New renewable energy regulations are crowding out investment, the Alberta government has said

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Dozens of municipalities in Alberta received a total of more than $28 million from wind and solar projects in 2022, according to an analysis by BRC-Canada.Jeff McIntosh/CP

Cardston County covers a large area of ​​rolling Alberta grasslands nestled between the Rocky Mountains and the city of Lethbridge, extending south to the Canada-US border. Local authorities were counting on a major new renewable energy project to provide tax revenues to support the budget. Not any more.

TransAlta Corp. TA-T planned to build the Riplinger wind farm there, with the first power from 47 turbines expected to be delivered in 2027. Last week, the company canceled the 300-MW project, citing new renewable energy restrictions imposed by the Alberta government. made it impossible to continue.

Voters in the region unfailingly supported Prime Minister Danielle Smith’s United Conservative Party. But Cardston County Mayor Randy Bullock laments the impact the new regulations will have on local spending plans. The city authorities want to build a water treatment plant, pave roads and change the configuration of the communication artery in order to build commercial facilities along it.

“We want to do something, but all we do is tell people, ‘No, no, we can’t do that.’ We can not afford it. This will continue to be the case for many, many years, if not decades,” Bullock said.

The UCP touts a “libertarian, in-your-face style of government,” Bullock said, but has taken a tough approach when it comes to renewables.

Riplinger would be within a 35-kilometer buffer zone that Ms. Smith’s government declared on February 28 as a wind-free area, an area of ​​so-called pristine landscapes. These are among the restrictions the province introduced after a seven-month freeze on new renewable energy projects.

Others include restrictions on the industry’s ability to build projects on land suitable for irrigation and a new system of requiring secure funding for possible cleaning of turbines and solar panels.

The province is also making adjustments to its electricity market, prompting TransAlta to put three other projects on hold – a solar farm, a battery storage venture and a gas-fired plant – until it has more certainty about the economic impact.

The new buffer zone and restrictions on locating wind and solar farms on agricultural land risk shelving 57 projects worth $14 billion, according to the Pembina Institute, an environmental think tank. Of those, 32 would generate potential tax revenues of $80 million annually.

Mr. Bullock admits that wind energy development is a sensitive topic in his county. TransAlta’s project was opposed by many residents and said it understands the passion of those who want to preserve traditional rural landscapes. “But we are trying to manage the municipality, stay in business and have the necessary money to provide better services,” he said.

Bullock said Ms. Smith needs to listen to her council and other local municipalities about the fiscal realities, what they stand to lose and what can be done about it.

“No one wants a handout,” he said. Nevertheless, a frank discussion is needed about making up for lost revenues and strengthening economic growth.

Alberta Energy Minister Nathan Neudorf stands by the changes and in an emailed statement said they are beneficial to local communities.

“Municipalities can continue to benefit from their existing renewable energy projects and will benefit from future responsibly designed projects,” he said.

Industry representatives have warned that government interventions in the booming renewable energy sector risk directing investment elsewhere. Some developers said they were rethinking previously proposed projects.

Investors, especially institutions such as pension funds, are cautious, said Thomas Timmins, a lawyer at Gowling WLG who heads his firm’s energy group.

He added that adding regulatory uncertainty would prompt them to look for other jurisdictions where they could invest their capital. Alberta’s moves coincide with massive incentives for green energy and other clean technology projects in the United States, Ontario and other countries.

“Every time you add uncertainty, every time you add risk, you change the parameters of the trade. And these are long-term investors. These are also very large investments,” Timmins said.

Cardston won’t be the only municipality to experience economic hardship as a direct result of government policies, said Jorden Dye, director of the Business Renewables Centre-Canada, which serves as an information and networking organization for green energy buyers and sellers.

An analysis by BRC-Canada shows that dozens of municipalities in Alberta will receive a total of more than $28 million for wind and solar projects in 2022. By 2028, municipalities could receive tax revenues of as much as $277 million annually if all projects planned before the renewable energy blackout were implemented.

An influx of sustainable tax revenue from renewable sources would mean a new kind of community independence, Dye said.

But as companies evaluate wind and solar projects planned for Alberta and how they fit into a renewable energy space currently mired in red tape, Dye said more project holdups and cancellations are likely as the province remains uncertain about its continued review of renewables energy sources by the Alberta Public Utilities Commission and restructuring the province’s energy market, he said.

“We’re looking at the next few months to really show where developers are at,” he said.