The first phase of Alberta’s plan to add 5 GW of clean energy by 2030 will commence in the first three months of 2017. This phase involves the procurement of 400 MW of utility-scale projects (over 5 MW per installation). Here are three keys things you need to know.

1. What types of renewable energy technologies will be considered for phase 1?

The initial phase is intended to be technology neutral, and a wide range of options such as solar, wind, and biomass will be considered. However, it is likely that most of the projects will be wind or solar due to the economics of the various technologies today. In order to determine the suitable technologies, the government will have to evaluate the levelized cost of electricity (LCOE) to compare the economics of various proposals.

2. How will the renewable energy generators be getting paid?

The renewable energy generator will be getting paid a strike price in dollars per MWh for twenty years. 20% of this price will be linked to inflation. If the power pool price is lower than the strike price, then the government will pay the renewable energy generator the difference. If the power pool price is higher than the strike price, then only the strike price will be paid.

This payment structure essentially locks in the revenues of the project for twenty years. It limits how much the energy generator can make, but it also take away uncertainty surrounding future electricity prices.

3. When do the projects need to be operational?

The first batch of proposed projects need to be operational by 2019. There will be financial penalties for renewable energy generators if their proposed installations are not ready for start-up in 2019.