Approaching the halfway point on Alberta’s pause on new approvals of wind and solar projects, Danielle Smith spoke to a room full of renewable industry players in Calgary on a chilly Monday night.
Smith’s address to the Electricity Transformation Canada conference didn’t shy away from the contentious issue as nearly 1,000 people gathered inside the Big Four Building.
She also left no doubt about where the province sits on the matter — or the controversy it has ignited.
“I can’t help to think that perhaps the earlier code of conduct warning not to throw tomatoes and buns might have been directed at me,” the premier said to open her address to some laughter.
“I imagine there are a few people in the room who might be having some questions about the reason we put the pause on.”
Indeed, they do.
Alberta’s premier took centre stage at the annual gathering of the Canadian Renewable Energy Association as the province is locked in a battle with the Trudeau government over the federal Clean Electricity Regulations (CER), which seek to move provincial power grids to net-zero emissions — or close to it — by 2035.
The renewable energy sector is also busy building new generation projects across the country while striving to ensure it has enough workers and adequate supply chains in place to meet increasing demand.
But in the province, the elephant in the room is the government’s decision to place a moratorium on the Alberta Utilities Commission (AUC) granting approval to new renewable generation proposals.
On Aug. 3, the UCP government announced it would prohibit the commission from issuing approvals until the end of next February, saying it needed time to review and establish policies surrounding the surge of project applications, and to consider concerns from some landowners.
The AUC’s review is examining issues around the use of agricultural land, mandatory reclamation security requirements and the broader impact of adding more renewable capacity to the electricity grid.
What was so startling was the fact it came as the industry has become a “roaring success” story, in the province’s own words.
Last year, Alberta accounted for more than three-quarters of all new wind and solar capacity growth in the entire country.
The Alberta Electric System Operator (AESO) has projected renewables will make up 30 per cent of the province’s generation supply mix by the 2024 to 2026 timeframe.
Since 2019, it’s estimated that more than $5 billion of renewable energy investment has flowed into the province.
Alberta has a deregulated electricity market, along with strong wind and solar resources. Developers can build new generation projects and sell the power, and renewable energy credits, to corporate customers through long-term agreements.
“We are proud of the multiple sources of energy that make up our grid but we also need to be realistic. Wind and solar are intermittent … meaning that electricity supplies can simply stop, repeatedly and dangerously,” Smith said.
“The inquiry and associated pause are a necessary, and temporary, step in providing long-term certainty for the sector.”
The country must ensure there’s energy reliability and affordability as Canada moves to reach net-zero emissions by 2050. What is also clear is that as Canada strives to decarbonize, a lot more investment in new renewable generation will be required.
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The association estimates the country must deploy more than five gigawatts annually of new wind, solar and energy storage capacity to meet Canada’s net-zero commitment.
Last year, the country added 1.8 gigawatts of new renewable generation capacity.
Canadian Renewable Energy Association CEO Vittoria Bellissimo told the conference that several policy, regulatory and infrastructure barriers need to be addressed across the country. She also referenced Alberta’s pause on new project approvals.
“I would love to be standing here in front of you with the message that we have moved past that, but I will tell you that (the association) is working very hard to address all of the concerns brought forward by the government,” Bellissimo said.
More than 3,500 megawatts of renewable power generation projects are now under construction in Alberta.
By the end of August, the AESO received 74 wind and solar project applications after the moratorium was announced, Smith noted.
“We want to emerge from this pause able to provide investors with confidence and certainty so that Alberta is the destination for renewable energy investment in Canada,” she said.
Alberta now ‘a bit of a question mark’ for investors
However, Alberta already was the top place in the country for investing in new wind and solar farms before the freeze was unveiled.
Industry players and analysts say the moratorium has created investor uncertainty that could drive money into other jurisdictions, depending upon the outcome of Alberta’s review.
“We’re in a period where we went from being among the top of the list for options for investors looking to invest in renewable energy, to a period now of a bit of a question mark,” said Sara Hastings-Simon, director of the University of Calgary’s master of science in sustainable energy development program.
There’s a lot at stake for Alberta to get this right, including the need to decarbonize and attract billions of dollars of future investment, which can create jobs and generate additional taxes for governments.
The province’s renewable energy pause and its opposition to Ottawa’s call to reach a net-zero target by 2035 are creating “chaos” for the sector in Alberta, said Jason Wang with the Pembina Institute.
“There is not clarity over what the new rules are going to be in the new year,” he said.
“Alberta’s continued messaging over the role of renewables has caused uncertainty for folks.”
During her speech, Smith also pointed to the importance of fossil fuels in providing electricity and backing up renewable resources for periods when the wind doesn’t blow or the sun doesn’t shine.
The premier received polite, perfunctory applause at the end of the address.
In an interview, Bellissimo said it’s unclear what long-term effect the pause will have on the industry, but pointed out the sector requires regulatory certainty and clear processes to get projects approved.
“There is a bit of a waiting game on right now,” she said.
“We are all hoping the end of the pause comes and we all get back to business as usual…back to leading the country in renewable energy development.”
Chris Varcoe is a Calgary Herald columnist.