The provincial government wants to add 5,000 megawatts of renewable electricity by 2030.
The renewables, including wind and solar power, will replace coal-fired power plants, which will be shutting down as part of the province's strategy to lower greenhouse gas emissions.
Energy Minister Marg McCuaig-Boyd announced Friday the first competition will be for 400 megawatts, which is enough to power about 170,000 houses.
"We're known as the energy hub of Canada, and make no mistake, green energy is a big part of that," she said.
Mike Deising with the Alberta Electric System Operator (AESO) says the new green power has to be developed gradually.
The new green power must be developed gradually, says Alberta Electric System Operator’s Mike Deising. (CBC)
"We don't want to put on too much generation because what we're going to see is, if we have too much generation all at once, we're going to drive down the market price and it's going to distort the electricity market that we have," he said.
Deising says from their perspective as the grid operator, they want to make sure the addition of new capacity is timed with when they are losing capacity.
AESO wants the 400 megawatts of new green power to go onto the grid by the end of 2019 to replace electricity from coal-fired plants that will start shutting down by late 2020.