Commentary by Michelle Robichaud, President of the Atlantica Centre for Energy
The federal government is in the process of developing transformative new Clean Electricity Regulations (CER) to nearly eliminate emissions from electricity generation for utilities across Canada beginning in 2035. This process is taking time though as the proposed framework was released last July and the proposed regulations were supposed to be released by the end of 2022. That means less than 13 years to make significant changes to the electricity system.
This leaves one to wonder: “Where are the Clean Electricity Regulations?”
The Atlantica Centre for Energy used the Atlantic Canada Energy System (ACES) model in December and January to determine the least cost solution for multiple scenarios to meet future electricity demand across Atlantic Canada. Modelling compared scenarios which included or excluded the proposed CER framework. Analysis was clear that multiple pathways to a net-zero electricity grid in the region rely on deploying all types of electricity generation, including natural gas.
Future electricity generation in the region requires expanding renewables like wind, maintaining hydroelectricity, increasing exports, and deploying newer technologies like advanced small modular reactors to meet growing demand while phasing out most fossil fuel-fired generation. peaking facilities will be important.
These peaking facilities could rely on natural gas, for example, but their availability beyond 2035 was left uncertain in the CER’s proposed framework. The CER considered limiting new builds for unabated natural gas generation, but an existing one could continue operating if it emits less than a yet-to-be-determined thresholds for time of use and emission intensity. The framework was also noncommittal regarding fleet averaging (average for all a utility’s generating units).
To further complicate these matters, the Centre’s modelling scenario with the CER in place, results showed natural gas-fired generation would be paired with carbon capture and storage (CCS). However, CCS may not be an available solution in Atlantic Canada, as it is expected to be in Alberta, for example.
In a scenario without the CER in place, modelling deployed natural gas-fired generation in Nova Scotia and New Brunswick, both with CCS and unbated. Unabated natural gas was used sparingly after 2035. By doing so, the two provinces could have a more cost-effective solution available to help meet demand peaks, while keeping emissions very low. In fact, the difference between having the proposed CER framework in place versus not would cost Atlantic ratepayers an additional $4.18 billion cumulative until 2055. Modelling showed the proposed CER framework would save 2.63 MtCO2e cumulative during the same period relative to not having the regulations in place. For context, the Atlantic provinces combined emitted 36.4MtCO2e in 2021.
The Centre outlined important Atlantic region energy sector concerns during the CER’s last consultation period. It is important for the federal government to consider regional differences in its planning. The Maritimes especially has a unique energy system that is already heavily electrified and supported, in part, by fossil fuel baseload generation to help ensure reliability during heavy winter peaks. Atlantic Canada may be small but is nonetheless just as critical when it comes to developing national policy that so greatly affects one region over another.
Too often policies of a national scope sacrifice a better path for a more consistent one. For the CER, better policies are possible to help the Atlantic region reduce electricity emissions more affordably.
As 2023 drags on, we expect the federal government has heard this message loud and clear. As a result, the draft Clean Electricity Regulations remain in development. We understand governments and utilities have been working together to ensure these Regulations work for Atlantic Canadians and the environment.
“Where are the Clean Electricity Regulations?” is therefore not as important a question as understanding its impact, and ensuring it is actionable for utilities and fair for ratepayers.