Alberta must reassure renewable power market after wind, solar pause, says energy minister

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The Alberta government should reassure the renewable energy sector that the pause it has placed on approvals for wind and solar projects is a short-term measure, the federal Energy and Natural Resources Minister says, citing the need to avoid creating uncertainty and driving away investment.

Alberta announced the seven-month pause last week, blindsiding the billion-dollar renewable energy industry and grinding it to a halt so it can examine end-of-life rules, where infrastructure can be built and other concerns.

Jonathan Wilkinson told The Globe and Mail that he has spoken with the Alberta government, and takes it at face value that the decision is simply to review regulations in a sector that has seen explosive growth over the past few years.

“Alberta has some of the best resources that exist anywhere, and we want to move to a point where we actually are accepting new projects,” the federal minister said in an interview Tuesday.

“I think that’s an important message that we send to the investment community.”

On Saturday, Alberta Premier Danielle Smith told listeners of her provincewide radio call-in program that Ottawa is one of the reasons why her province placed the moratorium on approving new wind and solar power projects – arguing the federal government is preventing development of backup generation for renewable energy such as natural gas.

The federal government has set a 2035 goal for electricity grids across Canada to become zero-emitting. It’s a target that will be enshrined in clean electricity regulations – which could come as early as this week – that will also spell out a timeline for natural gas power plants to be closed or fitted with carbon-capturing systems.

Mr. Wilkinson said he has stressed to Alberta that it should wait to see the first draft of the regulations, which may have “more flexibility than what people are anticipating.”

He then intends to have a “structured and thoughtful conversation” to gather any remaining concerns from provinces, and address them “in a manner that’s consistent with reliability, affordability and non-emitting.”

Ms. Smith and Saskatchewan Premier Scott Moe have both rejected the federal 2035 target, branding it too expensive and impractical.

But if they don’t commit to Ottawa’s goal, they could lose access to billions of dollars in tax credits and grants, according to a federal paper released Tuesday that will guide the development of Canada’s clean electricity regulations. That includes several new investment tax credits for hydrogen production, clean technology, and carbon capture and storage systems, worth tens of billions over the next 12 years.

Alberta Environment and Protected Areas Minister Rebecca Schulz accused Ottawa on Tuesday of threatening the province by suggesting it will withhold federal funding from electricity projects that don’t reduce greenhouse gas emissions.

But Mr. Wilkinson stressed that no decisions have been made: “We’re not drawing a line in the sand,” he said. “We’re out consulting on what those conditions should look like.”

Each province and territory has unique circumstances when it comes to greening their grid, which highlights how critical it is to work collaboratively to ensure that electricity in every region remains reliable, affordable and non-emitting, Mr. Wilkinson said.

Some provinces – such as British Columbia and Newfoundland and Labrador – already have grids that are close to 100-per-cent non-emitting. Alberta, New Brunswick, Nova Scotia and Saskatchewan, however, are more reliant on coal and unabated natural gas, while numerous remote and Indigenous communities in the north are reliant on diesel to generate power.

Electricity transformation will therefore look different across the country, Mr. Wilkinson said, adding that seizing the economic opportunities that come from greening the grid is just as important as the emissions reductions.

The Canadian Climate Institute, an independent research organization, said the new federal strategy would help grow the economy, create jobs in growing sectors and keep energy affordable for Canadians.

“Canada needs to build a lot more clean electricity – and quickly – to stay competitive in a global economy that sees clean energy as a business imperative,” Kate Harland, the group’s interim mitigation research director, said in a statement.

With Canada’s Group of Seven peers already committing to net-zero electricity by 2035, and the U.S. supercharging clean energy growth through major incentives and new regulations, “falling behind would mean losing jobs and investment to other jurisdictions,” she said.

A June analysis from the institute found that Canadians will spend 12 per cent less on energy than they do today when they switch off fossil fuels to power their homes, vehicles and businesses with clean electricity.

With a report from The Canadian Press