Western Canada: A look at Alberta’s moratorium on wind and solar projects

Good morning. Wendy Cox in Vancouver today.

In a summer pocked by smoke-filled skies, exploding clouds and more territory than ever before scorched by something approaching hellfire, Alberta’s Conservative government announced last week that it was putting a pause on applications for new wind and solar projects.

The province has been leading the country with renewable energy projects, logical innovation in a province whose fortunes have long relied on energy industries. Alberta had been leading Canada in the sheer number of renewable power projects being built, energy reporter Emma Graney wrote in January. The result was a flood of new revenues for rural municipalities in the form of taxes.

Not everyone was on the bandwagon.

Land owners and municipal councils worried they’d be stuck when solar and wind projects wound down. They’ve had reason to be wary: Orphaned oil and gas wells are scattered across the province, Emma writes, left behind by bankrupt operators or run partially dry then sold to small companies that can’t, or won’t, pay to clean them up.

That’s one of the reasons the provincial United Conservative Party government offered when explaining the surprise halt on new approvals until March. The time is meant to give regulators a chance to decide where such projects can be built, how they will affect the province’s power grid and what rules should guide what happens when the installations reach the end of their lives.

Alberta Affordability and Utilities Minister Nathan Neudorf said in an interview that the province’s regulatory policies worked when the electricity grid was set up 25 years ago.

“But the world has changed, so we need to address this quickly and answer some of these challenges,” he said.

The policy changes could include the introduction of mandatory security bonds for developers to ensure projects can be cleaned up when they need to be decommissioned. The government also hopes to define exactly where renewable energy projects can be built. For instance, it could decide to exclude prime agricultural land, or allow projects on Crown land in utility corridors next to highways.

Although the government says it consulted widely before making the move, renewable energy officials say they were given no warning.

The pause, some executives said, is that Alberta’s decision will put the industry at a disadvantage in the competition for capital for emissions-reducing renewable energy, even as the effects of climate change worsen in Canada and globally.

Dan Balaban, chief executive of Greengate Power Corp., which built Canada’s largest solar farm near the town of Vulcan, Alta., and has another large project in the east of the province in the queue for regulatory approval, said these issues can be studied without shutting down the application process.

“Sure, the industry’s been growing quickly. It has been experiencing some growing pains, as with any fast-growing industry. But I think putting a moratorium on new project approvals is a very extreme measure. It’s like taking a jackhammer to a nail,” he said.

Critics note no such pause has been imposed on the oil and gas industry as years have gone by without solving the problem of orphaned wells.

“It did sting with a lot of hypocrisy and twist of ideology,” Blake Shaffer, an expert in electricity markets and economist at the University of Calgary, told reporter Carrie Tait.

Wind and solar are viewed, in some parts of Alberta, as the beginning of the end for the province’s oil and gas economy. This may have factored into the government’s thinking, he said.

In her weekly radio call-in program, Premier Danielle Smith responded to her critics with a well-worn explanation: It’s Ottawa’s fault.

She said the federal government is preventing development of backup generation for renewable energy such as natural gas. She argued that backup plants powered by natural gas are needed for when wind isn’t blowing or the sun isn’t shining.

But Vittoria Bellissimo of the Canadian Renewable Energy Association said that’s not so.

She said the province should remove impediments to energy storage projects, such as tariffs that she said could treat storage providers the same as energy consumers or generators, as well as requiring them to buy energy when in fact they’re only storing it.

That way, she said, green energy from solar and wind could be stored and released when it’s needed.

“The Premier and others are under the impression that you have to have natural gas to make the system work, but you don’t.”

This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.