According to an analysis by BRC-Canada, dozens of municipalities in Alberta collectively received more than $28-million from wind and solar projects in 2022.Jeff McIntosh/CP
Cardston County covers a big swath of rolling Alberta grasslands nestled between the Rocky Mountains and the city of Lethbridge, extending south to the Canada-U.S. border. Its local government had been banking on a major new renewable-energy project spinning out tax revenue to support its budget. No more.
TransAlta Corp. TA-T had planned to build its Riplinger Wind Farm there, with first power from its 47 turbines expected in 2027. Then last week, the company cancelled the 300-megawatt project, saying new restrictions on renewables imposed by the Alberta government made it impossible to proceed.
The region’s voters have reliably supported Premier Danielle Smith’s United Conservative Party. But Randy Bullock, Cardston County’s reeve, laments what the new rules have wrought on the local spending plans. Council wants to build a water treatment plant, pave roads and reconfigure a thoroughfare to build commercial developments alongside it.
“We want to do things, but all we do is tell people, ‘No, no, we can’t do it. We can’t afford it.’ So that’ll continue for us for the next many, many years, if not decades,” Mr. Bullock said.
The UCP touts a “libertarian, stay-out-of-my-face style of government,” Mr. Bullock said, but with renewables it has taken a heavy-handed approach.
Riplinger would have been located within a 35-kilometre buffer zone that Ms. Smith’s government announced on Feb. 28 would be off-limits to wind, an area of so-called pristine viewscapes. Those are among restrictions that the province established after a seven-month freeze on new renewable-energy projects.
Others include limits on the ability of the industry to build projects on irrigatable lands, and a new system of requiring secure funds for the eventual cleanup of turbines and solar panels.
The province is also making adjustments to its electricity market, which prompted TransAlta to put three other projects – a solar farm, a battery storage venture and a gas-fired power plant – on hold until it is more certain about the impact on the economics.
The new buffer zone and limits on locating wind and solar farms on agricultural land put 57 projects worth $14-billion at risk of being shelved, the Pembina Institute, an environmental think tank, has reported. Of those, 32 would generate $80-million a year in potential tax revenue.
Mr. Bullock acknowledges wind development is a touchy subject in his county. Many residents were opposed to the TransAlta project, and he said he understands the passion of those who want to preserve traditional rural vistas. “But we’re trying to run a municipality, stay afloat and have the necessary money to provide better services,” he said.
Mr. Bullock said Ms. Smith needs to hear from his council and other local municipalities about the fiscal reality of what they stand to lose, and what can be done about it.
“Nobody wants handouts,” he said. Still, there need to be frank discussions about making up for lost revenues and bolstering economic growth.
Alberta Utilities Minister Nathan Neudorf sticks by the changes, and said in an e-mailed statement that they are beneficial to local communities.
“Municipalities can continue to benefit from their existing renewables projects, and will benefit from future responsibly developed projects,” he said.
Industry officials had warned the government’s interventions in a renewables sector that was booming threaten to send investments elsewhere. Some developers have said they are rethinking previously proposed projects.
Investors are cautious, especially institutions such as pension funds, said Thomas Timmins, a lawyer with Gowling WLG who leads his firm’s energy-sector group.
Adding regulatory uncertainty will prompt them to seek other jurisdictions in which to invest their capital, he said. Alberta’s moves coincide with massive incentives for green energy and other cleantech projects in the United States, Ontario and elsewhere.
“Any time you add uncertainty, any time you add risk, you’re changing the deal parameters. And these are long-term investors. They are also very large investments,” Mr. Timmins said.
Cardston won’t be the only municipality to feel economic pain as a direct result of the government’s policies, said Jorden Dye, director of Business Renewables Centre-Canada, which acts as an information and networking organization for green-energy buyers and sellers.
Dozens of municipalities in Alberta collectively received more than $28-million from wind and solar projects in 2022, according to an analysis by BRC-Canada. Municipalities stood to bring in tax revenues of as much as $277-million annually by 2028 if all projects scheduled before the renewable-energy pause proceeded.
The influx of sustained tax revenue via renewables would have represented a new kind of independence for communities, Mr. Dye said.
But as companies assess wind and solar projects planned for Alberta, and how they fit into a renewables space now mired in red tape, Mr. Dye said more project pauses and cancellations are likely as the province layers on uncertainty with further renewables review by the Alberta Utilities Commission and the restructuring of the province’s energy market, he said.
“We’re looking to the next couple of months here to really give an indication of where the developers are at,” he said.