Commentary: The ‘Sticker Shock’ of Our Clean Energy Transition
The rising cost of living is a top concern for all Atlantic Canadians, and many of us are also worried about climate change. Unfortunately, it will likely be costly to tackle climate change in Atlantic Canada.
For example, NS Power is currently working to phase out electricity generated by coal by 2030, as is NB Power. This “low-hanging fruit” to immediately reduce emissions cannot happen without significant cost increases to ratepayers. The challenge of taking several generating facilities offline and finding cleaner baseload electricity options to replace the coal-fired electricity lost, is expensive.
As a result, NS Power applied for a 10 per cent rate increase between 2022 and 2024. Understandably, there has been pushback from political leaders and community advocates as many residents are already struggling with the rising cost of living.
The requirement to phase out coal and other fossil-burning fuels is just the first pancake in a growing stack of federal policies aimed at accelerating Canada’s goal of achieving net-zero emissions by 2050. It is the result of the federal government’s proposed Clean Electricity Standard, which may require all utilities like NS Power and NB Power to have net-zero electricity production beginning in 2035.
In addition to carbon taxes or cap-and-trade systems that increase fuel taxes each year, there will soon be a Clean Fuel Standard which may lead to additional costs for gasoline and diesel. There is also a policy on the table leading to every new light-duty vehicle sold by 2035 be a zero-emission vehicle.
Maritime provinces are also contemplating how to produce more clean electricity to meet population growth, heat homes and businesses as they transition off fossil fuels and electrify all these new zero-emission vehicles.
Reaching net zero by 2050 is a national priority and an important one. However, we must question the associated costs of these pancaking policies and whether they are attached to achievable timelines. In Atlantic Canada, the more we reduce emissions, the more costly it is for all of us.
Fortunately, there are things each of us can do to help this clean energy transition.
We must consider how we can reduce our own electricity usage and emissions. We can all take steps like turning down our hot water tanks, relying less on clothes dryers and turning off lights when we leave a room.
We can make our homes more energy efficient and, when available, find alternative clean options to heat our homes, such as using wood pellets, adding solar, switching to natural gas, or investing in heat pumps. We can also seek out more fuel-efficient vehicles if owning an electric vehicle is not yet possible and we can drive less or carpool.
For those looking to improve their knowledge about energy and access resources to reduce emissions, read the Atlantica Centre for Energy’s new 2022 Atlantic Canada’s Energy Transition Resource Catalogue.
Reducing our emissions and energy use alone won't solve our problems.
Governments, utilities and private industries in the region are trying their best to plan and build for the future with urgency, but the Atlantic provinces face challenges dealing with this transition that others do not, such as limited access to natural gas as an affordable home heating alternative, or widespread access to hydro to provide clean baseload electricity. These regional differences lead to higher transition costs of Atlantic Canadians.
And, as the cost of living is rising rapidly across the Atlantic region, paying more for clean electricity isn't a realistic option for many.
Between 37 and 41 per cent of households in the Atlantic provinces already experience high home energy cost burdens – double the national average.
The federal government must ensure that national emission reduction policies do not disadvantage Atlantic Canadians because of our unique geographic, demographic and infrastructure realities.
The Atlantica Centre for Energy is currently working on new research to help Atlantic Canadians better understand our energy needs for the future, and how regional cooperation can make this transition as fast and affordable as possible.
In the meantime, we should collectively send the message to the federal government to recognize our transition to net-zero can be and must be affordable for everyone. These federal ‘pancake’ policies may need to change to ensure affordability is achieved while we reduce our emissions.
Jonathan Alward is the Vice-President, Policy for the Atlantica Centre for Energy. The Centre provides a unique meeting ground for industry, government, the education and research sectors, and the community at large to foster partnerships and proactively engage in energy-related issues. The Centre’s membership represents the largest employers, energy producers, distributors, and consumers in the region. More information is available at www.atlanticaenergy.org.