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Innogy kicks off subsidy-free solar in Canada

The German utility takes investment decision on 57MW in PV capacity in southern Alberta

German utility Innogy has taken a final investment decision to build two PV arrays with a combined capacity of 57MW in Canada’s Alberta province without state subsidies, in another sign that support-free solar is gaining traction in northern countries.

The plan follows up on an announcement earlier this month by rival EnBW to build a 175MW solar array in the relatively cloudy northeastern German state of Brandenburg, also without subsidies.

“After last month’s announcement that we build our Spanish solar project Alarcos without state subsidies, we are continuing on this path with our two new Canadian projects,” said Hans Bünting, chief operating officer renewables at Innogy.

“This underlines that solar energy is already competitive in several markets. Decreasing prices for equipment will further drive this development.”

Innogy plans the start of construction and commissioning of both solar projects (Prairie Sunlight II and III) near Vauxhall in southern Alberta in the second and fourth quarter of this year, respectively.

Innogy subsidiary Belectric is responsible for all construction and will also take on operation and maintenance of the solar farms as a service provider.

The planned investment volume is in the mid double-digit million euro range.

The projects were originally developed by Canadian company Solar Krafte Utilities, and the project rights have been transferred to Innogy in February 2019. Innogy will review all options regarding the future ownership and financing structure of the projects in order to maximise value for the company and its shareholders.

“Our first two projects in Canada are a perfect fit with our strategy to deliver utility-scale solar projects in promising markets, like North America, with high irradiance and a strong commitment to renewable energy,” said Thorsten Blanke, head of solar at Innogy.

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“And this is only the beginning. In 2017 we joined forces with Solar Krafte and they are the perfect partner to build up a substantial solar portfolio in Canada. Together, we aim to develop solar projects with a total capacity of up to 1GW.”

Cheaper than gas

New solar plants in Alberta have been contracted at a lower cost than gas-fired generation, according to the Canadian solar industries association (CanSIA).

The average contract pricing of three new facilities to be built in south-eastern Alberta in a competitive process to supply the government of Alberta with power will be C$0.048 ($0.036) per kilowatt hour, which is less than the average historical wholesale power pool price paid to gas-fired electricity over the past ten years, CanSIA said.

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The contracting also shows how PV is increasingly beats wind, as the electricity of the three new solar plants in part will replace wind power operations whose contracts with the provincial government have expired.

Despite its northern location, Alberta receives more hours of sunshine than Miami, Florida, in the summer months, CanSIA says, with its electricity supply being most strained in the summer when high temperatures increase the resistance of distribution and transmission systems.

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