New windmills being built in a farmer’s field in Paintearth County near Castor, Alta., on Oct. 22, 2023.Todd Korol/The Globe and Mail
Solar and wind operations are set to bring in more than $54-million in tax revenues for Alberta municipalities in 2024, a 93-per-cent bump from just two years ago, according to an analysis by the Business Renewables Centre-Canada.
But the sector worries that the provincial government’s recent pause on renewable development, as well as the uncertainty surrounding new rules governing where projects can be built, will erode the long-term, stable cash flow that renewables bring to rural municipalities scrambling to plug a growing gap caused by shrinking oil-and-gas revenues.
Wind and solar projects bring in revenue via land taxes. BRC-Canada obtained the tax assessment value of each project and the local mill rate to arrive at its figure of $54,355,161. In 2022, projects paid $28,102,430 in land taxes.
Jorden Dye, the director of BRC-Canada, said the growth was a pleasant surprise. So, too, was the fact that projects are becoming more widely dispersed across central Alberta, as opposed to being concentrated in the south of the province.
But the skyrocketing growth comes with a warning: The pause instituted by the provincial government and the vague new rules have spooked investors.
“From what I hear from developers, it’s either projects were early enough that there’s not a big hit to cancel and they can look at other locations for now,” Mr. Dye said. “In other cases it might be concern about where the rules are going.”
Many of the details of renewables development remain up in the air, including agrovoltaic rules (which govern how the same land is used for both solar energy and agriculture), reclamation security payments and a map of where projects are banned owing to a new 35-kilometre “pristine viewscape” buffer zone.
A separate analysis by the Pembina Institute, an environmental think tank, found that 53 projects representing 8.6 gigawatts of capacity have withdrawn applications from Alberta’s electricity generation development process since the moratorium was announced last year.
That includes 33 that were in the development process prior to the start of the pause on Aug. 3, 2023. They could have produced enough power for 98 per cent of Alberta homes.
Mr. Dye said the 53 cancelled projects would have brought an additional $91-million to municipalities.
While he acknowledged that not every project in the queue for approvals will be built, he called the increased rate of cancellations alarming.
“We’ve had a fivefold increase in project cancellations since the moratorium,” he said. “Before the moratorium, you’d see an average of three projects cancelled per three-month period. Since the moratorium, we’re seeing 18, on average, cancelled.”
Utilities and Affordability Minister Nathan Neudorf disputes those figures.
In an e-mail, he accused both Pembina and BRC-Canada of using “flawed and inaccurate assumptions” and making “unfounded claims about cancellations to inflate their numbers” and push a false narrative.
“Even if BRC-Canada’s imagined potential tax revenues were accurate, those dollars would be negated by the fact that ratepayers would pay 10 times that amount in added transmission costs,” Mr. Neudorf wrote.
“The cost of additional transmission infrastructure to connect 8,000 megawatts to the grid, paid by ratepayers, grossly outweighs any additional tax revenue.”
Will Noel, an analyst at Pembina and one of the authors of the recent report, acknowledged that there was a rush on wind and solar developments just after the government announced the pause. However, he said, that’s because developers scrambled to become part of a new approval process that uses clusters of projects as opposed to individual sites.
Many rushed to be part of the first cluster, he said, in the hope they could be grandfathered under existing rules.
“Given construction timelines and how long it takes to develop these projects, we’re going to see the full impact by next year, maybe 2026,” he said.
“While the queue might look large now, if you give it another year, or even six months, I imagine it’s going to shrink quite significantly if things don’t change.”