Arizona asked to void renewable energy rule

Canada Clean Electricity Standard targets a net-zero grid by 2035, using carbon pricing, CO2 caps, and carbon capture while expanding renewables and interprovincial trade to decarbonize power in Alberta, Saskatchewan, and Ontario.

Key Points

A federal plan to reach a net-zero grid by 2035 using CO2 caps, carbon pricing, carbon capture, renewables, and trade.

✅ CO2 caps and rising carbon prices through 2050

✅ Carbon capture required on gas plants in high-emitting provinces

✅ Renewables build-out and interprovincial trade to balance supply

A new tool has been proposed in the federal election campaign as a way of eradicating the carbon emissions from Canada’s patchwork electricity system. 

As the country’s need for power grows through the decarbonization of transportation, industry and space heating, the Liberal Party climate plan is proposing a clean energy standard to help Canada achieve a 100% net-zero-electricity system by 2035, aligning with Canada’s net-zero by 2050 target overall. 

The proposal echoes a report released August 19 by the David Suzuki Foundation and a group of environmental NGOs that also calls for a clean electricity standard, capping power-sector emissions, and tighter carbon-pricing regulations. The report, written by Simon Fraser University climate economist Mark Jaccard and data analyst Brad Griffin, asserts that these policies would effectively decarbonize Canada’s electricity system by 2035.

“Fuel switching from dirty fossil fuels to clean electricity is an essential part of any serious pathway to transition to a net-zero energy system by 2050,” writes Tom Green, climate policy advisor to the Suzuki Foundation, in a foreword to the report. The pathway to a net-zero grid is even more important as Canada switches from fossil fuels to electric vehicles, space heating and industrial processes, even as the Canadian Gas Association warns of high transition costs.

Under Jaccard and Griffin’s proposal, a clean electricity standard would be established to regulate CO2 emissions specifically from power plants across Canada. In addition, the plan includes an increase in the carbon price imposed on electricity system releases, combined with tighter regulation to ensure that 100% of the carbon price set by the federal government is charged to electricity producers. The authors propose that the current scheduled carbon price of $170 per tonne of CO2 in 2030 should rise to at least $300 per tonne by 2050.

In Alberta, Saskatchewan, Ontario, New Brunswick and Nova Scotia, the 2030 standard would mean that all fossil-fuel-powered electricity plants would require carbon capture in order to comply with the standard. The provinces would be given until 2035 to drop to zero grams CO2 per kilowatt hour, matching the 2030 standard for low-carbon provinces (Quebec, British Columbia, Manitoba, Newfoundland and Labrador and Prince Edward Island). 

Alberta and Saskatchewan targeted 
Canada has a relatively clean electricity system, as shown by nationwide progress in electricity, with about 80% of the country’s power generated from low- or zero-emission sources. So the biggest impacts of the proposal will be felt in the higher-carbon provinces of Alberta and Saskatchewan. Alberta has a plan to switch from coal-based electric power to natural gas generation by 2023. But Saskatchewan is still working on its plan. Under the Jaccard-Griffin proposal, these provinces would need to install carbon capture on their gas-fired plants by 2030 and carbon-negative technology (biomass with carbon capture, for instance) by 2035. Saskatchewan has been operating carbon capture and storage technology at its Boundary Dam power station since 2014, but large-scale rollout at power plants has not yet been achieved in Canada. 

With its heavy reliance on nuclear and hydro generation, Ontario’s electricity supply is already low carbon. Natural gas now accounts for about 7% of the province’s grid, but the clean electricity standard could pose a big challenge for the province as it ramps up natural-gas-generated power to replace electricity from its aging Pickering station, scheduled to go out of service in 2025, even as a fully renewable grid by 2030 remains a debated goal. Pickering currently supplies about 14% of Ontario’s power. 

Ontario doesn’t have large geological basins for underground CO2 storage, as Alberta and Saskatchewan do, so the report says Ontario will have to build up its solar and wind generation significantly as part of Canada’s renewable energy race, or find a solution to capture CO2 from its gas plants. The Ontario Clean Air Alliance has kicked off a campaign to encourage the Ontario government to phase out gas-fired generation by purchasing power from Quebec or installing new solar or wind power.

As the report points out, the federal government has Supreme Court–sanctioned authority to impose carbon regulations, such as a clean electricity standard, and carbon pricing on the provinces, with significant policy implications for electricity grids nationwide.

The federal government can also mandate a national approach to CO2 reduction regardless of fuel source, encouraging higher-carbon provinces to work with their lower-carbon neighbours. The Atlantic provinces would be encouraged to buy power from hydro-heavy Newfoundland, for example, while Ontario would be encouraged to buy power from Quebec, Saskatchewan from Manitoba, and Alberta from British Columbia.

The Canadian Electricity Association, the umbrella organization for Canada’s power sector, did not respond to a request for comment on the Jaccard-Griffin report or the Liberal net-zero grid proposal.

Just how much more clean power will Canada need? 
The proposal has also kicked off a debate, and an IEA report underscores rising demand, about exactly how much additional electricity Canada will need in coming decades.

In his 2015 report, Pathways to Deep Decarbonization in Canada, energy and climate analyst Chris Bataille estimated that to achieve Canada’s climate net-zero target by 2050 the country will need to double its electricity use by that year.

Jaccard and Griffin agree with this estimate, saying that Canada will need more than 1,200 terawatt hours of electricity per year in 2050, up from about 640 terawatt hours currently.

But energy and climate consultant Ralph Torrie (also director of research at Corporate Knights) disputes this analysis.

He says large-scale programs to make the economy more energy efficient could substantially reduce electricity demand. A major program to install heat pumps and replace inefficient electric heating in homes and businesses could save 50 terawatt hours of consumption on its own, according to a recent report from Torrie and colleague Brendan Haley. 

Put in context, 50 terawatt hours would require generation from 7,500 large wind turbines. Applied to electric vehicle charging, 50 terawatt hours could power 10 million electric vehicles.

While Torrie doesn’t dispute the need to bring the power system to net-zero, he also doesn’t believe the “arm-waving argument that the demand for electricity is necessarily going to double because of the electrification associated with decarbonization.” 

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California Rooftop Solar Rate Reforms propose shifting net metering to fixed access fees, peak-demand charges, and time-of-use pricing, aligning grid costs, distributed generation incentives, and retail rates for efficient, least-cost electricity and fair cost recovery.

Key Points

Policies replacing net metering with fixed fees, demand charges, and time-of-use rates to align costs and incentives.

✅ Large fixed access charge funds grid infrastructure

✅ Peak-demand pricing reflects capacity costs at system peak

✅ Time-varying rates align marginal costs and emissions

The California Public Service Commission has proposed revamping electricity rates for residential customers who produce electricity through their rooftop solar panels. In a recent New York Times op‐​ed, former Governor Arnold Schwarzenegger argued the changes pose an existential threat to residential rooftop solar. Interest groups favoring rooftop solar portray the current pricing system, often called net metering, in populist terms: “Net metering is the one opportunity for the little guy to get relief, and they want to put the kibosh on it.” And conventional news coverage suggests that because rooftop solar is an obvious good development and nefarious interests, incumbent utilities and their unionized employees, support the reform, well‐​meaning people should oppose it. A more thoughtful analysis would inquire about the characteristics and prices of a system that supplies electricity at least cost.

Currently, under net metering customers are billed for their net electricity use plus a minimum fixed charge each month. When their consumption exceeds their home production, they are billed for their net use from the electricity distribution system (the grid) at retail rates. When their production exceeds their consumption and the excess is supplied to the grid, residential consumers also are reimbursed at retail rates. During a billing period, if a consumer’s production equaled their consumption their electric bill would only be the monthly fixed charge.

Net metering would be fine if all the fixed costs of the electric distribution and transmission systems were included in the fixed monthly charge, but they are not. Between 66 and 77 percent of the expenses of California private utilities do not change when a customer increases or decreases consumption, but those expenses are recovered largely through charges per kWh of use rather than a large monthly fixed charge. Said differently, for every kWh that a PG&E solar household exported into the grid in 2019, it saved more than 26 cents, on average, while the utility’s costs only declined by about 8 cents or less including an estimate of the pollution costs of the system’s fossil fuel generators. The 18‐​cent difference pays for costs that don’t change with variation in a household’s consumptions, like much of the transmission and distribution system, energy efficiency programs, subsidies for low‐​income customers, and other fixed costs. Rooftop solar is so popular in California because its installation under a net metering system avoids the 18 cents, creating a solar cost shift onto non-solar customers. Rooftop solar is not the answer to all our environmental needs. It is simply a form of arbitrage around paying for the grid’s fixed costs.

What should electricity tariffs look like? This article in Regulation argues that efficient charges for electricity would consist of three components: a large fixed charge for the distribution and transmission lines, meter reading, vegetation trimming, etc.; a peak‐​demand charge related to your demand when the system’s peak demand occurs to pay for fixed capacity costs associated with peak use; and a charge for electricity use that reflects the time‐ and location‐​varying cost of additional electricity supply.

Actual utility tariffs do not reflect this ideal because of political concerns about the effects of large fixed monthly charges on low‐​income customers and the optics of explaining to customers that they must pay 50 or 60 dollars a month for access even if their use is zero. Instead, the current pricing system “taxes” electricity use to pay for fixed costs. And solar net metering is simply a way to avoid the tax. The proposed California rate reforms would explicitly impose a fixed monthly charge on rooftop solar systems that are also connected to the grid, a change that could bring major changes to your electric bill statewide, and would thus end the fixed‐​cost avoidance. Any distributional concerns that arise because of the effect of much larger fixed charges on lower‐​income customers could be managed through explicit tax deductions that are proportional to income.

The current rooftop solar subsidies in California also should end because they have perverse incentive effects on fossil fuel generators, even as the state exports its energy policies to neighbors. Solar output has increased so much in California that when it ends with every sunset, natural gas generated electricity has to increase very rapidly. But the natural gas generators whose output can be increased rapidly have more pollution and higher marginal costs than those natural gas plants (so called combined cycle plants) whose output is steadier. The rapid increase in California solar capacity has had the perverse effect of changing the composition of natural gas generators toward more costly and polluting units.

The reforms would not end the role of solar power. They would just shift production from high‐​cost rooftop to lower‐​cost centralized solar production, a transition cited in analyses of why electricity prices are soaring in California, whose average costs are comparable with electricity production in natural gas generators. And they would end the excessive subsidies to solar that have negatively altered the composition of natural gas generators.

Getting prices right does not generate citizen interest as much as the misguided notion that rooftop solar will save the world, and recent efforts to overturn income-based utility charges show how politicized the debate remains. But getting prices right would allow the decentralized choices of consumers and investors to achieve their goals at least cost.

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UK Energy Price Guarantee Cost forecasts from Cornwall Insight suggest an £89bn bill, tied to wholesale gas prices, OBR projections, and fiscal policy, to shield households amid the cost of living crisis.

Key Points

It is the projected government spend to cap household bills, driven by wholesale gas prices and OBR market forecasts.

✅ Base case: £89bn over two years, per Cornwall Insight

✅ Range: £72bn to £140bn, volatile wholesale gas costs

✅ Excludes 6-month business support estimated at £22bn-£48bn

Liz Truss’s intervention to freeze energy prices for households for two years is expected to cost the government £89bn, according to the first major costing of the policy by the sector’s leading consultancy.

The analysis from Cornwall Insight, seen exclusively by the Guardian, shows the prime minister’s plan to tackle the cost of living crisis could cost as much as £140bn in a worst-case scenario.

Truss announced in early September that the average annual bill for a typical household would be capped at £2,500 to protect consumers from the intensifying cost of living crisis amid high winter energy costs and a scheduled 80% rise in the cap to £3,549.

The ultimate cost of the policy is uncertain as it is highly dependent on the wholesale cost of gas, including UK natural gas prices which have soared since Russia’s invasion of Ukraine put a squeeze on already-volatile international markets. Ballpark projections had put the cost anywhere from £100bn to £150bn.

The Office for Budget Responsibility is expected to give its forecast for the bill when it provides its independent assessment of Kwasi Kwarteng’s medium-term fiscal plan, which the chancellor said on Tuesday would still happen on 23 November despite previous reports that it would be brought forward.

Cornwall Insight analysed projections of wholesale market moves to cost the intervention. In its base case scenario, analysts expect the policy to cost £89bn. That assumes the cost of supporting each household would be just over £1,000 in the first year, and about £2,000 in the second year.

The study’s authors said the wholesale price of gas would be influenced by energy demand, the severity of weather, “geo-political uncertainty” and prices for liquified natural gas as Europe seeks to refill storage facilities, which countries have rushed to fill up this winter but which could be relatively empty by next spring.

In the best-case outcome, the policy would cost £72bn, with some projections pointing to a 16% decrease in energy bills in April for households, while the “extreme high” outlook would see the government shell out £140bn to protect 29m UK households.

Gas prices are expected to push even higher if the Kremlin decides to completely cut off Russian gas exports into Europe.

Cornwall Insight’s projection does not include a separate six-month initiative to cap costs for companies, charities and public sector organisations, which is forecast to cost £22bn to £48bn.

The consultancy’s chief executive, Gareth Miller, said the £70bn range in its forecasts reflected “a febrile wholesale market continuing to be beset by geopolitical instability, sensitivity to demand, weather and infrastructure resilience”.

He said: “Fortune befriends the bold, but it also favours the prepared. The large uncertainties around commodity markets over the next two years means that the government could get lucky with costs coming out at the low end of the range, but the opposite could also be true.

“In each case, the government may find itself passengers to circumstances outside its control, having made policy that is a hostage to surprises, events and volatile factors. That’s a difficult position to be in.”

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The government has faced criticism, as some British MPs urge tighter limits on prices, that the policy is effectively a “blank cheque” and is not targeted at the most vulnerable in society.

Concerns over how Truss and Kwarteng intend to fund a series of measures, including the price guarantee, have spooked financial markets.

The EU, which has outlined possible gas price cap strategies in recent proposals, said last week it planned to cap the revenues of low-carbon electricity generators at €180 a megawatt hour, which is less than half current market prices. Truss has so far resisted calls to extend a levy on North Sea oil and gas operators to electricity generators, who have benefited from a link between gas and electricity prices in Britain.

Truss hopes to strike voluntary long-term deals with generators including Centrica and EDF, alongside the government’s Energy Security Bill measures, to bring down wholesale prices.

The Financial Times reported on Tuesday that the government has threatened companies with legislation to cap their revenues if voluntary deals cannot be agreed.

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Senate Renewable Energy Tax Credits face Finance Committee scrutiny, with Democrats urging action on tax extenders, clean energy incentives, and climate policy, while Republicans cite prior wins in wind, biodiesel, and EV credits.

Key Points

Legislative incentives debated in the Senate Finance Committee to extend and align clean energy tax benefits.

✅ Democrats press hearings and action on energy tax policy

✅ Focus on clean energy, EVs, wind, biodiesel, and resilience

✅ Grassley cites prior extenders; disputes push for bigger subsidies

A group of 27 Democratic senators is calling for action in the Senate Finance Committee on extending energy-related tax credits and examining new tax proposals, especially those that incentivize renewable energy projects and align with FERC action on aggregated DERs across the grid.

Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, who recently introduced a wildfire-resilient grid bill with Sen. Merkley, led the group of Democrats in writing a letter Tuesday to Sen. Charles Grassley, R-Iowa, who chairs the committee.

“Despite numerous opportunities, including in the recent tax extenders package, the Finance Committee has failed to take action on the dozens of energy tax proposals pending before it,” they wrote. “It is critical that the Committee move to address these issues in a timely manner, along with much needed policy changes that heed warnings on regulatory rollbacks to combat the damage and growing dangers caused by global climate change.”

The number of Americans ages 65 and over is projected to nearly double by 2060. And most would prefer to age in place and hiresenior caregivers if needed.

They pointed out that the Senate Finance Committee hasn’t held a single hearing on energy tax policy during the previous congressional term, and has yet to hold one in the current one.

“The sole energy tax-related recommendation of the Committee’s temporary policy task forces was ignored in the tax extender legislation passed in December 2019, along with nearly all proposals put forward in members’ legislation this Congress,” they wrote. “This Committee must fulfill its role in examining members’ energy tax proposals and in bolstering our nation’s efforts to combat climate change, including a clean electricity standard approach that sets firm targets.”

They noted that In 2019, the global average temperature was the second highest ever recorded and the past decade was the hottest ever. The lawmakers pointed to raging wildfires and increased flooding in the western part of the U.S., as well as challenges in California’s power system during the transition, causing unprecedented destruction over the past several years. They called for tax incentives for renewable energy to help combat climate change.

“Gaps in the tax code have disadvantaged complementary technologies that could improve climate resiliency and provide additional emissions reductions,” they wrote. “While power sector emissions continue to decrease, emissions from transportation, heavy industry and agriculture have stayed level or increased over the past 10 years, even amid $5 gas not spurring a green shift in consumer behavior. The United States is not on pace to meet its international climate commitments, to say nothing of the reductions necessary to stave off the worst potential outcomes of global warming.”

Grassley reacted to the letter, noting that he had worked to get tax extenders legislation passed, even as some states consider bans on clean energy use by utilities. "I begged Democrats for a year to help me get an extenders package passed, about half of which were green energy policies, so this rings hollow," he said in a statement Tuesday. "We wouldn’t have a wind energy credit or a biodiesel credit but for me, let alone an extension of either. Democrats were holding up these green energy provisions in an attempt to get a big expansion of taxpayer subsidies for rich Tesla owners."

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France Electricity Crisis drives record power prices as nuclear outages squeeze supply, forcing energy imports, fuel oil and coal generation, amid gas market shocks, weak wind output, and freezing weather straining the grid.

Key Points

A French power shortfall from nuclear outages, record prices, heavy imports, and oil-fired backup amid cold weather.

✅ EDF halted reactors; 10% capacity offline, 30% by January

✅ Imports surge; fuel oil and coal units dispatched

✅ Prices spike as gas reverses flow and wind output drops

Electricity prices surged to a fresh record as France scrambled to keep its lights on, sucking up supplies from the rest of Europe.

France, usually an exporter of power, is boosting electricity imports and even burning fuel oil, and has at times limited nuclear output due to high river temperatures during heatwaves. The crunch comes after Electricite de France SA said it would halt four reactors accounting for 10% of the nation’s nuclear capacity, straining power grids already facing cold weather. Six oil-fired units were turned on in France on Tuesday morning, according to a filing with Entsoe.

“It’s illustrating how severe it is when they’re actually starting to burn fuel oil and importing from all these countries,” said Fabian Ronningen, an analyst at Rystad Energy. The unexpected plant maintenance “is reflected in the market prices,” he said

Europe is facing an energy crisis, with utilities relying on coal and oil. Almost 30% of France’s nuclear capacity will be offline at the beginning of January, leaving the energy market at the mercy of the weather. To make matters worse, Germany is closing almost half of its nuclear capacity before the end of the year, as Europe loses nuclear power just when it really needs energy.

German power for delivery next year surged 10% to 278.50 euros a megawatt-hour, while the French contract for January added 9.5% to a record 700.60 euros. Prices also gained, under Europe’s marginal pricing system, as gas jumped after shipments from Russia via a key pipeline reversed direction, flowing eastward toward Poland instead.

Neighboring countries are boosting their exports to France this week to cover for lost nuclear output, with imports from Germany rising to highest level in at least four years. In the U.K., four coal power units were operating on Tuesday with as much as 1.5 gigawatts of hourly output being sent across the channel. 

The power crisis is so severe that the French government has asked EDF to restart some nuclear reactors earlier than planned amid outage risks for nuclear-powered France. Ecology Minister Barbara Pompili said last weekend that, in addition to the early reactor restarts and past river-temperature limits, the country had contracts with some companies in which they agreed to cut production during peak demand hours in exchange for payments from the government.

Higher energy prices threaten to derail Europe’s economic recovery just as the coronavirus omicron variety is spreading. Trafigura Group’s Nyrstar will pause production at its zinc smelter in France in the first week of January because of rising electricity prices. Norwegian fertilizer producer Yara International, which curbed output earlier this year, said it would continue to monitor the situation closely and curtail production where necessary.

Freezing weather this week is also sending short-term power prices surging as renewables can’t keep up, even though wind and solar overtook gas in the EU last year. German wind output plunged to a five-week low on Tuesday.

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Estonia energy prices 2021 show sharp electricity hikes versus the EU average, mixed natural gas trends, kWh tariffs on Nord Pool spiking, and VAT, taxes, and support measures shaping household bills.

Key Points

EU-high electricity growth, early gas dip, then Nord Pool spikes; taxes, VAT, and subsidies shaped energy bills.

✅ Electricity up 7% on year; EU average 2.8% in H1 2021.

✅ Gas fell 1% in H1; later spiked with global market.

✅ VAT, taxes, excise and aid impacted household costs.

Estonia saw one of the highest rates in growth of electricity prices in the first half of 2021, compared with the same period in key trends in 2020 across Europe. These figures were posted before the more recent, record level of electricity and natural gas prices; the latter actually dropped slightly in Estonia in the first half of the year.

While electricity prices rose 7 percent on year in the first half of 2021 in Estonia, the average for the EU as a whole, where energy prices drove inflation across the bloc, stood at 2.8 percent over the same period, BNS reports.

Hungary (€10 per 100 Kwh) and Bulgaria (€10.20 per 100 Kwh) saw the lowest electricity prices EU-wide, while at €31.9 per KWH, Germany's power prices posted the most expensive rate, while Denmark, Belgium and Ireland also had high prices, in excess of €25 per Kwh.

Slovenia saw the highest electricity price rise, at 15 percent, and even the United States' electricity prices saw their steepest rise in decades during the same era, while Estonia was in third place, joint with Romania at 7 percent as noted, and behind Poland (8 percent).

Lithuania, on the other hand, experienced the third highest electricity price fall over the first half of 2021, compared with the same period in 2020, at 6 percent, behind only Cyprus (7 percent) and the Netherlands (10 percent, largely due to a tax cut).

Urmas Reinsalu: VAT on electricity, gas and heating needs to be lowered
The EU average price of electricity was €21.9 percent per Kwh, with taxes and excise accounting for 39 percent of this, even as prices in Spain surged across the day-ahead market.

Estonia has also seen severe electricity price rises in the second half of the year so far, with records set and then promptly broken several times earlier in October, while an Irish electricity provider raised prices amid similar pressures, and a support package for low income households rolled out for the winter season (October to March next year). The price on the Nord Pool market as of €95.01 per Kwh; a day earlier it had stood at €66.21 per Kwh, while on October 19 the price was €140.68 per Kwh.

Gas prices
Natural gas prices to household, meanwhile, dropped in Estonia over the same period, at a sharper rate (1 percent) than the EU average (0.5 percent), according to Eurostat.

Gas prices across the EU were lowest in Lithuania (€2.8 per 100 Kwh) and highest in the Netherlands (€9.6 per KWH), while the highest growth was seen in Denmark (19 percent), in the first half of 2021.

Natural gas prices dropped in 20 member states, however, with the largest drop again coming in Lithuania (23 percent).

The average price of natural gas EU-side in the first half of 2021 was €6.4, and taxes and excise duties accounted on average for 36 percent of the total.

The second half of the year has seen steep gas price rises in Estonia, largely the result of increases on the world market, though European gas benchmarks later fell to pre-Ukraine war levels.

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