Electricity micro-generation
Electricity generation in Canada is much more than traditional energy sources and large retailers. The electricity generation mix in Canadian provinces is diverse not only because of its multiple sources, but also because of its various generation methods, which includes electricity micro-generation (also known as micro power generation).
Also Albertans are offered several ways to reduce their electricity bills such as considering augmenting grid connection with a generation source (solar panel, natural gas generator), reducing consumption, and micro-generation.
Micro-generation is the production of electricity from clean sources on a micro scale. Instead of relying solely on energy from electricity providers, micro-generators produce the electricity residents need to power their homes. In some cases, they can even generate more electricity that they need and then get paid for it.
If you’re curious about micro electricity generation in Canada, you will find below an interesting example of how micro-generation works. In Alberta, which is a deregulated electricity market, most micro-generators are whether small businesses or homeowners.
Discover below what is micro-generation, how it works and how people can generate their own electricity in Alberta.
Micro-generation in Alberta
The Micro-Generation Regulation was established in 2008 to organize the process in Alberta. The regulation is inspected by the Alberta Utilities Commission (AUC) and covers everything from generating your own electricity to getting credit for the power you produce but don’t use.
Since then, the Alberta Micro-Generation Regulation is revised from time to time by the Government of Alberta in order to meet current industry standards and make the small-scale generation regulation up to date, including noise control, safety procedures and other requirements.
What’s micro-generation in Alberta?
Micro-generation in Alberta means generating electricity from a micro-generation unit with a total nameplate capacity that doesn’t exceed 5 megawatts (MW). In Alberta, there are two types of micro-generators: small micro-generation units, which generate up to 150 kilowatts (kW), and large micro-generators, which can generate between 150 kW and 5 MW.
According to the 2008 Electric Utilities Act by the Government of Alberta, to be considered for micro-generation, your energy sources must be renewable.
By renewable energy sources, the Act means electricity generation from:
- Solar power
- Wind energy
- Hydro
- Fuel cell generation
- Geothermal power
- Biomass energy
- Products that have EcoLogo certification
- Other sources with a greenhouse gas intensity of less (or equal to) than 418 kg per MWh
Who’s eligible to become a micro-generator?
You need to meet some basic requirements to become a micro-generator in Alberta, including:
- Using renewable or alternative energy sources
- Intent to generate all or a part of your total electricity consumption
- Total nameplate capacity that doesn’t exceed 5 MW
- Generating electricity only to a site that is owned or leased by the generator
Depending on your main energy source and location, there can be other requirements. Also, there are specific permits, safety standards and legal matters related to each type of electricity generation and wire service provider (WSP).
How can I start generating electricity at home?
There are quite a few steps until you start generating electricity at home in Alberta. The whole process will require you to get in touch with the AUC, your energy retailer, and the WSP. In case you don’t know who is your WSP, here’s a full guide on how to find it out and contact your WSP.
Check below a summarized version of the main steps toward micro-generation in Alberta:
- Plan the installation and contact your WSP.
- Make an electrical consultation, confirm your legal land and get city permits.
- Prepare documentation and check equipment certification.
- Prepare and submit the micro-generation notice to your WSP.
- The project will then be evaluated and approved by the WSP.
- Install the micro-generation system and apply for electrical inspection.
- Contact your energy supplier (retailer) and notify them about the project.
- The WSP will then install the required meter.
The detailed steps can be found on the Alberta Utilities Commission’s micro-generation guide.
What are the costs of micro-generation? Do micro-generators need to pay for transmission and distribution fees?
All costs of operating the micro-generation unit are the micro-generator’s responsibility, which includes the costs related to applicable laws and necessary permits.
However, all of the costs related to interconnection (including bidirectional meters) such as metering, meter data management and load settlement, are costs of the local wire services provider.
What about delivery charges, distribution tariffs and similar fees?
Micro-generators won’t be charged for electricity generated and consumed at the site, but they will still be billed for the electricity from outside sources. In other words, your retailer will charge the delivery charges in the months that you consume any electricity from them.
The tariffs applied to micro-generation sites are based on the electricity supplied into the unit. Such charges would be billed the same way if the consumer weren’t a micro electricity generator.
It’s important to note that the micro-generator is not required to pay for the electricity that they supply into the grid.
Do micro-generators need to be signed up with an electricity retailer?
Yes. One of the requirements to be a micro-generator of electricity in Alberta is to be signed up with an electricity retailer. The retailers play a key role in the micro-generation process: They work as electricity market participants and send your monthly data regarding bill credits to the Alberta Electric System Operator (AESO). They are also responsible for managing bill credits and paying any unused credits to micro-generators.
How can I earn money or bill credits from my micro-generation system?
Micro-generators can be compensated for the electricity they generated but didn’t consume. After you let your service provider (retailer) know that you intend to be a micro-generator, it will act as the electricity market participant for you and it will provide you with bill credits for each month that you supplied more electricity than consumed.
Every month, the electricity supplied out of the micro-generator unit will result in bill credits to offset charges for any month. At the end of every 12-month period, unused credits accumulated by the micro-generation unit will be paid as money by the retailer.
How much do retailers pay you for generating electricity at home?
All micro-generators can be paid by retailers at the end of 12-month periods if they still have unused credits. However, small micro-generators (total nameplate capacity of up to 150 kW) and large micro-generators (between 150 kW and 5 MW) are paid under different conditions.
Small micro-generators are paid for each kWh of electricity supplied out of the unit. The prices are the same rates of the electricity supplied by the retailer into the site. As an example, if the retailer electricity rate is 8 cents per kWh, the micro-generator will be compensated 8 cents per each kWh.
Large micro-generators, however, will be paid at the hourly pool prices, when using a bidirectional interval meter.
When can I expect to receive a payment or bill credits?
Bill credits will be used to offset costs in the next month only. During a year, credits may be carried to offset costs for any month.
In case there are no costs to be offset in the 12-month period, the unused credits accumulated by the micro-generator will be paid in a single payment — which will be the sum of all of the credits accumulated in the previous year.
Who regulates the whole process?
The micro-generation process is supervised by the Alberta Utilities Commission (AUC), but includes many other stakeholders, including the wire services provider (WSP), which connects your micro-generation unit to the distribution system, and the energy retailer, which provides you with monthly credits. The process will also require that you contact electrical inspectors and get in touch with the City for permits.
Which retailers in Alberta have two-way meters and micro-generation programs?
The wire service provider, not the retailer, is responsible for connecting your micro-generation unit to the electricity grid. Most WSPs in Alberta can provide you with bi-directional meters and evaluate your micro-generation project. In rural areas, micro-generators can contact their local Rural Electrification Association (REA).
Each Alberta location has its WSP. For example, the WSP in the Edmonton region is EPCOR, whereas in Calgary, it is ENMAX Power. If you don’t know who is your wire service provider or don’t know how to contact it, you will find all the necessary information here.
What are two-way meters (or bidirectional meters)?
Two-way meters (most commonly known as bidirectional meters in Alberta) are interconnected devices that meter not only your electricity consumption but also how much you supply every month into the grid. The bi-directional meter is the tool used by your retailer to know the difference between your property’s electricity generation and its consumption. Generally, the WSP will decide which meter fits your project.
There are two types of bidirectional meters provided by WSPs in Alberta: The bidirectional cumulative meter and the bidirectional interval meter.
Bidirectional cumulative meter: In most cases, micro-generators will be provided with a bidirectional cumulative meter. This metering gadget shows the total amount of electricity that has both been exported to or imported from the grid during a specific time period.
Bidirectional interval meter: The bi-directional interval meter, however, has two separate trackers that measure individually the amount of electricity that has been exported to or imported from the grid. The bidirectional interval meter records the electrical energy data every 15 minutes. Such a system allows large micro-generation units, for example, to be paid at the hourly pool prices.
What are the related costs of installing a bidirectional meter?
According to the AUC, under the Alberta Micro-Generation Regulation, the local WSP is required to install a bidirectional meter at no costs for you — including metering, meter data handling and any meter installation costs.
In spite of that, the WSP may require you a reimburse, in case it considers your interconnected electricity project too complex, which can generate extraordinary costs in the meter installation process. The main reasons for reimburse are related to safety considerations or technical complexity.
In case the WSP refuses to install a meter by alleging extraordinary costs, the micro-generator has two options: paying for the extraordinary costs, or filling a complaint with the Alberta Utilities Commission. The AUC will then evaluate the case and make a decision based on what it considers just.
What are my obligations?
According to the AUC, these are the micro-generator’s main obligations:
- The costs of operating the micro-generation unit
- Letting your neighbours know about the project
- Contacting the WSP and the energy retailer
- Submitting separate notices for each micro-generation project you have
What are the WSP’s obligations?
According to the AUC, these are the WSP’s main obligations:
- Determining if a project fits the micro-generation requirements
- Installing the appropriate meter that measures imported and exported electricity
- Covering all metering, meter data handling and any meter installation costs
- Providing generators with an Interconnection and Operating Agreement
- Providing generators with a notice of approval and grid connection
What are the retailer’s obligations?
- Crediting the micro-generator for energy supplied out of the site, and acting as a participant of the Alberta’s electricity market
- Making sure the electricity exported to the grid will incur credit on the micro-generator’s bill
- Making sure unused credits will be paid once every 12-month period
What are the AESO’s obligations?
- Determining hourly pool prices for use in large micro-generation units payment
- Evaluating the micro-generation units’ claims sent by retailers
- Providing generation credits to retailers with micro-generator customers
What about energy storage (off-grid power)?
Many consumers in Alberta are curious about the possibility of storing electricity at home. Instead of generating electricity and sending the excess energy back to the grid, people can store energy, which is called off-grid power. Whether using solar batteries or equipment such as the Tesla Powerwall2 (Tesla battery packs), consumers can find solar contractors that install solar power systems with batteries.
Solar power systems, obviously, generate more electricity during the day than in the night. By storing solar energy, some households can have better use of their electricity generation systems. As some consumers would say, storages work as the grid. In case the energy goes down due to a power outage, you will be able to use the energy stored in your battery or Powerwall.
Depending on your energy goals and who your contractor is, you can have whether a micro-generation unit or an off-grid storage system at home. Both of them have their pros and cons, and will depend on who’s your contractor or energy retailer (in case you decide for a solar storage system provided by your retailer).
The whole micro-generation process is pretty standard regardless of who your retailer is, as it depends more on your wire services provider and on the regulation, which defines general procedures. Still, some retailers are willing to provide micro-generators with special conditions.
Spot Power, for example, offer micro-generators special rates for exporting (when they produce more than they need) and importing (when they consume more than they generate) electricity. As of April 2019, micro-generators with Spot Power can earn 18.75 cents/kWh when they export electricity to the grid, and pay 6.49 cents/kWh when they import electricity from the grid.
As a wire services provider, ENMAX can help you with the whole solar panel installation process. The company offer its customers two options: purchasing the solar energy systems from them or the lease option, which allows you to lease the equipment for years.
As to storage projects, ATCO offers another interesting example. The energy company provides its customers with a range of solutions regarding off-grid solar power systems, including engineering design, procurement and the feasibility of the project.
What about grid-connected storage systems in Alberta?
When it comes to grid-connected storage systems in Alberta (also known as hybrid systems), there is still little information about its applicability and cost-effectiveness in the province. The AESO and the Alberta Storage Alliance (ASA) have been researching and recommending more studies and pilot projects on how such projects will behave in the Alberta electricity context, according to a report by the AESO.
Are there any retailers that cannot support micro-generation billing?
Find below a list of some of the retailers that support micro-generation billing. Most major retailers in Alberta can support such projects, which includes the necessary billing structure to credit micro-generators.
- ENMAX
- EPCOR
- ATCO Energy
- Direct Energy
- UtilityNet companies
- Sponsor Energy companies
Some energy providers even have special perks for small solar power generators in Alberta, including higher rates for crediting micro-generators and cash backs on the annual energy imported from the grid.
However, it’s essential to contact your current electricity provider before you become a micro-generator, so the process can work smoothly. In most cases, you will only need to notify your retailer about the new micro-generation unit. Still, it’s worth calling your provider before you start your project in order to avoid any setbacks.
