Minister says investor confidence in renewables is strong, despite report that suggests otherwise

· The Pulse
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A Pembina Institute report found that the Alberta Electric System Operator saw more electricity production cancelled than pitched in 2024.

Will Noel, a senior analyst at the clean energy think tank, told Taproot that Pembina tracked 55 project cancellations in 2024 compared to 58 applications for new renewable energy projects. But while the new applications outnumbered the cancellations, Noel said the overall amount of electricity nonetheless fell: New projects offering 9.5 gigawatts of electricity were cancelled, while new projects with eight gigawatts worth of electricity were proposed. Noel said this is the first time since at least 2020 that the capacity of electricity in the AESO queue shrunk.

The Pembina report, published in late May, ties the drop in overall proposed new renewable electrical capacity to the province's seven-month moratorium on renewables, which ran from August 2023 to February 2024, as well as new provincial restrictions on these projects implemented over the last two years. Pembina concluded in the report that growing cancellations indicate investors have reduced certainty. "What the data now shows is ongoing uncertainty and reduced investor confidence in the market, even after the moratorium was officially lifted," Pembina said. "This is out of step with global trends, where interest in renewable energy remains strong."

Pembina previously found that 53 projects were cancelled or paused between August 2023 and July 2024. Two of the postponed projects were from Alpin Sun, a German solar developer, valued at a combined $509 million. Fred Null, Alpin Sun's director of project development, told Taproot via email that the company's withdrawals were due to Alberta's "snail-like pace" in updating its regulations.

Electricity generation is a differentiator in the provincial government's work to attract $100 billion in hyperscale data centre investment. In June, the Alberta Electric System Operator capped data centres at 1.2 gigawatts of energy from the province's grid until 2028.

Nathan Neudorf, the minister responsible for utilities, told Taproot that investors in renewable electricity generation projects still have confidence. He pointed to 25 renewable projects that were approved in 2024, compared to 12 in 2023 (which endured the bulk of the moratorium), and 19 in 2022.

Neudorf added that he understands concerns from developers of renewable projects, but also noted challenges for these projects include the grid's overall inability to accept all of the electricity that could be generated.

He also said Alberta has a high surplus of generation capability from renewables right now, after a long spell without it, which affects the profitability for new operators due to Alberta's unique deregulated energy market.

Neudorf added that Alberta has not developed to export electricity, noting efforts are underway to sell Albertan electricity to Saskatchewan, British Columbia, the Northwest Territories and, with greater difficulty, to the United States. "When you have congestion or an abundance of generation, you either curtail it off, or you have to try to attract new load, and that's what we're working through," he said.

Workers in yellow hardhats and safety vests walk by an array of solar panels

The kīsikāw pīsim solar farm was completed in 2022 for $40.7 million, plus $10.7 million for a battery energy storage system. Since a moratorium on renewable projects, held for seven months between 2023 and 2024, some suggest rules for building renewable energy projects in Alberta have become more onerous. (Edmonton Global)

What's next in light of data centres?

Noel with Pembina said 15 projects, worth 1.4 gigawatts, were cancelled in 2022, 52 projects worth 6.9 gigawatts were cancelled in 2023, and 55 projects worth 9.5 gigawatts were cancelled in 2024.

During the aforementioned moratorium, Heather MacKenzie of Solar Alberta told Taproot that renewables face restrictions that other industries like oil and gas do not.

The Pembina report makes similar points, identifying new rules that limit renewable projects as regulations that require projects to maintain clear views of Alberta's landscapes, land reclamation, and recycling plans for materials used to build the energy generation.

But Neudorf said it's not entirely accurate that renewables face relatively more restrictions. Many projects in other categories must budget 100% of reclamation costs before approvals, he noted, whereas renewable proposals only need to hit the 30% mark. He also said more specifics are being worked on for reclamation of renewables, and that his ministry is learning from the orphan well problem that comes from the oil and gas industry.

Null with Alpin Sun said he plans to resubmit proposals for both the Airport City Solar project ($169 million) near the Edmonton International Airport and Sol Aurora ($340 million) in Sturgeon County now that more renewable regulations have been updated.

Null said he still sees the potential for solar power in Alberta. "Where there is a watt, there is a way," he said.

Neudorf said the updates to rules for renewables were overdue, and that industry input has helped incite change. But he added there is no consensus on the pace needed to make those changes.

"We've heard, 'Go faster' (and) 'Go slower' at the same time, and we've been consistent on setting time frames," Neudorf said. "Government does move slower than industry, but we have been moving as quickly as we can."

He said Alberta lacks storage capacity for electricity, and that data centres can be built quicker than power generation can come online. That leaves renewable generators without a predictable customer and data centres without a guaranteed supplier, he said.

"There's a tremendous opportunity for generators and developers to build to fit that growing and future need," Neudorf said of data centres. "There's this technical dance between who goes first and how fast do you grow? Data centres don't want to grow faster than the generation, because that puts them in a unreliable space which they don't want, and they can't have."

Earlier this year, Brent Jensen, the senior director of business development for Edmonton Global, told Taproot that the province's push for data centres may be motivated by Alberta's desire to use its stranded natural gas, as Alberta has an abundance of it but Canada lags in liquid natural gas export facilities and has limited pipeline capacity.

Pembina previously told Taproot that electricity generated from natural gas comes with greater emissions than other sources.

In June, the CEO of the American company, NextEra Energy, said at the Politico Energy Summit that renewable electricity is currently faster to bring online than that derived from natural gas due to shortages in construction labour and materials, as well as tariffs.

Neudorf said the province is agnostic on the source of electricity generation for data centres. What's more important, he said, is that the grid is affordable, balanced, and reliable.

"Most renewables projects are (in the range of) 50 megawatts, 100 MW, or 250 MW," he said. "Natural gas can very easily hit the nominal 1,000 MW in a large project. We need that balance. We need both."