'Helped us to catch back up': Municipal tax dollars from renewable energy projects nearly double

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Alberta municipalities have seen a big jump in tax revenues from renewable energy projects in the past year.

Driven by 20 new projects, annual tax revenues have shot up to $54 million in 2024 from $28 million last year, a 92 per cent increase, according to the Business Renewables Centre-Canada’s latest annual report on municipal tax revenues from wind and solar projects.

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Fourteen Alberta municipalities are collecting over $1 million annually now in revenues, with the southern Alberta rural municipalities of the County of Forty Mile ($9 million), Vulcan County ($7 million) and Municipal District of Pincher Creek ($4.8 million) heading the list.

For the County of Forty Mile, the millions in tax dollars from wind projects have stabilized municipal tax revenues following a steep decline in oil and gas tax dollars, said reeve Stacey Barrows. The tax dollars from renewables make up about half of its total revenue.

“It helped us to catch back up,” she said.

But the Business Renewables Centre-Canada says a slowdown in new projects will affect the financial future of rural municipalities unless the province further addresses uncertainty created by its moratorium on renewable energy approvals.

The centre’s recently released annual report comes a little early this year, to coincide with the one-year anniversary earlier this month of a moratorium on renewable energy project approvals of more than one megawatt that ended Feb. 29. In late February, the province introduced new restrictions on future wind and solar projects, taking an “agricultural-first” stance when companies are seeking approval for new projects and preventing wind farms from being built within 35 kilometres of protected areas and other “pristine viewscapes.”

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The industry group is concerned about the rate at which renewable projects are now being cancelled. Since the moratorium announcement, 53 projects have been shelved, it says.

But in a statement to Postmedia, the province notes that as of July 22, the Alberta Utilities Commission (AUC) has approved 18 new renewable generation projects this year since the pause on approvals was lifted on Feb. 29, compared to 12 approvals in all of 2023 and 19 approvals in 2022.

Renewables industry seeking clarity from Alberta government

While Jorden Dye, the program director for the Business Renewables Centre-Canada says the industry is not expecting the province to come up with the answers to regulatory reform overnight, the Alberta government could clarify some issues to give industry insight into what direction the province is heading.

One of those issues the industry is seeking clarity around is a proposed change to day-ahead pricing in the wholesale market, instead of the current day-of selling of Alberta’s power. With sunlight and wind fluctuating each day, a day-ahead market would make it difficult for renewables companies to consistently bid, said Dye.

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“How that’s handled will really dictate how profitable renewables can be, and how viable they can be in the province,” he said.

Following the Alberta Electric System Operator’s ongoing talks with the renewables industry about the restructuring of the Alberta energy market, the province says it intends to introduce legislative changes for the new market design, which will be “fully implemented” by 2027.

The latest report by the Market Surveillance Administrator on grid alerts backs up the the Alberta government’s decision to move to a day-ahead market, which the province in an Aug. 6 news release says will “help to better prepare for and respond to power shortages during times of high demand in the province.”

In response to the Business Renewables Centre-Canada report, Affordability and Utilities Minister Nathan Neudorf said in a Friday statement that the province is focused on addressing rising transmission costs as well as the “protection of Alberta’s most beautiful landscapes and the best agricultural industry in the world.”

“BRC Canada’s report shows that the renewables industry is alive and well in the province, with municipal tax revenue from wind and solar projects nearly doubling,” said Neudorf. “We will not sacrifice the affordability and reliability of Alberta’s power grid to increase municipal tax revenue.”

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