The cancellation of TransCanada’s Energy East pipeline in early October had major consequences for a rather unexpected player: Manitoba Hydro.

The company had been counting on the energy demand from the pipeline, and now the cancellation is putting extra strain on a company already plagued by debt and in the middle of building an $8.7 billion dam.

Back in 2014, the provincial utility company anticipated that almost 40 per cent of electricity generated by its proposed 695-megawatt Keeyask dam in northern Manitoba would be allocated to “pipeline load” for the Alberta Clipper, Line 3 and Energy East pipelines.

Specifically, the electricity would be used to run pumping stations, which force crude oil through pipelines via a series of pumps and motors. Among those pumping stations were those that would move bitumen from the oilsands to New Brunswick through the Energy East pipeline.

But Energy East is now officially dead.

A recent document filed by Manitoba Hydro to the province’s public utilities board estimated that will result in a loss of 534 gigawatt-hours in annual demand, equivalent to 12 per cent of the dam’s production — which comes at an awfully bad time given the utility’s ongoing debt issues, proposed rate hikes and cost overruns, which have resulted in the utility laying off  900 staff.

Building Renewables for the Fossil Fuel Industry

The connection between the Keeyask Dam and the Energy East pipeline raises important questions about renewable energy projects that are built, at least in part, to meet the demands of the fossil fuel industry.

On the one hand, powering the industry with cleaner electricity is a step in the right direction. But on the other hand, building new electricity, even when it is renewable, has serious impacts, and hydro is no exception.

It’s not the first time a hydro dam has been proposed to meet the electricity demands of the fossil fuel industry. In British Columbia, the rationale given for the controversial $10.7 billion Site C dam has at times included powering the liquefied natural gas export industry and Alberta’s oilsands.

What has been talked about a lot less in B.C. is that the new Kinder Morgan Trans Mountain pipeline would use 1,046 gigawatt-hours of electricity per year (PDF, page 64), or the equivalent of about 20 per cent of the production of the Site C dam (about half of that power will be consumed in B.C. with the other half being consumed in Alberta).

In B.C. that power will be sold at a subsidized rate and is expected to result in a cost to BC Hydro of $27 million a year. In Alberta, the Trans Mountain pipeline will use nearly a quarter of the new generating capacity created by the newly announced wind contracts.

Shifting Justifications for New Dams

Manitoba Hydro’s game plan for the Keeyask dam became clear during two sets of hearings during late 2013 and early 2014.

Peter Kulchyski, professor of Native studies at the University of Manitoba and long-time critic of impacts of hydroelectric projects on northern Indigenous communities, said in an interview with DeSmog Canada that Manitoba Hydro presented two very different narratives.

The first presentations — made to the Clean Environment Commission, which explores social and environmental impacts — saw the energy utility boast about the potential for new hydro projects to help fight climate change by exporting electricity to other jurisdictions and displacing the use of coal and natural gas.

In 2016-17, Manitoba Hydro exported $460 million of electricity to other jurisdictions. But that number has effectively flatlined due to the shale gas boom in the United States. In its most recent annual report, Manitoba Hydro listed “loss of export market access” as one of its most significant risks, alongside “catastrophic infrastructure failure” and “extreme drought.”

Kulchyski said the review of the project then moved on to the Public Utilities Board, which looks at economic modelling. At that point, some of the early financials from the newly built and way over budget 211-megawatt Wuskwatim Dam were emerging. They weren’t good.

At the time, Kulchyski said the Wuskwatim Dam was selling power at four cents per kilowatt-hour while it was costing seven cents per kilowatt-hour to actually produce power. The dam hadn’t ever been profitable (and still hasn’t been to this day, resulting in a restructuring of the agreement with local First Nations).

That’s when the “pipeline load” first entered the picture, Kulchyski said.

“As they were scrambling for where they would sell the power, they publicly came out saying they could sell power to the pipelines that are being built,” he said. “On one hand they’re fighting climate change, on the other hand they’re quite willing to sell to the pipelines.”

The connection between the Keeyask Dam and the Energy East pipeline raises important questions about renewable energy projects that are built, at least in part, to meet the demands of the fossil fuel industry. https://t.co/zn9yyRNL9w

— DeSmog Canada (@DeSmogCanada) January 10, 2018

Manitoba Could Sell Excess Power to Saskatchewan

Despite these concerns, Keeyask is still being constructed, anticipated to be in operation by late 2021. A $5 billion transmission line, Bipole III, is also being built to transport electricity from the dam to the south of the province.

Enbridge — which owns both the Alberta Clipper and Line 3 pipelines — didn’t respond to a request for comment by DeSmog Canada.

Manitoba Hydro still expects Keeyask to have a “pipeline load” of more than 1,000 gigawatt-hours, meaning that one-quarter of the dam’s capacity (4,400 gigawatt-hours) will go to helping pump Alberta bitumen through Line 3 and Alberta Clipper.

That leaves a lot of excess electricity without a clear market though, which could require future ratepayers to cover the difference. Manitoba Hydro is already requesting significant hikes in rates — currently pushing for 7.9 per cent increases per year until 2023-24.

Electrification Will Bring New Demand: Clean Energy Analyst

But there are plenty of opportunities for Manitoba to use the excess electricity from Keeyask in positive ways, Dan Woynillowicz, policy director at Clean Energy Canada, said in an interview with DeSmog Canada. That includes moving to electric vehicles (including freight trucks and buses) and heating buildings with electricity instead of with natural gas.

“In a hydro-dominated system like Manitoba where you’ve got plentiful, affordable, clean power, the emissions benefit of applying that to transportation is particularly significant,” Woynillowicz said. “We certainly need to be capitalizing on that from a climate change perspective.”

He added there’s also the potential for increased exports to the U.S. and other Canadian provinces —especially Saskatchewan, given that it’s right next door and “still has one of the dirtiest electricity grids in Canada.”

“There’s still a lot of low-hanging fruit in terms of cleaning up Saskatchewan’s system,” he said. “Definitely one element of that could be increased imports of hydro from Manitoba.”

Canada May Need 150 More Keeyasks to Meet 2050 Climate Targets

Canada’s mid-century long-term low-greenhouse gas development strategy reported that over 100,000 megawatts of additional hydro capacity will be required by 2050 to reach greenhouse gas reduction targets.

That’s equivalent to almost 150 Keeyask dams in capacity.

Canada is the third-largest hydro producer in the world, with over 80,000 megawatts of capacity already in place. One of the benefits of large quantities of hydropower is its ‘dispatchable’ nature, meaning reservoirs essentially act as giant batteries that can be drawn from when needed.

ICYMI: What’s the Future of Hydroelectric Power in Canada?

Yet often left unaddressed by proponents of additional hydroelectric power are the devastating impacts that dams can have on local and Indigenous communities, especially the ability to hunt, fish, trap and gather on traditional lands and waters.

Opponents of hydro dams also point out the high costs of building large dams crowd out small-scale and more localized sources of energy like wind, solar and geothermal.

And Manitoba, a hydro-heavy province, hasn’t seriously explored renewable electricity sources other than hydro. In 2014, a former NDP energy minister accused the utility of making it “virtually impossible to build wind [power] here.” The province has just 260 MW of installed wind energy capacity, less than New Brunswick.

But outside of rapid innovations in battery storage, transmission lines and the emergence  of alternative low-carbon baseload power (such as geothermal), it’s unclear how Canada will dodge the conflict over hydro.

There are some obvious options to help reduce demand, such as energy efficiency retrofits for existing buildings and reducing industrial load.

Woynillowicz noted that the biggest chunks of new demand come from large industrial projects. For instance, in B.C., a single large LNG plant could consume the equivalent of all of the power created by the Site C dam.

Ultimately, the public needs to know the planned end use of new electricity projects before being able to form an educated opinion on them.

With files from Emma Gilchrist.

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After weeks of delay, the B.C. NDP has finally been asked to form government, thanks to a co-operation agreement with the Green Party.

A key component of that now-famous NDP-Green “confidence and supply agreement” signed in late May is its commitment to “immediately refer the Site C dam construction project to the B.C. Utilities Commission.”

While premier-delegate John Horgan hasn’t confirmed whether he will cancel the $9-billion project — it will take around six weeks for the utility commission to actually provide a preliminary report — previous statements suggest he’s certainly sympathetic to the idea.

Conflicts over hydroelectric dams aren’t confined to British Columbia: think of Labrador’s Muskrat Falls or Manitoba’s Keeyask dam. In fact, alongside oil and gas extraction projects, hydroelectric dams arguably serve as some of the most contentious projects in Canada, largely due to detrimental impacts on Indigenous lands, territories and resources and skyrocketing costs.

But hydroelectric projects are also projected to serve as fundamental components in Canada’s transition away from fossil fuels. It’s a tension that only grows by the day.

DeSmog Canada took a deep dive into some of the politics of hydro.

Hydro Expected To Increase Up to 295 Per Cent by 2050

Firstly, it’s clear that Canada needs to rapidly transition off coal, oil and gas to meet its climate change commitments. It’s also clear that shift will require a great deal more low-carbon electricity to power everything from electric cars, to public transit, to residential and commercial building heating, to industrial processes.

Dan Woynillowicz of Clean Energy Canada says in an interview with DeSmog Canada that even with very aggressive energy efficiency measures, most estimates he’s seen suggest full decarbonization will essentially double the country’s demand for electricity.

The Government of Canada’s “Mid-Century Long-Term Low-Greenhouse Gas Development Strategy,” published in 2016, cited projections of an increase between 113 per cent and 295 per cent in total generation between 2013 and 2050.

The obvious follow-up question is how will Canada do that?

Each of the three sources cited in the report — Trottier Energy Futures Project, the Deep Decarbonization Pathways Project and Environment and Climate Change Canada — anticipate a significant increase in hydro capacity, anywhere between 36,000 megawatts of capacity in a “high nuclear scenario” up to 130,000 megawatts in a “high hydro scenario.”

Canada currently has close to 80,000 megawatts in generating capacity from hydro, making it the third largest hydro producer in the world. Woynillowicz says that, as a result, Canada has a much cleaner grid than most other countries, with 59 per cent of the country’s electricity supply already coming from hydro.

“Most of the scenarios that I’ve looked at looking out to 2050 or beyond project that there would be a need for additional large hydro capacity, sometimes quite significantly and up to a doubling of current hydro capacity,” Woynillowicz says.

“That said, energy analysts have had a challenge in projecting the rate of growth of wind and solar and the rate at which those technologies would actually become cost competitive or cheaper than other sources of renewable power.”

UBC Expert Argues Hydro is No Longer ‘Cleanest, Greenest’ Option

Hydro is often advertised as “clean, renewable power.”

But critics suggest there are a host of major problems with the technology, including catastrophic impacts on ancestral Indigenous practices (such as hunting, trapping, fishing and gathering), the release of toxic methylmercury that can bioaccumulate in the food chain and the flooding of productive agricultural land.

That’s not to mention growing concerns about greenhouse gases emitted from dams themselves. A UBC report found even using BC Hydro’s own greenhouse gas estimates for the Site C dam,  “Site C is not cleaner or greener than other renewables.” A study by a Washington State University researcher published in BioScience last year found the rate of methane emissions from hydro reservoirs was 25 per cent higher than previously estimated. The emissions come from decomposing plant material under the water.*

Karen Bakker, founding director of the water governance program at the University of British Columbia, says in an interview with DeSmog Canada that her team’s analysis of Site C that was published in five distinct reports showed that hydropower is “no longer the cleanest, or greenest, or cheapest way of meeting our future energy and capacity needs.”

“It’s not that hydropower is competing against coal,” Bakker says. “It’s that it’s competing against 21st century renewables such as wind and solar.

“These new technologies are the focus of rapid innovation and coming down in price and increasing in efficiency with much lower environmental impacts than hydropower. The question before us is not ‘do we build new dams to get off of fossil fuels?’ The question is, rather, ‘as we move off fossil fuels, which renewables do we pick?’ ”

Bakker says there are numerous options in B.C. for increasing generating capacity, especially in wind and geothermal. Yet she says that beyond proposed projects such as Site C and Muskrat Falls, it’s difficult to tell what the federal government’s plan is as the “mid-century plan” isn’t a legislated strategy.”

“I’m not sure the government is actually planning new [hydro] capacity,” she says. “When you talk to them, they say it’s just a discussion document, although it’s called a strategy not a white paper.”

What’s the Future of #Hydroelectric Power in Canada? #climate #renewables #cdnpoli https://t.co/wbMTY0OykC

— DeSmog Canada (@DeSmogCanada) July 5, 2017

Hydro Offers ‘Dispatchable’ Power, Complementing Other Renewables

One of the major upsides of hydro is its “dispatchable” nature, meaning it can effectively be turned on or off at any point. As Woynillowicz says, this means dams can “serve as a really significant asset by playing the role of giant batteries.”

Such a trait, which can also be provided by power plants fueled by gas, nuclear and geothermal, serves as extremely complementary to “variable renewables” like wind and solar, which only produce electricity when the wind is blowing and sun shining.

Pumped-storage hydroelectricity — spinning turbines in periods of high demand and using low-cost electricity to refill the reservoir in times of low demand — can also help with that, but requires very particular conditions to work and operates with a net generation loss, costing more electricity to run than it actually produces.

Natural gas power stations have serious flaws from a greenhouse gas emissions point of view, especially given recent reports that suggest there is far more significant methane leakage from the wellhead than previously assumed. Nuclear isn’t a politically viable option in most of the country, although it produces between 50 and 60 per cent of Ontario’s electricity. Geothermal has massive potential in both B.C. and the Yukon, although neither jurisdiction has signed a power purchase agreement with a producer to date.

That effectively leaves hydro to provide the “dispatchable” power in provinces and territories that don’t have significant geothermal potential or the political capital for nuclear.

Climate Change May Impact Flows That Hydro Relies On

But hydropower has an added and somewhat ironic complication: climate change.

Markus Schnorbus, lead hydrologist at the University of Victoria-based Pacific Climate Impacts Consortium, says in an interview with DeSmog Canada that projections indicate that as the climate continues to get warmer, interior B.C. watersheds including the Fraser, Peace and  Columbia will likely see earlier freshet (or snowmelt) and lower flows in the summer than have been historically observed.

Meanwhile, precipitation levels are expected to increase in other seasons, especially during winter and spring.

Both increase and decreased water levels can impact hydroelectric production in different ways, with too little water reducing potential generation and too much damaging facilities. Record low snowpack due to drought in California led to poor hydroelectric performance in 2015. The state spent over $1.4 billion purchasing power from natural gas-fired plants to make up the difference.

While Schnorbus emphasizes that he doesn’t study the potential impacts of climate change on hydropower, he notes the severity of impacts will vary greatly depending on “the actual trajectory of emissions that will or were to take place.”

“Suffice it to say that the more intensely we emit, the sooner we’ll notice it,” he adds.

Experts Unanimous in Call for More Planning

Regardless of the percentage that hydro makes up of Canada’s energy mix in the future, it seems clear there needs to be more planning.

As noted previously, Bakker suggests there is little clarity from the federal government as to its actual plan for new capacity. Woynillowicz also notes we still haven’t seen a good analysis that would outline how to optimize the country’s electricity system looking at all different sources of supply.

“Frankly, that’s been one of the big challenges we’ve had in Canada: our electricity systems have largely been isolated from one another because they’re under provincial jurisdiction,” Woynillowicz says.

“We don’t have nearly as much exchange of electricity across provincial boundaries as would be optimal both from a cost perspective and from a carbon emissions perspective.”

Ideally, the country’s future grid will include more diversity of supply — with far more generation from wind, solar, geothermal and biomass — and more integration across provincial boundaries via new transmission lines. The federal Liberals have committed $22 billion over 11 years into “green infrastructure,” which could ostensibly include transmission lines. The new infrastructure bank — intended to “leverage” private investments into large capital projects — may also serve a role.

And while Woynillowicz supports future expansion of hydro, he notes that such projects often cost more and take longer to build. Comparatively, smaller scale renewables can be built as needed to meet demand.

That’s a big part of why Bakker’s team ultimately concluded that Site C should either be cancelled or suspended: “Dealing with what is now outdated ideas is really necessary before we can have a healthy debate,” she says.

*Update Notice July 7th: A paragraph on growing concerns about greenhouse gas emissions from hydro reservoirs was added to provide further context.

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After six months of consultations, the National Energy Board (NEB) Modernization Expert Panel has delivered its long-awaited report.

The results are damning.

“In our consultations we heard of a National Energy Board that has fundamentally lost the  confidence of many Canadians,” the five-member panel wrote. “We heard that Canadians have serious concerns that the NEB has been ‘captured’ by the oil and gas industry.”

The 87-page report issued 26 key recommendations to repair the oft-criticized quasi-judicial tribunal, responsible for regulating interprovincial and international oil, gas and electricity projects.

Those include establishing a one-year review process by cabinet to ascertain whether a major project meets “national interest” prior to regulatory review, replacing the NEB with a “Canadian Energy Transmission Commission” and placing a broader focus on interprovincial transmission lines and renewable energy.

In addition, the panel recommended the government create a new agency responsible for collecting information about energy, relocate board headquarters back to Ottawa, considerably improve consultation with Indigenous peoples including an Indigenous Major Projects Office and extend the timelines for review of major projects (which were accelerated under the previous Conservative government).

“It’s clear that this is a pretty major confirmation of what we’ve been saying for years,” says Adam Scott of Oil Change International in an interview with DeSmog Canada.

“It’s basically saying that the National Energy Board as it stands today is a broken and outdated institution that’s not fulfilling its role, and not serving the best interest of Canadians. It was very good at the very beginning to see that acknowledgment: there’s a problem here, and we really need to do something bold to rebuild what the NEB is and figure this out.”

Trudeau Promised to Fix the National Energy Board. Here’s What His Expert Panel Recommends https://t.co/tkSQLYJcNz @james_m_wilt #cdnpoli pic.twitter.com/pb8I2Hh9re

— DeSmog Canada (@DeSmogCanada) May 16, 2017

Recommendations Include Prioritizing Renewables, Transmission Lines and Independent Information

According to Natural Resources Canada, the panel travelled to 10 cities, heard presentations from almost 200 people and received another 200 written submissions online.

Dan Woynillowicz, policy director at Clean Energy Canada, says in an interview with DeSmog Canada the recommendation to focus more on interprovincial transmission lines and renewables is “very consistent with the direction that the Pan-Canadian Framework on Climate and Clean Growth sets for the country.”

“As acknowledged in the report, so much of the focus and conflict right now has been around pipelines,” he says.

“But in making recommendations for how to approach this regulatory decision-making in the future, they need to make sure that expertise is being brought in on the electricity side [to address] the interprovincial nature of that.”

The creation of a proposed Canadian Energy Information Agency will also assist with this task, he says.

The NEB’s current “Energy Futures” projections are “always very conservative when it came to renewable energy” and largely disconnected with climate policies that have been put in place on both provincial and federal levels.

As the panelists wrote: “We heard over and over in public consultations in all the regions of Canada that the NEB appears to be operating in a national policy vacuum.”

Critics Flag ‘National Interest Designation’ As Giving Cabinet Too Much Say

However, experts have already voiced serious concern about the recommendation that federal cabinet have the ability to designate “national interest” for major projects.

In a statement, Erin Flanagan of the Pembina Institute noted: “The recommendation that the Government of Canada make up-front recommendations on the extent to which proposed projects align with national policy objectives lacks any discussion of trade-off rules or other guidance to ensure this process is not arbitrary.”

Similarly, Anna Johnston of West Coast Environmental Law said in a statement: “The NEB Panel’s recommendation for determining ‘national interest’ is putting the cart before the horse. How can you determine whether or not a project aligns with policy objectives, respects Indigenous rights or carries unacceptable risks before a full impact assessment is conducted?”

Indeed, it’s unclear how cabinet would adequately assess national interest before an environmental assessment is even conducted.

Patrick DeRochie, climate and energy program manager at Environmental Defence, says in an interview with DeSmog that there needs to be more clarification about how the NEB modernization would intersect with the proposed changes to Canada’s environmental assessment process, including issues like “net contribution to sustainability.”

“This national interest determination doesn’t actually spell out how we get to that, or why a project would be rejected within that process,” DeRochie says.

Flanagan also noted in her statement that Pembina is “disappointed” with the recommendation that environmental assessments of energy transmission projects (and energy transmission project alone) be conducted in collaboration between the proposed Canadian Energy Transmission Commission and Canadian Environmental Assessment Agency, as opposed to just the latter.

“Many experts agree that consistent application of [environmental assessment] law can only be achieved if all projects are reviewed under one set of rules, applied consistently,” she wrote.

Natural Resource Minister Suggests Government Won’t Adopt All Recommendations

Next up is a 30-day window for public comment on the report, closing on June 14, 2017.

Jim Carr, minister of natural resources, told reporters in Ottawa on Monday: “Now the government will ask Canadians what they think, and with other reviews that are happening now, come the fall, we’ll meet together as a government and determine the modernization of the National Energy Board and environmental assessment in Canada.”

In addition, he implied the government wouldn’t be accepting all 26 recommendations, telling the National Observer: “That means that we wouldn’t have any tough decisions to make, and I can tell you, we will have tough decisions to make.”

Woynillowicz adds that transmission projects that allow for more renewable energy and emissions reductions are still at risk of being held up because of an insufficient regulatory process, and that having these recommendations adopted will increase the likelihood that they’ll get built.

“I think it’s really positive that this review has happened,” he concludes. “Hopefully Minister Carr and the federal government will pay heed to these recommendations and move quite quickly to adopt them.”

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Saskatchewan Premier Brad Wall has repeatedly argued that putting a price on carbon would be bad for the economy — but experts say Wall’s own climate change strategy will end up costing the province more per tonne than the federal government’s plan, while failing to be nearly as fair or effective as a carbon tax.   

Much of Saskatchewan’s climate strategy centres around the SaskPower Boundary Dam carbon capture and storage (CCS) project, which cost $1.5 billion to build (funded mostly by SaskPower ratepayers and a $240 million investment from the federal government).

“When we think about how we can reduce emissions most cost-effectively, [Boundary Dam] probably stands out as an example of how not to do it,” says Dan Woynillowicz, policy director at Clean Energy Canada.

Choosing a preferential technology and using public dollars to subsidize it is “quite inconsistent with the approach that most conservative politicians and economists would take,” Woynillowicz added.

Indeed, even as oil companies and conservative politicians — such as Preston Manning, Jean Charest and Jim Dinning — have spoken in favour of putting a price on carbon, Wall has worked hard to establish himself as the major voice of opposition to a federal carbon tax.

Enter Saskatchewan’s 53-page “Climate Change White Paper,” released on October 18. Carbon nerds eagerly jumped into the paper head first, anxious to learn how Canada’s highest greenhouse gas emitter per capita planned to help Canada meet its climate commitments.  

Disappointingly, the paper essentially packaged up the policy actions Saskatchewan has already taken to date.

Off the Wall: #Saskatchewan @PremierBradWall's Bizarre, Contradictory #ClimatePlan https://t.co/sWJXdJzEFd #cdnpoli #skpoli #carbontax

— DeSmog Canada (@DeSmogCanada) October 25, 2016

Carbon Capture and Storage Far More Expensive Than Carbon Tax

The Boundary Dam CCS project is intended to reduce emissions from SaskPower’s largest coal-fired power plant by capturing smokestack emissions (in the range of one million tonnes of carbon per year).

However, because one-third of those captured emissions will be sold for use in oil extraction at Cenovus’ Weyburn site, the current estimate is that Boundary Dam will remove more like 600,000 tonnes per year from the atmosphere — if it can even manage that.

With that level of emissions recovery, the cost of CCS works out to about $100 or $110 per tonne, according to Trevor Tombe, assistant professor of economics at the University of Calgary.

Only four days prior to the release of Saskatchewan's plan, on the same day as Wall argued in the Globe and Mail that “carbon-capture technology works,” a report in Science concluded that negative-emission technologies such as carbon capture storage are an “unjust and high-stakes gamble” that “should not form the basis of the mitigation agenda.”

One of the reasons carbon pricing has attracted support from across the political spectrum is because it doesn’t pick winners and losers. It puts a price on pollution and then lets the market determine the best ways to reduce carbon emissions. The bizarre thing is that Saskatchewan’s gamble on CCS is the exact opposite of that.

Woynillowicz adds there’s little evidence that SaskPower has developed any plans for monetizing their experience and technology to sell it to other jurisdictions, or securing investments from the federal government for future projects.

The One New Thing In Saskatchewan’s Climate White Paper

The only major new announcement in those riveting 53 pages was the call to redeploy $2.65 billion in foreign aid to technology subsidies within Canada.

Tombe says that recommendation mixes two separate conversations —there’s no need to tie a case for additional government investment in research with foreign aid funding.

Experts Suggest Carbon Tax Required to Spark Investments in Renewables

A more consistent approach would be the establishment of a broad-based carbon price.

Such a mechanism — which will take the form of either a $50/tonne carbon tax or cap-and-trade system by 2022 due to the recent federal decision — would address the “market failure” of unpriced pollution, something that Tombe pointed out isn’t solved by providing subsidies for R&D.

It would also incentivize investments in renewable power sources, energy efficiency measures and perhaps even carbon capture and storage (although given the current price tag of the technology — between $75 and $100/tonne just for the “capture” part of it — such a carbon price would have to be significantly higher than currently proposed to justify it).

Yet Wall completely rules out the role of taxation: he argues British Columbia’s emissions are rising despite having a carbon tax, even though many acknowledge emissions are rising precisely because Premier Christy Clark has put a freeze on the tax, preventing its increase from $30/tonne since 2012.

In the White Paper, Wall strangely suggested that “we should be focusing our efforts on innovation and adaptation” and that “a carbon tax will harm Saskatchewan.”

But Woynillowicz says suggested innovations like “new crop varieties that are better able to withstand climate change and that effectively fix GHGs to the soil” would be incentivized in part via a price on carbon.

“You need either dollars to do that if it’s going to be the government making those strategic investments in R&D, or you need to send a price signal that creates the incentive for private sector actors to invest in R&D,” Woynillowicz says.

“You can do that through a price on carbon pollution.”

Climate Plan Quietly Recommits to Carbon Tax on Large Emitters Despite Premier’s Apparent Opposition

Even odder is the fact that Saskatchewan’s White Paper includes a commitment to “[move] ahead with plans for a fund supported by a levy on large emitters, with the fund’s expenditures limited to new technologies and innovation to reduce GHGs and not for general revenue” when the resource economy rebounds.

Tombe says that whether or not Wall likes to admit it, the notion of a “levy on large emitters” is indeed a tax, similar to what Alberta implemented with the Specified Gas Emitters Regulation (SGER) in 2007.

“Roughly speaking, that places that Saskatchewan carbon tax on about 50 per cent of what could be subject to a carbon tax,” he says. “It’s roughly the equivalent of half the coverage of Alberta and B.C.”

Carbon pricing can be designed in many different ways; Alberta’s Climate Leadership Plan offers up a recent example of how to insulate low-income residents and “energy-intensive, trade-exposed” sectors from the economically damaging byproducts of a tax.

“That’s more what I’m disappointed with: that [Wall] sets up straw men and then knocks them down on the carbon tax front,” Tombe says.

“It’s fine: if he wants to have more costly action through the CCS or through the large-emitter levy and leave a lot of low-hanging fruit unpicked, that’s something that will be up to the Saskatchewan people to decide.”

Saskatchewan Has ‘Excellent Renewable Resources’  

Woynillowicz says the one bright spot of the White Paper was the re-commitment to double SaskPower’s generation capacity of renewables by 2030, although that announcement was already made in November 2015.

However, he emphasizes it’s a pledge for 50 per cent generation capacity, not actual generation, meaning it’s more in line with Alberta’s target of 30 per cent renewable generation by 2030 (for contrast, Iowa generated 31 per cent of its electricity from wind power in 2015).

Saskatchewan has “really excellent renewable resources,” Woynillowicz says.

As part of its plan, SaskPower intends to develop 1,600 megawatts of power between 2019 and 2030. But as mentioned, such a transition would be greatly accelerated by a commitment to a broad-based carbon price.

“Really, I’m just left scratching my head, wondering why Premier Wall has made this decision to oppose [carbon pricing] so vocally and aggressively,” Woynillowicz concludes.

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Federal and provincial climate policies unveiled over the last year are paving the way for Canada to massively increase the amount of energy the country gets from renewable sources, according to a new analysis released today by Clean Energy Canada.

“For the first time the federal government and the provinces are working together to establish a national climate plan,” Dan Woynillowicz, policy director at Clean Energy Canada, said. “A big piece of the puzzle is not just cleaning up the grid, but electrifying other parts of the economy reliant on fossil fuels.”

Prime Minister Justin Trudeau’s government is drafting a ‘pan-Canadian clean growth and climate change framework’ to be released this fall. Meantime, last year Alberta and Saskatchewan, Canada’s main oil and gas producing provinces, set ambitious renewable energy targets. And Ontario recently announced one of the most cutting edge greenhouse gas (GHG) reduction plans in Canada to date.

All of that means things are finally looking up for clean energy in Canada. Federal and provincial politicians now need to make good on their climate pledges for the country to reap even bigger benefits from this $500 billion global industry.

“There’s never been a greater opportunity to move forward on this file for Canada. There is certainly reason for optimism,” Robert Hornung, president of the Canadian Wind Energy Association, told DeSmog Canada.

“We are in a unique moment in time. Not just the federal government, but Ontario, B.C., Quebec, and Alberta have all expressed climate change as a priority,” Hornung said.

Clean Energy Canada says the renewable energy challenge facing Canada right now is different from other heavy greenhouse gas emitting countries like China or the U.S. Nearly 80 per cent of all Canadian electricity comes from non-GHG emitting sources (including nuclear power), three-quarters of which is hydroelectricity.

In the United States, on the other hand, fossil fuels produce close to 70 per cent of the country's electricity.

“We have a comparative advantage in Canada because our grid is already pretty clean,” Woynillowicz told DeSmog. “Canada is in an enviable position.”  

While other countries are focused on switching their electricity base from fossil fuels to clean energy, Canada has a different challenge. Sectors heavily dependent on fossil fuels  — oil and gas, transportation, and industrial processes — have hardly any renewable energy in the mix at the moment.

That means to reduce emissions Canada needs to do things like shift to electric vehicles and efficient electric-based home heating systems (like air and ground source heat pumps).

Has #CleanEnergy's Time Finally Come in #Canada? https://t.co/xncUcQSaPM @standearth @merransmith @SciPolEnv pic.twitter.com/9QMtSvt81X

— DeSmog Canada (@DeSmogCanada) June 16, 2016

“Clean electricity is one of the best tools to fight climate change,” Clean Energy Canada’s executive director Merran Smith told DeSmog Canada. “As we shift to power our economy by clean electricity there will be an increase in demand for electricity and we need that to be clean electricity.”

In B.C., that raises the specter of the controversial Site C dam, but even with an increased demand for electricity in the future (demand in B.C. has been flat for the past 10 years), Site C isn’t necessarily the best solution according to Smith.

“From an economic perspective, Site C is concerning because the cost of renewables like wind and solar power have been dropping dramatically,” she said.

“In the U.S. the price of solar has dropped 80 per cent over last six years and the price of wind has dropped 60 per cent over the last six years. As the cost of those keep going down, that makes them attractive — whereas eight of the last 10 hydro projects built globally have gone over budget.”

A new report released by Bloomberg New Energy Finance this week found that wind and solar will be the cheapest ways of producing electricity in many countries during the 2020s and in most of the world in the 2030s.

“The good news for B.C. is we already have so much large hydro, we really can add intermittent renewables on easily because we already have the large hydro that acts as a battery and acts as storage,” Smith said.

“We could build solar and wind in 100 megawatt units as we need it in rural communities. It could create work around the province. And we could bring it on line as we need it. So a decade from now when we need another 100 MW, it will be even cheaper.”

Woynillowicz sees the emerging national climate framework as the space to address how to power more of the Canadian economy with renewable energy.

“That’s the place to articulate a clear priority of electrification and establish renewable energy targets,” Woynillowicz said. “It will change the conversation around climate away from where jobs are going to be lost to what we are going to create and build.”

Studies have shown the two pillars to decarbonizing any industrialized economy are to first transition completely to non-GHG emitting electrical generation and then run the economy off this clean electricity.

Clean Energy Canada’s analysis highlights energy storage and electricity sharing between provinces as areas where Canada is starting to break ground in electrifying the economy. In regards to the latter, Hornung would like to see more happen politically.

“What the federal government could do is provide a platform for provinces and territories to talk about the shared challenges they face in optimizing their electricity systems and enable collaborative relationships,” Hornung told DeSmog Canada.

Hornung points out more renewable energy is sold to the United States than shared between provinces right now.

Ontario and Quebec, and Alberta and Manitoba have all signed separate memorandums of understanding to take steps toward integrating their electrical grids.

In a report released in February, Clean Energy Canada warned Canada was falling behind its peers on the international stage in terms of renewable energy investments. At the time, it was estimated clean energy investments in Canada had dropped by a whooping 46 per cent, while they increased in the U.S., China, India and the United Kingdom.

However, when analysts with Clean Energy Canada took a deeper dive into the numbers for this latest report, they uncovered the decrease in investments was only 15 per cent when accounting for all clean energy projects, making 2015 the second biggest year for renewable energy investments in Canada.

Meantime, the country’s installed clean energy capacity grew by four per cent last year despite that drop in investment dollars, which the think tank concludes was likely due to policy uncertainty.

Smith noted that an increased price on carbon is needed to level the playing field.

“Right now fossil fuels are getting a free ride for their pollution,” Smith said. “Clean energy is the future. This train is going in one direction and that’s off of fossil fuels and onto clean energy.”

— With files from Emma Gilchrist.

Image: 1010/Flickr

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It’s a sentence that feels weird to write: by 2030, Alberta will have shuttered the 18 coal-fired power plants that currently generate around 55 per cent of the province’s electricity, with two-thirds of that power replaced by renewable sources.

The stunning move was announced as part of Alberta’s climate change policy framework that was released on Sunday. According to the government, only 12 of the 18 coal-fired power stations would have been phased out by 2030 under the previous arrangement.

The immediate health benefits of such a move are tremendous.

Kim Perrotta, executive director at Canadian Association of Physicians for the Environment (CAPE), says that coal accounts annually for an estimated 107 premature deaths, 80 hospital visits and almost 5,000 asthma-related sick days in Alberta, costing the province around $300 million.

Prior to the government’s announcement, over 40 organizations — including the Alberta Medical Association and Asthma Society of Canada — made a joint call for an accelerated phase-out on health grounds.

“We see the air quality benefits that are fairly immediate that would be felt by the people in Alberta,” Perrotta says. “But we also want to reaffirm that as an organization run by physicians, we actually believe climate change is the public health challenge of the century. So we think this is a huge win for public health in terms of the the immediate benefit for Albertans but also for the long-term benefits for public health around the globe.”

Coal is responsible for 17 per cent of Alberta’s greenhouse gas emissions and six per cent of emissions nationwide.

While a faster ramp-down of coal would have been possible, that likely would have lead to a great proportion of power generation coming from natural gas, says Dan Woynillowicz, policy director at Clean Energy Canada.

“So I think it’s a good approach that’s going to lead to a significant amount of renewable electricity generation in the province and a diverse supply of electricity,” Woynillowicz says.

Under former regulations, TransAlta’s Keephills 3 could have stayed open until 2061, which is when the federal government’s flaccid half-century phase-out plan would have neutered the plant.

Coal-related Job Losses and Disputed Compensation

To be sure, not everyone’s happy about the decision. The mayors and reeves of 30 Albertan municipalities signed an open letter to Premier Rachel Notley prior to the announcement noting the phase-out will likely come at the cost of jobs and tax revenue.

The mayor of Hanna — the same town which exported Nickelback — reiterated that argument on Tuesday, suggesting the loss of 200 jobs coming with the closure of the local coal mine and power station will be “devastating.”

Woynillowicz acknowledges such concerns, noting that institutions like NAIT, SAIT, the University of Lethbridge and Medicine Hat College are already offering training in the renewable energy sector.

“That’s going to create all kinds of new investments and job opportunities in the province,” he says. “The government is committed to ensuring that for workers and communities that transition occurs as smoothly as possible. We’ve got the capacity to train the workforce we need so I think there’s definitely opportunity there.”

Read more about Alberta's coal consumption: Alberta's First NDP Climate Victory May Have Nothing to Do With the Oilsands and Everything to Do With Coal

Some coal power plant owners have argued they will deserve some compensation from the province due to the forced phase-out. However, a recent report authored by Tom Marr-Laing and Ben Thibault for the Pembina Institute contended that a great majority of power purchase agreements were struck with coal operators before the deregulation of the electricity market in 2001 and that the “Effective Life of the Unit” — guaranteeing a “fair return on capital” — would be completed by 2030 for all but two plants.

As a result, Marr-Laing and Thibault concluded in the report that 16 of the 18 stations can be retired without the need for compensation. Marr-Laing says in an interview that many of the older plants will receive between a six and 10 per cent return on equity, which constitutes a “heck of a return.” However, compensation may be required in the cases of Capital Power’s Genesee 3 (built in 2005) and Keephills 3 (built in 2011), even though a phase-out has been discussed for upward of 20 years.

“We actually don’t owe them anything, technically, but it may behoove us in Alberta to say some form of compensation may be appropriate for those two units rather than simply saying ‘tough, you lose a billion bucks,’ Marr-Laing says in an interview. “It sends a useful signal to the new investors we want to come to the table to invest in renewable energy and gas that there’s an example of having being treated fairly, at least.”

Controlling Prices During the Transition

The potential rise in electricity costs is yet another factor that’s received plenty of attention. Plenty have pointed to Ontario — which has experienced spiking rates in recent years — as an example of why the transition won’t work.

But Woynillowicz says the Ontario comparison is unjustified considering the need for the province to upgrade its grid infrastructure and refurbish nuclear plants. He says that Alberta may be entering the renewable energy market at the exact right moment, given plummeting prices for technology and the presence of increased competition between different developers. Alberta’s new energy efficiency program could also help reduce costs for electricity and heating, counterbalancing any price increase.

But Woynillowicz also stresses it’ll be very important for the government to keep Albertans up-to-date on what’s happening with the revamp of the system.

“I think we need to avoid a situation, to the extent we do see increases [in cost], that isn’t just attributed to renewables,” he says. “The reality is it’s a relatively aging power system that’s going to need upgrading regardless. The government and Alberta Electricity System Operator and renewable electricity developers are going to have to ensure they are very open and transparent in terms of how the electricity system in Alberta is evolving and being willing to discuss that. They can’t just put the policy in place and just stop talking about it.”

At this point, Alberta is by far the largest consumer of coal in the country, although Saskatchewan and Nova Scotia are also high consumers of the dirty fuel.

The next steps on the national and global stage will be determined in Paris. But plenty is happening on the provincial stages, too: Manitoba is potentially rolling out its cap-and-trade program, Ontario has announced a comprehensive climate change strategy and Saskatchewan has committed to drawing half its electricity from renewables by 2030.

“We’re seeing other jurisdictions wanting to step up and also deliver leadership on this,” Woynillowicz concludes. “Everybody is beginning to finally recognize there’s opportunity in this: that it’s going to be a better economic strategy than lagging behind, trying to fight something that has so much momentum.”

Image: Battle River Coal Plant via Pembina Institute 

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It’s finally happening: after years of stalling by the Progressive Conservatives, Alberta’s new NDP government announced Thursday it will double the province’s meager carbon levy on large emitters by 2017.

Industry and environmentalists alike welcomed the decision, while also saying it doesn’t go far enough. 

Currently, any facility that emits more than 100,000 tonnes of greenhouse gases per year must reduce its emissions by 12 per cent below typical performance or pay $15 per tonne for emissions over the baseline. By 2017, the new framework will require companies to lower emissions by 20 per cent below typical performance, with a $30-per-tonne levy for emissions above that target.

“It’s not going to drive the meaningful reductions or give the market incentives that we need,” said Ed Whittingham, executive director of the Pembina Institute.

Pembina advocates for a $40-per-tonne levy with a 40 per cent emissions reduction target. Whittingham said the NDP had three options given the circumstances: let the regulation expire at the end of the month, kick the can down the road by renewing the current framework (as previous governments often did) or actually make some changes.

Dan Woynillowicz, director of policy at Clean Energy Canada, said the most impressive element of the announcement was its decisiveness.

“The previous government has been talking about changing the SGER, or changing the price, or changing the coverage for several years,” he said. “Within a matter of weeks, this government has come in and said: ‘We’re going to do that, we’re going to make that change.’ ”

Cenovus Wants Economy-Wide Carbon Price

Brett Harris, media lead at Cenovus Energy — which has historically supported a price on carbon — says the company is pleased the government has provided clarity on the issue. However, he says “in an ideal world” the company would like to see a pan-Canadian or pan-North American carbon pricing regime to create a “level playing field.”

Shell Canada also welcomed the new rules.

Despite support from energy companies, the concept of a carbon tax has consistently been ridiculed by Canada’s federal government.

Dale Beugin, director of research at Canada’s Ecofiscal Commission, acknowledges a national or international carbon tax should be the end goal, but notes it’s a difficult thing to achieve and that reform must happen incrementally.

“It’s great that the big industrial emitters are priced by the SGER, but that’s not the only emissions in the economy: a good carbon pricing policy is going to be broad as well as stringent, Beugin said. “You want to make sure you’re going after the small emitters, the vehicles, the buildings, the process emissions from waste and agriculture.”

How Alberta’s Carbon Levy Works

There are 103 large emitters in Alberta. While most of the sites are gas plants, a great majority of emissions come from seven coal power plants and five oilsands mines/upgraders. Such companies have three options if they exceed the target: buy carbon offsets, use Alberta Emission Performance Credits (similar to carbon offsets but rewarded based on performance) or contribute to the Climate Change and Emissions Management Fund, which funds climate change projects.

“What [this change] is going to do is drive more money into offsets in the tech fund,” Whittingham said. “There are some greenhouse gas savings or benefits to be had from that.”

Andrew Leach to Head Climate Change Panel

In addition to announcing changes to the carbon levy, Environment Minister Shannon Phillips reported the government is forming a climate change panel, chaired by Andrew Leach, the University of Alberta environmental economist.

"Andrew Leach is pretty much the first person I'd choose for that gig, so good job,” said Chris Turner, the author of The Geography of Hope and The Leap.

According to a feature Leach wrote for Maclean’s, the panel will examine a wide assortment of potential actions. It will deliver a report to the government in the fall, prior to Premier Rachel Notley’s trip to Paris in December to attend the United Nations climate change summit.

Many options will need to be considered. Whittingham says the province must find a way to phase out coal-fired electricity, ensure renewable energy fills a fair share of that void and implement energy efficiency programs, as well as deal with growing emissions from the oilsands.

Photo: Kris Krug via Flickr

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