Renewables industry feels burned by Alberta's sudden pause on project approvals

Aug 02, 2023

Members of the renewable energy industry say the Alberta government has knocked the wind out of them by pausing all approvals of new power plants for nearly seven months.

"I think it was a mistake," says Vittoria Bellissimo, president and CEO of the Canadian Renewable Energy Association (CanREA). "I'm worried about investor confidence in our electricity market. I'm worried about affordability for customers. I'm worried that we took something that was going very well in Alberta, and we had an advantage, and we're giving up our advantage."

The government on Thursday morning announced the Alberta Utilities Commission (AUC), the agency which evaluates and approves electricity generation projects, would hold an inquiry on land use and reclamation. It will report back to the government by Feb. 29, 2024 on how to foster an orderly development of renewable power in the province, considering the effects on agricultural, recreational and Crown land and whether developers should pay a security to account for future site cleanup costs.

The commission says it will pause power plant project approvals for wind, solar, geothermal, biomass and hydroelectric generators during that time.

Although the government said there were 15 projects in the queue for AUC approval, the Pembina Institute on Thursday said the pause puts 91 projects worth $25 billion of investments and tens of thousands of jobs at risk.

Binnu Jeyakumar, director of the electricity program at the Pembina Institute think tank, says the move could also exacerbate power prices, as wind and solar are among the cheapest sources in the province.

Critics say the temporary moratorium on new renewable power installations larger than one megawatt is unprecedented and unnecessary.

Heather MacKenzie is the executive director of Solar Alberta, which has 900 members who produce power commercially or generate it for personal use.

She said Alberta leads the country in solar reclamation with a pilot recycling project underway for over a year.

Despite concerns from some landowners about solar and wind installations potentially encroaching on arable farmland, MacKenzie says Solar Alberta already has recommendations published, encouraging developers to avoid wetlands and wildlife corridors. She says the installations do not have to compromise food security.

"We're out ahead here, and it's really shocking to see that an industry and a province that is at the forefront of all of these issues is putting a pause on some really significant environmental, but also economic and energy sector growth," she said.

As more citizens suffer the effects of climate change — including wildfires, floods and droughts — now is not the time to delay the greening of Alberta's electricity grid, she said.

Although some municipalities benefit from the property taxes renewable energy installations are paying, there have been growing concerns with the rapid growth in wind and solar installations in rural areas.

In addition to worrying about the loss of farmland, some neighbours said they don't want the noise generated by wind turbines. And municipal leaders wonder who is responsible for cleaning up an abandoned site.

They're also skittish in the wake of bad actors in the oil and gas industry that left toxic sites pockmarking the province and millions of dollars in property taxes unpaid.

According to the Alberta Energy Regulator, more than a third of Alberta's nearly 466,000 oil and gas wells are inactive or abandoned. Estimates for cleaning up oil and gas tailings ponds in northern Alberta range from the tens to hundreds of billions of dollars.

Paul McLauchlin, president of Rural Municipalities of Alberta and the reeve of Ponoka County in central Alberta, is a renewables enthusiast who has solar and wind power on his rural property.

However, the province's rural reeves and councillors are watching as massive industrial installations increasingly appear on former farmland, while at least 15 communities have declared agricultural emergencies due to drought, he said.

The future liabilities also worry him, as some proposed projects have changed owners multiple times before they are even built, he said.

Municipalities support the adoption of renewable energy, but they want to see it done correctly, he said.

"It's been the Wild West out there, and it needs to have some corrective action," McLauchlin said.

Although the generators are installed on private property, transmission lines will go on public land, at public expense, McLauchlin said.

The RMA had raised concerns about the expansion of the industry but hadn't explicitly advocated for a moratorium on approvals, he said.

Renewable energy advocates argue that solar and wind installations do not present the same environmental risk as the oil and gas industry because the Sun and wind are eternal. They say that outdated equipment can be replaced on the same site.

Several observers also call the province's move unfair, saying no one is halting oil and gas project approval until they devise a better clean-up plan.

University of Calgary economics and public policy associate professor Blake Shaffer said it's "a mix of hypocrisy and ideology that the finger was pointed solely at renewables," while the government contemplates publicly subsidizing more cleanup of abandoned oil wells.

Investors hate regulatory uncertainty, Shaffer said, calling the pause a significant setback for the province.

Both Shaffer and University of Alberta economics and law professor Andrew Leach said the AUC and government should have seen the renewables expansion coming and had regulations in place.

"This is a government that has in the past taken issue with regulatory delays and how that's a real barrier to investment," Leach said of the province's protracted battle with the federal government over environmental policies. "And now we're seeing essentially that same situation being presented here."

Provincial affairs reporter

Janet French covers the Alberta Legislature for CBC Edmonton. She previously spent 15 years working at newspapers, including the Edmonton Journal and Saskatoon StarPhoenix. You can reach her at [email protected].

With files from Madeline Smith, Nassima Way and Joshua McLean