Today, the Canadian Gas Association released the study Impacts of Policy Driven Electrification in Canada. Prepared by ICF, the study assesses four scenarios that quantify what effects, requirements and costs electrification of roughly 40 to 50 per cent more of Energy use would impose on generation capacity, electricity infrastructure, peak demand supply capability, emission reductions, and energy affordability. The study makes clear that:
Electrification will require a massive build out of new infrastructure.
- Currently only 20 per cent of Canada’s energy requirements are met by electricity. Based on ICF analysis, fuel switching to electricity of an additional 40 per cent would require an expansion from 141 gigawatts (GW) of generating capacity today, to between 278 GW and 422 GW of capacity by 2050, depending on the electrification strategy deployed. That represents a tripling of generation capacity to meet peak demand on the energy system.
The infrastructure required will be enormously expensive.
- The expansion, along with the associated incremental costs of energy, electric technology adoption, new transmission infrastructure, and renewable natural gas (RNG), could increase national energy costs by between $580 billion and $1.4 trillion over the 30 year period between 2020 and 2050.
The expense for the average Canadian household will be significant.
- The cost is equivalent to increasing average Canadian household spending by $1,300 to $3,200 per year. The capacity requirements and associated costs could be significantly higher were it not for the study’s aggressive, cost-conservative assumptions related to the improvement of electric technologies (e.g., heat pumps) and assumed steep reductions in the heating loads of residential and commercial buildings.
Environmental policy goals can be pursued at significantly lower cost through a multi-grid approach that integrates natural gas solutions with the electric system rather than an electric-only option.
- GHG reduction policies that entirely favour electricity over multi-grid approaches are significantly more costly (at $289 /tCO2 for electric alone vs $129 /tCO2 for integrated systems). Canada’s existing natural gas and electricity systems and existing infrastructure working together can be optimized for a reliable, affordable, low emissions solution.
The goal of this report is to help better inform the public discourse on options for Canada’s energy future. What is clear from the research is that the cost to electrify additional parts of the Canadian economy will come at tremendous cost. More importantly, pathways that leverage both natural gas and electricity systems can deliver important emission reductions much more affordably. As we move forward, the Canadian natural gas delivery industry is committed to advancing cost effective solutions that will help Canada meet its environmental objectives, while remaining economically competitive. For more details on this study, visit Link
CGA believes studies like this one are necessary if we want to have an informed discussion about energy policy options and their implications for Canadians. It is too easy for decision-makers to make bold statements about what an energy system might look like without ever explaining what is involved, and what that will cost working Canadians.
Timothy M. Egan, President and CEO, Canadian Gas Association
Many of my colleagues around the Board table lead integrated gas and electric companies, and all of us face a big challenge in trying to meet Canadians’ energy needs in a way that is environmentally sound, reliable, and affordable. Studies like this help us to be better informed about those challenges, so that we can better meet those customer needs. We hope this study fuels a more informed energy discussion in our country.
Leigh Ann Shoji-Lee, President, Pacific Northern Gas, Chair, Board of Directors, CGA
Fuel switching and energy transitions are difficult to accomplish. The NGV industry’s experience over the last decade in the transportation sector points to the pivotal role of cost and affordability in supporting these transitions. This report provides a realistic look at cost implications and the real supply chain challenges that need to be addressed if Canada is to meet its emissions reductions targets.
Bruce Winchester – Executive Director CNGVA
The Canadian Gas Association (CGA) is the voice of Canada’s natural gas distribution industry and its members are distribution companies, transmission companies, equipment manufacturers and other service providers. Natural gas has a central place in Canada’s energy mix meeting 35 per cent of the country’s energy needs. Today, in over 7 million homes, apartments, buildings, businesses, hospitals and schools, customers representing two-thirds of Canadians rely on natural gas for heat and power.
Report: Impacts of Policy Driven Electrification in Canada
Infographic: CGA’s Electrification Infographic
Website: Canadian Gas Association
LinkedIn: Canadian Gas Association
Canadian Gas Association
Office: 613-748-0057 ext. 310