Get ready Albertans, you’re about to pay a steep bill to kill coal

What will it cost to kill coal completely by 2030?

Albertans wondering what their electricity bills might look like within the next few years should pay close attention to the Alberta government’s ambitious greenhouse-gas-reduction agenda. That plan, revealed in November, aims to increase Alberta’s carbon tax (which is already underway) and shut down coal plants early, while subsidizing alternative power generation.

If similar policies elsewhere in Canada are any indication, Albertans can expect to become tied to a hefty bill.

Until recently, Alberta avoided tapping consumers or taxpayers in order to “go green.” Regardless of this, coal-fired electricity generation already dropped from 66 percent from the electricity grid in 1996, to 38 per cent this past year, and was on the right track to say no to simply 10 % by 2034.

Meanwhile, wind and natural gas were set to rise to 11 per cent and 74 percent of electricity generation, respectively, by 2034, up from nine per cent and 44 per cent respectively in 2015.

All of that greening was already within the power pipeline before the new government committed itself to forcing coal power down to zero by 2030.

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So here’s a question: What’s going to it cost to kill coal completely by 2030?

To answer that, first consider Alberta’s recent power prices. While volatile, from 2002 to 2015, electricity prices in the province rose just 16 per cent, slower compared to consumer price index (34 percent) and much slower than prices of government-delivered things like riding on the bus (69 per cent) and water (91 per cent).

All of this is about to change, however. The provincial government’s plan to double the tax on carbon emissions – to start with – will definitely cost the typical Alberta household $480 annually by 2018, and twice that quantity by 2030. That’s based on the Climate Leadership Plan commissioned through the Alberta government.



An extra thousand dollars a year is a burden, even though the government plans to subsidize some consumers.

But there is no “free lunch,” as subsidies should also get paid for from someone’s pocket. Besides, governments routinely underestimate increased power costs (for everyone-consumers taxpayers, and businesses) when they hurry to kill off coal plants.

Ontario is an ideal example. In 2006, its government decided to end all coal-fired electricity generation, about one-quarter of the power generated within the province at the time. This capacity ended up being to get replaced with power sourced from renewable energy for example wind and solar, with the help of guaranteed price programs (feed-in tariffs). Power prices subsequently grew from five cents per kWh in 2004 (pre-announcement) to nine cents per kWh in 2014, an 80 percent increase.

Even the province’s “cheaper” post-2009 subsidies will, according the Ontario Auditor General, lead to one more $9.2 billion paid to alternative power producers over 20 years.

Alberta’s government says it’ll avoid feed-in tariffs, however the Climate Leadership report explained the province will subsidize green energy in other ways.

The cost of replacing Alberta’s coal-powered electricity generation with more expensive renewable alternatives will thus be also significant. One Standard & Poor’s estimate is the fact that $7 billion in debt will be contracted by power companies necessary to build green energy projects earlier than expected.

Then you have the other iceberg Albertans are going to sail headlong into: The province’s new policy of skyrocketing the shutdown of coal plants means significant costs for consumers, taxpayers, and shareholders. An earlier coal phase-out can create obligations for government to pay firms that own coal-fired facilities towards the tune which is between $5 billion and $15 billion, based on EDC Associates Ltd.

The Alberta government’s artificial and forced “hurry up” green plan means killing cheap power. That inevitably means much higher electricity bills – all this for “zero coal” by 2030 instead of 10 per cent coal-generated electricity by 2034.

The government should be upfront about these costs so that Albertans can understand the policies they might soon be asked to invest in. Or better yet: Probably the new government may wish to rethink their rush.

Mark Milke and Youri Chassin are the authors of “Green Energy Subsidies: Is Alberta Jumping on the Bandwagon?” authored by the Montreal Economic Institute