The cost of evicting coal from Alberta

The speed with which the NDP government is introducing change less than one year after being elected is a little dizzying.

The speed with which the NDP government is introducing change less than one year after being elected is a little dizzying. Some of the changes seem to reflect NDP dogma, and some don’t seem to have the best interests of Albertans at heart.

What’s more alarming is the number of warning bells going off from other quarters, alarm bells that are apparently going unheard by NDP leader Rachel Notley’s government. Earlier in January Moody’s Investor Services issued a report with rather alarming comments, stating the Province of Alberta’s treasured AAA credit rating was staying unchanged for the moment, but the province’s economic forecast was being downgraded to “negative.” In a statement along with the report Moody’s added, “The negative outlook for the province of Alberta reflects the rising risk that the province’s fiscal position will deteriorate further than previously expected in an environment of protracted low oil prices and deterioration of economic activity.”

Three days later another credit rating organization, DBRS, changed Alberta’s long-term debt rating from stable to negative. DBRS, apparently concerned about the NDP government’s plan to spend $34 billion over the next few years while oil continues to plummet, continued to voice worry by stating, “Without a material improvement in the fiscal and debt outlook supported by a credible multi-year fiscal plan, a one-notch downgrade to the rating is likely.” Debt downgrading can result in a  number of problems, but usually means interest rates will go up. Less taxpayer money spent on projects, more taxpayer money wasted on loan servicing.

But one of the truly worrying decisions made after only a few months in office is the NDP’s eviction of coal power from Alberta. Recently announced rules to phase out coal-generated power are being touted as a way to fight climate change which, despite the recession and plunging oil prices, seems to be the most vital issue according to Notley and her government. According to the provincial government, “Under (Notley’s) plan, up to 30 per cent of Alberta’s electric power will come from renewable sources by 2030, and pollution from coal-fired electricity generation will be phased out… Coal-fired plants will be phased out and replaced by renewable energy and natural gas-fired electricity, or by using technology to produce zero pollution.”

This week, a report noted that kicking coal out of the province would cut some emissions the NDP are concerned about, but would leave Albertans vulnerable to powerful inflationary factors as a cheaper alternative was no longer on the table.

Global News reported that “The report, prepared by utilities consultant EDC Associates Ltd., looked at the impact of the NDP government’s plan to phase out coal power by 2030 and source 30 per cent of energy from renewable sources.

“It found that the boost in renewables and the end of coal would mean a 45 per cent reduction in emissions, or 18.5 million fewer tonnes of carbon released into the atmosphere a year.

“However, under the province’s privatized utility system, prices would have to be between $60 to $85 per megawatt hour to justify wind power construction.

“And if solar power were to make up 50 per cent of the renewables mix “it would cost between $200 and $300 per megawatt hour.”

There are so many pitfalls in this short-sighted scenario, it’s difficult to pick just one to focus on, such as increasing reliance on power sources like natural gas. A few years ago south of the border, President Barack Obama couldn’t stop talking about how corn-based ethanol was going to change the face of his country, until his eggheads finally sat down and calculated that, in essence, it would take 1.1 tons of fossil fuel to produce 1 ton of ethanol. Dummies.

There’s also the issue of the aging population. The Baby Boomer generation is entering their autumn years. With many retired and many entering their 70’s and beyond, retired Boomers, one of the largest social demographic groups in Canada, have been hearing for years about how the government should do everything they can to keep Boomers independent, keep them in their homes and reduce the stress on long-term care facilities.

Those Boomers get to face escalating power costs on a fixed income now.

Albertans haven’t even reached the NDP’s first anniversary in power.

 

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