Canada On Track to Hit Carbon Reduction Target for Grid Electricity

Be sure to sit down before you read this: Canada is in good shape to meet one of its national greenhouse gas (GHG) reduction targets, according to a report the federal government recently filed with the United Nations.

“Canada is on track to achieve a national GHG target. No, really,” writes Smart Prosperity Institute Executive in Residence Dave Sawyer in a recent blog post. “The latest GHG projection from Environment and Climate Change Canada (ECCC) shows Canada is on track to meet or exceed the target of 90% non-emitting electricity generation by 2030.”

“Yes, it’s good news,” Sawyer told The Canadian Press. “It shows the provinces and federal government have been doing a lot, and they’ve somehow managed to do more than we thought they could do.”

While “it is national sport to complain about Canada’s carbon policy failures,” he adds in his blog post, with “national plan after national plan failing to rein in rising GHGs as national targets fall by the wayside,” the promise to produce 90% of utility electricity from non-emitting sources is worth keeping. And it looks like the country is on track to hit or exceed the target.

Sawyer says that’s a big deal. And it’s also a bit of a pleasant surprise.

“Just last year, the 90% non-emitting target looked unattainable because the emission projection to 2030 indicated that Canada was on track to generate about 85% of its electricity from non-emitting sources,” he writes. “This shortfall looked persistent despite strong GHG-reducing federal and provincial policies, including a coal phaseout by 2030 in Alberta and nationally, carbon pricing for electricity under the federal carbon pricing backstop, and renewable subsidies in many jurisdictions.”

But in this year’s projection, “the share of non-emitting renewable generation hits 90% in 2030 in the ECCC Reference Case, a scenario that reflects current measures that have tangible implementation plans.” The total tips above 90% after factoring in measures like the federal Clean Fuel Standard that are likely to be implemented, but have not yet been fully detailed.

Sawyer attributes the shift to three new developments:

• The federal output-based pricing system for large industrial emitters, which Sawyer says will fully price natural gas-fired electricity by 2030 and make it less competitive against non-emitting sources;
• New transmission capacity from B.C. to Alberta and from Manitoba to Saskatchewan that will displace fossil generation in the two receiving provinces with hydro;
• New cogeneration units recently announced by Alberta fossils like Suncor.

“With these additions to the latest ECCC Reference Case, the 2019 projection for generation by natural gas-fired utilities (excluding industrial generation) is down 40% from 2018,” Sawyer writes. “Filling the gap is large hydro, which indicates the interties into Alberta and Saskatchewan from the hydro-rich provinces of B.C. and Manitoba are a big deal. It is also no surprise that other renewables lose market share as more low-cost hydro becomes available and lower overall demand for utility-generated electricity increases competition between generation types.”