As the 130-megawatt Rattlesnake Ridge Wind Power Project is located in southeast Alberta, it helps to advance Bullfrog Power's goal to increase the adoption of renewables in places with high carbon intensity.Supplied
Alberta’s surprise decision to halt all new wind and solar projects in the name of environmental stewardship ignores the energy sector’s largest reclamation risk, critics say, in a move experts believe is propelled by the government’s world view and desire to appease rural voters.
“It did sting with a lot of hypocrisy and twist of ideology,” said Blake Shaffer, an expert in electricity markets and economist at the University of Calgary.
The United Conservative Party on Thursday announced a seven-month moratorium on approvals of new renewable electricity generation projects over one megawatt so the Alberta Utilities Commission (AUC) can review the rules around the booming industry.
The government said the pause, between Aug. 3 and Feb. 29, 2024, is necessary to weigh concerns around land use, preserve Alberta’s reliable electricity supply and address environmental issues such as reclamation.
Freezing development in one of Alberta’s multibillion industries appears to be motivated more by Premier Danielle Smith’s skepticism over renewable power than her commitment to the environment or concern over best use of land, according to experts. Ms. Smith, an unabashed supporter of Alberta’s oil and gas industry, came to power thanks to support from rural communities. The transition away from fossil fuels could be especially painful in rural Alberta, where pockets of residents have lobbied against wind and solar projects.
Mr. Shaffer said the government is wise to look at the energy sector’s end-of-life costs, but it does not make sense to target the wind and solar industries when the “real issue” is unfunded liabilities tied to old oil and gas wells. He argued wind and solar developments should be viewed more favourably, when considering reclamation risk, than oil and gas projects.
“When you have a spent oil and gas well, you’ve exhausted the resource,” he said. “Wind and solar don’t go away.”
Solar panels or wind turbines might need to be replaced as materials deteriorate or technology advances, but the land they occupy still has value as energy-producing property, he said.
Mr. Shaffer said Alberta has the technical prowess to address concerns about adding more power from wind and solar projects to the electricity grid. Wind and solar provide intermittent supply, although he said there are increasingly solutions available to smooth this spottiness. The cost to generate electricity from these projects has plummeted and policy-makers who previously doubted the value of renewables need to adjust their calculations to account for this shift, Mr. Shaffer said.
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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.
Prime Minister Justin Trudeau wants Canada’s electricity grid to hit net-zero emissions by 2035, which Ms. Smith and the UCP have decried as unfair to Alberta and an ideological and expensive goal. Ms. Smith, in turn, said Alberta aspires to a net-zero electricity grid by 2050.
Renewable power sources make up about one-third of Alberta’s 18,000 megawatts electrical grid capacity. There are 3,400 megawatts of wind and solar projects under construction in Alberta, worth nearly $3-billion. Some rural residents have pushed back against wind and solar projects, arguing they are ugly and take up valuable agricultural land.
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Claude Mindorff, the director of development with PACE Canada LP, a clean energy investment company, said renewable power companies were not consulted prior to Alberta’s announcement.
“It is, however, clear that the minister is responding to pressure from the rural electorate to stop what they seem as see as irresponsible solar and wind development,” he said.
PACE now has a solar project in limbo.
“You would never do this to the oil and gas sector – make a fundamental announcement that’s going to impact investment decisions in the billions of dollars without consulting industry,” Mr. Mindorff said.
Nathan Neudorf, Alberta’s Minister of Affordability and Utilities, in an interview with The Globe and Mail earlier this week acknowledged that the policy review could have happened without pausing approvals.
But the government chose not to go that direction so developers weren’t “looking over their shoulder for when we’re going to change the policy,” he said.
“We’re just going to draw a line right now and say: ‘We want to look at these things.’ It’s just a pause. It’s not a cancellation of their application. There’s a very good likelihood that many of those projects, if not all of them, proceed when we make some of these clarifications.”
None of the companies The Globe spoke with that are affected by the decision knew of the government’s plan. In multiple instances, the AUC had even asked companies for more information or had given them updates on their applications less than 24 hours before the province announced the pause.
Ms. Smith, prior to becoming premier, pushed Alberta to give oil and gas companies billions of dollars in royalty breaks in exchange for them fulfilling their legal duty to clean up wells, a proposal known as RStar. She continued to favour the plan after becoming premier.
She instructed Brian Jean, the Minister of Energy and Minerals, to develop a “strategy to effectively incentivize reclamation of inactive legacy oil and natural gas sites, and to enable future drilling while respecting the principle of polluter pay,” according to a mandate letter dated July 10.
Ms. Smith also asked Mr. Jean to develop and improve “regulatory regimes to incentivize investment in hydrogen, ammonia, helium, lithium, liquefied natural gas, small modular reactor, geothermal and mineral development in our province.” She requested he “develop and implement a regulatory framework for small modular reactor technology use in Alberta.”
The premier, however, did not mention wind or solar in her mandate letter to the energy minister. The two power sources were also absent from her letter to Mr. Neudorf, as well as her instructions to Rebecca Schulz, the Minister of Environment and Protected Areas.