Turbines generate power at a wind farm in Alberta. Recent provincial restrictions have paused new wind and solar energy projects.Getty Images
For a U.S. state that has been reliably red since the early eighties, the emergence of Texas as a leader in renewable energy on its surface might be baffling at best. But the southern location is boosting its capacity with support from its deregulated market – an area in which Alberta has experience. It begs the question: What can Canadian provinces, not just Alberta, learn from Texas?
A money-driven market
A combination of abundant resources, minimal red tape, an open market, and an innate desire to make money has led Texas to a prominent position as a wind- and solar-power producer, says Dr. Michael Webber, a professor at the University of Texas at Austin.
“In Texas, we’ve arrived at a set of answers that are nearly identical to what New York or California would arrive at, but we arrived there with a very different set of motivations,” he says.
While other parts of the world might be galvanized to increase their renewable energy capacity due to climate-change impacts or national-security risks, Dr. Webber says Texas is motivated by the opportunity to make money.
Some Canadian provinces, such as Alberta, have shared key traits with Texas for decades, making them drivers for the country’s implementation of renewables. But recent policy changes by the Alberta government and slow uptake in other provinces are moving Canada further away from the model that the southern state has proven to be effective.
“Canada is one of the leaders of energy, but it could be a bigger one,” Dr. Webber says.
Water powers British Columbia
Hydropower dominates electricity generation in British Columbia, and Crown corporation BC Hydro controls the market, says Milind Kandlikar, a professor at the University of British Columbia at the School of Public Policy and Global Affairs and the Institute for Resources, Environment and Sustainability. While other renewables, such as wind or solar, are topics of conversation, their implementation is going to take longer than it would in a province with an open power market, he says.
BC Hydro’s expertise in hydropower makes it much more likely to stick to what it knows than pivot to something entirely new, says Prof. Kandlikar. Especially if it requires working with independent power producers – something that has led to trouble in the past. “They know how to build dams, not wind farms, so they have to learn to do that,” he explains. The province could learn from Texas’ money-driven market and encourage investment and growth by being more open to private producers with different types of skills.
He expects a similar scenario to play out in other provinces with large hydro capacities where electricity generation is mostly centrally controlled, such as Ontario, Manitoba and Quebec. They may be slower to tackle new projects that vary from what they know.
Wind and solar energy
In Saskatchewan, the format is similar with Crown corporation SaskPower controlling the power market, says Brett Dolter, professor at the University of Regina and member of the Clean Energy Technologies Research Institute.
To meet the provincial government’s target of increasing its renewable energy capacity to as much as 50 per cent by 2030, Dr. Dolter says SaskPower needs to start thinking more like Texas and increase the pace at which it’s issuing requests for proposals.
“If you had that open door that Alberta recently had, and it sounds like Texas has, I think you’d see that pace of investment speed up.”
With a federal election on the horizon, Dr. Dolter says wind and solar development in Canada could be incentivized one of two ways, depending on policy. He says carbon pricing, clean electricity regulations and tax credits will remain to drive the transition, or a push to move away from the Crown corporation model could offer an opportunity to expand wind and solar for its own merits.
Government restrictions in Alberta press pause
Alberta’s open electricity market has encouraged competition and innovation by independent power producers in the past, contrasting the dominant Crown corporation model in other provinces.
When an energy market opens up it attracts the most economic forms of energy. That’s why, for the past two years, Alberta has led Canada in renewable energy growth, says Vittoria Bellissimo, president and chief executive officer of the Canadian Renewable Energy Association. “It was obvious that wind and solar were the most economic forms of energy, and Alberta was open for energy. So, that’s how Alberta led the country in 2022 and 2023.”
After the United Conservative Party (UCP) placed a seven-month freeze on new wind and solar energy in 2024, however, growth has slowed down. Restrictions placed on renewable energy projects means the province is losing its unique kinship with Texas, says Ms. Bellissimo.
“I spend a lot of time worrying about what the Alberta electricity market will look like going forward.”
Should Canada be more like Texas?
While an open market structure is optimal for inciting innovation, Ms. Bellissimo says provinces outside of Alberta are simply not set up to adopt that format.
She says provinces need to encourage competition by having reliable procurement schedules. Provinces with power controlled by a central body such as a Crown corporation should regularly send out requests for proposals to independent power producers, she says, encouraging renewable energy companies to invest time and money into their markets.
Whittling away at renewable energy production goals means expanding the possibilities and accepting new providers bringing different ways of doing things to the market. It’s working for Texas, it worked for Alberta, and it could be a path forward for other provinces.
“You don’t have to have an open market structure,” Ms. Bellissimo says. “You can run predictable procurement schedules and still have a very successful renewable energy market in your province.”
