Alberta banning renewables on prime land, declaring no-build zones for wind turbines

Open this photo in gallery:

The Alberta government is barring renewable energy projects from large swaths of prime land, under sweeping new rules for the sector that the industry says will stymie growth and strangle development in unnecessary red tape.

The changes, announced Wednesday by Premier Danielle Smith and Utilities Minister Nathan Neudorf, are the culmination of a regulatory inquiry into the province’s renewable energy planning rules that began almost seven months ago. The province ordered a moratorium on renewable project approvals while the inquiry proceeded, a move that was widely criticized by the industry and environmental advocates.

The new rules will come into force March 1, though many details have yet to be ironed out. Under the changes, Alberta will ban new projects from private property the government considers to have excellent or good irrigation capability, unless a proponent can demonstrate that crops or livestock can co-exist with power infrastructure on the site. The government gave no indication that similar restrictions would be applied to the development of fossil fuels or other natural resources.

Developers will be responsible for eventual cleanup costs through bonds or securities paid to the government, though the format of that system has not been finalized. Project proponents will have the option to negotiate directly with landowners on reclamation costs. But the government said in a news release that developers will have to provide “sufficient evidence” to the Alberta Utilities Commission, the provincial utilities regulator, for such a deal to be accepted. The oil and gas industry, by contrast, is not required to post security for future cleanup of wells and oil sands tailings ponds.

Buffer zones of 35 kilometres will be introduced around what the province deems “protected areas and other pristine viewscapes.” The government did not define those terms. New wind-power projects will not be permitted within those zones, and other forms of renewable energy may be subject to so-called “visual impact statements” before approval.

Ms. Smith said Wednesday the changes would ensure that Alberta doesn’t sacrifice future agricultural yields or tourism dollars to rush through renewable development.

“Renewables have a place in our energy mix, but the fact remains that they are intermittent and unreliable. They are not the silver bullet for Alberta’s electricity needs,” she told media.

Alberta, which leads Canada in renewables growth, announced its moratorium on new renewable energy project approvals in August last year. It ordered the Alberta Utilities Commission to halt approvals for those projects – be they solar, wind, geothermal, biomass or hydro – and launch an inquiry into various issues, including where they can be built, rules regarding cleanup and how renewable power fits into Alberta’s grid.

The renewables sector was not consulted before the pause, and some industry executives worried that unprecedented government intervention into the multibillion-dollar business would stoke uncertainty and stifle investment.

Wednesday’s announcement did little to quell those concerns.

Calgary-based BluEarth Renewables Inc. has invested more than $600-million in Alberta over the past three years, developing 333 megawatts of wind and solar projects. When the government announced the pause in 2023, the company had been contemplating another 400 megawatts of developments, BluEarth chief executive officer Grant Arnold said.

The moratorium sent a signal to the company that it should pause its Alberta plans and focus on other regions, he said, and the new rules outlined by the province this week reinforced that message.

“What the announcement brought was the awareness that it’s probably time and money that can be better spent elsewhere, so that we can do something that’s competitive,” he said. “We are struggling to find a way to keep investing in Alberta for future projects.”

Mr. Neudorf, the Utilities Minister, told reporters he believes the changes are fair for the renewables sector, and will strengthen investor certainty by providing clear expectations.

But he made no promises that the same rules would apply to development of other natural resources, such as coal, timber or oil and gas.

“That is a potential, but it’s up to those regulators in those industries to determine that,” he said.

Jason Wang, a senior analyst at the Pembina Institute, an environment think tank, said the new rules are fraught with subjectivity and will only serve to add more uncertainty to a previously booming investment climate for renewables in Alberta. The concept of “pristine viewscapes,” for example, has no legal description and appears to have no bearing on oil and gas facilities within the province.

“It might just be like a backdoor ban – a soft moratorium,” Mr. Wang said.

Industry officials have warned that onerous new restrictions will result in Alberta being seen as unfriendly to renewable energy, even as jurisdictions compete for capital to finance projects connected to the goal of achieving net-zero greenhouse emissions.

Evan Pivnick, a program manager at Clean Energy Canada, called the announcement an “uncertainty bomb” for renewable project investors and developers in Alberta.

“Until last year, the province was the undisputed renewables capital of Canada,” he said in a statement. “Now Alberta is undermining its own success, making it one of the only jurisdictions in the world trying to frustrate the deployment of cheap, clean, renewable electricity.”

Corporate renewable energy deals in the province have supported nearly $6.3-billion in new capital investment since 2019, according to Business Renewables Centre-Canada, an information and networking organization for green energy buyers and sellers. That equates to 12,400 gigawatt-hours per year of energy, enough to power 1.7 million homes.

Those solar and wind projects are sited overwhelmingly on low-value agricultural land in rural parts of the province, where they have provided about $28-million in revenues to municipalities.

While many municipalities have welcomed the windfall, some have raised concerns about friction between power generation and farming.

And some have expressed worries that – much like what has happened with oil and gas – they will be left dealing with the remnants of wind turbines or solar panels if projects fail or companies go bankrupt.

Municipalities will have the right to participate in Alberta Utilities Commission hearings under the new rules, which was not previously the case. They will also be able to request funding to cover the costs of taking part in those hearings.

Jason Schneider, the Reeve of Vulcan County in southern Alberta, said in a statement that the new rules are a “very balanced and thoughtful approach” to long-term sustainable renewable energy development.

“We greatly appreciate the province and Minister Neudorf’s willingness to listen to concerns brought forward by our residents and feel the policy changes being announced will help create ‘win-win’ opportunities for our municipality, our residents, and for developers,” he said.

“Wind and solar has become a very large part of Vulcan County, and we look forward to seeing what the future holds.”