Report finds Alberta's restrictive renewables policies dampened investment
Investment in Alberta's renewables sector has dropped off significantly owing to unprecedented policy and regulatory uncertainty, with the number of wind and solar projects in the province's connection queue shrinking for the first time, a new report has found.
According to the report released Wednesday by the Pembina Institute, a think tank, Alberta's renewables sector has gone from leading the country to cancelled projects and lost investment. That has put the province at odds with global trends and other Canadian jurisdictions, which continue to gain momentum.
According to the International Energy Agency, for example, two-thirds of global energy investment in 2024 went toward clean energy, rather than fossil fuel projects.
Will Noel, one of the report's authors and a senior analyst with Pembina's electricity team, said with Prime Minister Mark Carney pushing to build Canada into an energy superpower in fossil fuels and renewables, every province is going to have to pull its weight.
Why Alberta's new regulations put renewables at an even bigger disadvantage
'For Alberta, whether they like it or not, we've got the best wind and solar resources,' Mr. Noel said in an interview ahead of the report's release.
'The best thing that we can do to play a meaningful role in making Canada economically resilient and energy secure is to capitalize on those renewables. And as of right now, we're not really doing a great job of that.'
Various factors have contributed to the slide in investment in Alberta, the report says, including a seven-month moratorium on renewable project approvals, banning projects from certain classes of agricultural lands and within 35 kilometres of protected areas, a new upfront recycling fee for wind and solar equipment, and new reclamation security requirements for developers.
'No other industry sectors have been subjected to such onerous rules,' the report says.
While Alberta is seeing roughly the same number of new projects being proposed as in pre-moratorium times, Mr. Noel said that is being offset by the number of proponents of long-term projects pulling out and looking to invest elsewhere.
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Further undercutting long-term certainty for the renewables market are changes to the province's electricity system, the government's challenge to the constitutionality of federal Clean Electricity Regulations, and signals that updates to transmission regulations would increase the cost of grid access for new power plants, especially wind and solar, the report says.
The office of Alberta's Affordability and Utilities Minister Nathan Neudorf said in an e-mail that the province continues to lead Canada in renewables investment.
Mr. Neudorf said the province has also driven down the cost of electricity, improved grid reliability and passed legislation that will restructure the market to provide long-term power stability.
'Our government has set a clear, responsible path forward for a balanced approach on renewable energy development, ensuring our grid is reliable, affordable and sustainable for generations to come,' he said.
To draw their conclusions for the report, Mr. Noel and his colleagues Jason Wang and Scott MacDougall examined the Alberta Electric System Operator's project connection queue, which provides a high-level overview of investment interest in Alberta's electricity sector.
Opinion: As Alberta shows renewables the door, other jurisdictions are reaping the benefits
They expected to see steady growth in the queue year-on-year, as in other jurisdictions. But by the end of 2024, 'Alberta's project queue was instead sitting at its pre-moratorium level, but with the added concerning factor of a significant number of project cancellations in the previous 12 months,' the report says.
The report notes that Alberta has made some progress clarifying its new rules on renewable energy development, but says the province needs to do more to restore investment.
It recommends three actions: clearly outlining a vision for a clean, resilient and affordable electricity system, and directing regulators to create the rules and regulations to support such a system; encouraging investment in new projects by fast-tracking development for areas where utility-scale renewable projects would be particularly well-suited; and, modernizing electricity regulations to support energy independence and resilience by promoting the use of interties, energy storage and demand-side management.
'Developers are still really trying their best to try and invest here,' said Mr. Noel.
'Once we stop stacking uncertainty on uncertainty, developers can figure out a way to navigate this. Best-case scenario, we can start leading the country in renewables again.'
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