As Canada develops a nationwide law to green the grid, loopholes have experts concerned
Zoë Yunker · CBC Radio · Posted: Sep 04, 2022
Isaac Moriwake, managing attorney for Earthjustice's Mid-Pacific Office, beside a rooftop solar panel in Hawai'i. Rooftop solar makes up a third of the U.S. state's renewable energy. (Matt Mallams/Earthjustice)
Canada has just 13 years to achieve a formidable task: practically erase its electrical emissions while growing the grid to displace fossil fuels powering its cars, homes and factories.
It's a double-bind that calls for unprecedented action. And Canada is developing a regulatory tool to get there — a clean electricity standard, a major step in the government's goal of reaching a net-zero electricity grid by 2035.
"If this policy is effective, it can send a very clear signal to industry, as well as to investors, so that we actually see an increase in clean energy investments in Canada's grid," said Binnu Jeyakumar, program director of electricity at the Pembina Institute.
The forthcoming regulation will act like a game of limbo for electrical emissions, setting a bar for how much each utility can produce for every unit of energy generated, and ideally, said Jeyakumar, lowering it over time.
If a utility's emissions are too high when the regulation takes effect, they'll be forced to buy offsets or shut down — and those consequences could push non-emitting renewables like wind and solar to the top.
'Nation-building' investments in electricity grid needed to reach net-zero: expertsScorecard in works to help show utilities' progress to clean energy
Canada isn't the first jurisdiction to develop such a regulation. In various forms, electricity regulations have helped spur renewable development in the U.S. since the late '90s, and now extend throughout 30 states. Leading the pack is Hawaii, whose target of reaching 100 per cent renewables by 2045 helped fasttrack their transition from imported fossil fuels. The state now produces about six times more renewable energy than Canada.
Hawaii's standard was "instrumental" in that shift, said Isaac Moriwake, managing attorney at Earthjustice's Mid-Pacific Office in Honolulu.
"It creates an acceleration effect where in pointing to that direction, and gearing up, it becomes a self-fulfilling prophecy," he said.
Canada's plan under scrutiny
Unlike the state-based standards in the U.S, Canada's incoming national standard could provide a unifying role in a country where electricity is controlled provincially.
Jeyakumar thinks that policy signal is particularly important to support building interprovincial transmission to harmonize regions' renewable energy capacity. "The investments needed in doing something like this requires a national-level effort," she said.
Last month, Environment and Climate Change Canada provided an early window into the future regulations, with a draft expected to be released by the end of the year.
'Extensions, exemptions and loopholes' for gas
Natural gas poses a substantial threat to Canada's net-zero goals, suggests Jeyakumar.
Although the majority of Canada's electricity comes from non-emitting hydro power, future demand could change that balance. Without a regulatory standard in place, Jeyakumar said that the country could see a 70 per cent increase in gas use by 2035.
And while the standard makes some efforts to minimize emissions from gas-fired power, Jeyakumar points to the gaps that remain.
First, the regulations are slated to go into effect in 2035, leaving over a decade with no regulations in place. "Waiting that long, and given all the political uncertainties in the next 13 years, really weakens the signal to investors," Jeyakumar told What On Earth host Laura Lynch.
And it's unclear how many power facilities will be regulated by the new standard. As currently proposed, any existing gas-fired facility — and any facility built in the next three years — would not be subject to the standard in 2035, and instead would be allowed to operate above the emissions cap until the facility's "end of prescribed life." Government has not indicated how long that life cycle would last.
Hawaii's energy transition
Hawaii may be a small island state, but its own electricity transformation has important takeaways for Canada.
Just 15 years ago, nearly all the state's electricity came from fossil fuels. When oil prices skyrocketed after the 2008 financial crisis, the region got serious about making the switch to renewables. "The real driver in Hawaii was the cost of fossil fuels," said Moriwake.
That's when the state set an ambitious electricity standard, aiming for 40 per cent renewables by 2030. Seven years later in 2015 it set its 100 per cent renewable target. Unlike Canada's standard, which is based on emissions intensity, Hawaii's regulation focuses on the percentage of renewables like wind, solar and geothermal running through the grid..
The regulatory consequences are clear: if utilities fail to meet their renewable targets, they're forced to pay penalties which must be covered by companies shareholders, rather than ratepayers. And unlike Canada's proposed standard, all power plants in Hawaii, no matter when they're built, will need to meet the bar.
Canada has just 13 years to achieve a formidable task: practically erase its electrical emissions while growing the grid to displace fossil fuels powering its cars, homes and factories.
It's a double-bind that calls for unprecedented action. And Canada is developing a regulatory tool to get there — a clean electricity standard, a major step in the government's goal of reaching a net-zero electricity grid by 2035.
"If this policy is effective, it can send a very clear signal to industry, as well as to investors, so that we actually see an increase in clean energy investments in Canada's grid," said Binnu Jeyakumar, program director of electricity at the Pembina Institute.
The forthcoming regulation will act like a game of limbo for electrical emissions, setting a bar for how much each utility can produce for every unit of energy generated, and ideally, said Jeyakumar, lowering it over time.
If a utility's emissions are too high when the regulation takes effect, they'll be forced to buy offsets or shut down — and those consequences could push non-emitting renewables like wind and solar to the top.
'Nation-building' investments in electricity grid needed to reach net-zero: expertsScorecard in works to help show utilities' progress to clean energy
Canada isn't the first jurisdiction to develop such a regulation. In various forms, electricity regulations have helped spur renewable development in the U.S. since the late '90s, and now extend throughout 30 states. Leading the pack is Hawaii, whose target of reaching 100 per cent renewables by 2045 helped fasttrack their transition from imported fossil fuels. The state now produces about six times more renewable energy than Canada.
Hawaii's standard was "instrumental" in that shift, said Isaac Moriwake, managing attorney at Earthjustice's Mid-Pacific Office in Honolulu.
"It creates an acceleration effect where in pointing to that direction, and gearing up, it becomes a self-fulfilling prophecy," he said.
Canada's plan under scrutiny
Unlike the state-based standards in the U.S, Canada's incoming national standard could provide a unifying role in a country where electricity is controlled provincially.
Jeyakumar thinks that policy signal is particularly important to support building interprovincial transmission to harmonize regions' renewable energy capacity. "The investments needed in doing something like this requires a national-level effort," she said.
Last month, Environment and Climate Change Canada provided an early window into the future regulations, with a draft expected to be released by the end of the year.
Binnu Jeyakumar is the program director of electricity at the Pembina Institute. (Pembina Institute)Minister of Environment and Climate Change Steven Guilbeault called it "a key part of our government's plan for a healthy environment and healthy economy" in a press release.
But Jeyakumar's Pembina Institute and other environmental organizations are raising concerns.
"A lot needs to change," said Stephen Thomas, a climate solutions policy analyst with the David Suzuki Foundation. "These proposed regulations are not likely to actually achieve the core goal of a net-zero electricity system across Canada by 2035."
But Jeyakumar's Pembina Institute and other environmental organizations are raising concerns.
"A lot needs to change," said Stephen Thomas, a climate solutions policy analyst with the David Suzuki Foundation. "These proposed regulations are not likely to actually achieve the core goal of a net-zero electricity system across Canada by 2035."
'Extensions, exemptions and loopholes' for gas
Natural gas poses a substantial threat to Canada's net-zero goals, suggests Jeyakumar.
Although the majority of Canada's electricity comes from non-emitting hydro power, future demand could change that balance. Without a regulatory standard in place, Jeyakumar said that the country could see a 70 per cent increase in gas use by 2035.
And while the standard makes some efforts to minimize emissions from gas-fired power, Jeyakumar points to the gaps that remain.
First, the regulations are slated to go into effect in 2035, leaving over a decade with no regulations in place. "Waiting that long, and given all the political uncertainties in the next 13 years, really weakens the signal to investors," Jeyakumar told What On Earth host Laura Lynch.
And it's unclear how many power facilities will be regulated by the new standard. As currently proposed, any existing gas-fired facility — and any facility built in the next three years — would not be subject to the standard in 2035, and instead would be allowed to operate above the emissions cap until the facility's "end of prescribed life." Government has not indicated how long that life cycle would last.
Some critics say Canada's plan for a clean electricity standard leaves too many back doors for natural gas to remain as a backup source.
(Robert Jones/CBC)
The proposed standard also leaves room for some natural gas as a "backup" for renewables — an attempt to make up for times when the wind doesn't blow and the sun doesn't shine.
The framework also suggests unlimited gas can also remain on the grid in "emergency circumstances."
"The extensions, exemptions and loopholes in these proposed regulations leave the door wide open to a huge increase in natural gas emissions in many provinces," said Thomas.
The Ministry of Environment and Climate Change did not respond to the CBC's request for comment by press time.
The proposed standard also leaves room for some natural gas as a "backup" for renewables — an attempt to make up for times when the wind doesn't blow and the sun doesn't shine.
The framework also suggests unlimited gas can also remain on the grid in "emergency circumstances."
"The extensions, exemptions and loopholes in these proposed regulations leave the door wide open to a huge increase in natural gas emissions in many provinces," said Thomas.
The Ministry of Environment and Climate Change did not respond to the CBC's request for comment by press time.
Hawaii's energy transition
Hawaii may be a small island state, but its own electricity transformation has important takeaways for Canada.
Just 15 years ago, nearly all the state's electricity came from fossil fuels. When oil prices skyrocketed after the 2008 financial crisis, the region got serious about making the switch to renewables. "The real driver in Hawaii was the cost of fossil fuels," said Moriwake.
That's when the state set an ambitious electricity standard, aiming for 40 per cent renewables by 2030. Seven years later in 2015 it set its 100 per cent renewable target. Unlike Canada's standard, which is based on emissions intensity, Hawaii's regulation focuses on the percentage of renewables like wind, solar and geothermal running through the grid..
The regulatory consequences are clear: if utilities fail to meet their renewable targets, they're forced to pay penalties which must be covered by companies shareholders, rather than ratepayers. And unlike Canada's proposed standard, all power plants in Hawaii, no matter when they're built, will need to meet the bar.
With nearly 40 per cent renewable energy statewide, Hawaii is well on track to meet its 2030 target. (Matt Mallams/Earthjustice)
So far, the standard has worked.
"We haven't gotten close to failing on any of the targets we've set so far," said Moriwake. "Once you set the target you get the utility running, and we've been blowing past these goals very quickly."
With nearly 40 per cent renewable energy statewide, Hawaii will soon meet its 2030 target. One of its islands, Kauai, has nearly passed its 2040 target of 70 per cent renewables.
But to reach their 100 per cent goal, challenges remain. As one of the world's most remote regions with a limited land mass, decisions on where to put solar panels and wind farms will be critical in the years to come.
In 2019, 55 people were arrested for protesting a wind farm built adjacent to the village of Kahuku.
Moriwake thinks large, utility-scale projects developed without community's consent may become a relic in what he describes as the "community-based decade" ahead.
Another major tool in building community support? Distributed renewables, like rooftop solar, which now make up nearly half of Hawaii's renewable grid.
The polar bear became an 'accidental icon' of climate change. Is it time to rethink that?Why retired scientists may have already discovered today's green energy solutions
Moriwake suggests that the uptake of rooftop solar was "a prime driver in getting people to actually make the leap to go green, but also building a mentality that there was an alternative."
In Hawaii, distributed solar acts like a giant battery, allowing users to store extra power, but also sell it to the grid at peak times, helping balance out the draw on energy. That helps ease the reliance on other backups like gas.
"When people say, 'you can't balance a grid [or] you can't have a reliable grid with solar'— we're there. We already do," said Scott Glenn, chief energy officer for Hawaii State Energy Office.
When asked to offer advice for Canada's attempt to build its own standard, Moriwake is straightforward.
"Just do it," he said. "It drives itself once you set the goal or the mandate. And Hawaii is perfect proof for that."
So far, the standard has worked.
"We haven't gotten close to failing on any of the targets we've set so far," said Moriwake. "Once you set the target you get the utility running, and we've been blowing past these goals very quickly."
With nearly 40 per cent renewable energy statewide, Hawaii will soon meet its 2030 target. One of its islands, Kauai, has nearly passed its 2040 target of 70 per cent renewables.
But to reach their 100 per cent goal, challenges remain. As one of the world's most remote regions with a limited land mass, decisions on where to put solar panels and wind farms will be critical in the years to come.
In 2019, 55 people were arrested for protesting a wind farm built adjacent to the village of Kahuku.
Moriwake thinks large, utility-scale projects developed without community's consent may become a relic in what he describes as the "community-based decade" ahead.
Another major tool in building community support? Distributed renewables, like rooftop solar, which now make up nearly half of Hawaii's renewable grid.
The polar bear became an 'accidental icon' of climate change. Is it time to rethink that?Why retired scientists may have already discovered today's green energy solutions
Moriwake suggests that the uptake of rooftop solar was "a prime driver in getting people to actually make the leap to go green, but also building a mentality that there was an alternative."
In Hawaii, distributed solar acts like a giant battery, allowing users to store extra power, but also sell it to the grid at peak times, helping balance out the draw on energy. That helps ease the reliance on other backups like gas.
"When people say, 'you can't balance a grid [or] you can't have a reliable grid with solar'— we're there. We already do," said Scott Glenn, chief energy officer for Hawaii State Energy Office.
When asked to offer advice for Canada's attempt to build its own standard, Moriwake is straightforward.
"Just do it," he said. "It drives itself once you set the goal or the mandate. And Hawaii is perfect proof for that."
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