Alberta gives cold shoulder to wind and solar industry, as the rest of the world is clamouring for more

The Alberta government's seven-month ban on new large-scale wind and solar power projects will end this week, but the province is unlikely to return to its previous status as a hotbed of investment.

Alberta is known for itssunshine and strong winds, especially in the southern region of the province. Those conditions combined with a deregulated electricity system helped drive a flurry of activity in the last decade.

In 2022, more than three-quarters of all the wind and solar built in the country was located in Alberta. Solar and wind now account for about 30 per cent of installed electricity capacityin the province.

Last summer, the Alberta government decided to hit the brakes on the thriving sector by introducing a moratorium on approving any new proposals while launching an inquiry to examine issues including the impact on agricultural land, concerns about reliability and the need for mandatory reclamation.

While the ban lifts this week, the Alberta Utilities Commission (AUC) is awaiting direction from the provincial government about how to proceed. There will be new rules placed on the wind and solar sector.

Globally, the solar industry, in particular, is growing rapidly, with investments even outpacing the oil and natural gas industry last year as the cost of panels has fallen in recent years.

"Alberta hit pause in the midst of a growth curve, and Alberta was the No. 1destination in Canada for solar investment," said Thomas Timmins, a Toronto-based commercial lawyer with Gowling WLG serving clients in renewable energy project development and finance.

"It's hard to say" whether companies will returnto the province, he said, because Alberta's reputation took a hit as an investment destination.

While Alberta rethinks how much renewable electricity it wants and what restrictions to place on the sector, other governments in Canada, the United States and around the world are competing to attract investment to grow their amount of solar and wind power.

"It's a global industry and it's a highly liquid and fluid industry. So Alberta is competing not just with Saskatchewan, not just with Manitoba, not [just] with Ontario, not [just] with Nova Scotia and Quebec, but also with every U.S. state," said Timmins.

The pause on approvals for new renewable energy projects is affecting 118 projects worth $33 billion of investment in Alberta, according to the Pembina Institute, a clean-energy think-tank.

Easy to invest elsewhere

The Sharp Hills wind farm is the newest large-scale renewable energy project in Alberta, after nearly 70 turbines began operating in January. The nearly 300-megawatt project is located near the town of Sedalia, about 300 kilometreseast of Calgary, and was unaffected by the province's moratorium because it was already approved and under construction.

The wind farm was developed by EDP Renewables, which is also pursuing a new 150-megawattsolar project in the southeast corner of the province near Medicine Hat. The company intends to apply to begin the permitting process soon.

"I find it a bit strange to have a moratorium on certain technologies rather than all technologies, if what's needed is a pause," said Thomas LoTurco, an Indianapolis-based executive vice-president with the company, about Alberta's wind and solar ban.

LoTurco says he's worried about a backlog of projects seeking approval in the province and about delays in developing projects.

While EDP pursues its proposed solar farm in Alberta, it's just one of many projects on the go.

EDP is a global renewable energy company operating in 28 different markets around the world, including France, Brazil andVietnam.

In North America alone, the company has 3,000 megawattsof projects currently under construction and another 30,000 megawatts of projects in the planning stages. EDP aims to build about 1,500 to 2,000 megawattsof projects every year in North America.

Many provincial and state governments across North America recognize the need for renewable energy, said LoTurco, as electricity consumption climbs. He pointed to Ontario as an example, since the province announced in December its intention to secure 5,000 megawattsof renewable electricity, its first major renewables procurement in seven years.

"It's just a realization in a place like Ontario that realization will hit everybody, that we're getting more electrified going forward," he said.

Reliable power

Alberta's premier isn't so sure.

Danielle Smith wants more power plants, but not necessarily wind and solar because of their intermittency.

"We have to make sure that we're bringing on a responsible amount of solar and wind so that we always have dispatchable power,...things like nuclear and hydroelectric, geothermal and natural gas," she saidon CBC's Power & Politics.

"That's got to be the basis for how we build our system, and then solar and wind can augment," addedSmith.

The province's inquiry was split into two parts. The first report was received in January, while the second is due by the end of March.

The provincial government will announce some regulatory changes in the coming days.

"The Alberta government will be setting a clear and responsible path forward for renewable energy development. This will begin ahead of the approvals pause lifting," said Ashley Stevenson, press secretary to Utilities MinisterNathan Neudorf, in an emailed statement.

After the government receives the second inquiry report next month, it will "continue announcing the next steps forward to enhance the energy market. These policies will apply to project approvals going forward," said Stevenson.

In the meantime, some companies have shifted their focus away from Alberta since the moratorium was announced.

BluEarth Renewables put on hold its projects (of about 400 megawatts) in the province and instead invested in renewable energy facilities in other Canadian provinces and U.S. states.

"The moratorium basically threatened a very strong, open market," said company president Grant Arnold.

"We will invest here when conditions allow us to do so," he said.

But first, he'll need to see how any new rules will impact the cost and time it takes to develop a project. Arnold said there will also need to be fairness and stability toward wind and solar companies compared to other electricity producers in the province.

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