Neudorf addresses pause on solar, wind projects

Posted on August 24, 2023 by Ryan Dahlman

By Al Beeber
Southern Alberta Newspapers

The provincial government’s six-month moratorium on solar and wind projects has sparked strong opposition but Lethbridge East MLA Nathan Neudorf says there are valid reasons for it.

Neudorf, who is also the Minister of Affordability and Utilities, says the province is trying to address the high costs residents pay for electricity – costs in part which include delivery charges.

Neudorf told Southern Alberta Newspapers in an interview earlier this month that the costs of getting electricity to the grid have to be considered and those costs aren’t cheap.

He said the province is supportive of renewable energy and believes Albertans should be getting credit for installing their own solar panels on the roofs of their home as a way of trying to reduce their carbon footprints. Such systems don’t bear the costs of building infrastructure to reach the power grid.

He said he is aware of criticism of the UCP’s lack of consultation before the pause, but said Albertans want the government to consult on solutions.

The impacted projects have been on the list for up to nearly three years in some cases and six months won’t be make or break for them, Neudorf added.

“It’s getting it right, it’s understanding how it’s going to make impacts now and in the future and it’s treating everybody fairly, especially the ratepayer,” said Neudorf.

In 2020, the province brought on 85 megawatts of renewables onto a grid that was about 12,000 megawatts, said Neudorf. In 2022, there were about 1,000 megawatts brought online for a 15,000 watt grid.

“Now we’re constructing 3,400 megawatts of renewables in an 18,000 megawatt grid. Close to 20 per cent of our grid is renewables which is great news but it also rapidly increases the volatility and makes this reliability question a really significant one.”

He said there are 23,000 more megawatts wanting to come online and there are costs associated with that.

The moratorium has support in rural Alberta where there are concerns about the displacement of agriculture.

The government consulted the Rural Municipalities Association, the Alberta Utilities Commission and the Alberta Electric Systems Operator – the independent systems operator which must engage with stakeholders to create or change rules that govern the electricity market’s operation, before announcing the moratorium, he said.

“They’re very supportive of this pause, in fact the AUC asked us to bring this pause in so we could look into this issue,” said Neudorf.

In a recent Canadian Press story, a University of Alberta economist named Andrew Leach said the growth of the renewable energy industry has outstripped the provincial regulator’s ability to deal with it.

Neudorf says Alberta has more renewable electricity online than ever before and typically, “they get into the system at zero dollars. But we are having historically high electricity prices. Why is that? That should be a question for everybody. And some of the answer is in your transmission and distribution costs because every time there’s a new energy generator put online, we’re obligated to build the transmission lines out there and the ratepayers pay for it.

“It doesn’t matter if it’s a 30-watt grid or a three-megawatt grid, and it doesn’t matter if it’s 500 kilometres in the middle of nowhere or right next door. You pay for that,” said Neudorf.

The cost of what happens when these generators aren’t producing also has to be considered, the MLA added.

“We know for a certainty that 50 per cent of the time roughly there’s no sun because it’s nighttime so we’re not generating. But you still need air conditioning at night in the summer and you still need heat in the winter. Where’s that power coming from? Well right now the system is set up that we have what’s called peaker plants, for peak usage or in emergency need” and that is extremely expensive, said Neudorf. Those plants run only when electricity demand is high. This can occur on hot summer days or on cold winter days when the demand for AC or heat is at its highest.

He asked the regulator how often the province is using the peaker plants to cover for renewables.

“Multiple times every single day,” he said.

“That coverage is very, very expensive electricity which is obviously contributing to our historically high prices. It’s right in my mandate to address high prices which is why we said we need to look at this, we need to have a time-out that we can get our regulators to investigate and enquire so it’s unbiased – it’s not just the government of the day – it is these arm’s length entities looking at what this system is doing and how it’s responding and making recommendations on how to correct it,” added Neudorf.

“To do an enquiry properly they need time to do that. So we said ‘listen, we don’t have years to do this so we’re going to ask you to pause – it’s only 16 projects – and go enquire, find out from all the stakeholders what’s going on and how we can we correct this.”

Neudorf said the province is looking at numerous things including land use and a proposed wind farm near Waterton.

“We’re not saying ‘yes’ or ‘no’ to any of these. What we’re doing is ‘let’s pause and let’s consider what are the factors we should consider.”

He said in Vulcan County one project that was previously passed now requires expropriation of 30 kilometres of private property to connect a solar farm to the grid.

“That’s a problem. Those other farmers now have to have a distribution line across their land – they don’t have a choice in it. They didn’t want it, it’s being expropriated because there’s an obligation of the system to provide that connection,” said Neudorf, adding considerations need to be thought of before projects go ahead, rather than after.

“That’s not fair. That’s why we proceeded with the pause in a timely manner to get these questions answered during the legislative session so either this fall or next spring we’ll have time to do that if it’s required.”

Neudorf said even if projects were approved today, they wouldn’t be built this winter but rather next summer “so we’re trying to get this done so they can build next summer if they are approved to proceed.”

Distribution charges are on a different line of a person’s bill and every rate payer pays for them. And GST is charged on top, said the MLA.

“That’s a multiplying factor on peoples’ bill that we want to make sure we’re handling very, very carefully,” said Neudorf.

The UCP isn’t against renewable energy, he said.

“We believe they play an important role now and into the future for the electricity grid in Alberta. There’s lots of projects we think are very, very sustainable and approvable and helpful” including a potential solar panel project in the parking lot or on the roof at the new Agri-Food Hub and Trade Centre here.

“That’s wonderful. There’s no distribution costs because that building already has lines to the grid,” said Neudorf.

If every Albertan puts a solar panel on the roofs of their homes, this reduces their demand on the system which he calls great.

“I think Albertans should be rewarded for that. If we can consider all those private entities that have put solar panels on their roofs or a wind turbine on their farm then Alberta is already way greener than the federal government gives us credit for. So we want to see credit for all of those Albertans who are really doing their utmost on the demand side by trying to have a smaller carbon footprint. We applaud that, however, the consideration to be kept in mind is they already have the redundancy built in because they have electrical lines to their house already.”

The MLA said people expect electricity to be available 100 per cent of the time including at night when there’s no sun or on days when there’s no wind to generate it.

“Especially at our hospitals, at our schools, at our public buildings, for our public transportation, we expect it,” so reliability is non-negotiable, added Neudorf.

“That’s why we’re trying to answer these questions. How do we do this responsibly? We want renewables as part of the mix – we can solve this if we just take a minute and say how do we solve these problems in a reliable way, an affordable way and a fair way,” said Neudorf.