As Canada builds a net-zero electricity grid, good decisions must start with good data 

In 2023, some things are impossible to ignore. One is climate change: from floods to heatwaves, it’s clear the climate clock is ticking. Then there’s energy: whether it’s $2 gas or higher home heating bills, powering our lives has gotten pricier. 

These two realities, climate change and volatile energy prices, have a common denominator in fossil fuels. They also share a common solution. 

Even without carbon pricing, wind power is set to be 40 per cent cheaper than gas-fired power in Alberta and Ontario by 2030. Solar power, meanwhile, is already cheaper than natural gas power in Alberta and is on track to be 16 per cent less expensive by the end of the decade, according to a new report from Clean Energy Canada informed by work from Dunsky Energy + Climate Advisors, which is among the first to examine the location-specific costs of building new clean power in these two provinces. 

Our analysis also explores the costs of using battery storage to complement wind and solar power, finding that, even with storage included, both are still highly cost-competitive. 

These results are important for a few reasons. For starters, Alberta and Ontario are in the midst of transforming their power grids. Alberta is phasing out polluting coal power, while Ontario has plans to decommission aging nuclear plants. Currently, both provinces are planning for natural-gas-fired power to play a leading role in filling this gap. 

Alas, there’s another gap in need of attention: good data. 

To their credit, both Alberta and Ontario’s grid operators are seriously investigating pathways to a net-zero power grid, but past forecasts have been made using data that’s dated or from other countries.  

A recent long-term outlook from Alberta’s energy regulator used renewable cost estimates prepared in 2018, with prices out to 2025 for wind and solar that were more than double the cost at which the electricity was actually being purchased in 2021. 

The federal government has committed to new regulations requiring Canada’s electricity grid to have net-zero emissions by 2035. The challenge is that power plants typically operate for decades, thus the choices made today will have substantial ramifications for 2035 and beyond.  

Building new natural-gas-fired power plants means locking in emissions — and costs — for many years to come. There is also the risk that fossil fuel infrastructure is retired before the end of its economic lifetime, becoming a stranded asset — a liability taxpayers would likely be on the hook for. 

The implications of these choices are compounded by another important factor: electrification. A lot more of the energy we consume is going to come via a plug, from our home heating systems to the cars we drive. In fact, achieving net zero by 2050 will require Canada to roughly double its power output. 

One of the great advantages of electrification is the potential to free Canadians from the cost burdens of yoyo-ing fossil fuel prices. In Europe, electricity bills increased 70 per cent year-on-year after Russia’s invasion of Ukraine fuelled a rise in the price of natural gas. But as bad as the situation was, renewables prevented it from being a whole lot worse. 

Record solar generation on the continent this summer helped the EU avoid $42 billion in imported natural gas costs. Accordingly, Germany has plans to double its wind and almost quadruple its solar capacity by 2030, while the EU has upped its clean power targets.  

Canadians clearly see the benefits too. Two-thirds think a clean energy system would be more affordable and secure than a fossil fuel system, according to recent polling.  

Similarly, companies are increasingly prioritizing clean electricity when making investment decisions. General Motors and Posco recently cited clean power as a major factor in their decision to build a new battery manufacturing plant in Quebec. 

But a clean energy system isn’t inevitable. Governments and power authorities must act to make it a reality. That means investing in wind and solar along with building a stronger, more flexible grid. It means providing the policy certainty needed to incentivize the necessary investments, including finalizing the promised federal Clean Electricity Regulations. And it means supporting the use of evolving energy storage solutions. 

The benefits are many, and the reasons are critical. With better data in hand, electricity decision-makers can chart a brighter course for Canada. 

This post was co-authored with Evan Pivnick and originally appeared in the Calgary Herald.

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