Canada needs electricity regulations that work in the real world

Canada needs electricity regulations that work in the real world

The draft Clean Electricity Regulations (CERs) were released in August of 2023. Since then, Electricity Canada and its members have consistently engaged with the federal government on the proposed rules, the modelling behind them, and what the potential impacts might be for the electricity sector and broader economy.

In late August, Electricity Canada CEO Francis Bradley was interviewed by the Globe and Mail to discuss some of the chief concerns that industry has when it comes to the achievability of the proposed regulations in certain jurisdictions. We also took our concerns public and launched an online ad campaign to increase awareness about the potential reliability and affordability concerns associated with an unachievable final regulation. Current Affairs sat down with Electricity Canada’s Vice President of Government Relations Michael Powell to discuss the importance of getting these new regulations right.

Hi Mike, thanks for joining us. Why are the Clean Electricity Regulations important-- not just to the electricity sector, but Canadians generally?

The Clean Electricity Regulations will limit how much electricity can be generated using emitting sources in 2035 and beyond. Today, Canada’s electricity system is over 84% non-emitting, so we are starting from a good place. But the remaining 16% will be the most difficult to reduce, especially as we work to double or even triple the size of the grid by 2050.

These rules would have the greatest impact in specific provinces: Nova Scotia, New Brunswick, Ontario, Alberta and Saskatchewan. Emitting sources of generation continue to play a key role in providing baseload power in these, so it’s really important to get the rules right. It will be vital that the right flexibilities are included to ensure that reliability and affordability can be maintained beyond 2035.

The Clean Electricity Regulations are also important to get right because they will have an impact on our ability to successfully electrify the Canadian economy and reduce overall emissions. Although the electricity sector represents just 47 Mt of carbon emissions, the Canada Electricity Advisory Council highlighted that we have the potential to reduce 268 Mt of carbon emissions from other sectors by 2050. Doing so can only happen if we can keep electricity affordable and reliable.

What would you say are the biggest issues that need to be resolved when it comes to the CERs and the electricity sector?

We're worried that when the government sets these rules, they're going to choose a path that is too stringent. This would make it difficult, and in some cases impossible, for grid operators to keep the system reliable for Canadians.

Every province and territory in Canada is starting from a different place when it comes to decarbonization of the system. Some provinces will have a bigger lift simply because of the natural resources that they have available. Right now, we are concerned that if we don't see sufficient flexibility in the final regulations there is a potential for blackouts and brownouts in these jurisdictions.

The online ads Electricity Canada put out on August 23^rd say the CERs will lead to problems with reliability and affordability. How will this be the case?

First of all, it's important to remember that the regulations have not yet been finalized. The reason we're running a campaign is to ensure the Canadian public and federal decisionmakers are aware of the risks when it comes to not getting them right.

Getting them right means that independent system operators and utilities in all provinces can see a path towards meeting the regulations. They are the experts in building the system and providing electricity every day of the year. Their voice is crucial.

We're all working towards building a cleaner electricity grid. Significant work is underway across Canada on nuclear projects, refurbishing and adding hydro, and building more wind, solar and batteries. This is exciting and important to our energy future. However, we need to be mindful about what is feasible in these tight timelines while ensuring all Canadians have power. We're experiencing the fastest rate of growth in electricity demand in a couple of generations. These are big problems, but they require thoughtfulness and balance.

If we are going to get there, we really need to make sure we have tools that are available, dispatchable, flexible and affordable. While we build a future and invest in the scaling clean technologies, we need to understand that getting there will take time. On the road to that future, we will need to ensure that the lights can stay on for every Canadian household.

The way the regulations are drafted right now, in the jurisdictions that have the greatest challenge, they can’t yet guarantee that will happen.

What need to be the next steps to make the CERs workable. Where do we go from here?

The Government of Canada is going to be making a decision in the next couple of months on what the final regulations will look like. Our sector in the meantime will continue to be clean and getting cleaner.

What we hope to see is a final regulation that is sufficiently flexible so that a system operator in any of the jurisdictions can see a path with which reliability and affordability aren’t a serious concern. It has to work using the tools and the technologies that we have today, and it has to do so in a way that is sensible for customers. We will continue to engage and provide our perspective to this end. This is too important to get wrong.