Oregon forces pollution cuts at PGE's coal-fired plant

Vancouver Natural Gas Ban Reversal spotlights energy policy, electrification tradeoffs, heat pumps, emissions, grid reliability, and affordability, reshaping building codes and decarbonization pathways while inviting stakeholders to weigh practical constraints and climate goals.

Key Points

Vancouver ending its ban on natural gas in new homes to balance climate goals with reliability, costs, and technology.

✅ Balances emissions goals with reliability and affordability

✅ Impacts builders, homeowners, and energy infrastructure

✅ Spurs debate on electrification, heat pumps, and grid capacity

In a significant policy shift, Vancouver has decided to lift its ban on natural gas appliances in new homes, a move that marks a pivotal moment in the city's energy policy and environmental strategy. This decision, announced recently and following the city's Clean Energy Champion recognition for Bloedel upgrades, has sparked a broader conversation about the future of energy systems and the balance between environmental goals and practical energy needs. Stewart Muir, CEO of Resource Works, argues that this reversal should catalyze a necessary dialogue on energy choices, highlighting both the benefits and challenges of such a policy change.

Vancouver's original ban on natural gas appliances was part of a broader initiative aimed at reducing greenhouse gas emissions and promoting sustainability, including progress toward phasing out fossil fuels where feasible over time. The city had adopted stringent regulations to encourage the use of electric heat pumps and other low-carbon technologies in new residential buildings. This move was aligned with Vancouver’s ambitious climate goals, which include achieving carbon neutrality by 2050 and significantly cutting down on fossil fuel use.

However, the recent decision to reverse the ban reflects a growing recognition of the complexities involved in transitioning to entirely new energy systems. The city's administration acknowledged that while electric alternatives offer environmental benefits, they also come with challenges that can affect homeowners, builders, and the broader energy infrastructure, including options for bridging the electricity gap with Alberta to enhance regional reliability.

Stewart Muir argues that Vancouver’s policy shift is not just about natural gas appliances but represents a larger conversation about energy system choices and their implications. He suggests that the reversal of the ban provides an opportunity to address key issues related to energy reliability, affordability, and the practicalities of integrating new technologies, including electrified LNG options for industry within the province into existing systems.

One of the primary reasons behind the reversal is the recognition of the practical limitations and costs associated with transitioning to electric-only systems. For many homeowners and builders, natural gas appliances have long been a reliable and cost-effective option. The initial ban on these appliances led to concerns about increased construction costs and potential disruptions for homeowners who were accustomed to natural gas heating and cooking.

In addition to cost considerations, there are concerns about the reliability and efficiency of electric alternatives. Natural gas has been praised for its stable energy supply and efficient performance, especially in colder climates where electric heating systems might struggle to maintain consistent temperatures or fully utilize Site C's electricity under peak demand. By reversing the ban, Vancouver acknowledges that a one-size-fits-all approach may not be suitable for every situation, particularly when considering diverse housing needs and energy demands.

Muir emphasizes that the reversal of the ban should prompt a broader discussion about how to balance environmental goals with practical energy needs. He argues that rather than enforcing a blanket ban on specific technologies, it is crucial to explore a range of solutions that can effectively address climate objectives while accommodating the diverse requirements of different communities and households.

The debate also touches on the role of technological innovation in achieving sustainability goals. As energy technologies continue to evolve, renewable electricity is coming on strong and new solutions and advancements could potentially offer more efficient and environmentally friendly alternatives. The conversation should include exploring these innovations and considering how they can be integrated into existing energy systems to support long-term sustainability.

Moreover, Muir advocates for a more inclusive approach to energy policy that involves engaging various stakeholders, including residents, businesses, and energy experts. A collaborative approach can help identify practical solutions that address both environmental concerns and the realities of everyday energy use.

In the broader context, Vancouver’s decision reflects a growing trend in cities and regions grappling with energy transitions. Many urban centers are evaluating their energy policies and considering adjustments based on new information and emerging technologies. The key is to find a balance that supports climate goals such as 2050 greenhouse gas targets while ensuring that energy systems remain reliable, affordable, and adaptable to changing needs.

As Vancouver moves forward with its revised policy, it will be important to monitor the outcomes and assess the impacts on both the environment and the community. The reversal of the natural gas ban could serve as a case study for other cities facing similar challenges and could provide valuable insights into how to navigate the complexities of energy transitions.

In conclusion, Vancouver’s decision to reverse its ban on natural gas appliances in new homes is a significant development that opens the door for a critical dialogue about energy system choices. Stewart Muir’s call for a broader conversation emphasizes the need to balance environmental ambitions with practical considerations, such as cost, reliability, and technological advancements. As cities continue to navigate their energy futures, finding a pragmatic and inclusive approach will be essential in achieving both sustainability and functionality in energy systems.

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U.S. Transmission Grid Modernization underscores FERC policy certainty, high-voltage infrastructure upgrades, renewables integration, electrification, and grid resilience to cut congestion and enable distributed energy resources, safeguarding against extreme weather, cyber threats, and market volatility.

Key Points

A plan to expand, upgrade, and secure high-voltage networks for renewables integration, electrification, reliability.

✅ Replace aging lines to cut congestion and customer costs

✅ Integrate renewables and distributed energy resources at scale

✅ Enhance resilience to weather, cyber, and physical threats

Today, in a high-visibility hearing on U.S. energy delivery infrastructure before the United States Senate Committee on Energy and Natural Resources, WIRES Executive Director and Former FERC Chairman Jim Hoecker addressed the challenges and opportunities that confront the modern high-voltage grid as the industry strives to upgrade and expand it to meet the demands of consumers and the economy.

In prepared testimony and responses to Senators' questions, Hoecker urged the Committee to support industry efforts to expand and upgrade the transmission network and to help regulators, especially the Federal Energy Regulatory Commission (FERC action on aggregated DERs), promote certainty and predictability in energy policy and regulation. 

His testimony stressed these points:

Significant transmission investment is needed now to replace aging infrastructure like the aging grid risks to clean energy, reduce congestion costs, and deliver widespread benefits to customers.

Increasingly, the role of the transmission grid is to integrate new distributed resources and renewable energy into the electric system and make them available to the market.

The changing electric generation mix, including needed nuclear innovation, and the coming electrification of transportation, heating, and other segments of the American economy in the next quarter century will depend on a strong and adaptable electric system. A robust transmission grid will be the linchpin that will enable us to meet those demands.

"Transmission is the common element that will support all future electricity needs and provide a hedge against uncertainties and potential costly outcomes. The time is now to be proactive in encouraging additional investments in our nation's most crucial infrastructure: the electric transmission system," Hoecker said. 

Hoecker's testimony also emphasized that transmission investment will contribute to the overall resilience of the electric system by bringing multiple resources and technologies to bear on threats to the power system, including extreme weather and proposals like a wildfire-resilient grid bill, cyber or physical attacks, or other events. Visit WIRES website for recently filed comments on the subject (supported by a Brattle Group study). 

"Transmission gives us the optionality to adapt to whatever the future holds, and a modern and resilient transmission system, informed by Texas reliability improvements, will be the most valuable energy asset we have," says Nina Plaushin, president of WIRES and vice president of federal affairs, regulatory and communications for ITC Holdings Corp. 

Hoecker closed his testimony by emphasizing that the "electrification" scenario that is being discussed across multiple industries demands action now in order to ensure policy and regulatory certainty that will support needed transmission investment. More studies need to be conducted to better understand and define how this delivery network must be configured and planned in anticipation of this potential transformation in how we use electrical energy. A full copy of the WIRES testimony can be found here.

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Hong Kong Typhoon Mangkhut Power Outages strain households with blackouts, electricity disruption, and humid heat, impacting Tin Ping Estate in Sheung Shui and outlying islands; contractor-led restoration faces fines for delays and infrastructure repairs.

Key Points

They are blackout events after Typhoon Mangkhut, bringing heat stress, food spoilage, and delayed power restoration.

✅ 16 floors in Tin Ping Estate lost power after meter room blast.

✅ Contractor faces HK$100,000 daily fines for late restoration.

✅ Kat O and Ap Chau families remain off-grid in humid heat.

Nearly 600 Hong Kong families are still sweltering under the summer heat and facing dark nights without electricity after Typhoon Mangkhut cut off power supply to areas, echoing mass power outages seen elsewhere.

At Sheung Shui’s Tin Ping Estate in the New Territories, 384 families were still without power, a situation similar to the LA-area blackout that left many without service. They were told on Tuesday that a contractor would rectify the situation by Friday, or be fined HK$100,000 for each day of delay.

In remote areas such as outlying islets Kat O and Ap Chau, there were some 200 families still without electricity, similar to Tennessee storm outages affecting rural communities.

The power outage at Tin Ping Estate affected 16 floors – from the 11th to 26th – in Tin Cheung House after a blast from the meter room on the 15th floor was heard at about 5pm on Sunday, and authorities urged residents to follow storm electrical safety tips during repairs.

“I was sitting on the sofa when I heard a loud bang,” said Lee Sau-king, 61, whose flat was next to the meter room. “I was so scared that my hands kept trembling.”

While the block’s common areas and lifts were not affected, flats on the 16 floors encountered blackouts.

As her fridge was out of power, Lee had to throw away all the food she had stocked up for the typhoon. With the freezer not functioning, her stored dried seafood became soaked and she had to dry them outside the window when the storm passed.

Daily maximum temperatures rose back to 30 degrees Celsius after the typhoon, and nights became unbearably humid, as utilities worldwide pursue utility climate adaptation to maintain reliability. “It’s too hot here. I can’t sleep at all,” Lee said.

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EU Energy Price Surge is driving up electricity and gas costs, inflation, and cost of living across the EU, prompting tax cuts, price caps, subsidies, and household support measures in France, Italy, Spain, and Germany.

Key Points

A surge in EU gas and electricity costs driving inflation and prompting government subsidies, tax cuts, and price caps.

✅ Low-income EU households now spend 50-70 percent more on energy.

✅ Governments deploy tax cuts, price caps, and direct subsidies.

✅ Gas-dependent power markets drive electricity price spikes.

Higher energy prices, including for natural gas, are pushing up electricity prices and the cost of living for households across the EU, prompting governments to cut taxes and provide financial support to the tune of several billion euros.

In the United Kingdom, households are bracing for high winter energy bills this season.

A series of reports published by Cambridge Econometrics in October and November 2022 found that households in EU countries are spending much more on energy than in 2020 and that governments are spending billions of euros to help consumers pay bills and cut taxes.

In France, for example, the poorest households now spend roughly one-third more on energy than in 2020. Between August 2020 and August 2022, household energy prices increased by 37 percent, while overall inflation increased by 9.2 percent.

“We estimate that the increase in household energy prices make an average French household €410 worse off in 2022 compared to 2020, mostly due to higher gas prices,” said the report.

In response to rising energy prices, the French government has adopted price caps and support measures forecast to cost over €71 billion, equivalent to 2.9 percent of French GDP, according to the U.K.-based consultancy.

In Italy, fossil fuels alone were responsible for roughly 30 percent of the country’s annual rate of inflation during spring 2022, according to Cambridge Econometrics. Unlike in other European countries, retail electricity prices have outpaced other energy prices in Italy and were 112 percent higher in July 2022 than in August 2020, the report found. Over the same time period, retail petrol prices were up 14 percent, diesel up 22 percent, and natural gas up 42 percent.

We estimate that households in the lowest-income quintile now spend about 50 percent more on energy than in 2020.

“We estimate that before government support, an average Italian household will be spending around €1,400 more on energy and fuel bills this year than in 2020,” the report said. “Low-income households are worse affected by the increasing energy prices: we estimate that households in the lowest-income quintile now spend about 50 percent more on energy than in 2020.”

Electricity production in Italy is dominated by natural gas, which has also led to a spike in wholesale electricity prices. In 2010, natural gas accounted for 50 percent of all electricity production. The share of natural gas fell to 33 percent in 2014, but then rose again, reaching 48 percent in 2021, and 56 percent in the first half of 2022, according to the report, as gas filled the gap of record low hydro power production in 2022.

In Spain, where electricity prices have seen extreme spikes, low-income households are now spending an estimated 70% more on energy than in 2020, according to Cambridge Econometrics.

Low-income squeeze
In Spain, low-income households are now spending an estimated 70% more on energy than in 2020, according to Cambridge Econometrics. It noted that the Spanish government has intervened heavily in energy markets by cutting taxes, introducing cash transfers for households, and capping the price of natural gas for power generators. The latter has led to lower electricity prices than in many other EU countries.

These support measures are forecast to cost the Spanish government over €35 billion, equivalent to nearly 3 percent of Spain’s GDP. Yet consumers will still feel the burden of higher costs of living, and rolling back electricity prices may prove difficult in the near term.

In March, electricity prices alone were responsible for 45 percent of year-on-year inflation in Spain but prices have since fallen as a result of government intervention, Cambridge Econometrics said. Between May and July, fossil fuels prices accounted for 19-25 percent of the overall inflation rate, and electricity prices for 16 percent.

Support measures
Rising inflation is also a real challenge in Germany, Europe’s largest economy, where German power prices have surged this year, adding pressure. Also there, higher gas prices are to blame.

“We estimate that the increase in energy prices currently make an average household €735 worse off in 2022 compared to 2020, mostly due to higher gas prices,” Cambridge Econometrics said, in a report focused on Germany.

The German government has introduced a number of support measures in order to help households, businesses and industry to pay energy bills, amid rising heating and electricity costs for consumers, including price caps that are expected to take effect in March next year. Moreover, households’ energy bills for December this year will be paid by the state. According to the report, these interventions will mitigate the impact of higher prices “to some extent”, but the aid measures are forecast to cost the government nearly 5 percent of GDP.

Fossil-fuel effect
In addition to gas, higher coal prices have also pushed up inflation in some countries, and U.S. electricity prices have reached multi-decade highs as inflation endures.

In Poland, which is heavily dependent on coal for electricity generation, fossil fuels accounted for roughly 40 percent of Poland’s overall year-on-year inflation rate in June 2022, which stood at over 14 percent, the consultancy said.

The price of household coal, which is widely used in heating Polish homes, increased by 157 percent between August 2021 and August 2022.

Higher energy prices in Poland are partly due to Polish and EU sanctions against Russian gas and coal. Other drivers are the weakening of the Polish zloty against the U.S. dollar and the euro, and the uptick in global demand after COVID-19 lockdowns, said Cambridge Econometrics.

Electricity prices have risen at a much slower pace than energy for transport and heating, with an annualized increase of 5.1 percent.

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California Net Zero Grid Investment will fuel electrification, renewable energy buildout, EV adoption, and grid modernization, boosting utilities, solar, and storage, while policy, IRA incentives, and transmission upgrades drive reliability and long-term rate base growth.

Key Points

Funding to electrify sectors and modernize the grid, scaling renewables, EVs, and storage to meet 2045 net zero goals.

✅ $370B over 22 years to meet 2045 net zero target

✅ Utilities lead gains via grid modernization and rate base growth

✅ EVs, solar, storage scale; IRA credits offset costs

$370 billion: That’s the investment Edison International CEO Pedro Pizarro says is needed for California’s power grid to meet the state’s “net zero” goal for CO2 emissions by 2045.

Getting there will require replacing fossil fuels with electricity in transportation, HVAC systems for buildings and industrial processes. Combined with population growth and data demand potentially augmented by artificial intelligence, that adds up to an 82 percent increase in electricity demand over 22 years, or 3 percent annually, and a potential looming shortage if buildout lags.

California’s plans also call for phasing out fossil fuel generation in the state, despite ongoing dependence on fossil power during peaks. And presumably, its last nuclear plant—PG&E Corp’s (PCG) Diablo Canyon—will be eventually be shuttered as well. So getting there also means trebling the state’s renewable energy generation and doubling usage of rooftop solar.

Assuming this investment is made, it’s relatively easy to put together a list of beneficiaries. Electric vehicles hit 20 percent market share in the state in Q2, even as pandemic-era demand shifts complicate load forecasting. And while competition from manufacturers has increased, leading manufacturers like Tesla TSLA -3% Inc (TSLA) can look forward to rising sales for some time—though that’s more than priced in for Elon Musk’s company at 65 times expected next 12 months earnings.

In the past year, California regulators have dialed back net metering through pricing changes affecting compensation, a subsidy previously paying rooftop solar owners premium prices for power sold back to the grid. That’s hit share prices of SunPower Corp (SPWR) and Sunrun Inc (RUN) quite hard, by further undermining business plans yet to demonstrate consistent profitability.

Nonetheless, these companies too can expect robust sales growth, as global prices for solar components drop and Inflation Reduction Act tax credits at least somewhat offset higher interest rates. And the combination of IRA tax credits and U.S. tariff walls will continue to boost sales at solar manufacturers like JinkoSolar Holding (JKS).

The surest, biggest beneficiaries of California’s drive to Net Zero are the utilities, reflecting broader utility trends in grid modernization, with investment increasing earnings and dividends. And as the state’s largest pure electric company, Edison has the clearest path.

Edison is currently requesting California regulators OK recovery over a 30-year period of $2.4 billion in losses related to 2017 wildfires. Assuming a amicable decision by early next year, management can then turn its attention to upgrading the grid. That investment is expected to generate long-term rate base growth of 8 percent at year, fueling 5 to 7 percent annual earnings growth through 2028 with commensurate dividend increases.

That’s a strong value proposition Edison stock, with trades at just 14 times expected next 12 months earnings. The yield of roughly 4.4 percent at current prices was increased 5.4 percent this year and is headed for a similar boost in December.

When California deregulated electricity in 1996, it required utilities with rare exceptions to divest their power generation. As a result, Edison’s growth opportunity is 100 percent upgrading its transmission and distribution grid. And its projects can typically be proposed, sited, permitted and built in less than a year, limiting risk of cost overruns to ensure regulatory approval and strong investment returns.

Edison’s investment plan is also pretty much immune to an unlikely backtracking on Net Zero goals by the state. And the company has a cost argument as well: Dr Pizarro cites U.S. Department of Energy and Department of Transportation data to project inflation-adjusted savings of 40 percent in California’s total customer energy bills from full electrification.

There’s even a reason to believe 40 percent savings will prove conservative. Mainly, gasoline currently accounts for a bit more than half energy expenditures. And after a more than 10-year global oil and gas investment drought, supplies are likely get tighter and prices possibly much higher in coming years.

Of course, those savings will only show up after significant investment is made. At this point, no major utility system in the world runs on 100 percent renewable energy, and California’s blackout politics underscore how reliability concerns shape deployment. And the magnitude of storage technology needed to overcome intermittency in solar and wind generation is not currently available let alone affordable, though both cost and efficiency are advancing.

Taking EVs from 20 to 100 percent of California’s new vehicle sales calls for a similar leap in efficiency and cost, even with generous federal and state subsidy. And while technology to fully electrify buildings and homes is there, economically retrofitting statewide is almost certainly going to be a slog.

At the end of the day, political will is likely to be as important as future technological advance for how much of Pizarro’s $370 billion actually gets spent. And the same will be true across the U.S., with state governments and regulators still by and large calling the shots for how electricity gets generated, transmitted and distributed—as well as who pays for it and how much, even as California’s exported policies influence Western markets.

Ironically, the one state where investors don’t need to worry about renewable energy’s prospects is one of the currently reddest politically. That’s Florida, where NextEra Energy NEE +2.8% (NEE) and other utilities can dramatically cut costs to customers and boost reliability by deploying solar and energy storage.

You won’t hear management asserting it can run the Sunshine State on 100 percent renewable energy, as utilities and regulators do in some of the bluer parts of the country. But by demonstrating the cost and reliability argument for solar deployment, NextEra is also making the case why its stock is America’s highest percentage bet on renewables’ growth—particularly at a time when all things energy are unfortunately becoming increasingly, intensely political.

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BC-Alberta Electricity Restrictions spotlight interprovincial energy tensions, limiting power exports and affecting grid reliability, energy sharing, and climate goals, while raising questions about federal-provincial coordination, smart grids, and storage investments.

Key Points

Policies limiting Alberta's power exports to provinces like BC, prioritizing local demand and affecting grid reliability.

✅ Prioritizes Alberta load over interprovincial power exports

✅ Risks to BC peak demand support and outage resilience

✅ Pressures for federal-provincial coordination and smart-grid investment

In a move that underscores the complexities of Canada's interprovincial energy relationships, the government of British Columbia (B.C.) has formally expressed concerns over recent electricity restrictions imposed by Alberta after it suspended electricity purchase talks with B.C., amid ongoing regional coordination challenges.

Background: Alberta's Electricity Restrictions

Alberta, traditionally reliant on coal and natural gas for electricity generation, has been undergoing a transition towards more sustainable energy sources as it pursues a path to clean electricity in the province.

In response, Alberta introduced restrictions on electricity exports, aiming to prioritize local consumption and stabilize its energy market and has proposed electricity market changes to address structural issues.

B.C.'s Position: Ensuring Energy Reliability and Cooperation

British Columbia, with its diverse energy portfolio and commitment to sustainability, has historically relied on the ability to import electricity from Alberta, especially during periods of high demand or unforeseen shortfalls. The recent restrictions threaten this reliability, prompting B.C.'s government to take action amid an electricity market reshuffle now underway.

B.C. officials have articulated that access to Alberta's electricity is crucial, particularly during outages or times when local generation does not meet demand. The ability to share electricity among provinces ensures a stable and resilient energy system, benefiting consumers and supporting economic activities, including critical minerals operations, that depend on consistent power supply.

Moreover, B.C. has expressed concerns that Alberta's restrictions could set a precedent that might affect future interprovincial energy agreements. Such a precedent could complicate collaborative efforts aimed at achieving national energy goals, including sustainability targets and infrastructure development.

Broader Implications: National Energy Strategy and Climate Goals

The dispute between B.C. and Alberta over electricity exports highlights the absence of a cohesive national energy strategy, as external pressures, including electricity exports at risk, add complexity. While provinces have jurisdiction over their energy resources, the interconnected nature of Canada's power grids necessitates coordinated policies that balance local priorities with national interests.

This situation also underscores the challenges Canada faces in meeting its climate objectives. Transitioning to renewable energy sources requires not only technological innovation but also collaborative policies that ensure energy reliability and affordability across provincial boundaries, as rising electricity prices in Alberta demonstrate.

Potential Path Forward: Dialogue and Negotiation

Addressing the concerns arising from Alberta's electricity restrictions requires a nuanced approach that considers the interests of all stakeholders. Open dialogue between provincial governments is essential to identify solutions that uphold the principles of energy reliability, economic cooperation, and environmental sustainability.

One potential avenue is the establishment of a federal-provincial task force dedicated to energy coordination. Such a body could facilitate discussions on resource sharing, infrastructure investments, and policy harmonization, aiming to prevent conflicts and promote mutual benefits.

Additionally, exploring technological solutions, such as smart grids and energy storage systems, could enhance the flexibility and resilience of interprovincial energy exchanges. Investments in these technologies may reduce the dependency on traditional export mechanisms, offering more dynamic and responsive energy management strategies.

The tensions between British Columbia and Alberta over electricity restrictions serve as a microcosm of the broader challenges facing Canada's energy sector. Balancing provincial autonomy with national interests, ensuring equitable access to energy resources, and achieving climate goals require collaborative efforts and innovative solutions. As the situation develops, stakeholders across the political, economic, and environmental spectrums will need to engage constructively, fostering a Canadian energy landscape that is resilient, sustainable, and inclusive.

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