Municipalities require tax revenues in order to provide the services they do to their ratepayers.
Since the turn of the century, across Alberta, a bigger and bigger portion of those municipal tax revenues have been coming from the renewable energy sector.
According to Jordan Dye, with the Business Renewables Centre in Edmonton, the total revenue calculations for renewables in the province are “Much higher than we were expecting.”
How much higher?
Revenues are estimated to be nearly three times higher than the 2017 estimates of $10 million; the calculations for 2022 show a total renewable revenue generated of over $28 million.
Eight of 18 counties in the province, including Paintearth County, receive over $1 million per year in tax revenue; according to a release by the Business Renewables Centre, Paintearth County received over $2.5 million, or over 15 per cent of its total operating budget, from renewable energy projects running within its borders.
“There’s a wide array of benefits,” said Dye.
In addition to decarbonizing the power grid, those funds go back into roads and services for the community, says Dye.
The revenues calculated in 2022 are just the projects that have been assessed; due to the way assessments work, there is a one-year lag. As more projects come online in Paintearth and across the province, those numbers are only going to go up, becoming a “significant driver of county revenues.”
While projects previously approved are under construction, the queue of projects has hit a snag; during the summer the Government of Alberta announced a seven-month pause on renewable energy projects in the province, which is setting them back that long, or longer, if they are not being cancelled outright.
“It’s slowing down projects, delaying revenues for municipalities by just about a year,” said Dye.
“It’s already increased uncertainty in the process … Some developers are walking away.”
Dye says that the majority of these renewable energy projects are all being built by industry, with no government funding, incentives or subsidies.
“They are private projects that make economic sense,” says Dye.
One often-heard objection by people regarding renewable energy projects is the comparison to orphan wells; many are concerned that at the end of a development’s life, the owners will walk away and leave the property owners to clean up the mess.
According to Dye, this is less of an issue with renewables than with oil and gas; in oil and gas, the producers have mineral rights which add an extra level of complication for the resource extraction and limits landowner recourse.
With renewable energy projects, the contracts are directly between a landowner and a project company and Dye says that it is well within a landowner’s right to demand a reclamation clause in the agreement before they sign the dotted line.
The direct contract between the landowner and the project developer provides an extra level of legal protection for the landowner, says Dye.
Also of note, Dye believes that when these projects reach the end of their service lives, be it 25 or 50 years, after many years of proven production producers will have an incentive to replace the projects with the next generation of renewable energy equipment at the same location.
Another concern some have regarding renewable energy is the possibility of it leading to an unstable power grid. Dye says that back in the early 200s, there was concern about a grid becoming unstable once renewable energy reached grid penetration of 20 per cent.
However, as technology has developed, and renewable penetration of the power grid has increased beyond that 20 per cent, those concerns have not come to pass; in fact, Dye calls the concerns “outdated.”
“There’s been a lot of great work done in the last few years,” said Dye.
“(Renewables) can play a significant part in a stable grid.”
Dye also says that the most expensive times for the electrical grid in the province are when it is relying solely on natural gas.
“It’s hurting prices keeping renewables off the grid,” said Dye.
But, Dye doesn’t discount the importance of having natural gas as a backup, noting that there are a dozen new power plants in various stages of approval or production in the province.
Dye notes that Alberta has had strong growth in renewables “because of” the province’s open market, and he hopes that the renewable energy sector can “remain open for business” alongside the regular energy sector.