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    Canadian Lobby Warns of Electrification Costs


Gas utilities group says that the focus on electricity ignores many viable options to reduce emissions

by: Dale Lunan

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Canadian Lobby Warns of Electrification Costs

As Canadian voters head into the final stretch of a national election campaign dominated by climate change rancour, the country’s gas lobby group issued an open letter on October 7 warning of the costs of electrification, seen by many as a key path to a lower-carbon future.

All three major federal parties, as well as the fringe Green Party, have issued environment and climate change platforms that are long on plans to reduce Canada’s carbon impact – currently about 1.6% of global greenhouse gas (GHG) emissions – but short on details of how to get there. A common thread of some of the plans, however, is the greater electrification of the country’s energy mix, aiming for a net-zero future in either 2050, under the Liberal plan, or as early as 2030, under the Green Party’s “Mission: Possible” climate plan.

But Canadian Gas Association (CGA) CEO Timothy Egan tells Canada’s energy ministers that they need to understand what is really at stake in a head-long charge to net-zero.

“At a time when the discussion around the environmental implications of energy is at an all-time emotional high, when public figures are feeling compelled to issue commitments to dramatic targets, we ask you to take a deep breath and reflect on what is really at stake,” he writes in an open letter. “Reliable, affordable energy delivery, with continuous environmental improvement, is being threatened.”

Egan warns of the costs associated with major electrification initiatives and with the danger of putting all Canada’s eggs in “one technology basket” which won’t necessarily deliver dramatic emission reductions.

“With only 20% of current energy needs met by electricity, an effort to meet the remaining 80% or some portion of it with new electric generation, transmission and distribution will represent a massive logistical challenge, this at a time when building any new infrastructure is already a daunting task,” Egan writes. Such a build-out would require hundreds of nuclear reactors or hydro dams, or “tens of thousands” of wind turbines, or “millions” of solar panels, and massive investment in new transmission and distribution infrastructure to get those electrons to consumers.

Canada’s existing electricity system represents about 150 GW of energy, and adding multiples of that number to replace natural gas and liquid fuel systems would likely cost ratepayers and taxpayers “trillions of dollars.”

“It would represent thousands and thousands of dollars per family per year,” Egan writes. “At a time when Canadian families are said to be within a few hundred dollars per month of making ends meet, this would be a punishing expense, not to mention the burden it represents for our competitiveness.”

And the investment, he warns, would not deliver meaningful or even measurable GHG emission reductions, since power generation in many parts of Canada requires the combustion of hydrocarbons – either directly, as with gas-fired power plants, or indirectly as back-up for non-hydro renewables.

And an increased reliance on electricity poses other reliability issues, not least of which is the risk of losing access to energy as the result of severe weather events – which climate change proponents insist will only increase in frequency and intensity – as the province of Nova Scotia found out recently when the remnants of hurricane Dorian left its power grid in shambles but the gas distribution systems were untouched.

“Why would we deepen our dependence on one system that is already very vulnerable to severe weather events, at a time when many claim there will be worse weather events coming?,” he asked.

And abandoning existing energy systems to focus on increased electrification, he added, would eliminate an “enormous” opportunity to take advantage of existing systems – like Canada’s far-reaching gas distribution network – to deliver environmental benefits.

“The emerging opportunity for hydrogen, the significant renewable natural gas resource available in Canada, the significant innovation under way with carbon capture technology in gaseous systems – these are just three examples of very exciting developments on another energy system, a system that is already more affordable and more reliable,” Egan writes. “Electrification would mean we miss these opportunities.”

The CGA, Egan admits, has a vested interest in the continued growth of the Canadian natural gas industry, but that industry, he writes, “has a proud performance record.” Gas utilities save Canadian families up to C$2,000 (US$1,480)/year compared to other options, offer the best reliability in terms of energy delivery, and are constantly improving their environmental performance.

“How could it be prudent to take these things away from Canadians? Yet talk of electrification threatens to do just that,” he writes.

Egan proposes that Canada’s energy ministers consider a three-pronged approach to improving the environmental performance of the country’s energy mix:

  1. Rebalance the energy policy discussion to include a focus on the role natural gas can play in delivering low-emission energy to Canadians.
  2. Broaden Canadian energy funding programs and research and development expenditures beyond the current focus on renewables, electric vehicles and batteries to recognize the “sizeable and growing” contribution of natural gas to the Canadian energy system.
  3. Work with industry to inform Canadians about the pathways to and costs associated with emission reductions from a range of scenarios. 

“Decision-makers need to be transparent with Canadians on the costs and implications of energy policy choices and the plans to achieve them,” Egan writes. “The natural gas industry recognizes that electricity is fundamental to our well-being – many of our companies are significant players in the electricity market as well – but meeting all our energy needs exclusively on an electric system will not ensure that well-being.”