As Canada ditches coal, Alberta bets on 'cheap' and 'temporary' natural gas

Jeff Lagerquist
Thu., December 2, 2021

Progress on Canada's goal to phase out traditional coal-fired electricity by 2030 is uneven across provinces still burning the world's dirtiest fossil fuel to generate power, according to a new study from the Pembina Institute.

The think tank found utilities in Alberta and Saskatchewan have made "considerably more progress" than peers in the Maritimes in their efforts to pivot away from coal. Alberta, Saskatchewan, New Brunswick and Nova Scotia are the four provinces that still use coal to generate electricity.

"Utilities in Alberta are on track to phasing out coal by 2023 — decades ahead of original forecasts," Binnu Jeyakumar, Pembina's director of clean energy, stated in a news release on Thursday.

"Nova Scotia has committed to a 2030 coal phase-out and New Brunswick has now been mandated by the federal government to meet the same timeline. However, New Brunswick Power and Nova Scotia Power have yet to implement concrete plans to phase out coal by 2030."

Coal-burning Prairie and Maritime provinces are charting decidedly different paths away from coal. Utilities out west have mainly opted to convert coal units to burn natural gas, which also generates greenhouse gas emissions. Those in Atlantic provinces primarily plan to replace retired coal plants with cleaner nuclear, renewable, and imported hydropower sources.

"Alberta has abundant and cheap natural gas, the Maritimes don't. So while Alberta is also building renewables, the bulk of the replacement has been converting coal facilities to run on natural gas," University of Calgary energy economist Blake Shaffer told Yahoo Finance Canada in an email on Thursday.

"It's a cheap option as much of the infrastructure can simply be repurposed, and it's a temporary one as coal-to-gas conversions have an expiry date, and much of the infrastructure is old," he added.

Meanwhile, the shift to renewables is proving challenging in New Brunswick. Ottawa rejected a bid from the province last week for an equivalency agreement that would have allowed New Brunswick Power to continue operating the coal-fired Belledune Generating Station past the 2030 federal deadline.

Shaffer says while cheap and plentiful natural gas has given Western provinces a lead in the race to abandon coal, the pivot to another fossil fuel may only serve to delay a shift to greener sources of electricity.

"Eventually Alberta, too, will move beyond natural gas, or at least unabated natural gas, for its power," he said.

Currently, 81 per cent of Canada’s electricity is generated by non-emitting sources, according to the Pembina study. Beyond Alberta, Saskatchewan, New Brunswick and Nova Scotia, the country chiefly relies on hydroelectricity, with the exception of Ontario's nuclear power plants.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.