Since 2023, Alberta’s renewable energy sector has been faced with an unprecedented level of policy and regulatory uncertainty. The most widely reported example is the sudden moratorium on new renewable project approvals that was in place from August 2023 to February 2024. However, there is now a number of other new policies and contemplated changes that directly affect the sector.
These include outright bans and ambiguous restrictions on areas of land where wind and solar projects can be built, new requirements relating to equipment recycling and land reclamation, and changes to transmission legislation, all of which will likely add new regulatory burdens and upfront costs to renewable energy developers. It is notable that many of these new requirements are not being equally applied to other industries, including other energy sectors such as oil and gas.
At the same time, renewable energy developers — like all electricity generators in Alberta — are contending with the uncertain outcome of a wide-reaching restructuring of the province’s electricity market, as well as the Government of Alberta’s recently announced legal challenge of the federal Clean Electricity Regulations.
While the 2023-2024 moratorium had a quick and immediate impact, causing the cancellation of 53 renewable energy projects, what the data now shows is ongoing uncertainty and reduced investor confidence in the market, even after the moratorium was officially lifted. Our analysis shows that, in 2024, there were more project cancellations than new proposals — making it the first year that the overall volume of projects in the Alberta Electric System Operator’s (AESO’s) renewable project proposal queue shrank.
This is out of step with global trends, where interest in renewable energy remains strong. Our analysis of peer jurisdictions with comparable electricity market structures to Alberta finds that project proposal queues are healthy and growing. This shows that there is a lucrative market that could be revived, if Alberta takes steps to demonstrate that renewables are welcome in the province once again.
Recommendations
We recommend the Government of Alberta take the following actions:
- Clearly state an electricity system vision of a clean, resilient and affordable system, and direct regulators and government to create the rules and regulations to support this vision.
- Encourage investment in new projects by fast-tracking development for areas where utility-scale renewable projects would be particularly well-suited.
- Modernize electricity regulations to support energy independence and resilience by promoting the use of interties, energy storage, distributed energy generation, and demand-side management.
