New power purchase agreements (PPAs) for renewable energy in Canada flattened out from 1,030 megawatts in 2023 to just 52 MW in 2024, the Business Renewables Centre-Canada reports, with just one new deal announced on a project that already had a PPA in place in 2023.
“This was a letdown compared to the record-breaking PPA activity in 2023, though not unexpected given the ongoing regulatory movement,” the Calgary-based organization writes in its Renewables in Review 2024 report, released last week. “Both buyers and developers seem to be holding off, waiting for more clarity before jumping into new deals.”
The setbacks focused in Alberta, the only Canadian jurisdiction that allows direct contracts between renewable energy buyers and developers, BRCC Director Jorden Dye says in his preface to the report. By November 2024, the province had accumulated 3,280 megawatts of shovel-ready projects—2,701 MW of solar and 579 MW of wind—for which no signed deals had been concluded.
“The current slowdown has been driven by persistent policy uncertainty, significant government intervention in the market, and the simultaneous launch of multiple policy processes,” Dye writes. “These factors create a challenging environment that restricts growth and stability.”
The continuing policy uncertainty “has defined the past two years,” BRCC adds, with Alberta simultaneously introducing regulatory restrictions on new project approvals, new regulatory charges for renewable energy projects, constraints on getting renewables to market, and market changes that will drive down project revenues.
“Cumulatively, the ongoing flux has introduced multiple layers of policy and regulatory uncertainty, preventing new capital allocation to renewable energy,” the report states. “Whereas the Alberta government justified the moratorium as a necessary pause to bring regulatory certainty to the industry, most of these initiatives, particularly the market and transmission framework reforms, have yet to reach sufficient clarity to enable continued capital investment by the end of 2024.”
So while “projects that initiated capital investment before the onset of the uncertainty proceeded with project completion,” the report states, “the pipeline of new renewable energy capacity will start to dry up” once the construction lag begins to hit in the early part of this year.
While Nova Scotia, Saskatchewan, and Ontario all built momentum toward private renewables procurement in 2024, BRCC says Canada is still missing out on the full potential of a global PPA market that hit US$28 billion in 2023, with more than 148 gigawatts of new capacity signed since 2008, and was trending toward $444 billion over the next decade.
In an interview late last month, Dye traced the origins of PPAs back to U.S. companies, primarily in the tech sector, that needed “massive amounts of renewables” to meet their 2030 decarbonization targets and knew they wouldn’t be able to get that quantity from the grid. But he said that profile is changing: BRCC’s membership includes major companies in telecom, banking, and retail, as well as the country’s biggest industrial bakery, and Renewables in Review 2024 reports new interest from pipelines, insurance brokers, data centres, and carbon dioxide removal companies.
“We often call this the voluntary market, and one of the things I hear most commonly from corporations is ‘please tell my board, please tell my investors’” that some private procurement is under way, ,” Dye told The Energy Mix.
“They’ve made these targets. The CEOs and boards have committed to them and communicated them out to shareholders. It’s now on the teams to execute that,” he added. “So I think the primary motivation is that reduction of carbon from their Scope 2 emissions, their electricity emissions, and doing that to meet those shareholder expectations.”
At least through the end of January, Dye said he’d seen no indication that the extreme ideological shift in the White House was translating into a reduced commitment to PPAs.
“I think there’s just a little bit of emotion driving some of the reads of it,” he said. “I’m really looking at corporate commitments and actions. When those change, when we start to see that shift, that’s when it would be an indicator to me that there might be a sentiment change in the market. But at this point, I’m meeting with corporations across Canada, and to this day talking about what’s next for them, what’s on their renewable agenda.”
