Alberta is pausing all approvals for new wind and solar power projects larger than one megawatt for the next six months, as it reviews where they can be built, how the surge in renewables affects the province’s power grid and rules about what happens to installations when they reach the end of their life.
Alberta leads Canada in renewables growth. The multibillion-dollar boom in the province over the past few years has been driven by an abundance of sun, a rapid and dramatic drop in the cost of solar technology and Alberta’s unique power market structure, which makes it easy for companies to sign renewable power purchase agreements, thus helping them with their corporate emissions-reduction goals.
Alberta’s power grid capacity is about 18,000 megawatts. Just a few years ago, in 2015, coal generated close to two-thirds of the province’s power. That year, a suite of climate policies introduced by the newly elected NDP included a goal to get Alberta off coal power by 2030, which is now set to happen by the end of 2023. Currently, about one-third of the grid is renewable power.
But the United Conservative Party government says the surge in wind and solar projects means policies need to be updated to reflect the current state of the market.
Affordability and Utilities Minister Nathan Neudorf said that could include mandatory security bonds that renewable developers must pay to ensure projects can be cleaned up when they reach the end of their life.
“When the electricity grid was set up 25 years ago, those were great policies, but the world’s changed. So we need to address this quickly and answer some of these challenges,” he told The Globe and Mail in an interview.
The pause on project approvals before the Alberta Utilities Commission (AUC) begins on Thursday, and runs until Feb. 29. Work on the policy review will begin immediately, led by the AUC. Microgeneration, projects under one megawatt and isolated generation projects will be exempted from the pause.
“The sooner we start with a defined process and timeline, the sooner we can resolve these items and move forward together,” Mr. Neudorf said.
“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.”
There are 3,400 megawatts of wind and solar projects currently under construction in Alberta, worth more than $2.7-billion. They have brought jobs and a flood of new revenue for rural municipalities in the form of taxes.
But the developments have also caused consternation.
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.
At the Rural Municipalities of Alberta fall convention last year, a resolution passed that urged the province to learn from its mistakes with fossil fuels and deal with the end-of-life issue for renewables before it’s too late. It asked the government to mandate the collection of adequate funds for a cleanup via, for example, a reclamation surety bond as a condition of project approval, with the amount of the bond based on data-driven projections of actual reclamation costs.
“We’re only expecting this industry to grow. The sooner we can actually get those expectations clearly defined and outlined for what happens at the end of life and reclamation, who pays how much, the better,” Mr. Neudorf said.
He said approximately 15 renewable projects will be affected by the pause.
The government has already spoken with around 200 individuals, Mr. Neudorf said, including landowners, stakeholder groups, consumer advocates and power providers that rely heavily on natural gas. He will meet with the Canadian Renewable Energy Association – the main group that advocates for wind, solar and energy storage solutions – later this week.
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