust load growth to continue because several oil sands projects are still being built. The grid operator expects the province's load will jump 17% to 10,711 MW by 2020, up from 9,162 MW last year.
Instead of selecting a low-growth scenario, the AESO's "reference case," which reflects the grid operator's most likely forecast, includes high load growth through 2022 due to the completion of oil sands projects, economic recovery from higher oil prices and the approval of new oil sands projects.
After 2022, the AESO assumes load growth will be modest, partly because of energy efficiency efforts. The AESO said there is a "downside risk" associated with the mid-growth load scenario over the next three years.
Also, the AESO assumes that the Alberta provincial government will adopt a plan outlined in November that calls for phasing out coal-fired generation by 2030 and replacing half to 75% of the coal capacity with renewables.
The Climate Leadership Plan was released in November, but key details are still being worked out, including the possibility of adopting a hybrid regulatory and market-based approach to reduce emissions from oil and gas resources, according to the report. The plan will require six coal-fired units totaling 2,545 MW to retire well ahead of their expected lives.
The climate plan will require a massive shift in Alberta's generation mix. Currently, the province's 6,289 MW of coal-fired capacity accounts for 39% of Alberta's total capacity.
The AESO estimates combined-cycle and simple-cycle natural gas-fired capacity will jump from 2,712 MW, or 17% of Alberta's capacity, to 10,848 MW in 2030, or 46% of total capacity.
At the same time, the grid operator expects wind generation to increase from 1,463 MW, or 9% of total capacity, to 5,663 MW, or 24% of capacity, according to the report.
The AESO also considered high-growth, low-growth and an "alternate policy" scenario that assumes much earlier coal plant retirements and sharply higher amounts of renewables than the reference case.
The AESO will use the report to craft a long-term transmission plan and to support interconnection requests for new generating resources.
