Alberta’s United Conservative government is pausing all approvals in the province’s booming renewable energy industry in response to what it says are rural and environmental concerns.
In a statement Thursday (Aug. 3), the government said the Alberta Utilities Commission is to institute a six-month moratorium on approving wind and solar power projects greater than one megawatt. The commission will initiate an inquiry into issues of development on agricultural land, effect on scenery, reclamation security, the role of municipalities and system reliability.
“There is a little bit of inconvenience now for the next few months,” said Nathan Neudorf, minister of affordability and utilities. “But if we can set that right for the next 20 years, I think that’s trade-off most people are willing to make.”
However, industry spokespeople said that not only were they blindsided by the decision, it’s a bad call that could cost the Alberta economy.
“It was a done deal before we had a chance to convince the minister that the industry doesn’t need a moratorium,” said Vittoria Bellissimo of the Canadian Renewable Energy Association.
Neudorf said he didn’t meet with industry before the announcement because of scheduling problems.
With few regulatory barriers to entry and abundant wind and sunshine, Alberta has been a leader in renewable energy development in Canada. In 2022, 17 per cent of its power came from wind and solar — exceeding the province’s 15 per cent goal.
There are another 15 renewable energy projects before the Alberta Utilities Commission and more than 90 in various stages of development. Since 2019, corporate renewable energy deals in Alberta have supported nearly $4.7 billion in new capital investment and provided 5,300 jobs.
That boom has created concern in rural communities where wind and solar farms get built.
Paul McLauchlin of Rural Municipalities Alberta said his members have too many abandoned wells and other oil and gas infrastructure on their land to take chances on a new industry that’s still getting established.
“We’ve learned a lot from the oil and gas industry,” he said. “I’d sure hate to see the same happen to solar operators.”
McLauchlin said farmers and municipalities get tax and rent revenues from renewable energy. But people in rural areas are also concerned about agriculture being displaced.
University of Alberta energy economist Andrew Leach said the industry’s growth, spurred by Alberta’s welcoming market, has outstripped the regulator’s ability to deal with it.
“Because Alberta has been open to it, it’s almost gone faster than anybody could have expected.”
He said projection of solar development tripled between May and June, from 2,000 to 6,000 megawatts.
“The grid operator really (was) not prepared for this rush,” he said.
Industry was not happy with the government announcement.
“We are waiting for more information and will continue to evaluate the impact of this decision,” said a statement from Grant Arnold, president of BluEarth Renewables, which has new projects with more than seven gigawatts in the Alberta pipeline.
“Without certainty in Alberta, we will focus our investment in other jurisdictions,” Arnold said.
Bellissimo said it’s not accurate to compare reclaiming renewable energy developments with cleaning up oil and gas wells.
Unlike oil reservoirs, sun and wind don’t go dry. As well, renewable energy is unlikely to create the same kind of contamination concerns as fossil fuels.
As well, Bellissimo said because such developments happen on private land, landowners can build safeguards into their contract.
Alberta currently builds about three-quarters of Canada’s renewables, she said. Thursday’s announcement could reduce that head start as other provinces open up their electricity markets.
“All those things — labour, capital and equipment — will flow elsewhere.”
Alberta New Democrat Opposition said the pause will restrict a source of low-cost energy for Albertans.
“Renewables are the cheapest form of energy for electricity, and increasing low-cost energy supply will help address the affordability crisis,” he said in a statement.
“The UCP should reduce red tape, create policy certainty, and incentivize the development of renewable energy and storage technologies. Instead, they’re sending a terrible signal to investors.”
Environmental groups also condemned the move.
Binnu Jeyakumar of the clean energy think tank The Pembina Institute, said Alberta already requires site cleanup.
“There’s always ways to improve, but you don’t need a moratorium to do that.”
She said it’s unprecedented for Alberta to shut down an industry — even temporarily — while it figures out how to regulate it.
The Canadian Climate Institute said on social media that the moratorium will hurt business.
“Robust reclamation should be required for all energy generation, but pausing approvals is a disruptive market intervention that will create uncertainty for businesses and discourage (investment) when clean electricity is quickly becoming a competitive necessity,” it said.
“This moratorium on renewable energy is bad for business, bad for the environment and bad for Albertans,” Keith Brooks of Environmental Defence said in a release.
“Scaling up renewable energy is essential to addressing the climate crisis. Stopping now makes no sense.”
Still, Neudorf said it makes sense to get in at the start of a burgeoning industry and write rules to ensure it doesn’t create problems down the road.
“We didn’t want the same issues the oil industry is facing,” he said. “We want to have clear expectations and give investors clear expectations of the dollars they might need to put up front.”
Leach said wind and solar farms create land-use issues, but the government’s approach to the industry is inconsistent with its treatment of the oil and gas industry, which is regulated on a case-by-case, project-by-project basis.
“No one can imagine in the middle of an oilsands boom everyone saying what we need is a six-month moratorium on new approvals until we figure out how we’re going to manage cumulative effects.”
He pointed out that while the government has stopped renewable energy partly over reclamation concerns, it faces billions of dollars in environmental liabilities from the oil and gas industry for which it has little security and no real cleanup plan.
“The irony is off the charts,” Leach said.
Bob Weber, The Canadian Press