For some landowners and municipalities in rural Alberta, the provincial government’s announcement of a seven-month moratorium on approving wind and solar power projects is being seen as welcome and long overdue — though the way it was rolled out was a surprise.
“It kind of came out of left field. But we’ve been advocating for a few years to take a look at some of the gaps in the legislation and the lack of legislation when it comes to things like reclamation,” said Jason Schneider, reeve of Vulcan County, Alta.
“So the pause was a little bit different than what we were asking for. But I think once we’d had a chance to speak with the minister’s office, I think I see the logic.”
Vulcan County is home to one of the largest solar farms in North America and one of western Canada’s largest wind farms, among other projects. Overall, the boom in renewables has been a positive to the county, including an important addition to the county’s tax base, Schneider said.
But a lack of regulation has posed challenges, too, he said — especially as the scale of projects has increased, with some projects being proposed that would involve up to 2,430 hectares (6,000 acres) of farmland.
The county also has concerns about the choice of locations for these projects on high-value agricultural land, and, in their view, what has been inadequate long-term land use planning.
In short, the county has been trying to avoid the sorts of problems that have plagued other energy industries over the years, including oil and gas and coal, Schneider said.
But his support for the provincial review isn’t popular with everyone.
“I’ve got hate email this last few weeks, saying like, ‘You guys don’t understand — you’re just trying to kill the [renewables] industry. Like, you know, you’re a climate denier,'” he said.
“No. Look at Vulcan County. We’ve been very successful. It’s been a great industry. We’ve really been able to come up with win-win scenarios, where we’ve been able to get these things located where they’ve had the least impact. That’s what we want.”
The pause has caused consternation within the renewables industry, marooning projects that are worth billions of dollars and throwing thousands of jobs into question, according to a renewable sector industry group.
On Monday, Reuters reported four major international companies at various development stages had stopped work on their plans as a result of the pause, citing an industry official.
Concerns around reclamation
Reclamation — the process that attempts to return the land to something resembling what it was prior to development — is among the chief concerns among municipalities and landowners.
Daryl Bennett, director of the Alberta Surface Rights Federation (ASRF), a landowner group, said it’s also been precipitated by rural Alberta’s experience with the oil and gas sector.
The difference there is that the oil and gas industry has had rules in place for years that are supposed to enforce reclamation — rules that haven’t always worked as intended — so landowners aren’t left on the hook after facilities expire.
In 2018, rules were announced under the NDP government that state that renewable companies are supposed to meet the same reclamation criteria that oil and gas does.
But there’s no orphan association that exists in the province, so if a renewable company goes bankrupt, there’s nobody to step in to fund reclamation like there is with oil and gas, which poses concerns, Bennett said.
“If they go bankrupt, [the rules are] meaningless, because there’s nobody there,” he said. “Then, the onus is on the landowner, and then the county or municipality may think they have to step in, because the landowner is not going to be able to afford to reclaim it.”
In Vulcan County, Schneider said he’s worried about what would happen in a worst-case scenario, where landowners are left with wind turbines taller than the Calgary Tower on their properties.
“No landowner could clean that up,” he said.
It’s why Bennett said his organization has been lobbying for some time that companies should have an orphan association in such scenarios.
“We may have 25 to 50 years before any of these projects need to be reclaimed. So we have lots of time to fix the problem now, learn from the oil and gas lessons, put a fund in place, and then that would resolve a lot of the landowner concerns and a lot of the municipal concerns,” Bennett said.
Similarly, given the hundreds of millions in unpaid taxes from oil and gas companies, the ASRF has been pushing for an exemption to be added to the Municipal Government Act to protect landowners from footing that bill, too.
Premier cites high costs of clean-up
On her weekly phone-in radio show Your Province Your Premier on Saturday, Alberta Premier Danielle Smith said she was focused on concerns around land-use planning for renewable projects, among other issues.
“And, I want people to understand why farmers are very concerned about the reclamation aspects of a wind turbine,” Smith said.
Smith said she has seen estimates of $500,000 per turbine for reclamation, adding, “You’ve got 50 turbines — that’s a $25 million reclamation project.”
Andrew Leach, an energy and environmental economist and a professor at the University of Alberta, said there are major renewable projects in the province that do involve a substantial amount of concrete, which would lead to significant removal costs.
But he said it’s important to keep those numbers in context, as drillers often sink hundreds of oil and gas wells each month in Alberta.
“[With renewables], it’s all surface disturbance. We’re not talking about any type of chemical contamination, we’re not talking about any kind of connection to the subsurface that could reopen and allow hydrocarbon leaks or gas leaks over time,” he said.
“We’re just talking about the removal of concrete, aggregate, et cetera … it’s a very different ballgame.”
The differences at play
Vittoria Bellissimo, president and CEO of the Canadian Renewable Energy Association, said it is unfortunate that Alberta has a history of orphan wells and environmental liabilities, and added that landowner concerns should be taken seriously.
But she said the situation involving renewables isn’t the same as oil and gas. That’s because renewable energy projects are only built on private land, where landowners hold the reins.
“If landowners do not want renewable energy projects on their land, they won’t have them. If landowners want reclamation security in place to ensure that end-of-life projects will be cleaned up and land will be restored, they can include that in their [private] contracting arrangements,” she said.
The industry also differs from oil and gas, Bellissimo said, because when it comes to orphan wells, as the productivity of the wells decrease, they become economically unviable.
“With renewables, you have sites that are windy and sunny, and the wind will still blow and the sun will still shine. So the sites actually are still very, very viable at the end of life of the generation assets,” she said.
But Bennett with the ASRF said his concerns still remain that landowners may not fully understand the scope of what they’re getting involved in the way the system is set up now.
“A lot of these landowners are signing these at their own risk. And they should be aware that they don’t have the protections in those contracts that … oil and gas contracts do,” he said.
When considering the premier’s estimates of reclamation costs she mentioned on Your Province Your Premier, Leach said that entering into a major industrial development worth millions of capital investment project means a landowner is potentially subject to some risk.
“I think I’m behind the idea that we do need more information … there should have been more upfront work on behalf of, whether it be the [Alberta Utilities Commission], the government, et cetera, to provide this information to landowners. No argument there,” he said.
“But in terms of needing a [seven-month] pause on regulatory approvals to get that type of situation in place, that just doesn’t ring true for me.”
Renewable projects marooned
For the Canadian Renewable Energy Association, the way the pause was rolled out without consultation can’t help but draw comparisons to how other energy sources have been treated in this province for years.
“I think that it is very, very unfortunate that we have inherited the decades of mistrust because of the orphan wells situation,” said Bellissimo with the Canadian Renewable Energy Association.
Ensuring the stability of the province’s power grid, along with the concerns surrounding reclamation and loss of farmland, are important issues to be considered, said Kent Fellows, graduate program director for the master of public policy program at the University of Calgary’s School of Public Policy.
“The province should be thinking seriously about those. But I’m not convinced that it requires a [seven-month] pause to get there,” he said.
“We have seen updates to regulation in the past through these regulators where they’ve not had to put the brakes on, where they’re able to walk and chew gum at the same time.”
Fellows said he’s concerned that there doesn’t seem to be consistent policies applied across sectors, where the province continues to approve new oil wells while managing a backlog of orphan wells.
“I think it was very surprising for this to occur without prior notice to people in the renewable generation space. And in particular, without prior notice to proponents that actually already have projects in under review, and in the queue, for regulatory review,” he said.
“That’s damaging to the investment climate. It’s just not a great way to do this kind of thing.”
Front Burner20:10Why is Alberta pausing new renewable energy projects?
A spokesperson with utilities minister Nathan Neudorf says the government, along with the Alberta Utilities Commission, have scheduled a number of meetings with affected groups. Some have already begun, the spokesperson said.