Alberta renewable energy development pause affects $33B in investment, 24,000 ‘job-years’: report | Canadian

Three weeks after Alberta’s provincial government announced it was imposing a six-month moratorium on approving large renewable energy projects, a clean energy think tank has come up with a detailed analysis of how many jobs and how much investment could be at risk because of the decision.

In a post published on the Pembina Institute’s website on Thursday, the organization said its analysis of public data reveals there are 118 projects impacted by the moratorium. The report found that the potential production of solar energy was most impacted, followed by wind energy and battery energy storage.

“The total investments supporting the projects are estimated to be just over $33 billion, with an additional $263 million per year of revenue from municipal taxes and land leases spanning 27 different municipalities,” the report reads. “The planning, development, and construction of these projects would generate an estimated 24,000 full-time job-years.”

Nagwan Al-Guneid, the Opposition’s energy and climate critic for renewables and electricity, issued a news release about the Pembina Institute’s findings and called them “shocking.”

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“We should be doing everything in our power to attract this investment, especially that private investment has been the main reason behind the renewables boom in Alberta,” the NDP MLA said. “Instead, (Premier) Danielle Smith and the UCP have chosen to stand in the way of the free market and hurt Alberta’s reputation as a place to do business.

“As a result, communities across the province will miss out on jobs and investment, affordable electricity and a chance to diversify their economies.”

Click to play video: 'Danielle Smith addresses Alberta’s pause on renewable energy projects'

Danielle Smith addresses Alberta’s pause on renewable energy projects

In an email to Global News on Thursday, Affordability and Utilities Minister Nathan Neudorf called the Pembina Institute’s analysis misleading.

“No projects are being cancelled,” he wrote. “All projects that have been approved will continue towards construction. The AUC (Alberta Utilities Commission) will continue to work with projects already in the queue and newly proposed projects while the pause is in place, up until the point of approval.

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“Only the 13 projects before the AUC seeking approval will be paused. That means there are 105 projects inaccurately listed by interest groups that are months, maybe years, away from even getting before the AUC. As the pause will be lifted in February of 2024, the next construction season will be available for approved projects.

“The pause will help set a regulatory standard for all projects to attain now and into the future.”

When it announced the moratorium, the province said the decision related to rural and environmental concerns relating to development on agricultural land, its effect on scenery, reclamation security and system reliability.

In a statement released on Aug. 3, the government said the Alberta Utilities Commission would be instituting a six-month moratorium on approving all wind and solar power projects greater than one megawatt.

“We are proud of our leadership in responsible renewable energy development and we are committed to its continued growth,” Neudorf said at the time.

“This approach will provide future renewable investments with the certainty and clarity required for long-term development.”

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Days after the decision was announced, Smith said the pause on renewables was a result of the Alberta Utilities Commission and the Alberta Electric System Operator writing the government in July to ask for the suspension of such approvals, a claim that was not evident in letters viewed by The Canadian Press regarding the matter.

However, the utilities commission letter asks for legislative action to respond to a large volume of renewable and thermal power plant applications, along with their development on high-value agricultural land, and rules on how they are to be reclaimed once the work is done.

The AESO letter simply thanks the government for informing the entity that it plans to impose a moratorium.

On her provincewide radio show with Corus Entertainment, the parent company that owns Global News, Smith told listeners earlier this month that part of the reason the moratorium was being introduced was related to federal policy.

She said the federal government is preventing the development of backup generation like natural gas for renewable energy.

Smith said such plants are needed for when there is insufficient wind or sunshine.

“I’ve told … (the federal government), how can I bring on additional wind and solar if I’m not able to secure the reliability of my power grid by being able to bring on natural gas peaker plants? That’s the heart of the problem,” she said.

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While delivering a keynote address to the Canadian Energy Executive Association in Banff on Thursday, Smith reiterated that Alberta will continue to fight back against criticism of its support for natural gas production.

“We don’t need a just transition in Alberta because we don’t intend to transition away from oil and gas,” she said, noting the goal should be to bring about a “transition away from emissions, not a transition away from production.”

Smith also reiterated her government’s position that the federal government’s plan to achieve a net-zero electricity grid by 2035 is unrealistic, and that Alberta will continue to work towards achieving a net-zero electricity grid by 2050.

She noted that she believes work being done by traditional energy producers continues to move ahead on finding innovative ways to reduce emissions, and argued exporting more natural gas from Alberta will help other markets transition away from coal.

In its report, the Pembina Institute described the government’s moratorium announcement as “abrupt” and “unnecessary.”

“Alberta’s proven, economic and available wind and solar resources position it to become Canada’s renewable energy capital,” the report reads. “In fact, three-quarters of renewable energy projects built in Canada last year were in Alberta.

“At a time when the investments are trending towards renewable energy growth globally, accelerating the buildout of renewables in the province is a no-regrets, economy-building decision. Renewable energy reduces electricity costs, creates jobs.”

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The Pembina Institute noted that because of its high amount of wind and sunshine, southern Alberta is in a position where it could be impacted more by the moratorium than other parts of Alberta.

–With files from The Canadian Press’ Dean Bennett, Bob Weber and Rob Drinkwater

For details on the methodology the Pembina Institute said it used to come up with its analysis, please read the excerpts in italics below, taken directly from the organization’s website.

Data source

The Alberta Electric System Operator (AESO) maintains a list of electricity generation projects formally within development on their website. Projects are categorized under several statuses and stages indicating how far along they are in the development process. Any projects that are in stage 5 or 6 have already received the necessary approvals from the Alberta Utility Commission (AUC) and are not affected by the moratorium. As such, we consider all projects up to and including stage 4 to be “in development” and impacted by the moratorium with the understanding that the projects that are in the later stages are the most at risk. The pause in approvals creates uncertainty for developers, investors and other stakeholders involved in projects that are in all stages of development. It also is likely to have long-lasting impacts on the development decisions of prospective investors. Projects that are actively awaiting AUC approval can be found in the AUC’s eFiling system.

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Calculating impact

The moratorium has placed a pause on all renewable energy projects including wind, solar, hydro, and geothermal. However, as a large number of solar projects are being developed in tandem with battery energy storage (i.e., hybrid batteries), we are considering those assets to be impacted as well. Renewable energy projects are a significant source of investment, jobs, and local revenues through taxes and land lease payments. Investment impacts are estimated using overnight capital costs. This means the cost of a project if it were built and paid for overnight so that it is not impacted by interest, depreciation, or inflation. Renewable projects are often located on privately owned land, obtained through a bilateral agreement with the project developer and the landowner. Renewable projects generate revenue for both the landowner — through land lease payments — and the municipality in which they are located — through municipal taxes. Job creation is estimated using the job-year metric. That is to say, these are not peak construction jobs, but rather the equivalent of one person being employed one year full-time.

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