Clean Energy Canada | Media Brief: Canada's Clean Electricity Regulations
August 8, 2023

Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

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The federal government has released a new paper, Powering Canada Forward, which lays out the federal government’s vision for a 100% clean power grid by 2035. The paper precedes the forthcoming Clean Electricity Regulations that will provide the regulatory support.

Canada’s grid is already 84% emissions free, but as the energy transition progresses, more homes, vehicles, and industries will be plugging into the grid. Estimates indicate that power demand could double between now and 2050 while generation capacity will need to be up to three times larger. The Clean Electricity Regulations help ensure that Canada’s regionally divided power system remains both clean and affordable in the years ahead.

This media brief summarizes some of the most relevant studies on what a clean power grid means for provinces, electricity costs, jobs, and public opinion, while providing a run down of similar policies in place elsewhere in the world.

Costs of clean power

• A recent Clean Energy Canada report, A Renewables Powerhouse, looked at the costs of producing power from wind and solar in Alberta and Ontario compared to gas power. Specifically it found:

  • In Alberta and Ontario, wind can now produce electricity at lower costs than natural-gas-fired power with even more cost reductions on the horizon.
  • Solar power is already cheaper than natural gas power in Alberta and is on track to be 16% less expensive by the end of the decade.
  • Even when the costs of battery storage are included, both wind and solar are cost-competitive in many scenarios. 

• Canadians will spend 12% less on energy overall than they do today when they switch off fossil fuels to power their homes, vehicles and businesses with clean electricity, according to a report from the Canadian Climate Institute. While electricity bills may increase over time, the report notes that Canadians will overall spend “less on energy because electric technologies are so much more energy efficient than fossil-based ones. The cost of renewable power has also fallen dramatically over the last decade, making it the cheapest source of new power.” For example, the price of charging an electric car may increase your electricity bill, but the savings on gasoline are far greater, as shown in Clean Energy Canada’s report, The True Cost. 
• The price of clean power is controlled by local market forces (and is therefore subject to fewer price fluctuations), while power produced from fossil fuels is exposed to the geopolitics surrounding global oil and gas prices. In Quebec, for example, which has an almost entirely emissions-free grid, utility Hydro-Québecpointed out that over the last 60 years, “electricity prices followed the inflation curve while oil and natural gas prices show(ed) greater fluctuations.”

• Already, provinces with the cleanest grids typically pay the least for electricity. 

• The effects of the climate crisis could cost Canadians some $700 per year by 2025—a price tag that is expected to double or triple by 2050.

Implications for provinces

• The financial support for clean electricity grids offered by the federal government in Budget 2023 benefits all provinces, but particularly those transitioning away from more emissions-intensive grids (namely Alberta, Saskatchewan, Nova Scotia, and New Brunswick), according to a recent paper by the Canadian Climate Institute. These provinces all stand to receive 33% more funding than hydro-rich provinces per gigawatt of presently installed capacity. Specifically,

  • Alberta could receive as much as $3.5 billion, in addition to $3 billion of financing support from the Canada Infrastructure Bank.
  • Saskatchewan could access more than $1.6 billion in direct support and over $1 billion in financing.
  • Ontario could receive as much as $13.4 billion in funding specifically for clean electricity. 

• Independent modelling in a variety of provinces has shown pathways to decarbonizing provincial electricity grids:

  • In Ontario, a recent analysis found that there are multiple pathways to achieving the 2035 goal, and that these pathways could be pursued cost-effectively if the right decisions are made. Importantly, all of the scenarios greatly limited the role of natural gas, playing as little as 3% of all generation in 2035 (with the assumption that emerging technologies like carbon capture and storage or carbon offsets would account from the remaining emissions).
  • In Alberta, significant decarbonization could be achieved by 2035 and would be $22 to $28 billion cheaper than estimated by the Alberta Electric System Operator, according to research from Pembina Institute and the University of Alberta.

• Alberta has seen nearly $4.7 billion of new clean electricity projects between 2019 and 2023, creating over 5,300 jobs. However, last week the Alberta government surprised investors and companies by announcing a seven-month moratorium on new projects. It is estimated that around 91 projects and over $25 billion of investment are now at risk due to this sudden announcement.

Impacts on jobs and the economy

Canada’s clean grid offers a competitive advantage to Canadian industry. Canadian electricity is, on average, more than twice as clean as America’s, meaning that many goods and services produced here are accordingly lower carbon. 

• Several big companies like Volkswagen and General Motors have indicated that they chose Canada for their manufacturing facilities in part due to its clean power.

In addition, clean electricity projects themselves are benefitting Canada’s economy.  

• Canada will see 700,000 more energy jobs in 2050 than exist today if Canada and the world reach net zero, with growth in clean energy jobs outpacing the decline in fossil fuel ones, according to a recent Clean Energy Canada report.
• The same report found that clean energy supply (which includes electricity generation) will support 478,700 workers in a net-zero 2050 with almost 60% more Canadians working to supply clean energy than in 2025.

Similar international actions

Canada is not alone with its ambition to create a clean power grid by 2035.

• The United States, Canada’s largest trading partner, also has a goal of producing 100% carbon pollution-free electricity by 2035. Significant investments in the Inflation Reduction Act and Bipartisan Infrastructure Law have already advanced the country’s clean power ambitions, with the National Renewable Energy Laboratory predicting that grid emissions could decline between 72% to 91% below 2005 levels by 2030 as a result.
• G7 countries all committed in 2022 to achieve “predominantly decarbonised electricity sectors by 2035.” As part of its G7 presidency, the U.K. requested an International Energy Agency assessment of the pathways to achieve this objective. The agency concluded there was a “comprehensive and cost-effective route to achieve net zero electricity in the G7 without compromising energy security.”

Public opinion

• An overwhelming majority (71%) of Canadians support the federal government’s Clean Electricity Regulations according to a recent Abacus Data poll commissioned by Clean Energy Canada. In B.C. and Atlantic Canada, support for the Clean Electricity Regulations is even higher, with nearly 8 in 10 saying that they “somewhat” or “strongly” support them. More Canadians support the regulations than are against them in every region, including Alberta.

• A different Clean Energy Canada poll found that two thirds of Canadians think a clean energy system would be more affordable than a fossil fuel energy system. This view is shared by a majority in every region or province, except for Alberta. Two-thirds also think a clean energy system would be more secure—that is, a system where prices and supply are less influenced by goal markets. This view is shared by a majority in every region or province, including in Alberta.