Alberta puts six-month freeze on all new renewable energy projects

Alberta is pausing approvals for all new renewable energy projects — effective immediately — while it reviews how these projects affect land use, the power grid and how they’ll be cleaned up down the line.

Reactions to the six-month moratorium have been mixed. Environmental groups say it's yet another one of the United Conservative Party’s attacks on climate action, while a large association of rural municipalities is applauding the province for taking “bold action” to address its concerns about regulating land use and ensuring companies will be accountable for the cost of eventually decommissioning renewable projects.

Tim Weis, an industrial professor in mechanical engineering at the University of Alberta, was surprised on many fronts and called the government’s approach an “amateur” and “pretty reactionary decision.”

Alberta’s renewable energy market has exploded in recent years, and today’s announcement “sends a bizarre signal in a province that likes to tout itself as an electricity market that's predicated on open competition,” Weis told Canada’s National Observer in a phone interview a few hours after the announcement.

“It's strange to pick a particular segment of an industry and hit the brakes on it, especially in the middle of, you know, currently the biggest market for investments in the country,” said Weis.

The province was on track to see $3.7 billion worth of renewables construction by 2023, creating more than 4,500 jobs, according to the Business Renewables Centre, which connects renewable energy producers with people looking to buy clean power. Analysis from Clean Energy Canada suggests that Alberta’s clean energy sector will grow the fastest of any province or territory between now and 2050.

The moratorium runs until Feb. 29, 2024, and applies to approvals of new renewable electricity generation projects over one megawatt. Alberta’s Utilities Commission is currently reviewing 15 renewable, thermal and energy storage projects that will be affected by the pause. During this time, “Albertans will still be able to install renewable energy products in their homes and communities will be unaffected by this process,” according to the provincial government.

The government said the six-month moratorium was in “direct response” to a letter it received from the Alberta Utilities Commission and “concerns raised from municipalities and landowners related to responsible land use and the rapid pace of renewables development.”

“This is a pretty blunt instrument to solve issues that people have been talking about for a long time,” said Weis. Before becoming a professor, Weis was most recently an adviser to Alberta’s Minister of Environment and Climate Change, spent a year as a policy director with the Canadian Wind Energy Association, and worked at the Pembina Institute from 2002 to 2014.

The UCP’s moratorium on renewables is “another attack on climate action … bad for business, bad for the environment and bad for Albertans,” said Keith Brooks, programs director at Environmental Defence, in a statement.

“Stopping now makes no sense. Albertans are already reaping the benefits of renewable energy,” said Brooks, pointing to the jobs and investments renewable projects are creating, as well as revenues for cash-strapped municipalities.

“This latest move threatens all of this.”

Brooks points out that the fossil fuel industry has “disrupted close to 900 square kilometres and left tens of thousands of inactive and orphan wells,” which Environmental Defence estimates will cost a minimum of $123 billion to clean up. Earlier this year, Imperial Oil made international headlines for failing to notify downstream communities about an ongoing leak at one of its tailings ponds in northern Alberta.

"According to Premier [Danielle] Smith, massive tailings spills that endanger Indigenous communities don’t constitute an emergency — but the potential for expanding cost-effective and proven climate solutions at a time when Canada is burning somehow poses a threat,” said Caroline Brouillette, executive director at Climate Action Network Canada, in an emailed statement.

The Rural Municipalities of Alberta (RMA), in sharp contrast to environmental groups, is applauding the decision. RMA president Paul McLauchlin said the association didn’t request the moratorium on project approvals but is “so appreciative” that the government “delivered a solution that far exceeded our expectations.”

“I know it seems somewhat dramatic … a moratorium on decision-making isn't very common,” McLauchlin told Canada’s National Observer in an interview. “But I think that the important part of the conversation is that … this industry has exploded. There's no higher growth area of renewables in North America than in Alberta right now and I think that this is an opportunity to get it right.”

Alberta led Canada for renewable energy growth in 2022, accounting for 77 per cent of the 1.8 gigawatts of solar and wind generation capacity that came online that year, according to data from the Canadian Renewable Energy Association.

One of RMA’s main concerns is that highly productive farmland will be sacrificed to accommodate massive solar and wind farms with little thought.

“We want to make sure that projects that are industrial at that scale are compatible with adjacent land uses, or at least those questions are being asked in the decision-making process,” said McLauchlin. Another key question is around how the eventual decommissioning of renewable projects will be regulated, an issue brought to the fore by the massive environmental liabilities left behind by the oil and gas industry.

“We've lived the dream of the non-renewable industry, we've seen companies come and go,” McLauchlin said with a chuckle. Oil and gas companies have left abandoned oil and gas wells and other inactive infrastructure strewn across the province and in many cases, the companies responsible filed for bankruptcy before fulfilling their duty to clean up the mess.

The RMA has been calling out oil and gas companies’ failure to pay hundreds of millions of dollars in property taxes to its members. Its most recent survey revealed members are collectively owed $268 million in unpaid property taxes from oil and gas companies, a number that has been steadily climbing over the years.

RMA members are not “anti-renewable,” McLauchlin emphasized. The revenues being brought in by these projects are “life-changing” for municipalities, he said. “But we want to make sure we're doing it right. And we're really concerned that if this was to go on the exponential scale it is right now, really bad decisions would have been made.”

The Pembina Institute, a clean energy think tank, said the moratorium puts 91 projects and $25 billion in investments and associated jobs for Albertans and revenues for municipalities at risk.

Municipalities are aware the six-month moratorium could “create some apprehension on investment,” but McLauchlin says because the business case for solar and wind in Alberta is so strong and the fact that “six months, to be quite honest, isn't a long time,” he believes investors will still flock to the sunny, windy province.

But Weis questions whether the moratorium will actually be limited to six months.

“That's what we're being told today. But yesterday, no one knew this was coming,” he said. Six months might not seem like a lot in the grand scheme of things, but the “massive uncertainty” it has caused “runs the risk of being a bigger deal in people's long-term confidence in the market,” said Weis. Investors can turn to Saskatchewan or Manitoba, or look south of the border at states like Montana. And, even though the moratorium is only directed at renewables, he said it creates uncertainty for all other projects in the electricity market.

Questions about decommissioning renewable energy projects and their impact on land and the power grid are important and need to be addressed, he added. For example, Weis said end-of-life plans for wind turbines were frequently discussed when he worked at the Wind Energy Association.

But these questions and issues also aren’t new and don’t need to be dealt with using a “sledgehammer,” he said.

Federal Environment and Climate Change Minister Steven Guilbeault declined a request for comment.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer