Alberta municipalities, almost all of them rural, are missing out on C$91 million per year in local tax revenue after last year’s provincial moratorium led to the cancellation of 53 new wind and solar projects, the Business Renewables Centre-Canada reports in an analysis released Tuesday morning.
The capacity of the cancelled projects adds up to more than 8,600 megawatts of generation, more than enough to power every home in Alberta, The Canadian Press writes, citing a report released Friday by the Calgary-based Pembina Institute. Many of those projects would also have come with substantial storage capacity.
Another 42 projects have delayed their in-service date by an average of 15 months, CP says.
And the lost revenue is starting to draw attention in some of the hardest-hit communities.
“There are definitely counties in Alberta that are opposed to renewable development, so I don’t want to paint with a broad brush here,” BRC-Canada Director Jorden Dye told The Energy Mix. But in communities that have welcomed solar and wind farms, “we’re hearing that this has hurt their ability to generate additional revenue going forward.”
In a release, Dye said local governments across the province nearly doubled their tax revenue from renewables from 2023 to 2024, from $28 to $54 million. But all of those projects “were initiated, approved, and constructed before the Alberta government announced its moratorium on renewable energy project approvals on August 3, 2023,” the release states.
In the year since, project cancellations have increased five-fold, and “we have conservatively calculated that this represents $91 million in lost annual tax revenues for municipalities,” Dye said. “That’s almost double what Alberta communities are earning this year.”
Uncertainty Drains Confidence
With clean energy industries still facing “confusing regulatory headwinds,” a year after an announcement the government signposted as “creating certainty” for renewable energy projects, “the uncertainty has drained confidence and energy from Alberta’s market,” BRC-Canada writes.
As a result, “the number of power purchase agreements (PPAs) by corporations looking to buy clean energy to fulfill their sustainability goals has plummeted,” said Dye.
PPAs accounted for 34% of new installed capacity from 2019 through 2023, producing 4.1 gigawatts of new capacity, 6,214 jobs, $6.3 billion in capital investment, and enough electricity to power 1.7 million homes. But “the first half of 2024 has been the slowest for the Alberta PPA market since 2020, with only one deal announced so far,” he said.
In the shadow of the moratorium, BRC-Canada published an updated map that shows seven Alberta municipalities taking in more than $4 million per year in tax revenues from renewable energy projects within their jurisdictions, and another seven collecting more than $1 million. The income accounts for 20 to 30% of total operating revenue for five of the communities, and for one of them—the County of Forty Mile, in the southeastern corner of the province—it hits 51%.
An earlier version of the map, published in late February, showed $277 million in tax revenues that 33 Alberta rural municipalities stood to gain from new solar and wind projects that had been expected to come online by 2028, many of them in the southern parts of the province where new restrictions related to so-called “pristine viewscapes” could have the greatest impact. A side by side comparison of the two maps shows how far local revenue shares currently fall short of that promise:
• From 171% to 23% in Paintearth County, a shortfall of nearly $23.3 million per year;
• From 105% to 28% in Willow Creek, or $11.7 million;
• From 96.7% to 4% in Cardston;, or $7.5 million;
• From 67% to 51% in Forty Mile, a gain of almost $475,000;
• From 58.1% to 8% in Cypress County, a gap of $17.3 million;
• From 52.7% to 9% in Special Areas Board, or $24.9 million;
• From 40.1% to 30% in Vulcan County, or $1.2 million.
Wainwright and Stettler counties, which stood to receive 85% and 63.9% of their 2028 tax income, respectively, from solar and wind projects, currently show up with zero revenue. They lost $23.9 and $11.3 million, respectively.
In the report released Friday on the one-year anniversary of the moratorium, the Pembina Institute said the 53 wind and solar projects were abandoned after the United Conservative Party government paused approvals for seven months, then failed to clarify new rules for those developments.
‘No One Is Looking at Alberta’
The province—once Canada’s hotbed of renewable activity—has seen only three new projects come before its system operator since the moratorium was announced August 2, 2023, CP writes.
“No one that wasn’t already in Alberta is looking at Alberta,” said Will Noel, one of the report’s authors.
Alberta’s minister of affordability and utilities called the report “misinformation.”
“(The institute’s) latest report yet again puts ideology before common sense and intentionally misconstrues the facts,” Nathan Neudorf said in a statement.
On August 3, 2023, the province announced no new renewable generation applications would be approved while it considered their effects on agriculture, the environment, municipalities, and “pristine viewscapes”. That pause came off in February and a new series of draft guidelines on where and how solar and wind projects could proceed was instituted.
But the shaky details in that announcement still had one analyst describing Alberta as “one of the only jurisdictions in the world trying to frustrate the deployment of cheap, clean, renewable electricity.”
Based on information from the Alberta Utilities Commission and the Alberta Electric System Operator, the Pembina report says before the moratorium was imposed, there were 118 projects that had notified the system operator of their intention to proceed.
“Looking at the electricity system operator’s project queue is a good reflection of the renewable development interest in Alberta,” co-author Jason Wang told CP in an email. “The first step in any type of electricity project development is to submit project plans and engineering details to the (system operator) before projects seek regulatory approval.”
More Cancellations Since Moratorium
Of those projects, 33 have been cancelled.
The report also says many projects tried to move forward despite the pause by “clustering” their proposals before the system operator in hopes of being grandparented. Twenty of those have since been cancelled.
Neudorf said basing the report on notices to the system operator distorts its findings. He said before the moratorium, only 13 projects had applied to the utilities commission.
“The Pembina Institute is ignoring the reality that not every proposed energy project leads to shovels in the ground,” he said.
“What we have in truth is a growing queue for energy projects, not a shrinking one. Alberta continues to be a leader in renewable energy and jurisdiction of choice for investors.”
Projects listed by the system operator are often abandoned before they apply for regulatory approval. But both Pembina and BRC-Canada said cancellations also increased after the moratorium.
In the two full years before the moratorium, an average of 13% of the renewables generating capacity before the system operator was squelched, CP writes. In the six months before the moratorium, cancellations reached 23%.
That figure skyrocketed after the pause was imposed. Between August 2023 and July 2024, 43% of the generating capacity before the system operator was cancelled.
It’s Still A Draft
The report adds that, a year after the moratorium was announced and five months after it was notionally lifted, none of the guidelines for renewables development have been finalized.
“There’s a draft map,” said Noel. “It still says draft. There’s no official draft.”
Final drafts have been promised by the end of the year.
Project proponents have blamed the new rules for at least some of the cancellations. TransAlta CEO John Kousinioris said in May that his company walked away from 300 megawatts of renewable generation because of the restrictions.
Meanwhile, other jurisdictions are moving forward.
Ontario has announced plans for 5,000 megawatts of wind and solar over the next decade. Nova Scotia has committed to getting 80% of its energy from renewable sources by 2030, though the province will face some formidable challenges along the way. Hydro-Québec says it will add 10,000 megawatts of new wind capacity to its network by 2035.
In April, BC Hydro called for bids to add about three million megawatt-hours by 2028. That’s expected to generate up to $3.6 billion in investment and create up to 1,500 jobs per year.
The second segment this report was first published by The Canadian Press on August 2, 2024.
