From Boom to Bust: The Impact of Alberta’s Pause on Clean Energy
In early March, Alberta’s seven-month moratorium on approvals for all renewable energy projects concluded, leading to the introduction of new rules that could significantly hinder economic development in key areas of the province.
By: Ava Cleghorn
A year ago, the government implemented a six-month pause on all approvals for renewable energy projects exceeding one megawatt, based on concerns about environmental impacts and effects on rural areas. At that time, the industry was flourishing in the open electricity market, attracting billions of dollars in investments to the province. This helped fuel a surge in solar wind projects.
From the government’s perspective, the moratorium was necessary to allow the Alberta Utilities Commission (AUC) to conduct a comprehensive review of procedures and policies related to renewable electricity generation projects and their impacts on the province.
Following the inquiry’s conclusion, the government outlined new policies to include municipalities in the regulatory process and to revise rules concerning the impact of energy programs on agricultural lands and “pristine viewscapes.” The new regulations create 35-kilometre buffer zones around these protected pristine viewscapes, within which wind projects are prohibited. Other developments within these zones will be subjected to an assessment of visual impacts.
The government’s “agriculture first” approach includes a ban on renewable projects on Class 1 and Class 2 agricultural land, or land with the best irrigation unless it can be demonstrated that agriculture and renewable energy can co-exist on a property. These restrictions jeopardize 57 percent of proposed projects, which represent $14 billion of investments. Of these projects, 32 percent were estimated to generate $80 million in tax revenue.
Although the moratorium has ended, the guidelines for renewable development remain in draft form and have not yet been finalized. This uncertainty leaves many companies in limbo, and the province may continue to experience the impacts of this pause forever.
In a report released on August 3, the Pembina Institute revealed, based on data from the Alberta Electric System Operator (AESO) and the AUS, that 118 projects had notified the AESO of their intention to proceed.
33 of these projects have been cancelled.
Typically, projects listed by the AESO are often abandoned after they apply for regulatory approval, but cancellations have notably increased since the moratorium.
After the United Conservative Party (UCP) introduction of the pause, 53 wind and solar projects were abandoned, which would have contributed 8,600 megawatts of power generation—enough to power every home in the province.
Additionally, 42 projects were delayed by around 15 months.
Since the moratorium was announced on August 2, 2023, Alberta has seen only three new projects submitted to the AESO.
The government’s interventions in Alberta’s previously booming renewable energy sector have had adverse impacts. Investors are going elsewhere and developers are rethinking previously proposed projects.
In 2022, Alberta’s municipalities collectively received over $28 million from clean energy projects. If projects scheduled before the pause had preceded, this figure could have risen to as much as $227 million annually by 2028.
Due to the unclear regulations, companies are hesitant to make long-term investments in the province. The new restrictions are also forcing many companies to explore opportunities in other jurisdictions. This shift occurs concurrently with increasing incentives for clean energy projects in other provinces.
In April, BC Hydro called for bids to increase clean energy capacity by approximately three million megawatts by 2028, which is predicted to generate up to $3.6 billion in investments and create 1,500 jobs per year. By 2035, Hydro-Québec plans to add 10,000 megawatts of wind capacity, while Nova Scotia aims to source 80 percent of its energy from renewable energy by 2030. Ontario also plans to add 5,000 megawatts of wind and solar over the next decade.
The pause on Alberta’s clean energy projects has resulted in cancellations and legal uncertainties, negatively impacting the renewable sector. Investment has shifted away from the province, undermining the province’s position as a leader in renewable energy and jeopardizing future economic growth and job creation in the sector.
Notes
● Article is written as of Oct 8, 2024, and all figures/info are accurate as of that date
https://thenarwhal.ca/alberta-renewable-energy-pause-end/
https://edmontonjournal.com/news/politics/alberta-ucp-danielle-smith-renewable-energy-restrictions
https://www.producer.com/news/alta-solar-policy-puts-farming-first/
https://www.alberta.ca/article-renewables-review
https://www.windconcerns.com/defining-pristine-viewscapes/
https://environmentaldefence.ca/wp-content/uploads/2022/10/iStock-1163243711_1705x1200.jpg
https://pipelineonline.ca/wp-content/uploads/2023/04/Alberta-wind-turbines-3000-_DSC7336-scaled.jpg