When it comes to meeting its climate targets through its electricity system, Canada faces a gargantuan challenge. First, it needs to cut the coal and gas from its current electricity system. Then it’s got to find new sources of clean electricity to power the energy transition — enough to double its entire supply within the next three decades.
“We know we need a tremendous amount of electricity,” said Tom Green, senior climate policy advisor for the David Suzuki Foundation. That additional power will power things like electric vehicles and replace gas heating systems.
Experts say renewables like solar and wind will need to ramp up exponentially to meet that demand. But on the global stage, Canada’s renewable sector continues to play at the fringes of its total supply, with wind providing five per cent and solar only 0.1 per cent.
The federal government has some often-overlooked levers for meeting this complex challenge.
Which is why when it comes to speeding up renewable energy development, a bit of a seminar in electrical policy and infrastructure is required as we compare party platforms. Grab some coffee. We’ll make this as clear and easy as possible!
The federal government’s role to play
Electricity generation, production and transmission is mostly a provincial affair, meaning that provinces have direct jurisdiction over the electricity they use and the utility systems they draw on to produce and transport it. But the federal government is responsible for climate action, and the interprovincial distribution of electricity.
These two areas will be critical in navigating the task ahead.
The International Energy Agency said that industrialized countries should fully decarbonize their grids by 2035 in order to get to net-zero emissions by 2050. That’s because emissions-free electricity is the foundation that allows other sectors of the economy to decarbonize, said Robert Hornung, president and CEO of the Canadian Renewable Energy Association.
One of the challenges inherent in renewable sources like wind, solar and small-scale hydro are “intermittent” meaning that they vary according to how much the wind blows and the sun shines. Battery capacity is getting better, but it’s still not always cost effective.
That’s where the federal government can come in, say experts, who advocate for a mixture of direct funding, regulation, carbon pricing and grid reform to ready Canada’s electricity system for massive change ahead.
Historically, the federal government has focused on targeted investments in renewable energy projects. The federal government announced a $960 million investment this June, which will invest in things like grid infrastructure, renewables like solar and wind, and energy storage.
These initiatives are helpful, says Andy Hira, professor and lead of the Clean Energy Research Group at Simon Fraser University, but they often fail to address the larger, more systemic reasons that renewables are few and far between.
“So they're really good with these one off things in providing cash,” he said. “But what we have is an absence of […] connecting the dots to say, 'Okay, here's how these different projects fit into a national strategy.'”
Experts see these key ways for the federal government to support renewable energy transition:
Mandating change through a clean electricity standard
A clean electricity standard is a key policy to fast track grid decarbonization, experts say.
Think of a game of limbo — but for electrical emissions. A clean electricity standard limits the amount of emissions utilities can create for every unit of energy, and then it drops that limit incrementally every year. Sometimes portfolio standards allow for utilities to trade “credits” that function like offsets. In the U.S., the Clean Electricity Standard is a flagship policy within Biden’s Jobs Plan.
Green describes the standard as a “big policy lever.”
“If you put that in place, then you can really change how utilities behave and what they invest in,” he said.
Instead of a long range target set far in the future, the incremental nature of electricity standards sends a clear signal that those regulations will get tougher to clear every year. A recent paper from Mark Jaccard and the David Suzuki Foundation found that a clean electricity standard could decarbonize Canada’s grid by 2035.
“With that one big national policy, you start to drive action in every province,” said Green.
So far, the Liberal platform is the only one to specifically indicate its plan to bring in a clean electricity standard. They say that policy will help them reach their goal of reaching “net zero” electricity by 2035. “Net zero” allows for the use of offsets to balance out emissions.
The Greens and the NDP don’t say whether they would use a clean electricity standard as their policy tool. Both set more ambitious electricity targets. The NDP have set a target of “net zero” electricity by 2030, and 100 per cent non-emitting electricity by 2040. The Greens, meanwhile, have committed to 100 per cent non-emitting electricity in 2030. Whether or not these targets would be met through a clean electricity standard remains to be seen.
“The electricity standard might be implied there,” said Green. “There's definitely room for that to occur under their platform.”
The Conservatives have not made any targets to decarbonize Canada’s energy supply, and they do not reference a clean electricity standard.
Driving transitions by pricing carbon
A carbon price that penalizes fossil-fuelled electrical generation is another key to support renewable energy development, experts say.
On that front Canada’s current carbon price doesn’t pass muster.
Current carbon pricing under the Liberal government exempts most natural gas-burning electricity because it often falls below the defined emissions limits, said Hornung. “There is no real price signal there that actually encourages those facilities to transition.”
The current price also allows for some coal-fired power plants that use some form of carbon capture and storage.
Hornung adds that while new natural gas facilities will be increasingly exposed to the carbon price, and totally exposed by 2030, that’s too late to bring about the change needed.
The NDP is the only party that indicates they would “eliminate loopholes” for major emitters. This could mean that natural gas-fuelled electricity would no longer be tax exempt. They also plan to continue the current carbon pricing scheme, which will rise from $65 per tonne in 2023 to $170 per tonne in 2030.
The Liberal government has committed to putting a rising cost on carbon, but haven’t indicated whether they will increase the amount of fossil-fuel based electricity that falls under the price.
The Greens have committed to a more ambitious carbon tax rise of $25 per tonne of C02 every year from 2022 until 2030. While they do not indicate whether they would increase the scope of carbon tax, their commitment to 100 per cent renewable electricity by 2030 provides a similar indicator that gas and coal electricity will no longer be viable.
Meanwhile, the Conservatives don’t indicate whether they would expand the industrial carbon price coverage to include gas and coal-fired electricity, and they don’t indicate whether or not it would increase over time. Instead, they say that Canada’s carbon price will only increase if other jurisdictions, like the U.S., do the same.
Sharing the renewable wealth by interconnecting grids
So far, Canada’s electricity system is mostly an in-province affair, with each province managing its own configuration of utilities transporting electricity within the province, and sometimes to the U.S. Interprovincial transmission is rare, and energy planning and forecasting across provinces is virtually non-existent. Canada currently sends more power to the U.S. than it does across provinces.
Experts say that insular structure needs to change.
“Every province is working to sort of optimize their own electricity grid,” said Hornung, “which means, from a national perspective, we're always suboptimal.”
Canada has provinces with abundant renewable energy sources, and ones with less opportunities which continue to rely on coal, gas and oil for their energy needs. That creates optimal conditions for interprovincial energy trade, allowing renewable-rich provinces to help decarbonize fossil-fuel heavy grids.
In B.C., for example, there are 13 shovel-ready projects owned by First Nations producers that can’t sell their power because BC Hydro is forecasting a provincial surplus for the next decade. Meanwhile, Alberta has a carbon-heavy electricity system, which could decarbonize its electricity buying power from renewable projects in B.C.
“Everyone is kind of competing with each other instead of creating a level playing field,” said Green.
Interprovincial connections could also help solve renewables' intermittency problem, by expanding the network of buyers that want to purchase renewable energy when it’s abundant — like when the the sun is shining.
With a responsibility to act on climate, and as the government body responsible for interprovincial transmission the federal government is the ideal actor to convene provinces around the national grid plan. But so far, that hasn’t happened.
The Greens, the Liberals and the NDP each mention their interest in supporting a national power grid, while the Conservatives say they will "improve interties" in Canada’s grid system. The Liberals also indicate that they would establish a Pan-Canadian Grid Council, though the function of that prospective organization remains unclear.
The NDP’s platform puts funding from a new "Canadian climate bank" towards investment in grid interconnection, among other investments in renewables and grid technology.
Because renewables only constitute a small fraction of the country's electricity mix, the immediate need for interprovincial grids is difficult to prove. “Until you get to a certain penetration level of renewables, the need for that interprovincial connection isn't there at the same scale,” said Sara Hastings-Simon, director of the sustainable energy development program at the University of Calgary.
But that doesn’t mean it shouldn’t be happening.
It’s a “chicken and the egg” issue, says Hastings-Simon. The buildout needs to happen to make the activity possible in the first place. “You don't judge the need for a bridge by the number of people, swimming, biking and driving across the water.”
Experts also call for the government to support investments in “smart grids,” which use artificial intelligence to better monitor energy production and use, and to cut down on transmission costs by using infrastructure more efficiently. The Liberals, NDP and Conservatives all indicate their support for smart grid technology in their platforms.
Reforming utilities to match a changed energy landscape
Most of the country’s electricity is managed by central utilities that act like monopolies. Often those monopolies make it difficult for small renewable producers to sell their power through provincial transmission lines. While utilities will sometimes purchase power from independent producers, they tend to focus on major projects they build themselves. “It’s in their natural bureaucratic interest to basically push out new forms of energy,” said Hira.
The Site C dam in B.C., produced by the province’s monopolistic utility, BC Hydro, is an example. As the dam construction goes ahead, renewable energy projects in B.C. have been put on ice. But mega dams are expensive — the original estimate for Site C has soared to $16 billion. And the price of renewables continues to fall. Solar energy prices have dropped 89 per cent in the last decade.
“The business model for utilities is going to keep falling apart,” said Hira. “They're kind of built from a different era.”
As the cost of battery storage continues to drop, Hira expects the need for big, centralized utilities will fall alongside it.
“There are certain areas where you're starting to see the future, which is that once battery technology comes around, people will be able to produce their own energy, and they won't need these big utilities.”
But utility reform is an understudied area in Canada, said Hira. He’d like to see investigation into utility structure and a shared regulatory framework, and substantive changes in the ways that Indigenous jurisdiction and Indigenous renewable energy projects would factor into electricity planning and governance across the country.
So, which party has the best plan for renewable energy?
Every party has some form of climate action baked into their election platform. But Hastings-Simon suggests that voters look at parties’ platforms with an eye to whether or not the roadmap to reaching targets is well laid out, while also assessing the parties’ track record on implementing the policies it says it will.
The Liberals arguably present the most detailed plan that includes a clean electricity standard and more granular detail around the types of renewable supports they would offer. But their electrification targets are less stringent than those commitments made by the Greens and the NDP. They also continue to subsidize fossil fuels, which renders their approach “incoherent,” said Hira.
Meanwhile, the NDP and the Greens put forward a more ambitious plan overall, but their plans lack details on how they’ll get there. The Conservatives lack both ambition and a clear plan to integrate renewable energy into the electricity grid, emphasizing building out natural gas and nuclear energy sources instead.
Green sees progress in the fact that parties are broadly recognizing the need for grid reform.
“Part of that is recognizing that oil and gas as a source of energy for our economy is something we've got to get rid of,” he said. “And if we're getting rid of it, we've got to replace it with electricity. So there is improving sophistication in the way we're looking at it”
Improving, but not there yet. “We're still in grade school,” when it comes to meeting the renewables challenge, Green says. “We haven't made it to high school yet.”