Front Burner - Why is Alberta pausing new renewable energy projects?

Episode Date: August 16, 2023

It’s been a busy month in Alberta energy politics. In early August, the provincial government caught many by surprise with a six-month pause on any new solar and wind projects that would produce more than one megawatt of power. Since then, Premier Danielle Smith has doubled down on her vow not to go along with the federal government’s plan to get to a net zero power grid by 2035. Meanwhile, Canada is experiencing its worst wildfire season on record. Today, CBC’s Jason Markusoff discusses these recent developments and the politics at play. For transcripts of this series, please visit: https://www.cbc.ca/radio/frontburner/transcripts

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Tamara Kandaker. It's been a busy month in Alberta energy politics. In early August, the Alberta government announced a six-month pause on approving any new solar and wind projects. The press release that came with the announcement was titled Creating Certainty for Renewable Projects. But people in the industry say that it's taken them

by surprise and done the exact opposite. Since then, Premier Danielle Smith has doubled down on her vow not to go along with the federal government's plan to get to a net zero power grid by 2035. Ottawa's strategy seems to be to placate the environmental extremists while throwing regular Canadians under the bus. That's wrong. It's unacceptable, morally and financially. And Alberta's government will not go along with it. We will never allow these regulations to be implemented here. This against the backdrop of the worst wildfire season in Canadian history.

So today I'm talking to CBC's Jason Markosoff about what's going on and the politics at play. Hi, Jason. Hi. It's great to talk to you. So I just want to start with this pause on new renewable energy projects because I think it took a lot of people by surprise. And could you paint me a picture of the reaction to this announcement in Alberta? Surprise is certainly one of the big words out of this. This completely blindsided a lot of people, both people who believe in the importance

of solar and wind and renewable energy and certainly the companies who were doing this. In fact, the Alberta Utilities Commission, which approves these projects, now is frozen from doing so until the end of February next year. According to the Globe and Mail, was asking these companies for information

hours before this moratorium was announced and giving them updates as though nothing was going on. Oh, wow. Companies were not consulted. They were completely blindsided. And it just cuts against so many things. So the big one is, of course, nationally and internationally is the climate change trends. Countries and

jurisdictions and governments both wanting to do good things on climate change and wanting to be seen as doing good things on climate change to burnish their reputation, especially a province or jurisdiction like Alberta, which has a reputation for fossil fuel development. This was seen as a great retreat from that, given this summer of extreme climate change events we're having. I mean, the Guardian headline internationally is called this reaction fury. And it's cut against the reputation for Alberta as a place where you can do predictable business, where regulation is supposed to be low and light touch. And normally when Alberta wants to review its policies,

reconsider an approach, they review the policy without pausing approvals in general. The pause was the real shocker in this and its impact on business will be severe. We'll get into the impact this is going to have on the industry, but I'm hoping we can kind of talk about why the government has decided to do this. And I know Danielle Smith, she's offered several explanations for the decision, but maybe you could start with the one that I heard her repeating at a press conference earlier this week, which has to do

with the stability of Alberta's power grid. This is the big one that she talks about a lot and the one that she seems most passionate, expresses the most concern about. If wind only works 33% of the time and solar only works 13% of the time, we need to bring on more baseload power to make sure that we don't have rolling blackouts. And she's correct in saying the wind doesn't always blow

and the sun doesn't always shine, so these don't produce power 24-7. That is correct. And this is an issue that is widely understood about wind and solar, that it is not 24-7. You cannot run a system solely on the flow of energy from wind turbines and solar plants. That is a universally understood concept. She takes it to the next level, worrying that we're going to have blackouts or massive energy shortages if we don't have enough balancing power, baseload power, as she will put it, from Alberta's main source of electricity, which is at this point natural gas. So there's that concern. There has been concerns from Alberta's electric system operator that manages all these different energy sources about the reliability issues. They didn't exactly ask for a moratorium or pause on developing these.

They didn't come screaming, demanding that this screech to a halt the growth in the sector. But certainly there are those talking in her ear about those. Her concerns do not exactly match up with what we hear publicly from regulators and officials, but certainly that anxiety is out there that we cannot rely solely on wind and solar. What do people who champion renewable energy say in response to that concern? There's a lot of concern out there that what she's saying exaggerates the problem. We have had energy alerts where there have been low energy and the system has been encouraging people to conserve energy, but

wind and solar were never the sole causers of that. There are multiple problems like traditional plants going down for unexpected maintenance, transmission issues, other extreme weather events. Solar and wind companies, knowing that their power is not 24-7, are working on storage solutions, batteries, other ways to store power. So when there's excessive wind and sun, it can be stored. The other option, and Danielle Smith has talked about this a bit, is relying on other sources of renewable power like hydropower. BC and Mantoba have produced it in spades. And there is talk of increasing the connections between the provinces so that BC and Mantoba can sell and transfer more hydroelectricity and get some wind and solar from Saskatchewan and Alberta in the meantime. But this is not something she's stressing. And she's saying that that's not only what would be part of the solution, not the heavy solution that, say, Ottawa might think it would be.

Gotcha. And then what about the other concerns that have been cited here, issues that have been raised by rural Albertans and even the Alberta Utilities Commission? And could you just briefly explain those to me? The reason the Utilities Commission. Could you just briefly explain those to me? The reason the Utilities Commission, which is the regulator that approves this project, has been relaying this concern to Daniel Smith is that rural municipalities and landowners have been giving it to them in both years. Their first concern is use of farmland. Solar panels especially are taking up, these solar farms are taking up large swaths of agricultural land, which some would argue is prime land.

And it's just a bit, you know, for some people it's even like an aesthetic issue, not just land use. They're used to driving by these fields and seeing fields of wheat or this brilliant yellow canola, this brilliant purple flax or cattle grazing. And then to see these large swaths of black solar panels, it's a major adjustment for rural Alberta. And they're worried about, yeah, farmland being gobbled up. The other concern is reclamation. That at the end of these solar plants or wind turbines life, what happens to that facility?

What happens to all that steel and concrete from the turbines or these fields of black panels once they reach their end of life in some decades' time. A lot of critics highlight the irony of this, that this is a province that is dotted with thousands of unreclaimed former oil and gas wells that has become this multi-billion dollar liability. But, you know, there will be even some companies who will agree that there needs to be some sort of strategy on this. Do

you need to pause the entire industry's growth and development to figure out how to handle these issues? A lot of regulators in tradition in Alberta would say no. No. Connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%.

That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Cups. There was also a video of Danielle Smith's chief of staff, Rob Anderson, in conversation with her and others, which has been making the rounds. It's from before she re-entered politics. And in the video, Anderson is really railing against renewables and he seems just totally opposed to wind and solar. These things are just butt ugly. OK, like let's just call it a spade a spade.

We have one of the most beautiful, pristine landscapes in the world here, especially on the eastern slopes. I do not want and I'm sure the residents I know, they are absolutely horrified by this. It's destroying their entire viewscape and landscape. They're ugly. And totally in support of natural gas instead. This is ridiculous. We're sitting on an ocean of natural gas. And all this is, is it's a scam.

It's a way. What role is natural gas playing in this discussion? What role is natural gas playing in this discussion? Back in March, before the election in which Danielle Smith did not run on promising this pause for wind and solar, she had a speech at the Rural Municipalities of Alberta conference. And in the same speech as she criticized the reliability and other problems with wind and solar, she said, natural gas, the way we have to go, we have to build more natural gas plants. We are a natural gas province. And there's some truth to that. We produce a lot of oil, but also produce a ton of natural gas and have huge reserves of natural gas. And as we've moved away from coal production, as the rest of the country has, we've converted plants from much more polluting coal to natural gas. But natural gas isn't actually all that clean, right?

If the point here is that we, as a society, need to dramatically lower our emissions, natural gas might be better than burning coal, but it's kind of a low bar to clear. Yeah. The realities of climate change, groups like the IPCC say, are greater than doing the cleaner burning stuff. Some emissions is not nearly as good as no emissions in terms of remediating all the pollution and effect on the atmosphere that we've already had. So, you know, most experts see natural gas as a bridging fuel. You switch off coal and turn on natural gas for now, but that will be a temporary solution. Danielle Smith and a lot of conservatives and a lot of resource developers in Alberta

do not see it that way, of course. Okay, so fast forward to late last week when the federal government put out their new draft regulations to get Canada's power grids to net zero by 2035. Danielle Smith immediately put out a statement saying that this was, quote unquote, irresponsible, unconstitutional. She elaborated more earlier this week. Any plan that makes electricity more expensive and less reliable is a bad plan. And the clean electricity regulations are an exceptionally bad, poorly thought out and illogical plan. And she says unequivocally Alberta will not recognize these regulations.

What do you make of this hardline stance that she's taken here? Not terribly surprising. She's been quite hardline on many positions against the federal government, especially when it comes to energy development. And there's a long string of Alberta premiers doing what they can to very loudly defend the, especially the oil and gas sector. And now that the natural gas is becoming such a big, big piece of the electricity puzzle, in advocates' minds, that is really what she's doing. So she is saying, we're not going to follow these. We're just going to go our own way. She suggests maybe challenging these in court.

There are a number of court challenges Alberta has had against federal government environmental projects, none yet successful, but still some underway. Alberta Sovereignty Act that she passed last year, which would purportedly, never been tested and very questionably in terms of its constitutionality, where she would pass a declaration from the legislature saying something is unconstitutional and then not have any provincial official enforce federal laws. Not sure how that would exactly work in terms of clean energy regulations from the feds in 2035, but we'll see. in terms of clean energy regulations from the feds in 2035. But we'll see. But no, she is firmly not giving up any quarter and trashing the federal government for even promising or going toward this 2035 net zero grid, even though that's also a promise and a strategy pursued by the United States

and many European countries. We agree with the broader goal of decarbonizing the electricity grid and getting to carbon neutrality. We have a plan to get there by 2050. It's our emissions reduction. So going back to the pause on renewables then, what impact do experts think this move is going to have on the industry in Alberta? It was such a fast-growing sector,

and I imagine that this could affect people's jobs, right? This could affect thousands of jobs. This is not nearly the size of the oil and gas sector, but it does employ thousands, wind and solar installation does. So there will be that impact. It won't be immediate because there are still these approved jobs and much wind and solar under construction, but that will come later on. People expect wind and solar to continue in Alberta. Alberta is really in a good position to be a major developer of wind and solar because of its geography, a very sunny and has a lot of wind in the south, but also because of the design of the market, which allows a lot of private companies to come in and make applications. It's

very different from many other provinces in that regard. So the appeal's there, but the industry is surely rattled. There are all these companies who play around North America and in several other provinces, and if they see a government taking such a dim view of wind and solar power, they'll say, why bother here? We'll spend elsewhere. This seems a bit strange because usually I think of Alberta as a place that really takes pride in the free market and the government stepping in and stopping this development, especially without having consulted the industry. It seems so kind of antithetical to that free market ethos. And I'm wondering if we've seen this happen

elsewhere. So there's a state, Texas, that also prides itself on being quote-unquote open for business and also has a lot of natural gas and oil. It's a big resource state. People often call Alberta, Canada, Texas. Well, Texas has also been throttling back and trying to put a whole bunch of restrictions on the development of wind and solar. They have a Republican, a very Republican government that is really trying to protect its traditional oil and gas sector as well. So it would be very easy to draw some parallels between those two jurisdictions. jurisdictions. So beyond the practicalities that we've talked about today, I wonder if you also see an almost existential element to some of this. Does it feel like the province is kind of taking a stand on behalf of the old fossil fuel economy against a green energy future?

There are a lot of challenges to the traditional oil and gas sector, which has for so many decades been the lifeblood of Alberta, brought so many thousands of people here from other countries and other parts of Canada that have been struggling economically in the past. So many Atlantic Canadians came to the oil and gas sector. There is a sense that it is a threat, the solar and wind sector, and there are people who want to limit it. Even, like I said, the idea of seeing Alberta's landscape transform into fields of solar and vistas of wind turbines in front of the mountains is for some people under this emotional level of change. And this is especially the case in rural Alberta, for which agriculture and oil and gas have been the backbone employers.

And that is where a lot of the majority of the Alberta United Conservative Party's caucus is, where the cabinet is, and that is who is driving these decisions, this rural base in the United Conservatives and in Alberta that is concerned about the shift that the world and much of Canada is, and Alberta itself, seems to be taking. So this seems to be a slamming on the brakes on some of that growth and change. Right. And this comes, as I mentioned in the intro, we are in the middle of the worst fire season on record in Canada. It's not done yet.

And a number of districts in southern Alberta have declared agricultural disasters prompted by droughts. Global ocean temperatures soared to unheard of heights earlier this month. And the IPCC has been clear. A swift and sharp reduction in fossil fuel use must happen now to avoid the worst climate outcomes. And this requires the immediate and massive expansion of solar and wind power. So do you get the sense that Alberta's provincial leadership feels the urgency here? This week, Daniel Smith held a news conference and I asked her how she takes stock. It's been a year unlike any other for wildfires in Canada. It's been a year unlike any other for wildfires in Canada. It's been a year unlike any other for wildfire in Maui.

It's been a year like any other for oceans in the South and the Antarctic ice caps. I said, I don't want you to talk to me about this goal that Alberta has for Net Zero. What do you feel about the climate? And she struggled to answer that. Please do not answer about what industry is doing. I want to know what you think about what the planet is doing. Look, we are committed to reaching carbon neutrality by 2050. We're committed to emissions reduction. And that's part of the reason why we want to do it in a practical way that we know is going to address the issue in the long term and still be one that's going to be affordable and sustainable. So 2050

is our target and we've been very clear about that. She didn't want to answer that at first. I pressed her on it fully and then she said, you know, we are concerned about the environment. We're doing this for the environment. You answered what I requested you not to talk about what industry and what Alberta wants to do in terms of those targets. What do you think of what the planet is doing right now with regards to climate change? The whole reason why we are focused on emissions reduction and a 2050 target is because people are very concerned about the environment. That's the main reason that's driving all of this. And we are concerned about the environment too, which is why she was very careful not to say climate. Daniel Smith has in the past, not lately, questioned climate science.

A lot of people will question the sincerity she has about this stuff. Certainly when she's been pushing back against almost any stronger target and never talks about the impacts of climate change or has this concern about climate change. And one wonders, if you don't have that underpinning sense of urgency and sense of the problem, how hard will you fight for a solution or how hard will you wind up fighting against those solutions? Okay, Jason, thank you so much for doing this.

I really appreciate it. Great talking to you, Tamara. All right, that's all for today. I'm Tamara Kandaker. Thank you so much for listening, and I will talk to you tomorrow. Thank you.