A decision by Canada’s largest oil and gas-producing province to halt new wind and solar projects has prompted disbelief among environmental groups and economists. The move comes as the country struggles with its worst wildfire season on record, a situation that experts agree is worsened by the climate crisis and a reliance on fossil fuels.
Alberta last week announced a six-month moratorium on large solar and wind projects so it can review policies surrounding the projects’ construction and impact on the power grid, as well as rules for their eventual decommissioning.
Since then, provincial and federal ministers have sparred over the controversial decision, exposing tensions between Alberta, which favours natural gas for power generation, and the governing Liberals, who have the broader ambition to decarbonize electrical grids across the country by 2035.
On Tuesday, the federal government unveiled its initial plans to transition to clean energy nationwide, ahead of its Clean Energy Strategy in 2024.
Acknowledging provinces’ responsibility for electricity infrastructure and delivery, the government also highlighted its own federal authority over environmental regulations and “strategic investments” to attain broader climate goals.
“This came as a complete shock to the industry. And it’s really a broader shock to all industries in Alberta, for a government to take such a drastic action without any consultation,” said Jorden Dye, acting director of Business Renewables Centre Canada.
Provincial officials have expressed concern over the rapid pace of investment and development of renewable-energy projects in the province – one of the sunniest and windiest regions of the country.
But Dye says that the province has successfully balanced tensions between the speed of development and residents’ concerns for decades. “We’ve conducted regulatory reviews for both coal bed methane production and the oil sands industry for years – all without pausing development,” he said, adding that the decision even hurts the oil and gas industry- an increasingly large player in the province’s renewables market.
“I’ve had many conversations over the last week, ranging from CFOs of oil and gas companies to my rural Alberta farming family. And no one can understand why this drastic of an action was taken. Because it’s just not how this province conducts business.”
Nearly C$2bn worth of projects have been proposed in recent months in the province, and Dye warns companies might look to other jurisdictions to develop them.
The decision to freeze projects is a “mistake”, the head of the Canadian Renewable Energy Association said in a statement, warning the move will weaken investor confidence in the province, which represents 75% of the country’s renewable growth since last year.
There are now nearly 3,500MW worth of wind and solar projects under construction in the province, worth more than C$2.7bn, that won’t be affected by the decision, according to reporting by the Globe and Mail. The vast majority of these projects are on private land.
With the scope of the moratorium unclear, the province’s plan could strand as many as 100 projects that were set to generate enough energy to power 3m homes and are worth at least C$25bn in investments, according to the Pembina Institute, an Alberta-based energy thinkthank.
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In recent years, the province has taken controversial decisions that have united unlikely groups, most notably Alberta’s short-lived plans to open coal mining in the eastern slopes of the Rocky Mountains. Those plans united environmentalists, ranchers and a famous country singer against the United Conservative government, which quickly backtracked.
The decision to halt renewables has baffled economists, environmental groups and business executives, whose companies are now questioning hefty investments in the province.
Nearly one-third of Alberta’s grid is powered by renewables and the province has shifted away from coal at a far faster rate than expected. When the previous New Democratic party announced in 2015 it would phase out coal power, it pledged to accomplish that feat by 2030. But the province will attain the goal this year – seven years early.
“It’s clearly an ideological decision, taken at a time when climate impacts have hit Canada so devastatingly. It is completely irresponsible to halt the deployment of cost-effective and proven climate solutions,” said Caroline Brouillette, executive director of the Climate Action Network. “The province is sending the message they’re not open for business. These projects are already happening, and they’re not only good for the environment, they’re good for the economy.”
Brouillette also pointed to longstanding issues over orphaned gas wells and leaks at tailings ponds that have left Indigenous communities fearing for the safety of their water supplies. “To the premier, massive tailings spills that endanger Indigenous communities don’t constitute an emergency – but the potential for expanding cost-effective and proven climate solutions at a time when Canada is burning somehow poses a threat,” she said.
“I really hope that logic and facts can prevail for the sake of Alberta, their economy, jobs, and access to a safe and affordable energy supply.”
