On September 14, 2016, the Alberta government provided an update regarding its Renewable Electricity Program. In particular, the government confirmed a firm target of 30 per cent electricity from renewable sources by 2030 (30 by 30) and announced that it will support the development of 5,000 megawatts (MWs) of additional renewable energy capacity to help achieve this target. Further details pertaining to how projects will be selected and what financial support will be provided to incentivize renewable development won't be available until November.
Notwithstanding the lack of clarity around project selection, it is anticipated that a significant portion of the additional 5,000 MWs of renewable energy capacity will come from wind power. The focus of policy discussions for achieving these renewable energy targets has to date been on the establishment of economic conditions to incentivize such development. Little attention has to this point been given to the issue of siting the large number of new wind power projects that will likely be required. Despite Crown or public lands encompassing approximately 60 per cent of lands in Alberta, wind power projects are currently restricted to private lands. Will the Renewable Electricity Program cause the government to revisit its decade-old policy prohibiting the development of wind power on public lands?
As discussed in our previous bulletins regarding Alberta's Climate Leadership Plan, including our November 2015 Blakes Bulletin: Just Like Any Good Recipe, Alberta's Climate Leadership Plan Has a Little Bit of Everything and our June 2016 Whitepaper: Predictions for Alberta's Renewable Electricity Program, the Alberta government has committed to the retirement of all coal-fired power plants in the province by 2030. The Climate Leadership Plan committed to replacing two-thirds of the generation capacity from coal with energy from renewable sources, which would equate to approximately 30 per cent of the province's electricity generation.
A "Firm" Target
On September 14, 2016, Environment Minister Shannon Phillips confirmed that the 30 per cent target is now "firm" and that the government will support the development of an additional 5,000 MWs of renewable generation capacity in Alberta. The government estimates that the development of this additional capacity will bring C$10.5-billion in new investment to the provincial economy and that the construction of the resulting renewable energy facilities will create over 7,200 jobs.
Renewable Electricity Program Criteria
The Alberta government confirmed that this investment would be solicited through the Renewable Electricity Program, which will be administered by the Alberta Electric System Operator (AESO). The AESO was tasked with developing a renewable procurement program in January 2016, and made its recommendations to the government in May 2016. The AESO's recommendations have yet to be made public, but the government has confirmed that prospective renewable power developers will have to satisfy the following criteria to be eligible for support within the Renewable Electricity Program.
- Be based in Alberta
- Be new or expanded
- Be five MWs or greater in size
- Meet the Natural Resources Canada definition of renewable sources
Confirmation regarding the applicable definition of "renewable" is significant as it had been an issue of concern for stakeholders with which the AESO had consulted prior to making its recommendations to government. The Natural Resources Canada definition of renewable sources does not include natural gas or nuclear energy, and includes limited forms of biomass.
Renewable Project Incentives
Minister Phillips indicated that Alberta's "goal is to provide the most certainty in terms of the support from the people of Alberta and at the lowest cost". To that end, she stated that although the government won't guarantee power prices, it could support renewable projects through the purchase of renewable energy credits or through "contracts-for-differences" agreements which would top up developer revenues if electricity prices fall. Otherwise, Minister Phillips provided no indication that the incentives would move beyond the financial realm and into the realm of making public lands available for the siting of renewable power projects.
Wind power projects require the assembly of large, contiguous areas of land, which, pursuant to the Renewable Electricity Program criteria, must all be contained within Alberta. Wind power developers currently face significant challenges when it comes to siting turbines on private lands. Among these challenges are restricted land availability, multiple lease negotiations, municipal zoning, various environmental and other setback requirements, permissible sound levels restrictions at residences, and visual impacts. Opening up large tracts of previously unavailable public land for wind power development would potentially ease the restrictions on available land, thereby facilitating the achievement of the 30 by 30 target.
While documentation is scant, it appears that the Government of Alberta has had a moratorium on the development of wind power projects on provincial Crown lands since 2005. This moratorium was to remain in place until a comprehensive energy strategy had been developed for the province, and has been the subject of stakeholder consultations at both the AESO and the Alberta Utilities Commission. In particular, stakeholders that participated in the AESO's Renewable Electricity Program consultation process earlier this year suggested that "exploring whether there may be options to build renewable electricity energy projects on public land" was warranted to remove a significant potential constraint on renewable energy development in Alberta.
Wind power projects can and have been developed on public lands in other provinces. For example, British Columbia has had a policy for wind power projects on Crown land since 2005. In Ontario, the Ministry of Natural Resources and Forestry revamped its policy for renewable energy on Crown land in 2014, and there are currently 30 accepted applications for wind power projects on Crown lands in that province.
Of course, the development of wind power projects on public lands comes with its own suite of challenges. Development in remote areas may result in significantly greater transmission and interconnection costs. Other challenges include environmental impacts and species at risk issues associated with developing on potentially undisturbed land, as well as the need to ensure the Crown adequately discharges its duty to consult with Aboriginal Peoples. However, Alberta has typically managed these challenges in the context of the development of oil, gas, and other non-renewable resources on Crown lands. It is unclear why the development of renewable energy projects on Crown lands has been and continues to be treated differently.
Ministry representatives have repeatedly advised that Alberta's public lands wind development policy is under review. With the exception of an explicit prohibition of wind power projects on heritage rangelands as described in the Heritage Rangelands Operational Management Directive, we are unaware of any such policy having been formally documented relative to the majority of public lands in Alberta.
The Alberta government's announcement of firm renewable energy targets and its confirmation that financial incentives will form part of the Renewable Electricity Program are both welcome news to industry participants and observers. Although the government's focus has to date been on creating the economic conditions to incentivize robust renewable energy development, we wonder how achievable its 30 by 30 commitment will be absent a lifting of the moratorium on the siting of wind power projects on public lands.
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