What is Micro-generation?


Micro-generation is the production of electricity on a small scale, using renewable and alternative energy sources, typically solar and wind, by individual home owners and small businesses, as well as municipal and community buildings, such as a fire hall, to meet their electricity needs. Other sources of energy include biomass, micro-cogeneration, geothermal sources, and fuel cells.

Micro-Generation Regulation
The Regulationexternal link icon, established in 2008, allows Albertans to meet their own electricity needs by generating electricity from renewable or alternative energy sources.

Under the regulation, micro-generators receive credits for the electricity that they produce but do not consume. Small micro-generators, sized under 150 kilowatts, are credited for the electricity sent back to the grid on a monthly basis at their retail rates, while large micro-generators, sized 150 kilowatts and above, are credited for the electricity sent back to the grid at the hourly wholesale market price. Small micro-generators may also choose to install a meter that allows them to receive credit for excess electricity based on hourly wholesale market prices rather than retail rates.

Micro-generation systems are sized to offset all or a portion of the customer’s electricity needs. Albertans that want to generate electricity to earn revenue, and not for their own use, are considered commercial generators and do not meet the requirements to be a micro-generator. Small commercial generators may qualify as distributed generation, see the Distributed-Generation Application Guidelineexternal link iconor contact the Alberta Utilities Commission (AUC) directly. 

Late in 2016, the Regulation was amended to provide more flexibility for rules on how Albertans can generate their own electricity. Changes included increasing the size limit of a micro-generation system to five megawatts from one megawatt and allowing a micro-generating system to serve adjacent sites, which is especially helpful for operations with more than one building. Other amendmentsexternal link iconPDF iconhelped to improve the reliability, stability, and safety of micro-generation and the distribution grid.

In 2017, the AUC conducted a distributed generation reviewexternal link icon.

How does this affect me?

Customers are provided more choices for how to source their electricity.

The local wire service provider, also called the distribution company, looks after connecting a micro-generator’s system. Individual micro-generators do not have to pay for the ordinary and reasonable costs of interconnection and meter infrastructure as these costs are shared by all customers in the distribution company’s service area. This is monitored by the AUC to ensure costs passed on to the customers are fair.

The customer's electricity retailer must manage the administration and billing of the excess energy sent into the grid. This saves the micro-generator customer direct and indirect administration costs. Credit is received for electricity supplied to the grid, which allows customers to obtain value for every kilowatt-hour (kWh) they generate and don’t use.

Micro-generators in Alberta 

January Statistics

Sites*

Combined Capacity

(megawatts)

2017

1840

17.2

2016

1426

 10.5

2015

1119

  6.2

2014

  866

  4.3

2013

   610

   3.1

2012

   329

   1.3

2011

   203

   0.8

2010

   115

   0.4

*Includes installed micro-generation systems and pending sites that have requested connection.

The Alberta Electric System Operator (AESO) publishes quarterly micro-generation reportsexternal link icon.

How do I become a micro-generator?
All customers who want to become a micro-generator must apply to their distribution company (also known as the wire service provider) to get approval to connect and operate a generating unit, the AUC is responsible for overseeing and making decisionsexternal link icon regarding the Micro-generation Regulation.

The first step in applying is to contact your distribution company to inform them that you plan to install a micro-generation unit. The Utilities Consumer Advocateexternal link iconat 310-4-UCA maintains a list of retailers and distributorsexternal link iconfor Alberta. You can also find your company on your electricity bill.

After notifying your distribution company of your intent to become a micro-generator, there are a series of steps that must be completed. These steps are part of the AUC’s guidelines and include, but are not limited to:

  • consulting with an electrical contractor;

  • getting municipal permits;

  • preparing a site plan.

When all steps have been completed, an application may be submitted through the AUC efiling system. The application form is submitted to your distribution company.

Micro-generation customers are also required to sign an interconnection agreement with the distribution company. The distribution company owns the distribution system for your home, farm, business or industry. The distribution system carries electricity from the provincial transmission lines to consumers. The distribution company reviews and approves micro-generation applications, installs meters, and provides metering data to retailers and the Alberta Electric System Operatorexternal link iconfor settlement. Small micro-generators may also choose to install a meter that allows them to receive credit for excess electricity based on wholesale market prices rather than retail rates.

You must also notify your electricity retailer to discuss the information required by your retailer for compensation and billing. Your electricity retailer credits you for excess electricity that you return to the grid. The rate at which you are credited is agreed upon between you and your electricity retailer. The government does not decide what this rate should be. Your retailer collects from the AESO for crediting you for the excess at the same rate that you paid when buying electricity from the grid. The way these credits flow between you, your retailer and the AESO is described under the Micro-generation Regulation.

If there is a dispute between the micro-generator and the distribution company or retailer that cannot be resolved, it may be referred to the AUC, the provincial regulator.

In all cases the micro-generator must prove that greenhouse gas (GHG) emissions from the system are 418 kilograms per megawatt hour (kg/MWh) or less of electricity and/or useful heat generated. This ensures that all micro-generators will have lower GHGs than a typical combined cycle natural gas power plant.

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