Micro-generation is electricity production, using renewable or alternative energy sources, sized to meet customer’s electricity needs.

How Micro-generation works

Under the Electric Utilities Act, the Micro-generation Regulation, allows Albertans to meet their own electricity needs by generating electricity from renewable or alternative energy sources.

Micro-generators producing excess electricity receive credits for what they feed to the grid. They are either;

  • Small micro-generators (under 150 kilowatts) who are credited for the electricity sent back to the grid on a monthly basis at their retail rates, but they may also install a suitable meter to receive credit for excess electricity based on hourly wholesale market prices; or
  • Large micro-generators (sized 150 kilowatts and above) who are credited for the electricity sent back to the grid at the hourly wholesale market price.

The local wire service provider, also called the distribution company, is responsible for 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. The customer's electricity retailer must manage the administration and billing of the excess energy sent to the grid. This is monitored by the Alberta Utilities Commission (AUC) to ensure costs passed on to the customers are fair.

In 2016, the regulation was amended to increase the size limit of a micro-generation system to five megawatts from one megawatt and allowing a micro-generating system to serve adjacent sites, other changes helped to improve the reliability, stability, and safety of micro-generation and the distribution grid. The Alberta Gazette, Part II, lists all of the amendments.

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.

Becoming a Micro-generator

Micro-generators must apply to their distribution company to connect and operate a generating unit. The AUC is responsible for overseeing and making AUC decisions regarding the Micro-generation Regulation.

  1. Locate your company on your electricity bill.
  2. Notify your company of your intent.
  3. Follow the AUC’s guidelines, some requirements include:
    • consulting with an electrical contractor;
    • getting municipal permits;
    • preparing a site plan.
  4. Submit the completed application through the AUC efiling system.
  5. Submit the completed application 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 Operator

You must negotiate compensation and billing with your retailer. They will credit you for excess electricity you supply 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. Disputes that cannot be resolved may be referred to the AUC, the provincial regulator.

Small Scale Generation

Commercial generators do not meet the requirements to be a micro-generator, but small commercial generators may qualify as small scale generation or distributed generation. See the Distributed-Generation Application Guideline or contact the AUC directly or learn how to generate your own electricity.

Renewable energy legislation

The Renewable Electricity Act outlines Alberta’s commitment to increasing the amount of green energy produced in the province, including a legislated target of 30% renewable electricity by 2030. Renewable energy comes from naturally occurring and sustainable sources, such as geothermal, hydro, solar, sustainable biomass, and wind.

  • In February 2019, a Ministerial Order established the following interim targets under the act:
  • 15% by 2022 (target met)
  • 20% by 2025
  • 26% by 2028

These targets were developed with consideration of the Alberta Electric System Operator’s long-term outlook for the electricity system, timing of new projects coming online and market events such as the phasing out of coal, coal-to-gas conversions, new infrastructure, and advances in technology. For more information, email [email protected].


Email: [email protected]