Alberta introduces new restrictions on renewable power development as moratorium ends

On February 28, 2024—the day before the expiration of the moratorium on the approval of renewable power projects—the Government of Alberta announced a host of prospective policy and regulatory changes for renewable power development in the province.

What you need to know

• Agriculture-first approach. Renewable power development will no longer be permitted on Class 1 and Class 2 agricultural lands unless the proponent can demonstrate the ability for agriculture to coexist with the renewable power project and that agricultural land uses will generally be prioritized in the processing of renewable power applications.
• Buffer zone. A 35-kilometre buffer zone will be implemented around areas designated as “pristine viewscapes”, which will preclude wind and potentially other renewable power developments.
• Reclamation costs. Developers will be responsible for reclamation costs associated with renewable power infrastructure through security or bond, or a sufficient agreement with landowners.
• Allocation of transmission costs. Amendments to Alberta’s Transmission Regulation are expected to change the allocation of transmission costs associated with renewable power development.
• Municipalities’ participation rights expanded for hearings. Municipalities will have expanded participation rights in renewable power development hearings before the Alberta Utilities Commission (AUC).

Background: moratorium and AUC inquiry

On August 3, 2023, the Government of Alberta implemented a hold on the AUC approval of renewable power plants that generate more than one megawatt (MW) of electricity pursuant to the Generation Approvals Pause Regulation and directed the AUC to conduct an inquiry into the future development of renewable power in the province (the Renewables Inquiry). The AUC split the Renewables Inquiry into two modules.

Module A of the Renewables Inquiry

Module A of the Renewables Inquiry considered the land impact issues related to the:

• development of renewable power plants on specific types of agricultural and environmental land;
• impact of renewable power development on Alberta’s “pristine viewscapes”;
• implementation of reclamation security requirements for renewable power plants; and
• development of renewable power plants on Crown land.

Module A involved over 150 registered parties, ranging from landowners and academics to renewable power developers and electric utilities. The AUC provided the Minister of Affordability and Utilities a report for Module A in January 2024. The Module A report has not yet been made publicly available.

On the eve of the expiry of the Generation Approvals Pause Regulation, the Minister of Affordability and Utilities issued a letter to the AUC providing guidance on a number of planned policy and regulatory changes for renewable power development in response to the AUC’s Module A report. The Minister and Premier also announced those changes in a press conference.

The prospective policy and regulatory changes

Development on agricultural lands

• The Government of Alberta will direct the AUC to prioritize agriculture when processing applications for renewable power development on agricultural land.
• Renewable power development on Class 1 and Class 2 agricultural lands will no longer be permitted unless the proponent can demonstrate the ability for crops and livestock to coexist with the power development.
  • These classifications relate to the national Land Suitability Rating System, where Class 1 lands are those with soils that have no significant limitations in use for crops and Class 2 lands are those with soils that have moderate use limitations.
  • Alberta has approximately 11,439 hectares of Class 1 lands and 6,887,983 hectares of Class 2 lands. Class 1 and 2 lands represent approximately 0.02% and 10.72% of total land in the province, and 0.05% and 32.86% of agricultural land, respectively¹.
• The Government of Alberta will establish measures to ensure the continued availability of native grasslands, and irrigable and productive lands, for agricultural development where renewable power generation is proposed.

Reclamation security

• Developers will be responsible for the reclamation costs of renewable power developments through bonds or security provided directly to the Government of Alberta or sufficient negotiated agreements with private landowners.

Pristine viewscapes

• Buffer zones of at least 35 kilometres will be implemented around areas designated by the province as “pristine viewscapes”. No definition of what will constitute a pristine viewscape has been provided yet, but parks such as Kananaskis and Nose Hill Park are expected to be the starting point.
• No new wind projects will be permitted within the buffer zones.
• Other proposed renewable power developments within buffer zones may be subject to a more structured visual impact assessment prior to approval.

Development on Crown lands

• Renewable power development on Crown lands will not proceed until at least 2025 and will be assessed on a case-by-case basis.

Allocation of transmission costs

• The Government of Alberta intends to make amendments to the Transmission Regulation, Alta Reg 86/2007 that will address the allocation of transmission costs associated with renewable power development.
  • The majority of transmission costs are currently allocated to load, and not to generation. In October 2023, the Government of Alberta issued a paper as part of a consultation process where it indicated it was considering other cost allocation options.

Involvement of municipalities in AUC proceedings

• Municipalities will automatically be granted participation rights in AUC hearings relating to renewable power plant applications and will be eligible to request cost recovery for participation.
• Municipalities will have input on future municipal submission and consultation requirements.

Renewable power infrastructure setbacks

• The Government of Alberta intends to direct the AUC to conduct a hearing or other process to determine appropriate setbacks of renewable power infrastructure from adjacent residences and other important infrastructure.

What to expect next

Alberta hosts the fastest-growing market for renewable power in Canada, and the Minister’s letter to the AUC indicates there are approximately 33,300 MW of wind and solar projects presently under construction, 2,760 MW with AUC approvals, and 22,900 MW of announced wind and solar projects in the province. During the press conference on February 28, 2023, the Minister indicated that the planned policy and regulatory changes would be largely prospective in application, as opposed to retroactively impacting existing renewable power plants. Still, the potential application of the policy and regulatory changes to renewable power plants that are not yet operational and the application of reclamation security requirements for existing renewable infrastructure remain uncertain.

While the contours of the announced changes have yet to take shape, we expect the implementation of those changes will involve various amendments to the AUC’s rules, the Transmission Regulation, and potentially other legislation. Additionally, following Module A, the AUC’s Module B Renewables Inquiry is forthcoming and will consider the impact that the increasing growth of renewables in Alberta has on both the generation supply mix and the broader reliability of the province’s electricity system.

In the meantime, as of March 1, 2024, the AUC will recommence issuing approvals for renewable power plant applications. In Bulletin 2024-03, the AUC provided guidance on updates to the application review process following the expiry of the Generation Approvals Pause Regulation. The Bulletin indicates that the interim Rule 007 power plant application requirements relating to agricultural land, viewscapes, reclamation security, and land use planning will remain in effect, and that the AUC will initiate a stakeholder consultation on the topics considered in Module A of the Renewables Inquiry to determine whether some or all of those interim requirements will be permanently incorporated under Rule 007. Further, the AUC will process applications that were affected by the approvals pause on a case-by-case basis.