Ottawa Plan for Net-Zero Faces Uphill Battle, Will Cost Taxpayers Over $1 Trillion: AB Minister Cites Report

Steven Guilbeault, Canada’s minister of environment and climate change, speaks at a press conference at the COP26 UN climate summit in Glasgow, Scotland, on Nov. 12, 2021. (Alastair Grant/AP Photo)

EDMONTON—The federal government’s plan for a net-zero electricity grid by 2035 faces considerable regulatory, technical, and supply chain challenges, according to a new report, and Alberta Minister of Affordability and Utilities Nathan Neudorf said the cost to Albertans will be extreme.

“We are at a critical point in history where the global energy market is changing and energy supply needs to be addressed. Demands for reliable, sustainable energy are higher than ever, and we need our system to evolve to meet these demands in a responsible way,” said Mr. Neudorf in a July 19 statement.

He said the federal government’s plan “risks imposing exponential costs on consumers in Alberta and Canada.”

The report that Mr. Neudorf’s statement referenced was released by the Public Policy Forum on July 19. The report, “Project of the Century: a Blueprint for Growing Canada’s Clean Electricity Supply—And Fast,” suggests electricity demand is forecast to double by 2050, which would necessitate supply growing “an astounding two to three times today’s volume.”

“According to this report, the cost to Canadians of a net-zero grid by 2035 is well over one trillion dollars. Alberta’s share of that will be much higher than our proportion of the Canadian population since we won’t be able to onboard stable base load renewables in such a short period of time,” said Mr. Neudorf.

He indicated that the Conference Board of Canada has estimated the cost of Ottawa’s expedited clean electricity transformation at $1.7 trillion. Mr. Neudorf said that’s almost the size of the entire Canadian economy in 2023.

“To put this into perspective, the country would need to grow its annual electricity investments by 2.5 times and devote more than half of Canada’s current annual infrastructure investment to electricity alone every year over the next quarter-century. Accelerating toward net-zero by 2035 would also cause massive immediate increases to the power bills of individual consumers,” said the minister.

He said that the federal government’s plan would require billions of dollars of investment, and that cost is going to be paid for by taxpayers across the country, especially in Alberta.

“Alberta’s government believes that carbon-neutrality by 2050 is achievable, and would position Alberta among global leaders and provide the best opportunity to transition our grid in a manner that considers regulatory approvals, supply chain challenges, and the human, financial, and physical resources to take on a project of this magnitude,” said Mr. Neudorf.

He said that the province has to make “well-considered, long-term decisions.”

The latest report indicates that Canada, which has more than 100 power plants of at least 250 MW—each big enough to supply a city of 180,000—would need 220 to 340 of them to meet the Liberal government’s goal of net zero.

“At the same time as adding all that new capacity, we also must subtract from the current electricity generating stock the remaining coal plants, particularly in Saskatchewan and Nova Scotia, that are regulated to go out of business by 2030, as well as those plants that are ready for normal retirement,” the report said.

Despite Ontario spending billions of dollars to refurbish its nuclear plants, the report indicated, there has been little impact on supply. According to the report, the real issue is the logistics of the federal government trying to create an emissions-free grid by 2035, on top of attempting to more than double the grid capacity by 2050.

‘Revolution’

The report says the goal is “nothing short of a revolution.” It would be a “massive shift change from the age of electricity abundance with which Canadians grew up to one of possible scarcity should we falter in the task of adding new and clean supplies at pace.”

In its March 2023 budget, the federal government put the price tag to build a net-zero economy at an astronomical $125 billion to $140 billion every year until 2050, according to the report.

That compares, the budget said, with current energy transition expenditures of between $15 billion and $25 billion. No breakdown of electrification expenditures was made available.

Université de Montreal’s Canada Energy Outlook report estimates the price tag at $1.1 trillion, without factoring infrastructure expenses such as charging stations.

According to Statistics Canada, Canada invested $112 billion in infrastructure projects across the entire economy in 2022, of which $24.8 billion went to electricity infrastructure and assets, the report notes.

Applying the Conference Board’s forecast, the country would need to increase its annual electricity investments by a multiple of 2.5 and devote more than half of Canada’s annual infrastructure investment to electricity alone for every year over the next quarter-century.

Besides the issue of cost, of which there is very little information provided, there is also the issue of the pace necessary to meet targets.

“It is not just the scale of change that is breathtaking. It is the pace as well,” stated the report.

Between 2010 and 2020, the grid’s capacity grew by just 13 percent.

For 2.2 to 3.4 times growth, generation capacity by 2050 must grow at a pace at least triple that of previous decades, according to the Canadian Energy Regulator, and as much as six times as fast, according to the Canadian Climate Institute.