Uncertainty hangs over wind farm

Rosatom-RAS Cooperation drives joint R&D in nuclear energy, nuclear medicine, fusion, particle accelerators, laser technologies, fuel cycle safety, radioactive waste management, and supercomputing, aligning strategic planning and standards to accelerate innovation across Russia's nuclear sector.

Key Points

A pact uniting Rosatom and RAS on nuclear R&D, fusion, and medicine to advance nuclear technologies across Russia.

✅ Joint R&D in fusion, accelerators, lasers, and new materials

✅ Focus on fuel cycle closure, safety, and waste management

✅ Shared strategic planning, standards, and expert evaluation

Russian state atomic energy corporation Rosatom and the Russian State Academy of Sciences are to cooperate on joint scientific, technical and innovative activities in areas including nuclear energy, nuclear medicine and other areas of the electricity sector under an agreement signed in Moscow on 7 February.

The cooperation agreement was signed by Rosatom Director General Alexei Likhachov and President of the Russian Academy of Sciences Alexander Sergeev during a joint meeting to mark Russian Science Day. Under its terms, the partners will cooperate in organising research and development activities aimed at providing technological advantages in various sectors of the domestic industry, as well as creating and developing interdisciplinary scientific and technological centres and organisations supporting energy sector training and innovation. They will also jointly develop strategic planning documents, improve the technical and scientific regulatory and legal framework, and carry out expert evaluations of scientific and technical projects and scientific consultations.

Rosatom said the main areas of cooperation in the agreement are: the development of laser technologies and particle accelerators; the creation of modern diagnostic equipment, nuclear medicine and radiation therapy; controlled thermonuclear fusion; nuclear energy of the future; new materials; the nuclear fuel cycle and its closure; safety of nuclear energy and power sector pandemic response preparedness; environmental aspects of radioactive waste management; modern supercomputers, databases, application packages, and import-substituting codes; and also X-ray astronomy and nuclear planetology.

Likhachov said joint activities between Rosatom and the Academy would strengthen the Russian nuclear industry's "leadership" in the world and allow the creation of new technologies that would shape the future image of the nuclear industry in Russia. "Within the framework of the Agreement, we intend to expand work on the entire spectrum of advanced scientific research. The most important direction of our cooperation will be the integration of fundamental, exploratory and applied scientific research, including in the interests of the development of the nuclear industry. We will work together to form the nuclear energy industry of the future, and enhance grid resilience, to create new materials, new radiation technologies,” he said.

Sergeyev noted the "rich history" of cooperation between the Academy of Sciences and the nuclear industry, including modern safety practices such as arc flash training that support operations. “All major projects in the field of military and peaceful nuclear energy were carried out jointly by scientists and specialists of our organisations, which largely ensured their timeliness and success," he said.

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Toronto Electricity Demand Growth underscores IESO projections of rising peak load by 2050, driven by population growth, electrification, new housing density, and tech economy, requiring grid modernization, transmission upgrades, demand response, and local renewable energy.

Key Points

It refers to the projected near-doubling of Toronto's peak load by 2050, driven by electrification and urban growth.

✅ IESO projects peak demand nearly doubling by 2050

✅ Drivers: population, densification, EVs, heat pumps

✅ Solutions: efficiency, transmission, storage, demand response

Toronto faces a significant challenge in meeting the growing electricity needs of its expanding population and ambitious development plans. According to a new report from Ontario's Independent Electricity System Operator (IESO), Toronto's peak electricity demand is expected to nearly double by 2050. This highlights the need for proactive steps to secure adequate electricity supply amidst the city's ongoing economic and population growth.

Key Factors Driving Demand

Several factors are contributing to the projected increase in electricity demand:

Population Growth: Toronto is one of the fastest-growing cities in North America, and this trend is expected to continue. More residents mean more need for housing, businesses, and other electricity-consuming infrastructure.

• New Homes and Density: The city's housing strategy calls for 285,000 new homes within the next decade, including significant densification in existing neighbourhoods. High-rise buildings in urban centers are generally more energy-intensive than low-rise residential developments.
• Economic Development: Toronto's robust economy, a hub for tech and innovation, attracts new businesses, including energy-intensive AI data centers that fuel further demand for electricity.
• Electrification: The push to reduce carbon emissions is driving the electrification of transportation and home heating, further increasing pressure on Toronto's electricity grid.

Planning for the Future

Ontario and the City of Toronto recognize the urgency to secure stable and reliable electricity supplies to support continued growth and prosperity without sacrificing affordability, drawing lessons from British Columbia's clean energy shift to inform local approaches. Officials are collaborating to develop a long-term plan that focuses on:

• Energy Efficiency: Efforts aim to reduce wasteful electricity usage through upgrades to existing buildings, promoting energy-efficient appliances, and implementing smart grid technologies. These will play a crucial role in curbing overall demand.
• New Infrastructure: Significant investments in building new electricity generation, transmission lines, and substations, as well as regional macrogrids to enhance reliability, will be necessary to meet the projected demands of Toronto's future.
• Demand Management: Programs incentivizing energy conservation during peak hours will help to avoid strain on the grid and reduce the need to build expensive power plants only used at peak demand times.

Challenges Ahead

The path ahead isn't without its hurdles.  Building new power infrastructure in a dense urban environment like Toronto can be time-consuming, expensive, and sometimes disruptive, especially as grids face harsh weather risks that complicate construction and operations. Residents and businesses might worry about potential rate increases required to fund these necessary investments.

Opportunity for Innovation

The IESO and the city view the situation as an opportunity to embrace innovative solutions. Exploring renewable energy sources within and near the city, developing local energy storage systems, and promoting distributed energy generation such as rooftop solar, where power is created near the point of use, are all vital strategies for meeting needs in a sustainable way.

Toronto's electricity future depends heavily on proactive planning and investment in modernizing its power infrastructure.  The decisions made now will determine whether the city can support economic growth, address climate goals and a net-zero grid by 2050 ambition, and ensure that lights stay on for all Torontonians as the city continues to expand.
 

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Canada Economic Crossroads highlights bank earnings trends, interest rates, loan delinquencies, EV tariffs on Chinese imports, domestic manufacturing, Algoma Steel decarbonization, sustainability, and housing market risks shaping growth, investment, consumer prices, and climate policy.

Key Points

An overview of how bank earnings, EV tariffs, and Algoma Steel's transition shape Canada's economy.

✅ Higher rates lift margins but raise delinquencies and housing risks

✅ EV tariffs aid domestic makers but pressure consumer prices

✅ Algoma invests to decarbonize, boosting efficiency and compliance

In a complex economic landscape, recent developments have brought attention to several pivotal issues affecting Canada's business sector. The Globe and Mail’s latest report delves into three major topics: the latest bank earnings, the implications of new tariffs on Chinese electric vehicles (EVs), and Algoma Steel’s strategic maneuvers. These factors collectively paint a picture of the challenges and opportunities facing Canada's economy.

Bank Earnings Reflect Economic Uncertainty

The recent financial reports from major Canadian banks have revealed a mixed picture of the nation’s economic health. As the Globe and Mail reports, earnings results show robust performances in some areas while highlighting growing concerns in others. Banks have generally posted strong quarterly results, buoyed by higher interest rates which have improved their net interest margins. This uptick is largely attributed to the central bank's monetary policies aimed at combating inflation and stabilizing the economy.

However, the positive earnings are tempered by underlying economic uncertainties. Rising loan delinquencies and a slowing housing market are areas of concern. Increased interest rates, while beneficial for banks’ margins, have also led to higher borrowing costs for consumers and businesses. This dynamic has the potential to impact overall economic growth and consumer confidence.

Tariffs on Chinese EVs: A Strategic Shift

Another significant development is the imposition of new tariffs on Chinese electric vehicles. This move is part of a broader strategy to protect domestic automotive industries and address trade imbalances, aligning with public support for tariffs in key sectors. The tariffs are expected to increase the cost of Chinese EVs in Canada, which could have several implications for the market.

On one hand, the tariffs might provide a temporary boost to Canadian and North American manufacturers by reducing competition from lower-priced Chinese imports. This protectionist measure could encourage investments in local production and innovation, mirroring tariff threats boosting support for energy projects in other sectors. However, the increased cost of Chinese EVs may also lead to higher prices for consumers, potentially slowing the adoption of electric vehicles—a critical goal in Canada’s climate strategy.

The tariffs come at a time when the Canadian government is keen on accelerating the transition to electric mobility to meet its environmental targets, even as a critical crunch in electrical supply raises questions about grid readiness. Balancing the protection of domestic industries with the broader goal of reducing emissions will be a significant challenge moving forward.

Algoma Steel’s Strategic Evolution

In the steel industry, Algoma Steel has been making headlines with its strategic initiatives aimed at transforming its operations, in a broader shift toward clean grids and industrial decarbonization. The Globe and Mail highlights Algoma Steel's efforts to modernize its production processes and shift towards more sustainable practices. This includes significant investments in technology and infrastructure to enhance production efficiency and reduce environmental impact.

Algoma's focus on reducing carbon emissions aligns with broader industry trends towards sustainability. The company’s efforts are part of a larger push within the steel sector to address climate change and meet regulatory requirements. As one of Canada’s leading steel producers, Algoma’s actions could set a precedent for the industry, showcasing how traditional manufacturing sectors can adapt to evolving environmental standards.

Implications and Future Outlook

The interplay of these developments reflects a period of significant transition for Canada's economy, shaped in part by U.S. policy where Biden is seen as better for Canada's energy sector by some analysts. For banks, the challenge will be to navigate the balance between profitability and potential risks from a changing economic environment. The new tariffs on Chinese EVs represent a strategic shift with mixed implications for the automotive market, potentially influencing both domestic production and consumer prices. Meanwhile, Algoma Steel’s push towards sustainability could serve as a model for other industries seeking to align with environmental goals.

As these issues unfold, stakeholders across sectors will need to stay informed and adaptable. For policymakers, the challenge will be to support domestic industries while fostering innovation and sustainability, including the dilemma over electricity rates and innovation they must weigh. For businesses, the focus will be on navigating financial pressures and leveraging opportunities for growth. Consumers, in turn, will face the impact of these developments in their daily lives, from the cost of borrowing to the price of electric vehicles.

In summary, Canada’s current economic landscape is characterized by a blend of financial resilience, strategic adjustments, and evolving industry practices, amid policy volatility such as a tariff threat delaying Quebec's green energy bill earlier this year. As the country navigates these crossroads, the outcomes of these developments will play a crucial role in shaping the future economic environment.

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Crosbie Hydro Energy Action Plan outlines rate mitigation for Muskrat Falls, leveraging Nalcor oil revenues, export sales, Holyrood savings, and potential Hydro-Quebec taxation to keep Newfoundland and Labrador electricity rates near 14.67 cents/kWh.

Key Points

PC plan to cap post-Muskrat rates by using Nalcor revenues, exports, and savings, with optional Accord funds.

✅ $575.4M yearly to hold rates near 14.67 cents/kWh

✅ Sources: Nalcor oil $231M, Holyrood $150M, rates/dividends $123.4M

✅ Options: export sales, restructuring, Atlantic Accord, HQ tax

Newfoundland and Labrador PC Leader Ches Crosbie says Muskrat Falls won't drive up electricity rates, a goal consistent with an agreement to shield ratepayers from cost overruns, if he's elected premier.

According to Crosbie, who presented the party's Crosbie Hydro Energy Action Plan — acronym CHEAP — at a press conference Monday, $575.4 million is needed per year in order to keep rates from ballooning past 14.67 cents per kilowatt hour.

Here's where he thinks the money could come from:

• Hydro rates and dividends — $123.4 million
• Export sales — $40.1 million
• Nalcor restructuring — $30 million
• Holyrood savings — $150  million
• Nalcor oil revenue — $231 million

The oil money, Crosbie said, isn't going into government coffers but being invested into the offshore which, he said, is a good place for it.

"But the plan from the beginning around Muskrat Falls was that if there was need for it — for mitigation for rates — that those revenues and operating cash flows from Nalcor oil and gas would be available to be recycled into rate mitigation, as reflected in a recent financial update on the pandemic's impact. and that's what we're going to have to do," he said.

According to Crosbie, his numbers come from the preliminary stage of the Public Utilities Board process, even as rate mitigation talks have lacked public details.

This is a recent aerial view of the Muskrat Falls project in central Labrador. The project is more than 90 per cent complete, with first power forecast for late 2019, alongside Ottawa's $5.2B support for the project. (Nalcor)

"I'm telling you this is the best information available to anyone outside of government," he said. "We're working on what we can."

The PUB estimated Nalcor restructuring could save between $10 million and $15 million, according to Crosbie, but he figures there's "enough duplication and overpayment involved in the way things are now set up that we can find $30 million there."

Currently, provincial ratepayers pay about 12 cents per kilowatt hour as electricity users have started paying for Muskrat Falls costs.

Crosbie's $575.4-million figure would put rates at 14.67 cents per kilowatt-hour in 2021, where his plan pledges to keep them.

A recent Public Utilities Board Report says there's a potential $10 million to $15 million in savings from Nalcor, but Crosbie says he can find $30 million. (CBC)

"The promise is that Muskrat Falls, when it comes online — comes in service — will not increase your rates. Between now and when that happens there are rate increases already in the pipeline up to that level of [14.67 cents per kilowatt-hour] … so that is the baseline target rate at which rates will be kept.

"In other words, Muskrat will not drive up prices for electricity to consumers beyond that point."

In addition to those savings, Crosbie's plan outlined two further steps.

"We think it could be done out of the resources that I've just identified now, but if there's a problem with that, and as a temporary measure, we can use a modest amount of the Atlantic Accord review, fiscal review, revenues," he said.

Plan 'nothing new'

Premier Dwight Ball slammed the plan at the House of Assembly on Monday, saying it lacked insight.

"It was a copy and paste exercise," he told reporters. "There's nothing new in that plan. Not at all."

"We're not leaving any stone unturned of where the opportunity would be to actually generate revenue," he said.  "We are genuinely concerned about rate mitigation and we've got to get a plan in place."

Potential to tax Hydro-Québec

Crosbie also said there's potential to tax Hydro-Québec.

According to Crosbie, tax exemptions that expired in 2016 allow the province to tax exports from the Upper Churchill, which, he said, could result in "hundreds of millions or billions" in revenue.

"It's not my philosophy to immediately go and do that because that would generate litigation — who needs more of that? — but we do need to let Quebec know that we're very aware of that, and aware of that opportunity, and invite them to come talk about a whole host of issues," Crosbie said.

Crosbie said the tax would also have to be applied to domestic consumption.

"But so massive is the potential revenue from the Upper Churchill export that there would be ways to mitigate that and negate the effect of that on consumers in the province."

Crosbie said with the Atlantic Accord revenue, he could still present a balanced budget by 2022.

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Solar-Wind-Water West Africa integrates hydropower with solar and wind to boost grid flexibility, clean electricity, and decarbonization, leveraging the West African Power Pool and climate data modeling reported in Nature Sustainability.

Key Points

A strategy using hydropower to balance solar and wind, enabling reliable, low-carbon electricity across West Africa.

✅ Hydropower dispatch covers solar and wind shortfalls.

✅ Regional interconnection via West African Power Pool.

✅ Cuts CO2 versus gas while limiting new dam projects.

Hydropower plants can support solar and wind power, rather unpredictable by nature, in a climate-friendly manner. A new study in the scientific journal Nature Sustainability has now mapped the potential for such "solar-wind-water" strategies for West Africa: an important region where the power sector is still under development, amid IEA investment needs for universal access, and where generation capacity and power grids will be greatly expanded in the coming years. "Countries in West Africa therefore now have the opportunity to plan this expansion according to strategies that rely on modern, climate-friendly energy generation," says Sebastian Sterl, energy and climate scientist at Vrije Universiteit Brussel and KU Leuven and lead author of the study. "A completely different situation from Europe, where power supply has been dependent on polluting power plants for many decades - which many countries now want to rid themselves of."

Solar and wind power generation is increasing worldwide and becoming cheaper and cheaper. This helps to keep climate targets in sight, but also poses challenges. For instance, critics often argue that these energy sources are too unpredictable and variable to be part of a reliable electricity mix on a large scale, though combining multiple resources can enhance project performance.

"Indeed, our electricity systems will have to become much more flexible if we are to feed large amounts of solar and wind power into the grid. Flexibility is currently mostly provided by gas power plants. Unfortunately, these cause a lot of CO2 emissions," says Sebastian Sterl, energy and climate expert at Vrije Universiteit Brussel (VUB) and KU Leuven. "But in many countries, hydropower plants can be a fossil fuel-free alternative to support solar and wind energy. After all, hydropower plants can be dispatched at times when insufficient solar and wind power is available."

The research team, composed of experts from VUB, KU Leuven, the International Renewable Energy Agency (IRENA), and Climate Analytics, designed a new computer model for their study, running on detailed water, weather and climate data. They used this model to investigate how renewable power sources in West Africa could be exploited as effectively as possible for a reliable power supply, even without large-scale storage, in line with World Bank support for wind in developing countries. All this without losing sight of the environmental impact of large hydropower plants.

"This is far from trivial to calculate," says Prof. Wim Thiery, climate scientist at the VUB, who was also involved in the study. "Hydroelectric power stations in West Africa depend on the monsoon; in the dry season they run on their reserves. Both sun and wind, as well as power requirements, have their own typical hourly, daily and seasonal patterns. Solar, wind and hydropower all vary from year to year and may be impacted by climate change, including projections that wind resources shift southward in coming years. In addition, their potential is spatially very unevenly distributed."

West African Power Pool

The study demonstrates that it will be particularly important to create a "West African Power Pool", a regional interconnection of national power grids to serve as a path to universal electricity access across the region. Countries with a tropical climate, such as Ghana and the Ivory Coast, typically have a lot of potential for hydropower and quite high solar radiation, but hardly any wind. The drier and more desert-like countries, such as Senegal and Niger, hardly have any opportunities for hydropower, but receive more sunlight and more wind. The potential for reliable, clean power generation based on solar and wind power, supported by flexibly dispatched hydropower, increases by more than 30% when countries can share their potential regionally, the researchers discovered.

All measures taken together would allow roughly 60% of the current electricity demand in West Africa to be met with complementary renewable sources, despite concerns about slow greening of Africa's electricity, of which roughly half would be solar and wind power and the other half hydropower - without the need for large-scale battery or other storage plants. According to the study, within a few years, the cost of solar and wind power generation in West Africa is also expected to drop to such an extent that the proposed solar-wind-water strategies will provide cheaper electricity than gas-fired power plants, which currently still account for more than half of all electricity supply in West Africa.

Better ecological footprint

Hydropower plants can have a considerable negative impact on local ecology. In many developing countries, piles of controversial plans for new hydropower plants have been proposed. The study can help to make future investments in hydropower more sustainable. "By using existing and planned hydropower plants as optimally as possible to massively support solar and wind energy, one can at the same time make certain new dams superfluous," says Sterl. "This way two birds can be caught with one stone. Simultaneously, one avoids CO2 emissions from gas-fired power stations and the environmental impact of hydropower overexploitation."

Global relevance

The methods developed for the study are easily transferable to other regions, and the research has worldwide relevance, as shown by a US 80% study on high variable renewable shares. Sterl: "Nearly all regions with a lot of hydropower, or hydropower potential, could use it to compensate shortfalls in solar and wind power." Various European countries, with Norway at the front, have shown increased interest in recent years to deploy their hydropower to support solar and wind power in EU countries. Exporting Norwegian hydropower during times when other countries undergo solar and wind power shortfalls, the European energy transition can be advanced.

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Berkshire Hathaway Energy Wind Power drives cheap electricity rates in Iowa via utility-scale wind turbines, integrated transmission, battery storage, and grid management, delivering renewable energy, stable pricing, and long-term rate freezes through 2028.

Key Points

A vertically integrated wind utility lowering Iowa rates via owned generation, transmission, and advanced grid control.

✅ Owned wind assets meet Iowa residential demand

✅ Integrated transmission lowers costs and losses

✅ Rate freeze through 2028 sustains cheap power

In his latest letter to Berkshire Hathaway shareholders, Warren Buffett used the 20th anniversary of Berkshire Hathaway Energy to tout its cheap electricity bills for customers.

When Berkshire purchased the majority share of BHE in 2000, the cost of electricity for its residential customers in Iowa was 8.8 cents per kilowatt-hour (kWh) on average. Since then, these electricity rates have risen at a paltry <1% per year, with a freeze on rate hikes through 2028. As anyone who pays an electricity bill knows, that is an incredible deal.  

As Buffett himself notes with alacrity, “Last year, the rates [BHE’s competitor in Iowa] charged its residential customers were 61% higher than BHE’s. Recently, that utility received a rate increase that will widen the gap to 70%.”

The Winning Strategy

So, what’s Buffett’s secret to cheap electricity? Wind power.

“The extraordinary differential between our rates and theirs is largely the result of our huge accomplishments in converting wind into electricity,” Buffett explains. 

Wind turbines in Iowa that BHE owns and operates are expected to generate about 25.2 million megawatt-hours (MWh) of electricity for its customers, as projects like Building Energy operations begin to contribute. By Buffett’s estimations, that will be enough to power all of its residential customers’ electricity needs in Iowa.  

The company has plans to increase its renewable energy generation in other regions as well. This year, BHE Canada is expected to start construction on a 117.6MW wind farm in Alberta, Canada with its partner, Renewable Energy Systems, that will provide electricity to 79,000 homes in Canada’s oil country.

Observers note that Alberta is a powerhouse for both green energy and fossil fuels, underscoring the region's unique transition.

But I would argue that the secret to BHE’s success perhaps goes deeper than transitioning to sources of renewable energy. There are plenty of other utility companies that have adopted wind and solar power as an energy source. In the U.S., where renewable electricity surpassed coal in 2022, at least 50% of electricity customers have the option to buy renewable electricity from their power supplier, according to the Department of Energy. And some states, such as New York, have gone so far as to allow customers to pick from providers who generate their electricity.

What differentiates BHE from a lot of the competition in the utility space is that it owns the means to generate, store, transmit and supply renewable power to its customers across the U.S., U.K. and Canada, with lessons from the U.K. about wind power informing policy.

In its financial filings for 2019, the company reported that it owns 33,600MW of generation capacity and has 33,400 miles of transmission lines, as well as a 50% interest in Electric Transmission Texas (ETT) that has approximately 1,200 miles of transmission lines. This scale and integration enables BHE to be efficient in the distribution and sale of electricity, including selling renewable energy across regions.

BHE is certainly not alone in building renewable-energy fueled electricity dominions. Its largest competitor, NextEra, built 15GW of wind capacity and has started to expand its utility-scale solar installations. Duke Energy owns and operates 2,900 MW of renewable energy, including wind and solar. Exelon operates 40 wind turbine sites across the U.S. that generate 1,500 MW.

Integrated Utilities Power Ahead

It’s easy to see why utility companies see wind as a competitive source of electricity compared to fossil fuels. As I explained in my previous post, Trump’s Wrong About Wind, the cost of building and generating wind energy have fallen significantly over the past decade. Meanwhile, improvements in battery storage and power management through new technological advancements have made it more reliable (Warren Buffett bet on that one too).

But what is also striking is that integrated power and transmission enables these utility companies to make those decisions; both in terms of sourcing power from renewable energy, as well as the pricing of the final product. Until wind and solar power are widespread, these utility companies are going to have an edge of the more fragmented ends of the industry who can’t make these purchasing or pricing decisions independently. 

Warren Buffett very rarely misses a beat. He’s not the Oracle of Omaha for nothing. Berkshire Hathaway’s ownership of BHE has been immensely profitable for its shareholders. In the year ended December 31, 2019, BHE and its subsidiaries reported net income attributable to BHE shareholders of $2.95 billion.

There’s no question that renewable energy will transform the utility industry over the next decade. That change will be led by the likes of BHE, who have the power to invest, control and manage their own energy generation assets.

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