On August 3rd, the Alberta provincial government announced, without warning, a temporary seven-month pause on new renewable energy project approvals by the Alberta Utilities Commission (AUC), the regulatory body responsible for reviewing and approving power plant applications. As reasons for the pause, the government has cited growing concerns from rural municipalities and landowners over the impacts renewable energy projects are having on agricultural land and unanswered questions around end-of-life decommissioning as reasons for hitting pause on an industry that has witnessed significant growth in recent years.
The announcement has caused a stir in the renewables industry and raised alarms that this move could spook investment and deviate it to other jurisdictions just as the industry was gaining momentum in the province. When there is rapid outgrowth in any industry, a call for regulation is likely to follow, making it plausible that the government would direct a regulatory body to address concerns resulting from that outgrowth. Now that the decision has been made, it is worth examining if there is any similar precedent for this or what positives might come out of the inquiry. Of course, ideally, this pause would have been done in consultation with industry and perhaps not with an outright ban, considering the negative impact this could have on the industry in the province going forward.
With a deregulated power market that contains few barriers to entry and favourable renewable energy resources (wind and solar), Alberta has fast become the leader in Canada for growth in renewables, leading it to exceed its interim installation targets. It would appear that Alberta was on track to achieve 30% renewable electricity by 2030; however, it remains to be seen what impact this decision could have on achieving this target.
The sheer number of projects applying to enter the power market is where the first challenge from this rapid growth lies. The number of megawatts waiting in the AESO interconnection queue has more than tripled in the past decade, spreading agency resources thin and causing delays in completing the interconnection process. Constant changes and new applications to the queue may require revisiting interconnection studies or starting new ones, demanding greater technical capacity and compounding challenges to grid planning. Likewise, the AUC stated in its letter to the provincial government released as part of this decision that its case-by-case application process for new power plants is “ill-suited” to meet the policy changes currently being experienced in the province.
If during this pause the AUC is able to streamline approvals in a way that treats projects less on a case-by-case basis and more towards focusing on key pre-determined issues, then there is a chance for this decision to have a positive effect and even a positive outcome for renewable energy companies themselves. If projects can be developed more efficiently and with less regulatory burden it may be a great incentive to bring investment back to Alberta if any investors decide to look elsewhere in the interim.
When announcing the pause, the government directed the AUC to include in its inquiry considerations for developing power plants on certain types and classes of agricultural land. Currently, there are no regulations that limit what an owner of agricultural land can develop on their land when it comes to renewable energy projects. This lack of regulation is in part what has made Alberta an attractive place to build renewable projects. However, when looking at other jurisdictions in North America, this paradigm is also highly unusual. In many cases, such as in Manitoba and Ontario, soil classifications already limit what can be built on agricultural lands, and the Agricultural Land Commission in British Columbia heavily limits what can be built on land designated as ALR (“agriculture land reserve”).
Looking at US jurisdictions may be more helpful, as many states have implemented land-use regulations specific to renewable energy siting and development, some in response to the rapid growth of the renewable energy industry. In 2020, New York created the Office of Renewable Energy Siting specifically for reviewing large-scale renewable projects (over 25 MW), where identification of proposed impacts on productive agricultural land is required in a project application. New York also requires certain projects to contain robust decommissioning plans to ensure agricultural restoration. Similarly, Vermont enacted a regulation that allows the Agency of Agriculture, Food and Markets to become involved and provide recommendations for power projects larger than 500 kW located on tracts of primary agricultural soils.
Massachusetts, through its Solar Massachusetts Renewable Target (SMART), incentivizes solar projects to be located on brownfield and contaminated sites instead of greenfield areas while still maintaining one of the highest percentages of electricity from solar power in the US. In California, the longstanding Renewable Energy Transmission Initiative seeks to bring together a wide range of stakeholders to help identify and evaluate land best suited for ‘renewable energy zones’. Would the Alberta government incentivize renewable energy? Probably not. However, perhaps there could be less AUC oversight on projects sited on brownfields, and other lands that aren’t agriculture.
These examples are demonstrative of governments and regulators seeking to get ahead and mitigate any adverse impacts that large-scale renewable energy development might have on land that is useful for other purposes. They also show that Alberta’s recent decision is perhaps not without precedent and that concerns raised, like those by rural Municipalities in Alberta, should be taken seriously.
In triggering this pause, the provincial government and AUC have given themselves a lot to consider at the risk of frightening off investment. To make the most of it, they must ensure that the roadmap they develop adequately addresses the concerns of all stakeholders while leaving sufficient room for the continued growth of the industry into the future. Effective land use will be critical for future sustainability, and there are a host of possible options, including those described above, that the government may wish to consider. Though this decision may have come as a shock, those involved in Alberta’s renewable energy industry must now look at what positives can come from it as they seek to develop an energy future for the province that is sustainable, resilient, reliable, and efficient. In the long-run, this pause could be seen as a decisive time in Alberta’s energy history, hopefully solidifying the launchpad for Alberta’s continued renewable energy growth.
About Blue Harp Consulting
Blue Harp Consulting consults in the renewable energy industry and works with municipal governments, renewable energy companies, and Indigenous organizations who all have differing interests and goals. Having been involved in renewable energy projects in Alberta and elsewhere in Canada, we are available to support your project and can help your team assess what impacts and opportunities this decision may have on your organization.
