A small wind turbine spins over Paul McLauchlin’s farm in Ponoka County, Alta. It’s a breezy day here, an hour south of Edmonton.
The skinny pole supporting a small rotor and blades looks very different — almost quaint — compared with the towering white turbines that have come to dot the landscape in the southern part of the province.
This one is homemade, constructed by McLauchlin 16 years ago, in a bid to lower his family’s power bill.
When it spins, it emits a constant hum.
“I can hear it making money,” he says as we walk around his small farm.
“This building,” he says, pointing to his home office, “is net positive.” It’s powered by a small wind turbine and 10 solar panels atop a neighbouring shed.
McLauchlin is so proud of his DIY setup that you would never guess this is the same man leading the charge against Alberta’s burgeoning renewable energy industry.
That opposition prompted Alberta’s provincial government to take unprecedented action last summer when it hit the brakes on the industry in the midst of a multi-billion dollar boom.
Alberta’s Quiet Renewable Revolution
Alberta has been a major energy producer since drillers first struck oil in Turner Valley more than a century ago.
But within the last decade, that black gold rush has been rivalled by a green one, as investors clamour to cash in on the province’s bright Prairie skies and Chinook winds.
In southern Alberta, where gales travelling over the Rocky Mountains regularly reach 70 km/h, the changes to the landscape are impossible to miss.
Driving along Highway 3, between Lethbridge and Medicine Hat, clusters of wind turbines turn gracefully through the air, a meditation against the wide open sky.
Acres and acres of black rectangular panels tilt toward the sun, which will shine more than 300 days of the year.
Those natural resources, combined with a unique competitive power market, have made Canada’s oil and gas province an unlikely leader in green energy.
More than three-quarters of all wind and solar built in the country last year took place in Alberta. Five billion dollars of investment have been injected into the renewable energy market since 2019, and this year was poised to be an even bigger year for the industry, with an estimated $1.5 billion worth of projects in the queue.
Alberta’s renewable energy boom happened quietly, thanks to groundwork laid decades ago.
When the electricity market was deregulated in 2001, the province opened its doors to wind and solar manufacturers, developers, and operators interested in producing electricity to sell into the grid.
There were a handful of early adopters — most notably in wind — but because the cost to build these facilities was still prohibitively high, it didn’t take off.
“The technology has really advanced quite a bit since,” says Sara Hastings-Simon, an energy transition researcher at the University of Calgary.
“So you’re able to generate power from wind more cheaply than you were back in those early days.”
But the true catalyst for Alberta’s current renewable energy boom, she explains, can be traced back to November 2015 when a rare NDP government in the province, led by Rachel Notley, rolled out its climate plan.
One of the government’s main objectives: reaching 30 per cent renewable power by 2030, replacing coal-fired electricity, Alberta’s second largest-emitting sector.
“We will phase out all coal emissions by 2030 and we will encourage the generation of clean, renewable electricity in its place,” the then-premier said at the time.
The province is now expected to reach that target as early as six years ahead of schedule. The pace of the transition surprised even the province’s most optimistic analysts.
Five years ago, Alberta had almost no solar power, says Will Noel, an analyst with the Pembina Institute’s electricity team.
“This summer, solar (power) was already surpassing coal for 12 to 13 hours at a time. So it’s a huge deal,” Noel says.
So how did Alberta greenify its dirty grid?
First, the government needed to make Alberta attractive to investors. It held a series of auctions where companies bid to create wind and solar projects and agreed to sell the energy produced at a guaranteed price. If the price for power fell below that point, the Alberta government would pay the power generator the difference, lowering risks for investors. However, if the price rose above the agreed-upon level, the province would stand to make money — and it did.
Wind contracts alone have generated $282 million for the government of Alberta, according to Blake Shaffer, an economics professor at the University of Calgary and the co-director of the Energy Modelling Hub.
The program was later cancelled by the United Conservative Party government, but by then, market conditions had ripened. The cost to produce wind and solar fell and investment took off.
“Alberta, all of a sudden, was on the map,” Hastings-Simon says.
Not only can energy companies sell the power they generate into Alberta’s grid, but they can also get a guaranteed price for that power through contracts with corporations looking to lower their own carbon footprint.
Power purchase agreements, or PPAs, have been a crucial backing force for the province’s renewable energy industry.
Solar and wind farms are inexpensive to operate — but they’re costly to build.
“As the modern mortgage made the suburbs, the PPA has made the renewables industry,” wrote journalist Andrew Blum in 2022.
BluEarth Renewables, based in Calgary, built its first project under this funding model back in 2016. Electricity produced by its Bull Creek wind farm in central Alberta was purchased by a collection of rural school boards.
“Buyers want renewables,” said Grant Arnold, president and chief executive of BluEarth Renewables.
“They’re cheaper than any other form of new generation and the market here facilitates the transaction perfectly.”
The energy company has gone on to build 330 megawatts of wind and solar projects, selling power to buyers like RBC, Shell Energy Canada, and the City of Edmonton.
Alberta’s open market has attracted major oil and gas players too. ATCO, a company that has long been synonymous with natural gas, has invested billions to meet its goal of owning more than 1,000 megawatts of renewable energy by 2030.
Walking along rows of glistening panels at the company’s newest solar project in Calgary, Darcy Fedorchuk, the vice-president of North American Power and Renewables at ATCO, says the company has no plans to abandon its interests in natural gas, but rather sees renewables as a “complementary element.”
“’All of the above’ is required to continue to meet the energy needs of the province,” he says.
ATCO’s Deerfoot solar project and its neighbouring sister site, Barlow, are Western Canada’s largest urban solar farm. Together they will produce enough energy to power about 18,000 homes.
All of that green electricity has been sold through a PPA to Microsoft, one of the largest corporate buyers of renewable energy in 2022, behind only Amazon, Meta, and Google.
The software company has been buying up power from wind and solar projects to offset the carbon footprint of its energy-intensive data centers. Amazon, for its part, has purchased the power from Canada’s largest solar project based in Vulcan County, 120 kilometres southeast of Calgary.
Once ATCO’s Deerfoot site is electrified at the end of November, it will become the latest addition to the company’s growing portfolio of renewables, which includes wind and solar assets acquired from oilsands giant Suncor earlier this year for $730 million.
Both ATCO and BluEarth Renewables had plans to develop more renewable energy projects in Alberta. The latter has about 400 megawatts of new projects in the works, which would more than double the company’s renewable energy output in the province if completed. But for now, those plans are on hold.
The Surprise Announcement
The Alberta government quietly released a statement in early August announcing that the regulator would not be approving any new renewable energy projects for the next six months.
“If we’re going to bring on solar and wind, we have to do it responsibly,” Premier Danielle Smith said about the decision days later. “When our regulators are telling us that we’re adding in an unsustainable way, we have to take a pause.”
The province outlined several reasons for the moratorium, including concerns about grid stability, reclamation of wind and solar sites after they are decommissioned, and pressure from rural municipalities about land use.
The sudden moratorium was unprecedented; no other industry in Alberta has experienced anything like it — not even when oil and gas development was raging through the province in the mid-2000s.
“I don’t think that there’s another example from Alberta’s history of a time when anybody said, ‘Well, we’re just going to stop and not allow any new projects to go forward during this period,’” Hastings-Simon says.
The renewable energy sector was caught completely off guard.
So was McLauchlin, but the announcement was a welcome surprise. Since late 2021, he says his phone has been ringing off the hook. As president of the Alberta Rural Municipalities Association (RMA), McLauchlin advocates on behalf of 69 communities.
“We are getting calls like crazy that people are concerned about agricultural productivity and food security related to renewables,” he says.
To build solar and wind projects, energy developers enter into agreements with private landowners.
While the deals can be lucrative for both the landowner and surrounding municipality or county — which sees the tax benefits of having major industrial projects in their communities — local governments have little say when it comes to deciding where large renewable energy projects end up.
McLauchlin remembers a call where a resident of 40 Mile County described irrigation pivots, used to water agricultural land, being pulled out of the ground so that solar panels could be installed.
“That really was a red flag for me,” he says.
“I’m like, ‘Woah, we have a land use policy problem here.’”
Rural municipalities are in a bind. While they want the tax dollars that come with new industry, their constituents may want to preserve agricultural land and a farming legacy. Take 40 Mile County, where the caller was from. Last year, more than 50 per cent of its tax revenue came from renewable energy projects, according to Business Renewables Centre-Canada, a non-profit that works with industry to accelerate the uptake of renewable energy in Canada.
“It’s a game changer,” McLauchlin says. “It’s changing the profile of renewables municipalities that relied on oil and gas.”
His members aren’t against solar and wind, he says, but they want “balance.”
But the idea that swaths of prime farmland that once grew wheat, barley, and canola are being taken out of production for renewable energy projects doesn’t hold up, according to Ian Urquhart, professor emeritus of political science at the University of Alberta.
He analyzed the locations of utility-scale solar projects approved by the Alberta Utilities Commission between 2019 and 2023 and compared them to the government’s Land Suitability Rating System (LSRS), which classifies land based on its limitations for growing wheat, canola and barley.
Urquhart found the majority of solar projects — 70 per cent — are on farmland rated as having severe limitations for crop production or worse.
“Those are not categories of land that are identified as prime agricultural land,” says Urquhart.
“There isn’t a lot of substance to this argument.”
If the government is interested in stopping the conversation of prime agricultural land, Urquhart says, it would be better to investigate the impacts of urban and rural expansion and the oil and gas industry.
“Those are the big ones,” he says. “Renewables are, I think, a really small fry by comparison.”
Hastings-Simon says even if Alberta were to fully develop its solar industry to the level necessary to reach an electricity grid with net-zero emissions, less than one percent of agricultural land would be required.
Using data from an AESO model that suggested the province would need to generate an additional 5.2 gigawatts worth of renewable energy by 2041, Hastings-Simon calculated the province would need an additional 38,000 acres for solar operations, amounting to .08 per cent of Alberta’s total agricultural land. That’s if no new solar operations are built on non-agricultural areas such as brownfield lands or on top of buildings.
Arnold, the CEO of BluEarth Renewables, says that while it’s important to discuss how Alberta’s land is used, at the end of the day, private landowners have the final say.
“It is their choice in terms of doing what they want with their land.”
McLauchlin had voiced concerns to the province about protecting productive farmland but says his group did not ask the government to take such a dramatic step. Neither did the Alberta Energy Regulator or the Alberta Electric Systems Operator (AESO).
Then in September, just weeks after the Alberta government announced the moratorium, it launched an $8-million ad campaign opposing the federal government’s plan to wean provincial electricity grids off fossil fuels by 2035.
The United Conservative Party’s “Tell the Feds” website claims this new net-zero target will “double, triple or even quadruple” electricity rates and could “dismantle thriving industries that are vital parts of our provincial economies.”
Alberta currently relies on natural gas for most of its power. Premier Smith wants investors to keep supporting natural gas-fired electricity, which she claims is needed to maintain a stable power supply and avoid future “rolling blackouts” that would leave people “shivering in darkness in the dead of winter.”
This hypothetical worst-case scenario was repeated by the AESO, but the electricity operator hasn’t provided evidence to support it.
Energy analysts agree that Alberta will need to bring on more battery storage to ensure that renewable power can meet demand when the sun isn’t out and the wind isn’t blowing.
There are many such projects in the queue, Noel says, but some of these projects have been “indirectly” held up by the moratorium since they are often components of solar and wind projects.
Despite Smith’s claims that relying more on wind and solar will saddle Albertans with costly electricity bills, there’s evidence that the opposite is true.
A recent study by the Pembina Institute found decarbonizing the grid could save households $600 annually due to the low cost of wind and solar.
Because the power from wind and solar is generated for free, Noel says the cost to consumers will “always be $0.”
“It is kind of sad that we’re making this a political issue when building more renewables is bringing so much investment into the province and bringing prices down for consumers as well,” he says.
The Chill Effect
The Pembina Institute estimates the pause instated by the province could affect 118 projects and cost Alberta $33 billion worth of investment and 24,000 jobs.
The provincial government disputes those numbers, claiming only 13 projects before the Alberta Utilities Commission are directly affected. Even though the pause is temporary, the chill it has sent through the industry at large could be felt for years to come.
“Even if we get through this period now, the question becomes, ‘What might this government do in the future around renewable energy?’” Hastings-Simon says.
BluEarth Renewables is rethinking its plan to develop another 400 megawatts of renewable energy projects in the province.
“We do have growth plans in Alberta (but) I can’t justify them right now,” Arnold says.
“I will spend our time and effort elsewhere.”
The company is exploring opportunities in other provinces and in the United States. ATCO is looking to another sunny Prairie province for future projects: Saskatchewan. But, Fedorchuk says, the company is hoping for a resolution.
“We look forward to participating in the inquiry process that the Alberta Utilities Commission is initiating,” Fedorchcuk says. “Within that process, we’ll have an active voice about working to resolve the issues tabled by the province.”
The province says the AUC will continue to process applications for new renewable energy projects up to the approval stage while it reviews policy issues related to future development. But any new applications now need to consider the impact the project will have on agricultural land and “pristine viewscapes,” as well as include details about reclamation plans.
The current pause on approvals is scheduled to lift on Feb. 29, 2024.
Back in his home office in Ponoka County, McLauchlin pulls out a thick text from his bookshelf. It’s his 2016 master’s thesis. The topic: micro-renewable energy production in Alberta.
Before being elected reeve of Ponoka County and president of the RMA, he was an environmental scientist excited about the potential of wind and solar to transform rural communities.
“The number one reason that people would invest in (renewables) is energy independence. They actually hate paying for power,” he says with a laugh.
“They want to make their own power. They want to be independent. Does that not sound like the average Albertan?”
McLaughlin plans to add another 10 kilowatts of renewable power to his farm to lower his energy bill even further. A lot more than that will need to be added to the grid if the province hopes to meet the federal government’s net-zero target.
Even if Albertans are not motivated by reducing emissions that cause climate change, perhaps, in time, they’ll get behind the other benefit of renewable energy: it’s free.