Alberta in the Age of Renewable Power: Policy Lessons from Germany and Sweden

In an increasingly carbon-constrained society, governments across the world have designed policies to support the development of renewable electricity. In particular, Germany and Sweden are world leaders in the development of renewable electricity. In contrast, the province of Alberta has limited experience creating a policy environment that encourages renewable electricity generation. This capstone project explores the policy lessons that Alberta can take from Germany and Sweden to foster the development of renewable electricity. By incorporating lessons learned from Germany and Sweden, the Alberta government could adopt new policies that increase the proportion of electricity derived from renewable sources. This paper is arranged into four chapters. The first chapter provides an overview of Alberta, Sweden, and Germany’s past and present renewable electricity policies. The second chapter analyzes each jurisdiction’s current policy according to four criteria: 1) effectiveness, as quantified through the compound annual growth rate in renewable electricity capacity or generation; 2) diversity of actors, as evaluated through any special provisions that promote the participation of companies of varying sizes; 3) diversity of technologies, through an analysis of the number of renewable technologies able to secure support under each program; and 4) each program’s impact on household electricity costs, as measured by the compound annual growth rate in the size of the electricity surcharge as a share of household electricity costs/kWh. The third chapter compares public acceptance of renewable energy in each region through an analysis of public opinion polls. Finally, the fourth chapter summarizes the policy lessons Alberta can take from Germany and Sweden to foster the development of renewable electricity. There are four lessons Alberta can take from Germany and Sweden. First, as seen in Germany, the government's ability to anticipate changes required to integrate renewables into the electricity grid may limit the effectiveness of Alberta's future renewable policy. Second, the Alberta government could improve future policy by making special provisions to promote a diversity of actors; however, Alberta can learn from the overwhelming participation of small actors in Germany’s auctions by limiting their future provisions to those that provide a level playing field for all actors. Third, for Alberta to encourage a diverse range of technologies while still promoting the most cost-effective electricity production, the province could implement a technology-neutral policy first (as seen in Sweden), followed by a transition to a technology-specific policy (as seen in Germany). Lastly, if Alberta strives to become a large-scale producer of renewable electricity, it may have to impose an electricity surcharge on consumers; however, it is likely the surcharge will stabilize as Alberta’s renewable sector matures, as seen in Germany and Sweden. In brief, this capstone provides the foundational knowledge required to understand renewable electricity policy in Alberta, Sweden, and Germany. This paper also offers specific policy lessons that Alberta may apply to keep pace with the global push towards a clean and renewable power sector.

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