Commentary by Michelle Robichaud, President.
This commentary appeared in all New Brunswick on September 8, 2023 and in the Telegraph Journal on September 11, 2023.
The federal government recently released their Clean Electricity Regulations. These are sweeping rules designed to eliminate virtually all greenhouse gas emissions from electricity produced in Canada by 2035. After months of stakeholder consultations and work with provinces and utilities, the regulations were finally released in draft form on August 10, 2023.
The regulations impact anyone who uses and pays for electricity or depends on products or services that require electricity, which fundamentally includes all of us. The regulations are a big deal, especially here in Atlantic Canada where we do not have the energy alternatives that are available in central or western Canada, including natural gas.
Our region is reliant on petroleum products and has a disbursed, rural population base. For these reasons the Centre has outlined in previous commentaries and reports, the transition to clean energy will have a disproportionate affect on and higher cost here in Atlantic Canada compared to the rest of the country.
The current version of the Clean Electricity Regulations responds to several concerns previously expressed by our region’s utilities. These include the flexibility to use some fossil fuel generation as backup for winter peaks, and the treatment of biomass and nuclear generation the same as other non-emitting sources.
Under the new regulations, by 2035 (or just over a decade from now) NB Power must replace or modify up to three fossil-fuel generation facilities with a capacity of over 1700 megawatts (MW) of its total 4415 MW generation capacity. In Nova Scotia, the province has a total electricity generation capacity of 3200 MW with more than 1900 MW currently generated by carbon emitting sources.
Transitioning our region’s electricity generation fleet away from coal and oil, while required, is a huge and costly task. The Centre’s website hosts a series of interactive energy maps that provide an overview of our region’s electricity generation assets.
Alternatively, Newfoundland and Labrador, Québec, Manitoba and British Columbia all have significant supplies of carbon free hydroelectricity generation resources. Ontario operates its grid with a high proportion of non-greenhouse gas emitting nuclear power.
The Maritime Provinces, along with Saskatchewan and Alberta, have a much more difficult path ahead of us if we are going to phase out fossil fuels from the electricity grid by 2035.
Unfortunately, there are limited options for New Brunswick and Nova Scotia to transition to a clean electricity grid quickly and affordably.
Current scenarios include:
- The Atlantic Loop: a new transmission line bringing clean power from Québec into New Brunswick, Nova Scotia and Prince Edward Island.
- Adding significantly more wind and solar generation paired with large scale battery or electricity storage back-up.
- New nuclear generation, including advanced small modular reactors.
- Retrofitting existing fossil generation to burn biomass.
However, none of these options are quick, cheap, or even a sure a thing.
For example, there is no guarantee that Québec will even have surplus electricity to supply us given seasonal peak demand, the requirements of heavy industry and efforts to electrify their province’s transportation sector.
Rapidly increasing demand for renewable energy equipment is straining global supply chains and driving up costs. Aggressive government incentives are also concentrating clean energy investments in the U.S., Europe and Asia.
Nuclear, including advanced small modular reactors, is showing great promise, but it will take time and sizeable investments for new technologies to advance to commercial viability.
Atlantic Canada is blessed with ample biomass resources and world-class forest management practices, but the cost of retrofitting existing power plants based on current electricity prices remains a challenging value proposition.
But our single greatest challenge is time and regulatory uncertainty.
Even if the options listed above prove to be economic, we need to plan, design, approve, retrofit or build new generation resources.
We need receptive and supportive host communities.
We need a trained, skilled and available workforce.
We need regulatory certainty.
And, we have ten years to get it done.
Achieving a ‘net-zero’ electricity grid will come at a significant cost, which need to be reflected in how our energy regulators assess ratepayer impacts and determine electricity rates. The recently released NB Power and Nova Scotia Power Integrated Resource Plans capture the complexity of what lies ahead, and the challenges faced by regulators in determining what is fair for ratepayers.
The laws that govern our region’s energy regulators need to be modernized to reflect both economic and climate change government policies, and societal goals.
While the current version of the Clean Electricity Regulations provides some flexibility, it severely impacts Atlantic Canada (more so than any other region in Canada). Emission reduction is a national problem, and federal funding and resources should be allocated proportionally to cost and ratepayer impacts.
Fortunately, the federal government has indicated that the Clean Electricity Regulations remain ‘draft’, and that they remain open to feedback and input.
Let’s get to work! We have until the end of the year to shape a regional clean electricity transition plan that reflects the best interest of utilities and ratepayers and ensures our region’s voice is heard in Ottawa.