August 3, 2023: Alberta put a booming renewable energy industry at risk and set a double standard in the way it treats renewable and fossil fuel development, clean energy groups said in early August, after the province slapped a seven-month moratorium on new solar and wind projects over a megawatt in size.
The decision could erode investor confidence and undermine the “Alberta advantage” in the province that accounted for 75% of the growth in Canada’s renewable energy sector last year, the Canadian Renewable Energy Association (CanREA) warned in a release. The association is meeting with provincial politicians and regulators “with the aim of minimizing the duration of the moratorium and creating clarity on its consequences,” the release added.
“This is a mistake,” said CanREA President and CEO Vittoria Bellissimo. “The Alberta government, Alberta Utilities Commission (AUC), and Alberta Electricity System Operator need to move quickly to sort out this situation for all Alberta ratepayers, investors, and municipalities.”
“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,” agreed Heather MacKenzie, executive director of Solar Alberta.
Other groups were sharper in their criticism.
“According to the Alberta Premier, massive tailings spills that endanger Indigenous communities don’t constitute an emergency—but the potential for expanding cost-effective and proven climate solutions at a time when Canada is burning somehow poses a threat,” added Climate Action Network-Canada Executive Director Caroline Brouillette.
“Other Conservative premiers have recognized the vast opportunities and economic benefits of affordable renewable energy, and so have Alberta communities,” Brouillette said in an email. But Premier Danielle Smith “seems more interested in pursuing her own ideology than lowering energy costs for Albertans, no matter the lost job opportunities and the damage to investor confidence.”
Binnu Jeyakumar, electricity director at the Calgary-based Pembina Institute, said the moratorium would put 91 projects worth C$25 billion at risk, during a summer when wildfires and smoke have made “the growing costs of climate change all too real for Albertans and Canadians.”
The moratorium “creates uncertainty around future investments while adding unnecessary red tape to these projects,” Jeyakumar said in a release. “While other provinces with Conservative governments like Saskatchewan, Manitoba, and Ontario have created calls for new renewable investments, adding wind and solar to their grids to lower the costs of electricity for consumers, Alberta appears to be heading in the opposite direction.”
The masters of satire at The Beaverton weighed in Saturday with their own take on the announcement. “Alberta Premier Danielle Smith has announced a moratorium on all pending renewable energy projects in Alberta until these projects can prove they will be just as detrimental to the environment as the province’s current and past fossil fuel extraction projects,” the online publication wrote. Now, “Alberta’s renewable industry is scrambling to come up with ways it can meet the province’s strict anti-environmental standards without increasing the low price of renewable energy.”
Squelching One Industry, Subsidizing the Other
Alberta imposed the moratorium earlier today through February 29 to review where future megawatt-scale solar and wind projects can be built, how the surge in renewables affects the provincial grid, and how to deal with the projects at the end of their operating lives, the Globe and Mail reports. New measures could include “mandatory security bonds that renewable developers must pay to ensure projects can be cleaned up when they reach the end of their life,” the Globe says, citing an interview with Affordability and Utilities Minister Nathan Neudorf.
“Minister Neudorf is imposing regulations on an industry that’s working towards bringing prosperity into communities while curbing the climate crisis, but where were these requirements for the oil and gas industry when they were polluting communities while setting the planet ablaze?” countered Tzeporah Berman, international program director at Stand.earth.
“While renewable energy projects already undergo extensive community consultations and must meet environmental requirements, the oil and gas industry faces very little accountability,” added Keith Brooks,” programs director at Environmental Defence Canada . “The fossil fuel industry has disrupted close to 900 square kilometres and left tens of thousands of inactive and orphan wells,” but Alberta “has shown no urgency in addressing these mounting environmental liabilities, beyond subsidizing the same companies responsible for the mess.”
With Renewables, Landowners Get to Decide
In a release, the province said the moratorium responded to concerns that rural municipalities and landholders had raised with the AUC. But Bellissimo said she met with Neudorf Thursday morning, delivering the message that the industry is already addressing all the issues behind the moratorium. She told The Energy Mix the minister “did express a willingness” to look at shortening the ban.
The fundamental difference between subsurface fossil developments and solar or wind projects is that, with surface development, the landowner is in the driver’s seat, Bellissimo said Thursday afternoon. In a recent blog post, CanREA Alberta Director Evan Wilson said the province’s renewables sector is already well regulated.
“Make no mistake, this isn’t ‘the wild west’ of renewable energy,” he wrote. “Alberta is enjoying well-regulated growth, rooted in strong policies and robust community engagement practices.”
“This is not orphan wells,” Bellissimo agreed. “I’m an Albertan, and it’s a legitimate fear,” but that’s not how renewables work.” Unlike subsurface development, “wind and solar are subject to surface rights, so landowners can refuse entry if they so decide,” she explained. “They can decide when and how a renewable project gets installed,” through private, civil contracts that can include provisions for decommissioning or other assurances to address landholders’ concerns.
Later, when a grid-scale solar or wind installation nears the end of its useful life, “you can sub out the generation, upgrade the panels or turbines, and it’s good to do that,” she added. “It’s already a windy or sunny site, and the wires that get the generation to market have more life than the asset.”
[The renewables industry is also working feverishly to get recycling in place for old panels and turbines before the accumulation gets out of control—Ed.]
Bellissimo pointed to the province’s renewables boom as evidence that the system is working.
“There are a lot of landowners who were able to negotiate deals they were happy with to get projects off the ground,” she told The Mix. But even that level of development falls far short of what Alberta is capable of, or what the province and the country need.
“We’re in the middle of a climate crisis, and if anything we need to develop much more renewables at a pace and scale we haven’t seen before,” she said. “So this is again a mistake, and I will be working very hard with my government and my regulator, as an Albertan, to try to fix this as soon as we can.”
Risking Alberta’s Advantage
Bellissimo said the impact of the moratorium will depend on how long the province keeps it in place.
“If we can right the ship fairly quickly, then not much impact,” she said. “But if we take the full six or seven months and we don’t come out the other side of this with a better process for industry, a plan to develop renewables on Crown land, and confidence that renewables will be able to build and generate revenue, then I think Alberta has given up its advantage.”
The risks Neudorf has created with today’s announcement trace back to the finance and supply chain issues in an increasingly competitive industry.
“Renewable developers have supply chain issues like everybody else, and if they have a supply of turbines or solar modules or batteries, they will look at where they can deploy them the fastest and they will look at stable investment regimes,” Bellissimo explained. “If they’ve got this equipment on the books, they will put it where they can make it work.” That puts Alberta up against provinces like Quebec, Manitoba, British Columbia, Ontario, and Nova Scotia, all of which are in the market for the same renewable energy gear.
“We’re competing against other provinces, we’re competing against other countries, and anything you do to hamper our ability to compete for that investment and capital and equipment in the supply chain is going to be problematic.”
She said she’d told Neudorf that she’s seen renewable energy companies opening offices in Calgary lately, “and I want to keep those jobs coming to Alberta. It’s a really good news story, and has been a really good news story.”