Tag: Alberta

Alberta government introduces policy changes without honouring previous commitments.

Edmonton, Alberta, December 10, 2024—The Canadian Renewable Energy Association (CanREA) is concerned that the latest round of changes to Alberta’s electricity sector, announced today, are punitive and unfairly target the renewable energy sector. They also do little to encourage investments in energy storage.

Signaling that he intends to bring forward the related legislation in the new year, the Minister of Affordability and Utilities Nathan Neudorf today sent a Direction Letter to inform the Alberta Electric System Operator (AESO) of the government’s latest decisions on changes to both the Transmission Regulation and the Restructured Energy Market (REM). Both sets of changes were expected, but both bring significant concerns to industry.

Imposing unexpected regulatory and administratively determined costs on existing projects, along with failing to provide the promised market access, makes these projects increasingly unviable. This erodes their returns and ultimately hampers their ability to repay debt.

“Alberta needs to proceed with caution: it is counterproductive to jeopardize existing wind and solar projects, especially when the province requires more electricity. These projects were built in good faith but could fail if they cannot repay their debt, causing credit downgrades across the sector. This will raise borrowing costs for companies and ultimately increase the cost of electricity for customers,” said Vittoria Bellissimo, CanREA’s President and CEO.

CanREA is concerned that, with this letter, the Government of Alberta is fundamentally changing the rules that govern how the electricity system is run, shortly after companies invested billions in new projects in Alberta. CanREA understands that some changes are needed going forward, but stresses that the announced changes add undue costs to existing assets.

CanREA would like to clarify two key points related to today’s announcement:

1. Alberta’s electricity system should seek to develop and maintain a diverse supply mix, rather than relying on only one source of electricity. This diversity will enhance reliability, reduce vulnerability to supply disruptions and, critically, balance costs. Wind and solar are the most affordable new electricity generation sources in the world today, and Albertans want affordable electricity. Energy storage has helped keep the lights on in Alberta and is doing so in jurisdictions all over the world: Alberta urgently needs to increase its energy storage capacity.
2. Most of Alberta’s “Big Build” transmission projects were built to get thermal generation to market, not to support renewable energy integration. In fact, most of this build happened before Alberta had any large solar facilities on its grid, and much less wind generation than what we have today.

While there are several items in the AESO Direction Letter that are helpful to the evolution of the power sector in Alberta, other items are unnecessarily punitive to renewable energy and may result in significant problems for projects that have been built and are currently operating in the province.

The most notable change is that the new market rules will be enacted by legislation, instead of being independently evaluated through a regulatory process. This is a significant departure from what was promised when the new market was proposed.

Alberta is undertaking sweeping changes to its electricity market design, while aiming for a hasty completion with a finalized design by the end of 2025, without an independent review. In contrast, Ontario is taking nine years for a similar exercise.

The Government is proposing to correct “technical deficiencies” after they have implemented this new market. It would be more prudent to do this in advance, through rigorous independent testing.

There is $15.8 billion per year flowing through Alberta’s electricity system: We cannot afford to get the market design wrong.

Positive elements of the Transmission Regulation:

• CanREA is pleased to see that existing generators, who cannot factor in new transmission costs to their financial structures, will not bear additional transmission costs.
• CanREA supports moving to a system-average losses approach, which will help provide more revenue certainty.

Concerning elements of the Transmission Regulation:

• CanREA is concerned that there are no plans to compensate existing generators for curtailments. Alberta promised investors a zero-congestion transmission system, and companies built projects around this assurance. But in Q3 2024, we experienced congestion 45% of the time. Alberta has not honoured its transmission commitments; it should compensate all existing generators who are unable to get their power to market because of transmission congestion.

• CanREA is concerned that the Government of Alberta is delaying much-needed transmission projects as Alberta moves to a new “Optimally Planned Transmission” Standard. There are two system upgrades that were identified years ago as necessary to bring low-cost renewable energy in southern Alberta to market. They are legally required under the existing legislated planning standard which requires zero-congestion. There is a global competition for electricity infrastructure, and delays will impede the delivery of clean electricity to market. Alberta also has big plans to welcome AI Data Centres. We will need all of the electricity we can get, but these needed projects will be tied up in red tape during the transition.

• CanREA does not support major changes to Ancillary Services cost allocation when existing projects are not in a position to take on additional costs. CanREA is concerned that capacity costs will be allocated to renewables by deeming them “ancillary.”

• There will be no certainty for new generation projects in Alberta in the near future. New generators will pay a non-refundable, uncapped, upfront Transmission Reinforcement Payment (TRP).  More clarity on this TRP will not be available until the AESO undertakes its ISO tariff application, likely in 2027 or beyond.

By making these changes, the government is sending a signal to investors that there is a lack of certainty and predictability around the regulations in Alberta. This is a deterrent to future projects, at a time when other jurisdictions are working hard to make sure investors can feel confident about their investments for decades to come.

One of the three pillars of Alberta’s AI Data Centres Strategy is power capacity. Jeopardizing existing projects that invested in good faith threatens both this Strategy and the ability of Alberta’s power system to provide affordable, reliable and clean electricity to customers.

Quotes

“Alberta needs to proceed with caution: it is counterproductive to jeopardize existing wind and solar projects, especially when the province requires more electricity. These projects were built in good faith but could fail if they cannot repay their debt, causing credit downgrades across the sector. This will raise borrowing costs for companies and ultimately increase the cost of electricity for customers.”

—Vittoria Bellissimo, President and CEO, Canadian Renewable Energy Association (CanREA)

About the Canadian Renewable Energy Association (CanREA)

The Canadian Renewable Energy Association is the voice for wind energy, solar energy and energy storage solutions that will power Canada’s energy future. We work to create the conditions for a modern energy system through stakeholder advocacy and public engagement. Our diverse members are uniquely positioned to deliver clean, low-cost, reliable, flexible and scalable solutions for Canada’s energy needs. Our vision is to ensure wind energy, solar energy and energy storage play a central role in transforming Canada’s energy mix. Follow us on Twitter and LinkedIn. Subscribe to our newsletter. Become a member. Learn more at renewablesassociation.ca.  

For more information or for interview opportunities, please contact:

Michaela Ianni, Communications Specialist
Canadian Renewable Energy Association
communications@renewablesassociation.ca

Restructured Energy Market and new consultation herald more upheaval for Alberta’s renewable energy industry

Banff, Alberta, March 11, 2024—The Canadian Renewable Energy Association (CanREA) is concerned about prolonged and increasing uncertainty for Alberta’s renewable energy and energy storage industry, after new documents were released by the provincial government and the Alberta Electric System Operator (AESO) today.

Speaking at the annual conference of the Independent Power Producers Society of Alberta (IPPSA) in Banff today, Alberta Minister of Affordability and Utilities Nathan Neudorf said that the province is moving ahead with significant electricity market reforms, based on recommendations from the AESO.

Specifically, in a letter to the AESO today, Minister Neudorf requested that the AESO work with industry and stakeholders to design, and submit to the government for consideration, a draft restructured energy market design based on the AESO’s Recommendation Report.

Mike Law, AESO’s President and CEO, confirmed in his address at the IPPSA conference that the AESO will run a new consultation to develop the first draft of the technical design for the “Restructured Energy Market” (REM), to be completed by fall 2024, with new market rules to come into effect in 2027.

“Today’s announcements introduced another significant layer of uncertainty for Alberta’s market, which will make the province less attractive to investors,” said Vittoria Bellissimo, CanREA’s President and CEO.

“However, CanREA does support the AESO’s collaborative engagement approach. We expect to be at the table, working to ensure the new market design recommendations work for existing renewable energy and energy storage assets and their customers, while also providing a path forward for future investment in these critical technologies in Alberta.”

According to the AESO, these reforms will focus on supporting affordability, reliability and system decarbonization by 2050. The cornerstones of the proposed reforms include a day ahead market, an administrative scarcity pricing mechanism, and adjustments to the current pricing system.

CanREA’s priorities, going into the consultation period, include:

• Any market reform must encourage wind, solar and energy storage technologies to play a foundational role in the electricity system of the future.
• The AESO needs to ensure there is a path forward for renewable and energy storage investment under this new REM framework, including a workable tariff for energy storage.
• The AESO’s REM recommendations should ensure that any new rules honour investments made by generators and their customers who have purchased electricity from these facilities via power purchase agreements (PPAs).

“These changes could provide opportunities for energy storage in Alberta, but we urge the government and the AESO to consider market structures that provide continued opportunity for renewables,” said Evan Wilson, Vice President of Policy—Western Canada and National Affairs at CanREA.

“We plan to continue to engage with the provincial government and participate in all consultation processes to ensure the success for renewable energy deployment in Alberta. It is critical for Alberta to get this right if it is to remain an attractive location for international investment,” said Wilson.

In recent years, Alberta has led Canada in new renewable energy development, representing more than 90% of Canada’s growth last year alone, but its position as Canada’s clean energy powerhouse is expected to falter in the coming years as a delayed effect of the 2023-24 moratorium, a negative consequence that will only be amplified by continued policy uncertainty.

Quotes

“Today’s announcements introduced another significant layer of uncertainty for Alberta’s market, which will make the province less attractive to investors. However, CanREA does support the AESO’s collaborative engagement approach. We expect to be at the table, working to ensure the new market design recommendations work for existing renewable energy and energy storage assets and their customers, while also providing a path forward for future investment in these critical technologies in Alberta.”

—Vittoria Bellissimo, President and CEO, Canadian Renewable Energy Association (CanREA)

“These changes could provide opportunities for energy storage in Alberta, but we urge the government and the AESO to consider market structures that provide continued opportunity for renewables. We plan to continue to engage with the provincial government and participate in all consultation processes to ensure the success for renewable energy deployment in Alberta. It is critical for Alberta to get this right if it is to remain an attractive location for international investment.”

—Evan Wilson, Vice President of Policy—Western Canada and National Affairs, Canadian Renewable Energy Association (CanREA)

For media inquiries and interview opportunities, please contact:

Bridget Wayland, Sr. Director of Communications
Canadian Renewable Energy Association
communications@renewablesassociation.ca

About CanREA

The Canadian Renewable Energy Association (CanREA) is the voice for wind energy, solar energy and energy storage solutions that will power Canada’s energy future. We work to create the conditions for a modern energy system through stakeholder advocacy and public engagement. Our diverse members are uniquely positioned to deliver clean, low-cost, reliable, flexible and scalable solutions for Canada’s energy needs. For more information on how Canada can use wind energy, solar energy and energy storage to help achieve its net-zero commitments, consult “Powering Canada’s Journey to Net-Zero: CanREA’s 2050 Vision.” Follow us on Twitter/X and LinkedIn. Subscribe to our newsletter here. Become a member here. Learn more at renewablesassociation.ca.

Many questions remain as Alberta lifts pause on renewable energy project approvals

Edmonton, Alberta, February 28, 2024—The Canadian Renewable Energy Association (CanREA) is pleased to see the end of Alberta’s moratorium on renewable energy project approvals on February 29, as announced today by by Alberta Premier Danielle Smith and Minister of Affordability and Utilities Nathan Neudorf.

That said, CanREA remains concerned about the considerable level of post-moratorium uncertainty that remains for new projects in the province.  

The industry is eager to resume after a seven month pause on renewable energy project approvals that created a climate of uncertainty with negative consequences for investor confidence in Alberta. 

“While the Pause has lifted, there remains significant uncertainty and risk for investors wishing to participate in Canada’s hottest market for renewables. It is critical to get these policy changes right, and to do so quickly,” said Vittoria Bellissimo, CanREA’s President and CEO.  

Alberta currently leads Canada in new renewable energy development, representing more than 90% of Canada’s growth last year alone. While the Pause did not affect operational projects or projects already in construction, the impact of the moratorium will be seen in the coming years.  

Over the past seven months, CanREA participated actively in the Alberta Utilities Commission (AUC) Inquiries while continuing to meet with Premier Smith, Minister Neudorf and his staff to create a greater understanding of the importance of this industry in Alberta and clarify the consequences of the pause. 

“CanREA will continue to consult with the AUC and encourage the Province to provide clarity on policy changes that will enable paused projects to move forward, in a manner that will restore investor confidence in Alberta,” said Evan Wilson, Vice President of Policy—Western Canada and National Affairs at CanREA.  

CanREA is pleased with policy announcements on the issues of crown lands, municipal participation and reclamation security, but concerned about the announcements on agricultural land bans and “pristine viewscape” setbacks. Wind energy and solar energy have a long record of co-location with productive agricultural land use. CanREA will work with the government and the AUC to seek opportunities to continue these beneficial approaches. 

CanREA is also pleased that our push for renewables on crown lands has come to fruition. We are happy for the opportunity to expand province wide, to increase geographic diversity, decrease pressures on agricultural land, and make more efficient use of the transmission system. 

Regarding reclamation security, CanREA members understand that Albertans expect developers to honour commitments to reclamation. This is why our members already make commitments to reclamation security. CanREA is pleased that the government decision matched our recommendations and that, going forward, reclamation security can continue be allocated to landowners if those landowners so chose.  

CanREA also accepts that municipalities, as the elected voices of their communities, have the opportunity to participate in the process.  

However, it is disappointing that the government has decided to put some parts of the province off-limits for renewable energy projects via “pristine viewscape” setbacks. This decision means that local communities and landowners in these regions will miss out on the benefit of renewable projects, specifically the tax revenues and lease payments associated with renewables.  

CanREA will continue to advise in upcoming consultations to support better outcomes, including the grandfathering of projects on sites that have already been selected, to avoid costly consequences for all parties. We will urge the government to reconsider their land-use bans for “pristine viewscapes,” or to provide opportunities to mitigate these blanket restrictions. 

Renewable energy in Alberta has long been a good-news story for Canada’s energy powerhouse province. And there is tremendous potential for even greater success. To realize this potential, we need a responsible, inclusive and thoughtful approach in Alberta. 

Quotes

“While the Pause has lifted, there remains significant uncertainty and risk for investors wishing to participate in Canada’s hottest market for renewables. It is critical to get these policy changes right, and to do so quickly.” 

—Vittoria Bellissimo, President and CEO, Canadian Renewable Energy Association (CanREA) 

“CanREA will continue to consult with the AUC and encourage the Province to provide clarity on policy changes that will enable paused projects to move forward, in a manner that will restore investor confidence in Alberta.” 

—Evan Wilson, Vice President of Policy—Western Canada and National Affairs, Canadian Renewable Energy Association (CanREA) 

For media inquiries and interview opportunities, please contact: 

Communications 
Canadian Renewable Energy Association 
communications@renewablesassociation.ca 

About CanREA

The Canadian Renewable Energy Association (CanREA) is the voice for wind energy, solar energy and energy storage solutions that will power Canada’s energy future. We work to create the conditions for a modern energy system through stakeholder advocacy and public engagement. Our diverse members are uniquely positioned to deliver clean, low-cost, reliable, flexible and scalable solutions for Canada’s energy needs. For more information on how Canada can use wind energy, solar energy and energy storage to help achieve its net-zero commitments, consult “Powering Canada’s Journey to Net-Zero: CanREA’s 2050 Vision.” Follow us on Twitter/X and LinkedIn. Subscribe to our newsletter here. Become a member here. Learn more at renewablesassociation.ca.