Market Snapshot: Wind continues to Gain Power in Ontario, Quebec and Alberta in 2014

Release Date: 2015-02-26

Canada now has almost 10,000 megawatts of wind-powered electricity generating capacity, representing about seven per cent of total generating capacity. Over 1,800 megawatts of this was installed in 2014, somewhat more than the 1,600 megawatts added in 2013. Electricity production from wind facilities varies with wind speed. As a result, wind has lower utilized rates compared to many other forms of generation, meaning its share of total generation is lower than its share of installed capacity. During the first ten months of 2014, about 1.4 per cent of electricity produced in Canada was generated from wind.

 

 

Figure Source and Description

Source: Canadian Wind Energy Association

Description: This stacked bar chart shows installed wind generation capacity in Canada from 2004 to 2014 in Ontario, Quebec, Alberta, the Atlantic Provinces, British Columbia, Manitoba, and Saskatchewan. Canada-wide capacity increased rapidly from approximately 400 megawatts in 2004 to nearly 10,000 megawatts in 2014. Combined, Ontario, Quebec and Alberta accounted for over 80 per cent of installed capacity in 2014.

Most of the wind capacity additions last year were located in Ontario, Quebec and Alberta. These are the three largest electricity markets in the country and offer unique advantages for wind developers.

In Quebec, vast hydroelectric supplies can be used to back-up intermittent generation sources such as wind. Quebec’s 2006-2015 energy strategy included a goal to install 4,000 megawatts of wind capacity by 2015. Quebec has about 2,400 MW of wind power currently installed, and will likely reach its target by 2018, according to the Canadian Wind Energy Association.

In Ontario, the Feed-In-Tariff program has created a stable investment environment for wind. This contributed to Ontario leading Canada in wind power capacity installations. Today, Ontario has more than 3,000 megawatts of wind capacity. A wave of Feed-In-Tariff procured wind energy is expected to be online in 2015, potentially bringing Ontario’s total to over 5,000 megawatts. In June 2013, the Ontario government ordered that large wind facilities be removed from the Feed-In-Tariff program, meaning large wind projects must be procured through competitive contracts, which will affect the addition of wind going forward.

As of January 2015, there are 17 projects in the Alberta Electric System Operator’s queue, totaling over 2,300 megawatts of wind power capacity. However, the nature of Alberta’s open market makes revenue streams for wind generators less certain than in other provinces. The average price for electricity in Alberta’s market in 2014 was $50 per megawatt-hour, which is thirty dollars less than the 2013 average and well below the Alberta Electric System Operator’s estimated all-in cost for wind ($84 per megawatt-hour).

While some wind farms continue to receive credits from Natural Resources Canada’s closed ecoEnergy program, industries throughout Alberta have used credits gained from wind generation against emissions charges under the province’s Specified Gas Emitters Regulation (worth approximately $15 per tonne of CO2 equivalent). Others, such as EDF’s Blackspring Ridge wind project, have sold credits outside of Alberta. This project represents 300 megawatts of the 350 megawatts of wind power added in Alberta in 2014 and has a 20-year renewable energy credit sale agreement with California’s Pacific Gas and Electric.

This snapshot builds on one topic covered in the Board’s recently released report: Canadian Energy Dynamics: Review of 2014. The Report describes many important developments in Canadian energy markets in 2014, while providing useful information and statistics.

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