The Three Amigos’ Clean Energy Target Explained

Today’s meeting of the three North American leaders put climate and clean energy at the centre of a packed agenda—an important signal in and of itself.

And the leaders took advantage of their time together to deliver several new and promising clean energy commitments. This blog digs into those continent-wide clean energy plans: what they mean, why they matter, and what Canada should do next.

What is the new clean energy target?

The leaders agreed to a target of “50 per cent clean power generation by 2025” for North America. They call this commitment “historic,” and they’re not wrong: this is North America’s first trilateral clean energy goal. It’s not a binding commitment—few outcomes from these kinds of summits are—but coming from this continent’s leaders, it’s a very strong political signal that demand for clean energy is only headed up.

What do the leaders mean by “clean”?

It’s an important question, because the term means very different things to different people. Fortunately, the action plan that accompanies the agreement provides a definition: “renewable, nuclear, and carbon capture and storage technologies” made the leaders’ “clean energy” list. The plan also notes that “demand reduction through energy efficiency” will help achieve the target.

Just to be clear: when we at Clean Energy Canada use the term “clean,” we’re referring to energy that comes from renewable sources—like wind, sunlight and water—as well as the technologies that support renewable energy generation.

But no matter how you define “clean energy,” we can expect the vast majority of the new power that comes online to hit the North American target will be renewable. The cost of renewable energy technologies has plummeted in recent years and is projected to keep right on dropping, so renewables are winning out over other options on cost alone in a growing number of jurisdictions—both on our continent and around the world.

How tough is this target?

It’s eminently attainable, but it’s not a slam dunk.

The continental grid is about 37 per cent “clean” today, using the Three Amigos’ definition. To get to 50 per cent by 2025, the three partners will have to ensure that virtually all new generation that comes online is clean—an increase from today, where about 80 per cent of North America’s new generation is fossil-free. At the same time, the three countries will have to reduce their reliance on existing coal and natural gas plants, and waste less energy across their economies.

In other words, this target builds on an existing trend—fast growth in clean energy generation—but will help to accelerate it.

Will some countries have to do more than others?

The target covers the entire continental electricity grid, so it’s very likely that the three partners will make different contributions to the collective target.

Canada, the U.S. and Mexico have very different starting points, as the table below shows:

Table: Canada, US and Mexico renewable electricity and nuclear generation

(The leaders’ definition of clean energy also includes carbon capture and storage, which is not depicted in this chart, but it’s still a very small percentage of the electricity sector in North America today.)

Of course, the United States has the largest electricity system on the continent—so although its percentage of renewable power is smaller, it contributes the largest amount of clean power to the continental total in absolute terms.

Meeting the goal in 2025 will require enough “clean” electricity on North America’s grid to power 76 million homes—a total equivalent to what Canada and Mexico generate today.

Canada’s electricity sector is well above the target level today. So does that mean we don’t have to do anything?

Nope: just because we have a head start doesn’t mean we can sit on the sidelines.

Any clean power we bring online in Canada—or fossil power we take offline—counts toward the target. And while some provinces are already powered almost entirely by clean energy, others have a lot more work to do to clean up their grids.

But there’s more: a continent-wide clean energy target is a fantastic export opportunity for Canada. The U.S. and Mexico want more clean power, and we’ve got it.

The communiqué says as much: it notes that the three countries will meet the target, in part, by “collaborating on cross-border transmission projects, including for renewable energy.” The text notes that at least six cross-border projects are currently proposed or under review, and names two Canada-U.S. links specifically: the Great Northern Transmission Line, connecting Manitoba to Minnesota, and the New England Clean Power Link, a Quebec-to-Vermont proposal.

President Obama’s central climate policy, the Clean Power Plan, allows states to use new Canadian clean energy projects to meet their targets—an opportunity that could see today’s $3 billion in Canadian electricity exports to the U.S. triple as the plan comes into full effect.

Is it too petty to mention Keystone at this point?

I hope it’s not, because I can’t resist that temptation.

As we all know, nearly a decade of Canadian lobbying couldn’t convince the U.S. to build the infrastructure that would send more high-cost, high-carbon bitumen their way.

But less than a year after President Obama decided Keystone XL wasn’t in his country’s national interest, he’s signed onto a communiqué that welcomes another kind of cross-border energy infrastructure project from Canada.

In reality, large energy infrastructure projects are never no-brainers, whether clean or not. There are always local environmental impacts to weigh, along with Indigenous and community perspectives.

But it turns out that there was a productive continental energy conversation to be had all along—and it’s all about clean energy.

What are the next steps for Canada?

Now that we’re signed on to an international goal, we should complement that with a Canada-specific target for clean energy.

The U.S. and Mexico already have clean energy goals for their own countries. Those goals and policies help provide direction to clean energy investors and developers, and contribute emission reductions to their national climate plans.

Canada’s previous federal government did set a national goal: to have 90 per cent of our country’s electricity be “non-emitting” by 2020. You may not be surprised to hear that Stephen Harper’s government didn’t follow through on that commitment.

Today, our federal and provincial governments are in the throes of crafting a national climate plan, which they’ve said will come into effect in early 2017. The new continental goal begs the question of what Canada’s contribution is going to be. The timing couldn’t be better to adopt a national clean energy target—one that we actually meet this time around.

Longer term, we need to do just what our American and Mexican neighbours will be doing: bringing more clean power online, increasing energy efficiency, and phasing out fossil fuelled electricity sources. For example, unless the carbon is being captured and stored, there’s no good reason to burn coal for power in Canada after 2030.

To make a serious dent in greenhouse gas pollution, we’ll need all that clean power—and then some—to electrify other parts of this continent’s economy: the cars we drive, the heating and cooling systems in our homes, and the industrial processes we operate.

Electrification in Action
For more detail on how important renewable electricity is in building a clean economy, see “A Canadian Opportunity: Tackling Climate Change by Switching to Clean Power”

So the continental target grabbed the headlines. But are there other clean energy goodies in this communiqué?

Great question, because the answer is yes: there are three more elements to this agreement that clean energy aficionados shouldn’t miss.

First, it’s time to get to know NARIS, the North American Renewables Integration Study. This trilateral analysis was launched quietly back in May at the U.S. Clean Energy Ministerial, and today it got a mention in the Leaders’ action plan.

The goal of the study is “to better understand the planning and operational impacts of integrating growing renewable energy sources, such as solar, hydro and wind, into our electricity grids.” The U.S. has produced excellent analysis of these kinds of questions domestically; by adding Canada and Mexico into the mix, the assessment should tell us exactly how and where cross-border cooperation can make the clean energy transition work better for all three partners.

The agreement also promises action on “clean vehicles”—adding more of them to government fleets, investing in charging infrastructure, harmonizing on regulations, and convening the continent’s carmakers next year “as part of a shared vision for a competitive and clean North American automotive sector.” It’s not quite a North American Electric Auto Pact yet—but it’s a step in that direction.

And last but certainly not least, if you’re a clean energy developer looking for a very big customer: the Canadian and U.S. federal governments announced “their intention to increase the percentage of electricity they purchase from clean energy sources to 100 per cent by 2025.”

All in, a good day’s work from our continent’s leaders—and it’s not even lunchtime yet.

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