Commentary by Jonathan Alward, Vice President, Policy, Atlantica Centre for Energy

Recent analysis shows that cost-effectively transitioning our energy system in Atlantic Canada to net-zero greenhouse gas (GHG) emissions can be based upon a mixed portfolio of solutions including wind-, hydro-, nuclear-, and natural gas-based energy generation.  

The federal government is currently developing the Clean Electricity Regulations (CER), which will dramatically reduce fossil fuel-fired electricity generation allowed by utilities after 2035. These new regulations will provide a powerful push for utilities to reduce emissions and help provinces reach net zero by 2050.  

The Atlantica Centre for Energy used the Atlantic Canada Energy System (ACES) model to determine the least cost solution for multiple scenarios, comparing scenarios that either included or excluded the proposed CER. The scenarios were constructed by using publicly available inputs from reputable sources including Energy + Environmental Economics (E3), which informed the Clean Power Roadmap for Atlantic Canada.  

Analysis is still underway, but early results are clear: multiple pathways to a net-zero electricity grid in Atlantic Canada rely on deploying all types of electricity generation. 

The modelling shows an increasing role for renewable energy across the region in the period 2020 to 2055, especially with additional onshore wind. These renewables would be paired with grid-scale batteries. But batteries are expensive, and renewables alone do not provide enough firm capacity to keep Atlantic Canadians warm on the coldest, shortest days of winter. Other sources of electricity generation are critical:  

  • Hydro generation would remain strong and consistent until at least 2055.  
  • Increased transmission across the region, led by the Atlantic Loop, would add significant capacity through the import of dependable (hydro) electricity from Québec.  
  • The role for thermal generation (biomass) would be relatively minor but steady until 2050. 
  • As an alternative to energy storage via batteries, hydrogen is used in some scenarios. 
  • Under the application of a subsidy that would provide $3.2 billion per GW of installed capacity, advanced small modular nuclear reactors (aSMR) start to be built out in 2025. The subsidy was designed to mirror a subsidy announced in Ontario.  

A diversified energy grid promotes energy security

Importantly, in the scenarios modelled, natural gas would continue to have an important role in Atlantic Canada’s transition to net-zero electricity. With the CER in place, natural gas-fired generation would be paired with carbon capture and storage (CCS). Without the CER requirement, natural gas (both unabated and with CCS) would be deployed in Nova Scotia and New Brunswick. In this scenario, the natural gas power plants without CCS were used sparingly after 2035 in large part because of a (likely) rising carbon price.  

Keeping natural gas power plants as backup capacity in the system can help meet peak demand during the coldest winter days, provide an added layer of energy security, and reduce energy system costs for utilities and ratepayers.  

Over the 35-year period studied, allowing natural gas power plants to remain in the system after 2035 reduced total energy system costs by around $2 billion (in 2018 dollars) while keeping emissions relatively low. In fact, in the previously mentioned scenario without the CER in place, Atlantic Canada’s electricity emissions would drop to 0.31 MtCO2 equivalent emissions in total between 2035 and 2055. This is accomplished without the CER in place. For context, the four Atlantic provinces currently emit more than 120 times that amount annually! 

A reliable path to net zero 

Between the phase-out of coal-fired electricity generation by 2030 in Nova Scotia and New Brunswick, and growing demand across the region over the next 30 years, readily dispatchable sources are needed to help maintain reliability on the path to net zero.  

Atlantica Centre for Energy calls on governments to focus on data-driven policies to ensure Atlantic Canada can reach emission reduction targets as affordably as possible for ratepayers. Similarly, Atlantic Canadians should focus on encouraging all types of energy needed to accomplish these goals.