Alberta suspends approvals of renewable energy projects

The Government of Alberta has put an immediate hold on the Alberta Utilities Commission (AUC) approval of hydro developments and power plants that generate more than one megawatt (MW) of renewable electricity. The approximately seven-month pause, which was announced August 3, is intended to give the government time to study and address gaps in the current regulatory framework around land-use concerns and the end-of-life reclamation of power plant sites, among other things. 

What you need to know

• A longtime leader in Canadian energy production, Alberta has also more recently helped pace the nation’s energy transition with a booming market in renewable energy development.
• Updates to the regulatory framework should provide more clarity on several issues; at the same time, the expectation of changes may bring some uncertainty for projects in the short term.
• The AUC has requested stakeholder feedback by August 18 on how to handle applications during the approval pause.
• The hold on renewable energy approvals was passed under the General Approvals Pause Regulation (the Regulation) through an order-in-council. It will be in effect until February 29, 2024.

Parameters of the pause

This approval pause applies to new renewable power plant applications under the Hydro and Electric Energy Act and those currently in queue for AUC approval, subject to the following exceptions:

• small-scale power plants (<1MW), isolated generating units (i.e., those within isolated communities or industrial areas, as designated under the Isolated Generating Units and Customer Choice Regulation), and micro-generation generating units (i.e., <5MW units designed for personal consumption);
• approvals for minor alterations to a power plant (as defined under section 18.2 of the Hydro and Electric Energy Regulation);
• amendment applications for wind, solar, and “other” power plants (e.g., biomass, geothermal and compressed air power plants) that have received AUC approval; and
• time-extension applications for completion of the construction or alteration of hydro developments or power plant projects that have received AUC approval.

Scope of the inquiry

In connection with the approval pause and pursuant to a separate order-in-council, the AUC has been directed to conduct an inquiry into and report on the following:

• the development of power plants on specific types or classes of agricultural or environmental land;
• the development of power plants on Crown land;
• the impact of power plant development on Alberta’s “pristine viewscapes”;
• the implementation of mandatory reclamation security requirements for power plants; and
• the impact of the increasing growth of renewables on both the generation supply mix and electricity system reliability.

The AUC is currently reviewing the terms of reference for the inquiry and will provide further guidance on next steps in due course.

Application status during approval pause

Further, the AUC has specifically requested stakeholder feedback on the following three options for the approval pause for hydro, wind, solar, and “other” power projects (e.g., geothermal, biomass, compressed air) by August 18, 2023:

• Complete abeyance: The AUC does not accept new applications during the pause period and all existing excluded applications will be placed in abeyance during the pause period with the AUC taking no further steps to complete their record or issue decisions.
• Partial abeyance: The AUC does not accept new applications during the pause period. For all existing applications with an incomplete record, the AUC process will proceed to the point where the written evidence is complete; applications will then be placed in abeyance until the pause period expires. The AUC will not hold any public hearings for these applications during the pause period. Existing applications with a complete record will be placed in abeyance until the pause period expires.
• Approval hold only: The AUC continues to fully process new and existing excluded applications without issuing any approvals until after the pause period.

Torys will continue to monitor any developments in the stakeholder feedback process and the implications of the Regulation.