China rejects emission caps that hobble economy

Ontario Clean Energy Adjustment lowers hydro bills by shifting global adjustment costs, cutting time-of-use rates, and using OPG debt financing; ratepayers get inflation-capped increases for four years, then repay costs over 20 years.

Key Points

A 20-year line item repaying debt used to lower rates for 10 years by shifting global adjustment costs off hydro bills.

✅ 17% average bill cut takes effect after royal assent

✅ OPG-managed entity assumes debt for 10 years

✅ 20-year surcharge repays up to $28B plus interest

Ontarians will see lowered hydro bills for the next 10 years, but will then pay higher costs for the following 20 years, under new legislation tabled Thursday.

Ten weeks after announcing its plan to lower hydro bills, the Liberal government introduced legislation to lower time-of-use rates, take the cost of low-income and rural support programs off bills, and introduce new social programs.

It will lower time-of-use rates by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers. For the next 10 years, a new entity overseen by Ontario Power Generation will take on debt to pay that difference.

Then, the cost of paying back that debt with interest -- which the government says will be up to $28 billion -- will go back onto ratepayers' bills for the next 20 years as a "Clean Energy Adjustment."

An average 17-per-cent cut to bills will take effect 15 days after the hydro legislation receives royal assent, even as a Nov. 1 rate increase was set by the Ontario Energy Board, but there are just eight sitting days left before the Ontario legislature breaks for the summer. Energy Minister Glenn Thibeault insisted that leaves the opposition "plenty" of time for review and debate.

Premier Kathleen Wynne promised to cut hydro bills and later defended a 25% rate cut after widespread anger over rising costs helped send her approval ratings to record lows.

Electricity bills in the province have roughly doubled in the last decade, due in part to green energy initiatives, and Thibeault said the goal of this plan is to better spread out those costs.

"Like the mortgage on your house, this regime will cost more as we refinance over a longer period of time, but this is a more equitable and fair approach when we consider the lifespan of the clean energy investments, and generating stations across our province," he said.

NDP critic Peter Tabuns called it a "get-through-the-election" next June plan.

"We're going to take on a huge debt so Kathleen Wynne can look good on the hustings in the next few months and for decades we're going to pay for it," he said.

The legislation also holds rate increases to inflation for the next four years. After that, they'll rise more quickly, as illustrated by a leaked cabinet document the Progressive Conservatives unveiled Thursday.

The Liberals dismissed the document as containing outdated projections, but confirmed that it went before cabinet at some point before the government decided to go ahead with the hydro plan.

From about 2027 onward -- when consumers would start paying off the debt associated with the hydro plan -- Ontario electricity consumers will be paying about 12 per cent more than they would without the Liberal government's plan to cut costs in the short term, even though a deal with Quebec was not expected to reduce hydro bills, the government document projected.

But that was just one of many projections, said Energy Minister Glenn Thibeault.

"We have been working on this plan for months, and as we worked on it the documents and calculations evolved," he said.

The government's long-term energy plan is set to be updated this spring, and Thibeault said it will provide a more accurate look at how the hydro plan will reduce rates, even as a recovery rate could lead to higher hydro bills in certain circumstances.

Progressive Conservative critic Todd Smith said the "Clean Energy Adjustment" is nothing more than a revamped debt retirement charge, which was on bills from 2002 to 2016 to pay down debt left over from the old Ontario Hydro, the province's giant electrical utility that was split into multiple agencies in 1999 under the previous Conservative government.

"The minister can call it whatever he wants but it's right there in the graph, that there is going to be a new charge on the line," Smith said. "It's the debt retirement charge on steroids."

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Alberta Clean Electricity Regulations face federal mandates and provincial autonomy, balancing greenhouse gas cuts, net-zero 2050 goals, and renewable energy adoption across wind, solar, and hydro, while protecting jobs and economic stability in energy communities.

Key Points

Rules to cut power emissions, boost renewables, and align Alberta with federal net-zero goals under federal mandates.

✅ Phases out coal and curbs greenhouse gas emissions

✅ Expands wind, solar, and hydro to diversify the grid

✅ Balances provincial autonomy with national climate targets

In a recent development, Alberta finds itself at a crossroads between provincial autonomy and federal mandates concerning federal clean electricity regulations that shape long-term planning. The province, known for its significant oil and gas industry, faces increasing pressure to align its energy policies with federal climate goals set by Ottawa.

The federal government, under the leadership of Environment Minister Steven Guilbeault, has proposed regulations aimed at reducing greenhouse gas emissions and transitioning towards a cleaner energy future that prioritizes clean grids and batteries across provinces. These regulations are part of Canada's broader commitment to combat climate change and achieve net-zero emissions by 2050.

The Federal Perspective

From Ottawa's standpoint, stringent regulations on Alberta's electricity sector are necessary to meet national climate targets. This includes measures to phase out coal-fired power plants and increase reliance on renewable energy sources such as wind, solar, and hydroelectric power. Minister Guilbeault emphasizes the importance of these regulations in mitigating Canada's carbon footprint and fostering sustainable development.

Alberta's Response

In contrast, Alberta has historically championed provincial autonomy in energy policy, leveraging its vast fossil fuel resources to drive economic growth. The province remains cautious about federal interventions that could potentially disrupt its energy sector, a cornerstone of its economy, especially amid changes to how electricity is produced and paid for now under discussion.

Premier Jason Kenney has expressed concerns over federal overreach, and his influence over electricity policy has shaped proposals in the legislature. He emphasizes the province's efforts in adopting cleaner technologies while balancing economic stability and environmental sustainability.

The Balancing Act

The challenge lies in finding a middle ground between federal imperatives and provincial priorities, as interprovincial disputes like B.C.'s export-restriction challenge complicate coordination. Alberta acknowledges the need to diversify its energy portfolio and reduce emissions but insists on preserving its jurisdiction over energy policy. The province has already made strides in renewable energy development, including investing in wind and solar projects alongside traditional energy sources.

Economic Implications

For Alberta, the transition to cleaner electricity carries significant economic implications as the electricity market heads for a reshuffle in the coming years. It entails navigating the complexities of energy transition, ensuring job retention, and fostering innovation in sustainable technologies. Critics argue that abrupt federal regulations could exacerbate economic hardships, particularly in communities reliant on the fossil fuel industry.

Moving Forward

As discussions continue between Alberta and Ottawa, finding common ground, including consideration of recent market change proposals from the province, remains essential. Collaborative efforts are necessary to develop tailored solutions that accommodate both environmental responsibilities and economic realities. This includes exploring incentives for renewable energy investment, supporting energy sector workers in transitioning to new industries, and leveraging Alberta's expertise in energy innovation.

Conclusion

Alberta's journey towards clean electricity regulation exemplifies the delicate balance between regional autonomy and federal oversight in Canada's complex federal system. While tensions persist between provincial and federal priorities, both levels of government share a common commitment to addressing climate change and advancing sustainable energy solutions.

The outcome of these negotiations will not only shape Alberta's energy landscape but also influence Canada's overall progress towards a greener future. Finding equitable solutions that respect provincial autonomy while achieving national environmental goals remains paramount in navigating this evolving policy landscape.

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Alberta Last-Resort Power Rate Reform outlines consumer protection against market volatility, price spikes, and wholesale rate swings, promoting fixed-rate plans, price caps, transparency, and stable pricing mechanisms within Alberta's deregulated power market.

Key Points

Alberta Last-Resort Power Rate Reform seeks stable, transparent pricing and stronger consumer protections.

✅ Caps or hedges shield bills from wholesale price spikes

✅ Expand fixed-rate options and enrollment nudges

✅ Publish clear, real-time pricing and market risk alerts

Alberta’s electricity market is facing growing instability, with rising prices leaving many consumers struggling. The province's rate of last resort, a government-set price for people who haven’t chosen a fixed electricity plan, has become a significant concern. Due to volatile market conditions, this rate has surged, causing financial strain for households. Experts, like energy policy analyst Blake Shaffer, argue that the current market structure needs reform. They suggest creating more stability in pricing, ensuring better protection for consumers against unexpected price spikes, and addressing the flaws that lead to market volatility.

As electricity prices climb, many consumers are feeling the pressure. In Alberta, where energy deregulation is the norm in the electricity market, people without fixed-rate plans are automatically switched to the last-resort rate when their contracts expire. This price is based on fluctuating wholesale market rates, which can spike unexpectedly, leaving consumers vulnerable to sharp price increases. For those on tight budgets, such volatility makes it difficult to predict costs, leading to higher financial stress.

Blake Shaffer, a prominent energy policy expert, has been vocal about the need to address these issues. He has highlighted that while some consumers benefit from fixed-rate plans, with experts urging Albertans to lock in rates when possible, those who cannot afford them or who are unaware of their options often find themselves stuck with the unpredictable last-resort rate. This rate can be substantially higher than what a fixed-plan customer would pay, often due to rapid shifts in energy demand and supply imbalances.

Shaffer suggests that the province’s electricity market needs a restructuring to make it more consumer-friendly and less vulnerable to extreme price hikes. He argues that introducing more transparency in pricing and offering more stable options for consumers through new electricity rules could help. In addition, there could be better incentives for consumers to stay informed about their electricity plans, which would help reduce the number of people unintentionally placed on the last-resort rate.

One potential solution proposed by Shaffer and others is the creation of a more predictable and stable pricing mechanism, though a Calgary electricity retailer has urged the government to scrap an overhaul, where consumers could have access to reasonable rates that aren’t so closely tied to the volatility of the wholesale market. This could involve capping prices or offering government-backed insurance against large price fluctuations, making electricity more affordable for those who are most at risk.

The increasing reliance on market-driven prices has also raised concerns about Alberta’s energy policy changes and overall direction. As a province with a large reliance on oil and gas, Alberta’s energy sector is tightly connected to global energy trends. While this has its benefits, it also means that Alberta’s electricity prices are heavily influenced by factors outside the control of local consumers, such as geopolitical issues or extreme weather events. This makes it hard for residents to predict and plan their energy usage and costs.

For many Albertans, the current state of the electricity market feels precarious. As more people face unexpected price hikes, calls for a market overhaul continue to grow louder across Alberta. Shaffer and others believe that a new framework is necessary—one that balances the interests of consumers, the government, and energy companies, while ensuring that basic energy needs are met without overwhelming households with excessive costs.

In conclusion, Alberta’s last-resort electricity rate system is an increasing burden for many. While some may benefit from fixed-rate plans, others are left exposed to market volatility. Blake Shaffer advocates for reform to create a more stable, transparent, and affordable electricity market, one that could better protect consumers from the high risks associated with deregulated pricing. Addressing these challenges will be crucial in ensuring that energy remains accessible and affordable for all Alberta residents.

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Global Renewable LCOE Trends reveal offshore wind costs down 32%, with 10MW turbines, lower CAPEX and OPEX, and parity for solar PV and onshore wind in Europe, China, and California, per BloombergNEF analysis.

Key Points

Benchmarks showing falling LCOE for offshore wind, onshore wind, and solar PV, driven by larger turbines and lower CAPEX

✅ Offshore wind LCOE $78/MWh; $53-64/MWh in DK/NL excl. transmission

✅ Onshore wind $47/MWh; solar PV $51/MWh, best $26-36/MWh

✅ Cost drivers: 10MW turbines, lower CAPEX/OPEX, weak China demand

World offshore wind costs have fallen 32% from just a year ago and 12% compared with the first half of 2019, according to a BNEF long-term outlook from BloombergNEF.

In its latest Levelized Cost of Electricity (LCOE) Update, BloombergNEF said its current global benchmark LCOE estimate for offshore wind is $78 a megawatt-hour.

“New offshore wind projects throughout Europe, including the UK's build-out, now deploy turbines with power ratings up to 10MW, unlocking CAPEX and OPEX savings,” BloombergNEF said.

In Denmark and the Netherlands, it expects the most recent projects financed to achieve $53-64/MWh excluding transmission.

New solar and onshore wind projects have reached parity with average wholesale power prices in California and parts of Europe, while in China levelised costs are below the benchmark average regulated coal price, according to BloombergNEF.

The company's global benchmark levelized cost figures for onshore wind and PV projects financed in the last six months are at $47 and $51 a megawatt-hours, underscoring that renewables are now the cheapest new electricity option in many regions, down 6% and 11% respectively compared with the first half of 2019.

BloombergNEF said for wind this is mainly down to a fall in the price of turbines – 7% lower on average globally compared with the end of 2018.

In China, the world’s largest solar market, the CAPEX of utility-scale PV plants has dropped 11% in the last six months, reaching $0.57m per MW.

“Weak demand for new plants in China has left developers and engineering, procurement and construction firms eager for business, and this has put pressure on CAPEX,” BloombergNEF said.

It added that estimates of the cheapest PV projects financed recently – in India, Chile and Australia – will be able to achieve an LCOE of $27-36/MWh, assuming competitive returns for their equity investors.

Best-in-class onshore wind farms in Brazil, India, Mexico and Texas can reach levelized costs as low as $26-31/MWh already, the research said.

Programs such as the World Bank wind program are helping developing countries accelerate wind deployment as costs continue to drop.

BloombergNEF associate in the energy economics team Tifenn Brandily said: “This is a three- stage process. In phase one, new solar and wind get cheaper than new gas and coal plants on a cost-of- energy basis.

“In phase two, renewables reach parity with power prices. In phase three, they become even cheaper than running existing thermal plants.

“Our analysis shows that phase one has now been reached for two-thirds of the global population.

“Phase two started with California, China and parts of Europe. We expect phase three to be reached on a global scale by 2030.

“As this all plays out, thermal power plants will increasingly be relegated to a balancing role, looking for opportunities to generate when the sun doesn’t shine or the wind doesn’t blow.”

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UAE Barakah Nuclear Plant connects Unit 1 to the grid, supplying clean electricity, nuclear baseload power, and lower carbon emissions, with IAEA oversight, FANR regulation, and South Korea collaboration, supporting energy security and economic diversification.

Key Points

The UAE Barakah Nuclear Plant is a four-reactor project delivering clean baseload power and reducing CO2.

✅ Unit 1 online; four reactors to supply 25% of UAE electricity

✅ Cuts 21 million tons CO2 annually; clean baseload for grid

✅ FANR-licensed; IAEA and WANO oversight ensure safety

Unit 1 of the UAE’s Barakah plant — the Arab world’s first nuclear energy plant in the region — has connected to the national power grid, in a historic moment enabling it to provide cleaner electricity to millions of residents and help reduce the oil-rich country’s reliance on fossil fuels. 

“This is a major milestone, we’ve been planning for this for the last 12 years now,” Mohamed Al Hammadi, CEO of Emirates Nuclear Energy Corporation (ENEC), told CNBC’s Dan Murphy in an exclusive interview ahead of the news.

Unit 1, which has reached 100% power as it steps closer to commercial operations, is the first of what will eventually be four reactors, which when fully operational are expected to provide 25% of the UAE’s electricity and reduce its carbon emissions by 21 million tons a year, according to ENEC. That’s roughly equivalent to the carbon emissions of 3.2 million cars annually.

The Gulf country of nearly 10 million is the newest member of a group of now 31 countries running nuclear power operations. It’s also the first new country to launch a nuclear power plant in three decades, the last being China’s nuclear energy program in 1990.

“The UAE has been growing from an electricity demand standpoint,”  Al Hammadi said. “That’s why we are trying to meet the demand (and) at the same time have it with less carbon emissions.”

The UAE’s electricity mix will continue to include gas and renewable energy, with “the baseload from nuclear,” including emerging next-gen nuclear designs, the CEO added, which he described as a “safe, clean and reliable source of electricity” for the country.

The project is also providing “highly compensated jobs” for the Emiratis and will introduce new industries for the country’s economy, Al Hammadi said. The company noted that it has awarded roughly 2,000 contracts worth more than $4.8 billion for local companies.

International collaboration
The UAE’s nuclear watchdog FANR, the Federal Authority for Nuclear Regulation, granted the operating license for Unit 1 in February, after an extensive inspection process to ensure the plant’s compliance with regulatory requirements. The license is expected to last 60 years. The program also involved collaboration with external bodies including the U.N.’s International Atomic Energy Agency (IAEA) and the government of South Korea, and its pre-start-up review was completed in January by the World Association of Nuclear Operators (WANO). The WANO and the IAEA have conducted over 40 inspection and review missions at Barakah.   

But the project has its critics, particularly some experts from the independent Nuclear Consulting Group non-profit, who have expressed concern about Barakah’s safety features and potential environmental risks.  

In response, ENEC said the “adherence to the highest standards of safety, quality and security is deeply embedded within the fabric of the UAE Peaceful Nuclear Energy Program.”

“The Barakah Plant meets all national and international regulatory requirements and standards for nuclear safety,” a  company statement said. It added that the reactor design had been certified by the Korea Institute of Nuclear Safety, FANR and the US-based Nuclear Regulatory Commission, “demonstrating the robustness of this design for safety and operating reliability.”

Worries of regional proliferation 
The achievement for the UAE is particularly significant given tensions in the wider region over nuclear proliferation. 

Some observers have warned of a regional arms race, though the UAE already partakes in what nuclear energy experts call the “gold standard” of civilian nuclear partnerships: The U.S.-UAE 123 Agreement for Peaceful Civilian Nuclear Energy Cooperation. It allows the UAE to receive nuclear materials, equipment and know-how from the U.S. while precluding it from developing dual-use technology by barring uranium enrichment and fuel reprocessing, the processes required for building a bomb.

By contrast, nearby Iran has suspended its compliance to the multilateral 2015 deal that regulated its nuclear power development and many fear its approach toward bomb-making capability. Meanwhile, Saudi Arabia has voiced its desire to develop a nuclear energy program without adhering to a 123 agreement.

And most recently, in the wake of a historic deal that has seen the UAE become the first Gulf country to normalize relations with Israel, Iran responded by warning the agreement would bring a “dangerous future” for the Emirati government. 

But ENEC and UAE officials emphasize the program’s commitment to safety, transparency and international cooperation, and its necessity for meeting growing electricity demand by cleaner means. 

“The nuclear industry is growing, with milestones around the world being reached, and the UAE is no exception. We are pursuing our electricity demand to meet that in a safe, secure and stable manner, and also doing it in an environmentally friendly way,” Al Hammadi said.

“Having four reactors that will provide 25% of electricity for the nation and will avoid us emitting 21 million tons of CO2 on an annual basis, as part of a broader green industrial revolution approach, is a very serious step to take — and the UAE is not talking about it, it is doing it, and we are reaping the benefits of it as we speak right now.”

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Ontario SMR BWRX-300 leads Canada in next-gen nuclear energy at Darlington, with GE Vernova and Hitachi, delivering clean, reliable power via modular design, passive safety, scalability, and lower costs for grid integration.

Key Points

Ontario SMR BWRX-300 is a 300 MW modular boiling water reactor at Darlington with passive safety and clean power.

✅ 300 MW BWR supplies power for about 300,000 homes

✅ Passive safety enables safe shutdown without external power

✅ Modular design reduces costs and speeds grid integration

Ontario has initiated the construction of Canada's first small modular nuclear reactor (SMR), supported by OPG's SMR commitment to deployment, marking a significant milestone in the province's energy strategy. This development positions Ontario at the forefront of next-generation nuclear technology within the G7 nations.

The project, known as the Darlington New Nuclear Project, is being led by Ontario Power Generation (OPG) in collaboration with GE Vernova and Hitachi Nuclear Energy, and through its OPG-TVA partnership on new nuclear technology development. The chosen design is the BWRX-300, a 300-megawatt boiling water reactor that is approximately one-tenth the size and complexity of traditional nuclear reactors. The first unit is expected to be operational by 2029, with plans for additional units to follow.

Each BWRX-300 reactor is projected to supply electricity to about 300,000 homes, contributing to Ontario's efforts, which include the decision to refurbish Pickering B for additional baseload capacity, to meet the anticipated 75% increase in electricity demand by 2050. The compact design of the SMR allows for easier integration into existing infrastructure, reducing the need for extensive new transmission lines.

The economic impact of the project is substantial. The construction of four such reactors is expected to create up to 18,000 jobs and contribute approximately $38.5 billion CAD to the Canadian economy, reflecting the economic benefits of nuclear projects over 65 years. The modular nature of SMRs also allows for scalability, with each additional unit potentially reducing costs through economies of scale.

Safety is a paramount consideration in the design of the BWRX-300. The reactor employs passive safety features, meaning it can safely shut down without the need for external power or operator intervention. This design enhances the reactor's resilience to potential emergencies, aligning with stringent regulatory standards.

Ontario's commitment to nuclear energy is further demonstrated by its plans for four SMRs at the Darlington site. This initiative reflects a broader strategy to diversify the province's energy mix, incorporating clean and reliable power sources to complement renewable energy efforts.

While the development of SMRs in Ontario is a significant step forward, it also aligns with the Canadian nuclear initiative positioning Canada as a leader in the global nuclear energy landscape. The successful implementation of the BWRX-300 could serve as a model for other nations exploring advanced nuclear technologies.

Ontario's groundbreaking work on small modular nuclear reactors represents a forward-thinking approach to energy generation. By embracing innovative technologies, the province is not only addressing future energy demands but also, through the Pickering NGS life extension, contributing to the global transition towards sustainable and secure energy solutions.

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