Federal net-zero electricity regulations will permit some natural gas power generation: source

After facing pushback from Alberta and Saskatchewan, Canada’s draft net-zero electricity regulations — set to be released today — will permit some natural gas power generation, CBC News has learned. 

A senior government source not authorized to speak publicly said that Environment Minister Steven Guilbeault will release Ottawa’s proposed Clean Electricity Regulations on Thursday.

Provinces and territories will have a minimum 75-day window to comment on the draft regulations. The final rules won’t take effect until 2035. 

Calling it a “technology neutral approach,” the source said the federal government believes there’s enough flexibility to accommodate the different energy needs of Canada’s diverse provinces and territories. 

That means the proposed regulations would permit the use of non-emitting sources — hydroelectricity, wind, solar and nuclear — but also natural gas and diesel, if they meet specific criteria. 

Remote and northern communities not connected to the main power grid, which tend to rely on diesel, won’t have to suddenly switch to solar or wind, the source said, as there would be exceptions in those places.

There will also be government programs to help them get off diesel, they said.

Meanwhile, places like Ontario and Alberta can continue to rely on natural gas power generation if they meet the proposed performance standards set out in the regulations with technology like carbon capture. Some natural gas power generation without carbon capture will be permitted during peak demand periods, the source added.

Although there will be flexibility, the source noted how cost-competitive renewables have become with fossil fuels — something the provinces and territories are expected to have to weigh as aging infrastructure reaches end of life, and considerable new investment will be needed to meet demand.

The Canadian Climate Institute says Canada’s electricity-generation capacity will need to double or triple by 2050.

The federal government states that its modelling shows more than $400 billion is needed to replace aging facilities and expand generation capacity. Without such investments, the government suggests, Canada may be unable to respond to the pressure placed on the system from electric heating and cooling systems, electric vehicles and population and economic growth. 

As outlined in the 2023 federal budget, it’s backed by a more than $40-billion commitment over the next decade to support Canada’s clean electricity sector through tax measures, public financing and grant contributions.

Some of this money would be tied to the provinces and territories demonstrating they are committed to Ottawa’s 2035 net-zero electricity grid.

The proposed regulations, the source said, will be the foundation for Canada’s climate goals. 

They work in tandem with Canada’s 2035 zero-emission vehicle sales target, the source said, with the hope that with more electric vehicles on Canada’s roads, there will be more clean electricity to charge them. 

The regulations also follow similar proposals made by other G7 countries, including the U.S. under the Biden administration, through its Environmental Protection Agency. 

Alberta, Saskatchewan and Nunavut raise concerns 

Canada’s power grid is more than 80 per cent non-emitting, thanks to its reliance on hydroelectric, nuclear, wind and solar generation. Power generation from biomass, petroleum and the soon-to-be phased out coal accounted for almost eight per cent (52 megatonnes of carbon dioxide equivalent) of the country’s total emissions in 2020. 

Ahead of the release of the draft regulations, some Prairie provinces and Nunavut have said they have concerns.

In a statement Tuesday, Alberta’s ministers of utilities and the environment criticized Ottawa for tying federal dollars to compliance with its Clean Electricity Regulations.

“This would obviously penalize the provinces most in need of assistance in transitioning to a carbon-neutral grid, including Alberta,” Environment Minister Rebecca Schulz said in a statement.

“Alberta will not recognize any target that will massively drive up the cost of Alberta power bills while simultaneously risking the integrity of Alberta’s grid.”

The Saskatchewan government also recently echoed those worries, committing instead to a net-zero power generation goal by 2050 — 15 years later than the federal target. 

“In Saskatchewan, we will not attempt the impossible when it comes to power production in our province. We will not risk plunging our homes, our schools, our hospitals, our special-care homes, our businesses into the cold and darkness because of the ideological whims of others,” said Saskatchewan Premier Scott Moe in May. 

The Nunavut government, whose 25 remote communities span across a vast land, relying on diesel for electricity, is also critical of the federal government’s proposal.

“Obviously, it is a major concern for us not having the different option to provide firm power to our communities,” Nunavut Premier P.J. Akeeagok told CBC News. “Solar and wind, as great as they are, provide intermittent power that just doesn’t sustain the environment that we are in.”

Akeeagok said the territory ultimately wants to get off diesel and transition to non-emitting power sources that are affordable and reliable. 

Nunavut is calling on the federal government to financially back projects like the Kivalliq Hydro-Fibre link, which would connect some communities in the central part of the territory to Manitoba. Another hydro project would power the capital city, Iqaluit.