The town of Innisfail intends to complete its solar power facility application despite increased uncertainty around the project's financial benefits.
Council was told recently that the electricity generation picture has changed significantly in Alberta over the last year or so.
Consultants EDC Associated Ltd. were hired to prepare a Fundamental-Based Forecast "as there has been a significant drop in the current and forecasted pool prive for (the) electricity generation market."
Significant new generation capacity has been added to the province's power grid, with more projects expected to come online in the next two years, which will affect supply and demand and pricing. As well, the province is committed to reducing Albertans' power bills.
"Based on the results from the report, the expected rate of return for the project has changed from a 6-7 year projection to 18-20 year," says a report to council from town operations director Steven Kennedy.
"It is administration's recommendation that it doesn't make it financially viable to proceed with the project on our own," Kennedy told council. "What this does, though, is provide us an opportunity to look at other partners within the province as they come forward."
The town announced its intention in late 2023 to invest $4 million in a 1.5-two megawatt solar power facility in its Southwest Industrial Park. Once the power switch was turned on, the facility was expected to generate $700,000 in annual revenue for the town.
Since nearly $150,000 has been spent on the solar power facility application to the Alberta Utilities Commission (AUC), town administration recommended finishing the process with a further $15,000 investment to tweak its application to meet new requirements around decommissioning solar facilities.
AUC approval is expected to be valid for five years when an extension could be requested.
"We feel this gives us an opportunity to be able to jump on project if an opportunity comes from an investor," he said.
Having all the necessary approvals in place makes the project more attractive to potential investors, he added.
Opportunities could be along the lines of a new company setting up in the industrial park that needs significant amounts of power and would benefit from having a solar facility next door.
Given the uncertainty around future electricity prices, staff also recommended taking a go-slow approach on the project and pushing construction to four or five years from now.
"This will give us time to determine if the project will progress and if an extension is required," says
"This will give time to monitor the market and investigate other possible opportunities to utilize the project," says Kennedy in his report.
Council voted to approve $15,000 to finish the AUC application.
