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Canada's Ambitious Path to a Net-Zero Grid by 2035: Navigating Hesitant Provinces, Accelerating Renewable Energy, and the Bold Phasing Out of Fossil Fuels

(Renewables as part of Canada's Electricity Grid)

Achieving a Net-Zero Electricity Grid by 2035

The Canadian government has made its intentions clear for the country's electricity production. As of 2021, the Canadian government is looking to make its electricity grid net-zero by 2035. Essentially, this will mean that Canada’s generation of electricity will result in exactly zero emissions at any given time by the target year. 

It will mean that Canada’s current sources of electricity generation will need to be significantly revamped in order to meet the net-zero targets. At the moment, 85% of Canada’s electricity generation sources are already net-zero using a mix of hydro, nuclear, wind, and solar technologies. The bulk of Canada’s electricity comes from hydroelectricity, which accounts for approximately 60% of Canada’s total electricity generation. Nuclear energy takes the next bulk with about 20% of total production, with solar and wind technologies taking the remaining 5%. The last remaining 15% of electricity is generated primarily from non-renewable sources like natural gas and coal. 

Nonetheless, the current 2035 target does not mean that electricity production will be ‘fossil-fuel’ free; instead, the federal government proposes that any electricity generation from fossil fuels will be allowed as long as they are subject to rigorous clean regulatory standards, essentially bringing emission-heavy energy sources to net-zero. 

Whereas Canada has set out goals for the nation to reach, the operation and production of electricity remain solely under the jurisdiction of the provinces. In other words, the federal government will have to work with, negotiate with, and fund the provinces to help them reach the national goal of a net-zero electricity grid by 2035. Fortunately, 6 out of the 10 Canadian provinces already boast impressive renewable energy production and ambitious goals to reach the 2035 target. The remaining 4 provinces still have much to do to reduce their reliance on emission-heavy sources, with 2 out of the 4 publicly rejecting the 2035 targets as of recently. 

The Bad: The Provinces of Nova Scotia and New Brunswick

Canada’s remaining 15% of electricity generation is produced using a mix of natural gas and coal, with the majority of this chunk belonging to natural gas. Some provinces disproportionately use fossil fuels more than others; such provinces include Alberta, Saskatchewan, Nova Scotia, and New Brunswick. While all the aforementioned provinces have made commitments to phasing out coal-generating plants by 2030, natural gas generation systems will continue to play an integral role in their power grids well beyond 2030. Thus, phasing out natural gas will prove to be a lot more difficult than coal for these provinces. 

Fortunately, the Atlantic provinces of Nova Scotia and New Brunswick have made strong commitments to reaching a net-zero grid by 2035. Nova Scotia in particular is making significant progress on this front, with notable growth in wind and solar power at the expense of reducing natural gas and coal use. Nova Scotia was able to increase its share of renewable energy use from 27% in 2015 to approximately 34% in 2023. And although Nova Scotia had committed to reaching 40% renewables by 2022, the Nova Scotia government is nonetheless confident that it will increase its renewable use to 80% of total electricity generation by 2030 and meet the 2035 targets. As a testament to the government’s commitments, the Nova Scotia government fined its sole electricity operator and producer, Nova Scotia Power, $10 million for failing to reach the 2022 target. 

The province of New Brunswick has also announced its commitment to reach a 100% net-zero grid by 2035. Fortunately, New Brunswick already boasts a grid that is 80% carbon-free today, with 70% of the 80% of power produced by nuclear and hydro. Unfortunately, New Brunswick’s public utility company, responsible for all production and distribution of electricity in the province, has stated that financial, technological, and regulatory concerns will result in “uncertainty” in meeting the 2035 target. Nonetheless, NBPower’s published energy plan states that “all scenarios lead to net-zero but result in a range of new resources required to reliably serve electricity customers in New Brunswick.” 

Eastern Canada: The Atlantic Loop Solution

Fortunately, the Atlantic provinces have a unique opportunity to pursue an important infrastructure project that will integrate their grids for the sharing of renewable energy generation. The $6.8 billion will see the construction of bidirectional power lines that will integrate energy generation between the provinces of Quebec, Newfoundland, Nova Scotia, and New Brunswick. More specifically, it will see energy exporters like Quebec and Newfoundland send clean renewable energy to Nova Scotia and New Brunswick, thus helping them reach their net-zero 2035 targets. 

Concerns from the NS and NB governments largely revolve around the cost of the project. The Nova Scotia government in particular argues that the Atlantic Loop is no longer the most cost-effective method to reach net zero and is looking to use other pathways to reach the target. According to the NS natural resources and deputy renewables Minister, focusing on wind-generating projects, improving existing transmission lines between the Atlantics, and the advancement of battery storage technology should help the province reach net zero. 

On the other hand, the federal government is ready to finance the project through a $4.5 billion loan and argues that Nova Scotia and New Brunswick otherwise have uncertain pathways to reach net zero without the loop project. The federal government is hoping to reach a deal with the Atlantic provinces by the end of the summer.

Outside of the concerns for cost and the loop’s efficacy to reach net zero, proponents of the project argue that a bidirectional transmission line will benefit the provinces in a number of ways: (1) it’ll allow the fragmented Atlantic provinces to bulk the amount of baseline electricity they produce; (2) it'll allow for easier regional support for meeting electricity demand in rural areas; (3) it'll support the increasing population and economic demand for electricity in the region with the Loop accruing as a backstop for that growth; and (4) getting the project started earlier to avoid cost increases years down the line.

The Ugly: The Provinces of Alberta and Saskatchewan

On the other hand, the provinces of Alberta and Saskatchewan have been publicly antagonistic towards the federal government’s 2035 net-zero goal. Instead, the two provinces are aiming for a net-zero grid by 2050, a full 15 years later than the rest of the country. The two fossil-fuel-rich provinces argue that the transition would be overtly expensive for their taxpayers and would end up increasing current retail rates of electricity for consumers.

The Premiers of both Saskatchewan and Alberta have made it clear that a 2035 target is not doable. 

“In Saskatchewan, we will not attempt the impossible when it comes to power production in our province. We will not risk plunging our homes, our schools, our hospitals, our special-care homes, our businesses into the cold and darkness because of the ideological whims of others," says the Premier of Saskatchewan in May. 

“Alberta’s government will protect Albertans from these unconstitutional federal net-zero regulations. They will not be implemented in our province – period,” tweeted the Premier of Alberta in August. 

As a testament to their hostility, the Alberta government has recently put a pause on solar and wind projects for six months. The provincial government indicates that due to a large number of project applications for renewables, the government is temporarily imposing a pause in order to develop guidelines and procedures for renewable project development. 

However, reports from a number of news sources indicate that the government had not consulted with stakeholders before the pause. The renewable energy sector in Alberta has expressed its concern over the province's lack of engagement, risking up to $25 billion in investment and 91 projects. 

A Net-Zero Grid, not a Fossil-Fuel-Free Grid

Even against uncertain odds, the federal government is nonetheless committed to negotiating with hesitant provinces to find a middle ground. Although not final, a snapshot of the middle ground has been outlined in the draft of clean electricity regulations (CER) the federal government released and shared with the provinces in early August. As part of these regulations, the federal government is looking to allow provinces to continue to use natural gas for electricity generation in exchange for stringent regulations on their emissions and the use of carbon capture technologies to effectively reduce emissions from natural gas generating systems to zero by 2035.

Fortunately, expansions towards non-emitting sources such as nuclear power are being seriously considered by the emissions-heavy provinces. The provinces of Alberta and Saskatchewan have jointly made a strategic plan with the nuclear leaders of Ontario and New Brunswick to expand the use of small modular reactor generators in the Prairies. This development will see the Ontario and New Brunswick governments first employ SMRs within their own jurisdictions before exporting their expertise to Alberta and Saskatchewan. While the gas-bastion provinces seem reluctant to invest in wind, solar, and hydro due to baseload constraints; nuclear continues to be an attractive option for all Canadian jurisdictions because of its reliability and consistency. 


What about Canada’s Most Populous Province: Ontario? 

Ontario, which is home to 40% of Canada’s population, sources a majority (60%) of its electricity production from nuclear, 25% from hydro, and the remaining 15% from a mix of other renewable and non-renewable sources such as solar, wind, and natural gas. Ontario remains a leader in hosting the most diversified, non-emitting energy grid. However, demand is increasing; as per Ontario’s needs, total electricity capacity will have to double by 2050 due to population and electrification pressures.

As a result, the province is looking to significantly expand its nuclear capacity by expanding its existing Bruce nuclear power plant to create the largest nuclear power plant in the world. This expansion will add 4,800 MW of output, bringing the total to 11,200 MW, the largest output for any nuclear power plant globally. The province is also currently refurbishing another existing nuclear plant to renew its operation for another 30 years.

In addition, the Ontario government is looking to expand its hydroelectric capabilities by funding multiple promising projects in the river-rich northern areas of the province; such projects include the Moose River Basin, Albany Rivers, Little Jackfish River, and Severn River Basin.

Fortunately, hydroelectricity remains the lowest-cost source of electricity worldwide, according to a report by the International Renewable Energy Agency.

Nuclear and Hydropower: The Future Backbone of Canadian Energy

Hydroelectricity is already Canada’s most abundant source of energy generation. In the jurisdictions of Quebec, Manitoba, British Columbia, Newfoundland, and Yukon, hydropower provides at least 90% of electricity. In the jurisdictions of Ontario and New Brunswick, a mix of hydro and nuclear accounts for at least 80% of electricity generation.

As for the future, hydro and nuclear will continue to be the most attractive energy sources for reaching the net-zero grid, as both energy types remain the only non-emitting sources that are most effective at producing a high baseload of energy reliably and cheaply 24/7. As a result, Canada’s provinces will likely look toward hydro and nuclear options for expanding their energy capacity requirements. 

For wind and solar, consistent electricity generation is only possible when environmental conditions allow it (i.e., sunshine or windy days); otherwise, the two energy sources produce limited amounts of energy at a large scale. Furthermore, as long as battery storage technology is insufficient at storing the extra energy from solar and wind to scale across the grid, nuclear and hydro will continue to be the only forms of non-emitting energies for large-scale energy needs. Wind and solar will instead be used as energy backups during peak periods. 

Support from the Federal Government

Fortunately, the federal government has put $45 billion on the table for the development of clean electricity projects. Although all provinces seek to benefit from these incentives, the provinces that are relatively unclean will receive 33% more in funding per gigawatt of currently installed capacity than their hydro-rich peers. 

The Canadian Climate Institute’s research paper shows that all provinces could receive billions in support from the federal government and the Canada Infrastructure Bank: 

“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. 

Furthermore, the clean electricity regulatory drafts released have also provided flexibility for struggling provinces. The drafts indicate that natural gas plants opened after 2025 (which is how most fossil-fuel electricity is generated in Canada) will be required to reduce their emissions by 95% using regulatory methods and carbon capture technologies.

As part of the draft, the federal government is also assuring that remote and northern communities not connected to the grid and relying on diesel will not have to switch to renewables; thus, exceptions will be made in those places. Instead, the federal government will look to support those communities for renewable electricity implementation directly.

The government shows that electricity rates would increase to about $31 to $65 per year by 2050, of which the CER regulations would only account for 2% of the rate increases. Nevertheless, Canadian households will experience savings of about 12% on energy bills overall when accounting for savings on the electrification of home heating, electrical equipment, and transportation. 

As the provinces look to implement a net-zero electricity grid under the regulations and guidelines set by the federal government, climate change is continuing to put pressure on countries to decarbonize their grids as fast as possible. While there are a number of provinces that are hesitant to reduce their grid emissions to zero by 2035, there is a lot of political will, funding commitment, and public support to reach the goal. Recent polling shows that a strong majority of Canadians, 71%, support the Clean Electricity Regulations and the 2035 net-zero target put forth by the federal government.

The onus is, however, completely on our governments to deliver, but Canadians also have a role in holding their federal and provincial leaders accountable to deal with climate change. Getting to a net-zero electricity grid is a major step toward fighting against climate change and reducing our nationwide emissions to net zero.

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