Last year’s shutdown of wind and solar approvals, alongside a newly erected thicket of red tape, has led to the scrapping of more than four dozen projects in Alberta.Jeff McIntosh/The Canadian Press
Twenty years ago, Minnesota burned coal to produce two-thirds of its electricity. Last year, more than half of the state’s electricity came from clean power.
The shift is remarkable, and much of it happened this decade. As of 2019, coal was still Minnesota’s primary source of power generation. The change is the result of private-sector ambition and smart government policy, led by Governor Tim Walz, who this month joined Vice-President Kamala Harris’s Democratic presidential ticket.
Mr. Walz in 2023 signed clean energy legislation in Minnesota that mandates 80 per cent of the state’s electricity come from non-fossil fuel sources by 2030 and 100 per cent by 2040. This June, Mr. Walz approved regulatory reforms to speed new clean power and transmission lines by as much as a year.
Minnesota’s already rapid progress shows the big goals are realistic. For the month of April, clean energy generated two-thirds of Minnesota’s electricity – led by wind power, at about 40 per cent of the total. Burning coal produced 14 per cent.
And the private sector is on board. Xcel Energy, shuttering hulking coal plants and opening massive solar farms, last year said it is “excited about being pushed to go faster.”
Underlying it all is the fast-changing economics of clean power, tighter federal climate rules and the weight of U.S. industrial policy.
The price of wind and solar power has plummeted and President Joe Biden’s 2022 climate-focused Inflation Reduction Act has unleashed a torrent of cash: an estimated US$48-billion in federal tax credits have, so far, propelled more than US$300-billion of investments into clean energy and transportation. Xcel has said the federal legislation could save people in Minnesota more than US$1-billion over the next decade, as it builds out solar farms, long-duration battery storage and other clean technology.
Welcome to the new world of competing for clean energy investments. Alberta was the early leader in Canada but provinces such as British Columbia, Ontario and Quebec are rushing to build renewable power, as are many U.S. states. And it’s not just Democrats. In Kansas, wind power produces nearly half the state’s power, almost double that of coal.
In May, a Scotiabank report warned of “fierce inter-country competition for private capital seeking to invest in green projects.” Data to date show that U.S. public money is getting a much bigger bang for the buck than in Canada.
But there’s promise in Canada. Policies have been slow to crystalize but an array of federal investment tax credits, from clean technology to carbon capture, are coming together. They could total $93-billion by 2035. Likely the most important is $32-billion slated for clean electricity – but it is still on the drawing board.
Then there’s the foundational clean electricity regulations. The goal is on the mark, to cut most emissions from power generation by 2035, but significant amendments from the initial draft are expected in the final rules later this year, centred on flexibility, such as specific regional considerations. (Flexibility was a useful factor in Minnesota.) Ottawa appears to be listening. Energy Minister Jonathan Wilkinson in June said “one size fits all” is likely not the best approach.
Finally, there’s the how-not-to guide, authored by Alberta Premier Danielle Smith. It was two summers ago when this space highlighted Alberta’s perhaps unexpected position as Canada’s capital of wind and solar power. But Alberta is squandering its position with ill-considered political interference, an attack on free enterprise. Last year’s shutdown of wind and solar approvals, alongside a newly erected thicket of red tape, has led to the scrapping of more than four dozen projects. Meanwhile, Ms. Smith’s main focus remains fossil fuels. In January, she suggested a desire to double oil and gas output from current record levels.
In the sudden race for clean power cash, there are clear lessons for government.
Ottawa was smart to drum up clean power tax incentives to compete with Mr. Biden’s climate push but the rollout has been slow. There is similar urgency to implement smart regulatory reforms. Further, regulatory certainty is key. Alberta did the opposite.
Canada has forever rooted its economy in a bounty of natural resources, from forestry and hydro to mining and fossil fuels. Canada can wield its expertise to help lead the global clean power boom, the rise of solar, wind and battery storage. The energy of the future is clean.