No shock: UCP freeze on renewable electricity generation projects and resulting uncertainty lead to deep chill on investments

It should come as no shock on the first anniversary of the United Conservative Party Government’s seven-month freeze on the development of renewable electricity projects that the policy has resulted in a deep chill on renewables. 

That was, of course, the idea. 

A new analysis by the Pembina Institute released yesterday shows that in the 12 months since the unexpected ban on wind, solar, hydro, biomass, and geothermal energy projects was announced on this day last year, a total of 53 applications for projects that would have added to the province’s electricity grid were withdrawn.

“Our research finds 33 projects that were in the queue prior to the announced moratorium have since cancelled,” the Calgary-based clean-energy think tank said in a news release. “These projects would have generated approximately the same amount of power as is used by 98 per cent of Alberta homes annually.”

In addition to a flash flood of applications during the rest of August 2023 as companies that had already proposed projects desperately tried to get them grandfathered under the old development rules, another 20 of those projects were eventually withdrawn, the Pembina study says, bringing the tally of lost projects to 53. 

On Aug. 3 last year, the government’s announcement seemed strangely disorganized, as if the communications professionals in several government departments didn’t know it was going to be made much before the rest of us heard the news. 

We’ll never know for sure, of course, but this likely means the scheme to stymie renewable development was cooked up by Premier Danielle Smith and some of her closest advisors – folks like Rob Anderson, her former Wildrose Party deputy leader and the current executive director of her office, who is on record calling solar and wind electricity generation facilities “butt ugly” and “a scam.” 

For her part, in a Calgary Herald op-ed in 2020, Ms. Smith sarcastically wrote: “For years, the green movement would have us believe it was possible, and even desirable, to have an energy grid powered entirely by wind and solar, producing free, clean energy forever and ever, amen. We would switch to electric cars and electric heating and all our energy needs would be met. When the wind was blowing and the sun was shining, we’d use what we needed and store the rest and Mother Earth would look upon us and say it was good. But it is not good.”

There’s plenty more where that came from, but the bottom line is that the current leaders of Alberta dislike renewable energy projects not so much for their aesthetics – which did indeed upset a few of their most influential supporters with nice views of the Rocky Mountains in far southwestern Alberta – as for the damage their existence does to the UCP narrative there is no alternative to fossil-fuel-generated electricity. 

At the end of August 2023, Pembina estimated that $33 billion in investments and 24,000 jobs had been put at risk by the unexpected moratorium. 

“Most of the moratorium’s impacts on the sector’s growth won’t be seen until 2025 when fewer renewable energy projects are built,” Pembina analyst Will Noel, one of the report’s authors, said in yesterday’s news release.

Since the surprise announcement, the UCP Government has further depressed investors’ interest in renewable projects in Alberta by announcing there would be new limits on where renewable projects could be located – to prioritize agriculture land, protect “pristine viewscapes” (if they happen to be visible from the front window of one of their supporters’ homes, anyway), and ensure site reclamation when the facilities are taken out of service. 

Oddly – or not so oddly – such concerns do not seem to trouble the UCP nearly as much when it comes to reclaiming oil and gas drilling sites, orphaned or otherwise, or letting Australian mining interests demolish entire mountains. 

A general outline of the new restrictions was published in a government news release in February, but the fine print – presumably intentionally – remains in development. 

The Pembina Institute pleaded for clarity because the lack of clear details “appears to be deterring new investment in Alberta.”

While the freeze officially ended in February, the institute noted, “as of the end of July, only three solar projects totalling 13 MW and zero wind projects have applied to the AESO” – the Alberta Electrical System Operator, responsible for the operation of the province’s electric system. 

Utilities Minister Nathan Neudorf, finding himself unable to argue that the paper’s authors had counted wrong, accused the institute of counting the wrong things. 

“The Pembina Institute is ignoring the reality that not every proposed energy project leads to shovels in the ground,” he complained in a media statement reported by The Canadian Press, tossing in colourful accusations that the report is “misinformation” and “intentionally misconstrues the facts.”

“Alberta continues to be a leader in renewable energy and jurisdiction of choice for investors,” he insisted. 

Meanwhile, south of the international boundary, wind and solar projects in the pipeline (if readers will forgive the inappropriate metaphor), have been growing by leaps and bounds – 23 per cent between January 2023 and January 2024, compared to only 6 per cent in Alberta. 

“Even after taking into account that the U.S. is roughly 69 times larger than the population of Alberta, the province’s 2024 queue would still need to see 897 MW of new applications to keep pace on a per capita basis,” Pembina said. 

“The number of projects cancelled in Alberta, contrasted with the renewable energy capacity being added elsewhere, suggest renewable developers will look for other jurisdictions where there appears to be less political risk associated with these investments, such as some U.S. states,” Mr. Noel said.

Carbon capture technology likely to do more harm than good

If it’s too good to be true, folk wisdom says, it probably is. 

If the likes of Alberta’s UCP Government are spending billions on a scheme that sounds too good to be true, you have to wonder if it won’t make things even worse. 

A new study by Stanford University indicates that so-called carbon capture technology that constantly touted by the Smith Government probably does more harm than good. 

“All sorts of scenarios have been developed under the assumption that carbon capture actually reduces substantial amounts of carbon,” wrote civil and environmental engineering professor Mark Z. Jacobson. “However, this research finds that it reduces only a small fraction of carbon emissions, and it usually increases air pollution.”

“Even if you have 100 percent capture from the capture equipment, it is still worse, from a social cost perspective, than replacing a coal or gas plant with a wind farm because carbon capture never reduces air pollution and always has a capture equipment cost,” said Dr. Jacobson, a senior fellow at the Stanford Woods Institute for the Environment. “Wind replacing fossil fuels always reduces air pollution and never has a capture equipment cost.”

“There is a lot of reliance on carbon capture in theoretical modelling, and by focusing on that as even a possibility, that diverts resources away from real solutions,” Dr. Jacobson said in a story on the California university’s website. “It gives people hope that you can keep fossil fuel power plants alive. It delays action.”