How renewable energy projects on brownfield lands can advance our Climate Strategy and provide economic benefit. 

Incentivizing Low Carbon Investments - EC2023-0131 / Click here to read the NoM

Read on for more details!

Firstly, I believe there is an opportunity for the City of Calgary to create a more favourable economic climate for all renewable energy development projects within the city, especially those on brownfield lands.

Secondly, renewable power will play a pivotal role in enabling The City’s Climate Strategy. So, when a project comes along that turns unusable or brownfield land that has no real other purposeful use into a generator of clean power—and simultaneously generates increased tax revenues for city programs and services—it should be explored.

To clarify: this is not City climate funds being directed toward an incentive program but rather an optimization exercise/negotiation that potentially makes Calgary an even more attractive market for low carbon investment.

That’s why I introduced a Notice of Motion that would ask City administration to investigate potential incentives for clean energy projects on unusable or brownfield land that has no real other use.

This is about Calgary being as competitive a jurisdiction as possible to site renewable energy projects

• Many other local jurisdictions/municipalities across the Province have already solidified incentive programs and this Notice of Motion is greenlighting that exploration; it isn’t assuming a specific outcome;
• There is a tremendous investment in green energy globally and we stand to attract a lot more of it here in Calgary and Alberta.  “Western Canada accounted for 98% of Canada’s total growth in 2022, with Alberta adding 1,391 MW and Saskatchewan adding 387 MW of installed capacity this year. Quebec contributed 24 MW to the total growth for 2022, Ontario 10 MW, and Nova Scotia 2 MW.  Solar energy grew by 25.9% (810 MW) in 2022 Alberta accounts for almost all this growth, with 759 MW”. Reference https://renewablesassociation.ca/news-release-canada-added-1-8-gw-of-wind-and-solar-in-2022/; 
• We have local goals of 10% of total City electrical demand being generated by renewables within City limits by 2030 and 40% by 2050;
• The City is committed to working closely with industry to remove barriers where appropriate and this work will not preclude smaller-scale investments.

Incentives have been part of The City's tool kit to help effect change and increase the pace of change. An outcome of an incentive model or change to the property tax will further support and enable Calgary in accomplishing the goals of the Climate Strategy.

• Council directed through the 2018 Climate Strategy that The City/Administration explore innovative financing solutions for climate mitigation initiatives and the 2022 Climate Strategy has provided more specific direction to Administration to leverage tax-based support, following suit with other jurisdictions;
• The Notice of Motion gives direction to explore what may be the best way to incentivize renewable projects. Incentives will provide the foundation for future incentive programs and more low-carbon development;
• There is no investment by the city to enable entities to develop renewable projects on what is otherwise unusable or brownfield lands. Exploring an incentive program on a clean energy project comes with the unique benefit of negotiating around real numbers and barriers.

This involves a novel – and beneficial – use of land that really can’t be used for regular activities. 

• A recent study found over 60 municipally, provincially, federally, and privately-owned brownfield sites being monitored or remediated that may provide similar opportunities;
• It is important to understand that the development of these kinds of projects will inherently increase the property taxes The City can collect from the lands. The City will benefit from a secure long-term revenue it would otherwise not receive. 

This Notice of Motion is about creating a series of “wins” for the City of Calgary– win on advancing renewable energy projects, win on enabling the City's Climate Strategy, win on the utilization of lands that otherwise are not useable, win on a secure long-term revenue the City would otherwise not receive, win on increasing the City’s competitive landscape, and a win in that the City does not have to contribute or make an investment for service.

Q&A:

Q: Why would The City even entertain incentives/subsidies for a for-profit company?

A: First, Council is fully engaged in realizing a more economically, socially, and climate resilient future. We build this future in partnership with the private sector and need to be ready to remove barriers and encourage the activities and investments we hope to see from the private sector.

Further, the situation surrounding the two Ward 12 solar projects is unique. They are on two extremely large sections of land that required environmental mitigation, at the direction of Alberta Environment, and are now essentially capped landfills. This means there are very limited uses available, and landfills generally sit unused after they are capped because of this. For example, you often can't even plant trees due to the need to protect the integrity of the cap. The question facing The City and Council surrounds the gap between what we charge for non-residential land with full developable usage and non-residential land that has been sterilized by contamination. Nothing will change unless The City finds a viable win/win intervention and Council will have to vote on that action when it comes back to us in a report with recommendations. This is not greenlighting a specific incentive, just the negotiation between Admin and the proponent. 

Q: If the situation is so unique how will it help future low carbon investment?

A: The direction of the Notice of Motion directs The City to engage in a good faith negotiation. The conversation and the potential incentive program stand to signal to all future investors that they have a favourable jurisdiction in which to explore making low carbon investments. Think of power generation projects on top of top our canal system, capped landfills, or combined with an odour mitigation treatment at the Shepard Biosolids Lagoons. There are likely far better and more creative ideas in our broader community that could be encouraged to move forward by this incentives program exploration.

Q: Can we force the landowner to remediate the land to allow for more productive uses of the land?

A: Previous industrial permitting and practices created this issue. These practices are no longer permitted but the problem remains and won't be going away anytime soon. This is a great way to ensure that the reduced usability of the land doesn't negatively impact the financial future of generations of Calgarians. As the project respects the integrity of the cap it can be more easily relocated should the land situation change in the future.

Q: The Alberta Utilities Commission (AUC) provides a regulatory framework that deals with utilities, doesn't this eliminate the need for The City to get involved?

A: Contrary to some of what has been reported, all renewable projects in the province are not regulated utilities and as a result have no mechanism to recover capital investment through the AUC or through rate base. Alberta energy production is unregulated, which enables the appropriate market signals for private investment in energy generation. Increased competition in the electricity generation space creates competitive electricity prices for consumers.

AUC's role in reviewing power generation applications - AUC

Utilities Consumer Advocate: Regulatory Process (alberta.ca)