Discover more from The Orchard
Experts baffled by Alberta's renewable energy pause
A 7-month moratorium on wind and solar development bolsters fossil fuels at the worst possible time.
The Alberta government is pausing approvals for new wind and solar energy projects for the next seven months as it reviews where they can be built, how increased renewable development impacts the province’s power grid and what happens once these installations stop producing energy.
Suffice to say, the government would never stymie the fossil fuel industry in this fashion.
About one-third of Alberta’s 18,000-megawatt energy grid comes from renewables. Construction is underway on an additional 3,400 megawatts of wind and solar projects, worth $2.7 billion. With its abundant sunshine and wind, Alberta leads the country in renewable development.
The government argues this unprecedented proliferation of renewable energy projects means regulations must be updated.
According to Affordability and Utilities Minister Nathan Neudorf, this might include forcing renewable developers to pay security bonds to ensure their projects can be cleaned up once they reach their end of life.
“The sooner we start with a defined process and timeline, the sooner we can resolve these items and move forward together,” Neudorf told Globe and Mail energy reporter Emma Graney.
“We think that transparency, as well as collaboration with industry, is going to set clear expectations, saying we all want to work together to a great end.”
The pause, which applies to renewable projects producing more than a megawatt of energy, begins immediately and will last until Feb. 29.
The government’s decision appears to be a sop to its rural base, Graney reports:
Rural municipalities worry that prime agricultural land is being used for solar panels rather than crops, and residents aren’t always fans of the wind turbines that spin on the horizon.
And energy projects have stung rural communities before. Orphaned oil and gas wells litter the province, left behind by bankrupt operators or run partially dry then sold to small companies that can’t – or won’t – pay to plug and mitigate them. Municipal councils and landowners don’t want to be stuck with a similar problem when it comes to solar and wind assets.
Renewable developers generally include terms to cover cleanup in contracts with landowners, but rural municipalities have said that’s not enough of a guarantee.
But rural municipalities are in effect biting the hand that feeds them, given the jobs and tax revenues renewable projects generate for them.
According to the Pembina Institute clean energy think tank, Alberta has attracted $3.75 billion in solar and wind investment, leading to 4,500 jobs, over the past four years, which has significantly benefitted rural municipalities’ finances.
Vulcan County, in particular, now receives 45% of its tax revenue from renewable energy, and is slated to generate an additional $3 million in revenue from the proposed Buffalo Plains Wind Farm. It’s home to the 3,330-acre Travers Solar Project — Canada’s largest.
Additionally, the Innisfail Solar Farm, which has been in operation since November 2020, provides the Town of Innisfail with $190,000 in revenue annually.
Dan Balaban, CEO of Greengate Power, which owns the Travers project in Vulcan, noted that there are pros and cons to any energy source. In an interview with the Calgary Herald, he likened the government’s moratorium to “taking a jackhammer to deal with a nail.”
In a statement, Binnu Jeyakumar, Pembina’s electricity director, slammed the “sudden announcement of an unprecedented moratorium on the lowest-cost new electricity available.”
According to Pembina’s stats, a clean electricity portfolio in Alberta costs $48 per megawatt hour — meaning if 1,000 kilowatts are generated in 60 minutes — compared to $57 for natural gas.
Minister Neudorf insists only the 15 energy projects currently before the Alberta Utilities Commission will be impacted by the moratorium. But Jeyakumar said the pause puts all 91 projects under development at risk, alongside the $25 billion in investment they’ve attracted. “[The pause] creates uncertainty around future investments while adding unnecessary red tape to these projects,” she explained.
Jeyakumar noted that while the conservative governments of Ontario Premier Doug Ford, Manitoba Premier Heather Stefanson and Saskatchewan Premier Scott Moe seek to further integrate renewables into their energy mix, “Alberta appears to be heading in the opposite direction.”
“This summer has also shown that fires and smoke are making the growing costs of climate change all too real for Albertans and Canadians. Accelerating the deployment of wind and solar energy in a responsible way is an essential part of the solution to the climate crisis,” said Jeyakumar.
Public interest lawyer Drew Yewchuk, on Twitter, called the government’s decision “dumb beyond belief,” arguing it puts the state’s thumbs on the scale in favour of oil and gas development.
He noted that there has never been an equivalent pause on oil and gas development, despite the fact that companies have violated their responsibility to clean up environmental liabilities for decades — in fact, governments have accelerated oil and gas approvals.
“Wind, solar, and oil and gas are competing energy sources - a free market approach should have as similar as possible reclamation and security bond rules for all the technologies,” Yewchuk wrote.
“And a sane approach would toss out the free market obsession and tilt the board somewhat against oil and gas because of climate change. We're roasting the Earth!!”
Julia Levin of Environmental Defence Canada agrees that, if anything, the province should pause oil and gas development, given the sheer scale of its environmental liabilities.
“If this were actually about addressing end of life clean up costs, there would be a [moratorium] on oil & gas projects while AB sorts out that +$150 billion problem,” she tweeted.
Levin authored a July 2023 report which shows the oil and gas industry is shirking a minimum of $123 billion in environmental liabilities. If oil and gas production is phased out by 2029 — fat chance of that happening under the UCP — companies will need to divert 37% of their annual profits to adequately fund cleanup costs.
“We know that demand for Canada's oil and gas will start to fall this decade, and we also know the production must be phased out to avoid catastrophic climate change. We wanted to see whether current levels of profit could cover current and future environmental liabilities,” Levin told The Maple reporter Taylor Noakes.
It turns out they can, but that will only occur if they’re forced to pay up.
University of Alberta economist and law professor Andrew Leach sardonically tweeted that end of life obligations for renewable energy pale in comparison to those for oil and gas.
“For some reason the concern about environmental contamination is only there for solar and wind, where literally no one expects us to have a generational multi-billion-dollar environmental cleanup problem,” said Leach.
In an interview with The Canadian Press, Leach said renewable energy approval should be considered on a case-by-case basis, as is the case for oil and gas projects.
"No one can imagine in the middle of an oilsands boom everyone saying what we need is a six-month moratorium on new approvals until we figure out how we're going to manage cumulative effects,” Leach said.
Martin Olszysnki, a University of Calgary environmental law professor, cheekily observed the tension between the provincial government’s stated embrace of free markets and its commitment to perpetuating the dominance of oil and gas.
“Alberta: Closed for Business [that is not ideologically aligned w/ our base]!” he tweeted.
Alberta Premier Danielle Smith has pushed back against the federal government’s impending regulations for Canada’s energy grid to be net-zero by 2035, arguing that target is “too aggressive.”
University of Calgary political scientist Lisa Young pointed out that pausing renewable energy production “makes the statement that it's impossible to achieve a net zero power grid by 2035 that much closer to being true.”
The moratorium has a dual purpose — to bolster the faltering fortunes of the fossil fuel industry while serving as ammunition in a predetermined confrontation with Ottawa.
The A/V Corner
Listen: On the latest Forgotten Corner, Scott and I welcome Left Reckoning co-host and Majority Report producer Matt Lech to discuss issues of common concern to the Canadian and U.S. Left.