Wind Farms on Alberta Crown Lands? - Haskayne School of Business

<strong>Wind</strong> <strong>Farms</strong> on Alberta Crown Lands?
An IRIS Executive Briefing
Key themes from research presented at a CPC-IRIS Public Seminar, March 17, 2010
Allan Ingelson
Associate Professor, Faculty of Law and the Haskayne School of Business
Ryan Kalt
B.Comm., LLB, MBA, LLM
Briefing # 10-02
Contact:
Commissioning Editor: Dr. Frances Bowen, Director, IRIS
Email: iris@haskayne.ucalgary.ca or phone: (403) 220-6073
2500 University Drive NW, Calgary, Alberta, Canada T2N 1N4
For more titles in this series: www.iriscentre.ca

Emerging <strong>Wind</strong> Farm Development in North
America
During November 2005, due to increased natural gas prices, retail
customers in Colorado started paying less for electricity generated
from wind farms than from fossil fuels for the first time. As stated in
an editorial in the Denver Post “No longer an environmentalist’s
pipe dream…wind is an energy source worthy of a bigger role in a
growing state’s electrical needs” (Pernick p. 59).
In the last five years there has been increased wind farm
development in other U.S. states including Texas and California,
and more interest in Canadian wind farms. <strong>Wind</strong> energy production
is expected to double in Canada between 2009 and 2015.
To promote investment in this renewable energy source on public
land in Ontario and British Columbia, the provincial governments
have created a land disposition process that provides for Crown
wind energy leases. These regimes outline the process and rights
associated with developing wind farms on public lands. The
Ontario and B.C. governments have positioned themselves to
obtain land rental, royalty and tax revenues from wind farm
development.
<strong>Wind</strong> <strong>Farms</strong> in Alberta
In 2007, the Hon. Ed Stelmach, Premier of Alberta stated that
“Alberta has the highest per capita of electricity generated by wind,
and in overall generation we are exceeded only by Ontario – which
has twice the area and four times the population” (March 16, 2007
speech to the Ft. Macleod and District Chamber of Commerce
Annual Meeting).
There has been significant wind energy development on private
lands in Alberta, but a lack of wind farms on public Crown lands.
While 60% of the land in Alberta is Crown land, the Minister of
Sustainable Resource Development in Alberta declared a
moratorium on wind power project development on Crown land
until a comprehensive energy strategy is put in place. In March
2009, the Alberta Association of Municipal Districts and Counties
called on the provincial government to “start granting companies
the right to develop wind power turbine farms on leased Crown
land” (Canadian Press, “Rural Communities want Alberta to allow
wind power farms on leased Crown land” Whitehorse Star, March
23, 2009, 14)
The lack of a Crown land disposition process in Alberta has prevented wind farm
development on public lands. Alberta could learn from Ontario and BC how to develop,
and gain revenue from, wind energy on public lands.

<strong>Wind</strong> Energy Revenue for the Ontario and
B.C. Governments
In 2005, the Ontario Government opened Crown lands for wind
energy leases under the Public Lands Act. In some areas the
provincial government receives a $20,000 application fee in a noncompetitive
process and issues a land use permit for a wind
energy developer to confirm the economic viability of a proposed
wind farm. In other areas, competitive bidding is provided for.
Commercial wind energy leases are granted for an initial term of
25 years with an extension period available. Conditions are
stipulated in Crown wind energy leases that typically include a land
rental payment schedule and royalties payable to the Ontario
government. <strong>Wind</strong> farm lessees also pay property taxes to
municipal governments.
In B.C. the Ministry of Energy, Mines and Petroleum Resources
(MEMPR) is responsible for land tenure policies for wind and
independent power producers. The MEMPR implemented a rent
policy for wind energy projects in 2005. There are investment
incentives for wind farm development on B.C. Crown lands. <strong>Wind</strong>
farm producers do not pay participation rents for the first ten years
of commercial operations. Starting in year 11, wind farm
producers pay from 1-3% of gross annual revenues on a sliding
scale formula, based on annual electricity production.
Useful Resources
Brad Armstrong, Krista Hughes & Monica Balaski, “Permitting
Issues in British Columbia and Alberta: <strong>Wind</strong> and Run-of-River
Projects” (Paper presented to the B.C. Power Summit, June 2,
2006);
Pernick, Ron and Clint Wilder (2008) “The clean tech revolution”
Collins Business, New York;
Helle Tegner Anker, Birgitte Egelund Olsen and Anita Ronne, <strong>Wind</strong>
Energy and the Law: A Comparative Analysis, 27(2) Journal of
Energy and Natural Resources Law (May 2009);
Michael M. Wenig et al, (2007) Legal and Policy Frameworks for
Renewable Energy in Alberta, Paper No. 12 of the Alberta Energy
Futures Project, Institute for Sustainable Energy, Environment and
Economy, University of Calgary.
About IRIS:
Established in 1994, IRIS: The International Resource
Industries and Sustainability Centre, brings together
expertise from the Haskayne School of Business and the
Institute for Sustainable Energy, Environment and
Economy (ISEEE) at the University of Calgary on
sustainable resource development.