Alberta Premier Danielle Smith has announced a 7-month moratorium in new renewable energy projects in her province. Ostensibly, this is so that the Alberta Utilities Commission can hold an inquiry on land use and reclamation, and to assess how best to fit renewables into Alberta's energy mix. A committe is supposed to report at the end of February 2024, although it remains to be seen whether there is still a viable renewable energy sector in Alberta at that time.
She has paused power plant project approvals for wind, solar, geothermal, biomass and hydroelectric projects during this period, but notably, not natural gas generation. This is described by a minister as "a little bit of inconvenience", although it has thrown the whole energy industry into turmoil. In a triumph of irony - ah, if only it were really irony! - the press release accompanying the news of the freeze was entitled "Creating certainty for renewable projects".
As an enthusiastic and evangelistic free marketer, this is a strange move for Smith. Renewables have been a singular success story in Alberta, with billions of dollars in investment in recent years, and many more in prospect in the near future (although now on hold).
In fact, an estimated $25 billion in investment is now on hold, and potentially tens of thousands of jobs. To close the industry down in this way, and risk a big hit to Alberta's business and investment image, seems particularly short-sighted. Wind and solar in particular are now among the cheapest methods of power generation in Alberta, so a political moratorium of this kind is also likely to increase energy costs for the province's population.
Because, make no mistake, this is a political move, not an economic one. Alberta, and Ms. Smith and her entire party, is in the pocket of its powerful oil and gas lobby, free market be damned. You have to know that they are involved in this surprise decision, somewhere behind closed doors. In fact, Alberta's energy market is supposed, by law, to operate on free and open competition, so there may be a legal case to be made against it.
Ms. Smith also holds herself up as the anti-Trudeau, so it is no surprise that she would directly oppose anything espoused by the federal Liberals (like combatting climate change, for instance). And indeed, she has specifically tried to blame the decision on Trudeau, claiming (falsely and disingenuously) that federal regulations won't allow her province to build necessary back-up natural gas generation to accompany any further development of renewables. There is no such federal requirement and no real need for back-up, and this is just her belated attempt to pass on the blame and cover up the reality of the situation.
Ms. Smith seems particularly concerned about end-of-life clean-up and disposal costs of wind and solar generation, which, in a province that has repeatedly dropped the ball on orphan oil wells, seems a bit rich.
It's hard to know where this will go. The UPC has a healthy majority in Alberta's parliament, but this move has raised quite a stink both within and without Alberta. And Smith is not above the odd political flip-flop.
UPDATE
Some international renewables companies are already pulling out of Alberta, spooked by the province's surprise move and business uncertainty it has created. Good job, Danielle!
UPDATE UPDATE
A more recent analysis suggests that 118 renewables projects in Alberta have been caught out by this surprise announcement, with a combined worth of $33 billion and impacting 24,000 jobs. This is a far cry from the government's stated claim that no more than 15 projects are impacted by the moratorium.
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