Canada is a World Leader in Clean, Affordable Power – But Can it Stay in the Sweet Spot?

 

Visualization: Sourced data from IEA Key World Energy Statistics 2016 and World Bank Open Data Source.

Canada is a leader in electricity generation, producing some of the cleanest and most affordable power in the world. Hitting this “sweet spot”, balancing environmental leadership with affordability, is not easy. In fact, only two developed countries manage to crack the top quartile for greenhouse gas-free (GHG) electricity generation while remaining in the bottom quartile for residential rates, Canada and Norway.

In 2015, Canadian residential prices for electricity sat at 10.72 cents/kwh and just under 80% of its electricity was produced GHG-free. In 2017, that number is now over 80% as Canada continues to take traditional coal assets offline. A significant portion of Canada’s electricity is also renewable, coming primarily from Hydro generation. However, Canada also relies on nuclear power as another important source of non-GHG emitting electricity. Norway, who edges out Canada for the top spot, relies almost exclusively on hydro generation.

The two countries have another important divergence, population size. Our population is much larger than Norway’s. In fact, in the top emissions quartile only France has a larger population than Canada and, although their electricity related GHG emissions are lower, their domestic electricity rates are much higher. The closest countries to Canada in terms of population are United Kingdom and Germany, both of whom have significantly higher GHG emissions and rates.

 

What does the future hold?

As part of an ambitious climate agenda, Canada has committed to increasing its GHG-free power generation to 90% by 2030. Can we do so and retain that coveted balance between environmental leadership and cost? Can Canada overtake Norway as the cleanest and most affordable electricity producing country in the world?  Some interesting questions indeed.

Canada’s greatest challenge, one shared by countries around the world, will be infrastructure renewal. In 2010, the Conference Board of Canada estimated that by 2030 Canada would need to invest $350 million in infrastructure to maintain our current system. More recently, a draft report estimated that the price tag to meet Canada’s most recent climate targets increases to $1.6 billion. These costs necessarily impact rates, in order to maintain that balance Canada will need to be creative in its approaches to investments and infrastructure.

I am looking forward to seeing the new data when it becomes available. I believe Canada will continue to lead the world in reliability, sustainability and affordability, but may be precariously close to the edge of the top quartile as we renew our infrastructure. I am also interested in seeing how the rest of the world shifts following the groundbreaking Paris Climate Agreement and global push for a cleaner future.