Carbon capture projects up despite costs

Australia Electricity Supply Shortfall highlights AEMO's warning of reduced reserves as coal retirements outpace capacity, risking load shedding. Calls for 1GW strategic reserves and investment in renewables, storage, and dispatchable power in Victoria.

Key Points

It is AEMO's forecast of reduced reserves, higher outage risk, and a need for 1GW strategic backup capacity.

✅ Coal retirements outpacing firm, dispatchable capacity

✅ AEMO urges 1GW strategic reserves in Victoria and South Australia

✅ Investment needed: renewables, storage, grid and reliability services

Australia’s electricity operator has warned of threats to electricity supply including a shortfall in generation and reduced power reserves on the horizon.

The Australian Energy Market Operator (AEMO) has called for further investment in the country’s energy portfolio as retiring coal plants are replaced by intermittent renewables poised to eclipse coal, leaving the grid with less back-up capacity.

AEMO has said this increases the chances of supply interruption and load shedding.

It added the federal government should target 1GW of strategic reserves in the states most at risk – Victoria and South Australia, even as the Prime Minister has ruled out taxpayer-funded power plants in the current energy battle.

CEO of the Clean Energy Council, Kane Thornton, said the shortfall in generation, reflected in a short supply of electricity, was due a decade of indecisiveness and debate leading to a “policy vacuum”.

He added: “The AEMO report revealed that the new projects added to the system under the renewable energy target will help to improve reliability over the next few years.

“We need to accept that the energy system is in transition, with lessons from dispatchable power shortages in Europe, and long term policy is now essential to ensure private investment in the most efficient new energy technology and solutions.”

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Renewable Energy Security strengthens affordability and grid reliability through electrification, wind, and solar, reducing fossil fuel volatility exposed by the Ukraine crisis, aligning with IEA guidance and the Paris Agreement to deliver resilient, low-cost power.

Key Points

Renewable energy security is reliable, affordable power from electrification, wind and solar, cutting fossil fuel risk.

✅ Wind and solar now outcompete gas for new power capacity.

✅ Diversifies supply and reduces fossil price volatility.

✅ Requires grid flexibility, storage, and demand response.

Oil, gas, and coal have been the central pillar of the global energy system throughout the 20th century. And for decades, these fossil fuels have been closely associated with energy security.  

The perception of energy security, however, is rapidly changing. Renewables form an increasing share of energy sectors worldwide as countries look to deliver on the Paris Agreement and mitigate the effects of climate change, with IEA clean energy investment now significantly outpacing fossil fuels. Moreover, Russia’s invasion of Ukraine has demonstrated how relying on fossil fuels for power, heating, and transport has left many countries vulnerable or energy insecure.  

The International Energy Agency (IEA) defines energy security as “the uninterrupted availability of energy sources at an affordable price” (IEA, 2019a). This definition hardly describes today’s global energy situation, with the cancellation of natural gas deliveries and skyrocketing prices for oil and gas products, and with supply chain challenges in clean energy that also require attention. These circumstances have cascading effects on electricity prices in countries like the United Kingdom that rely heavily on natural gas to produce electricity. In Europe, energy insecurity has been even further amplified since the Russian corporation Gazprom recently cut off gas supplies to several countries.  

As a result, energy security has gained new urgency in Canada and worldwide, creating opportunities in the global electricity market for Canada. Recent events provide a stark reminder of the volatility and potential vulnerability of global fossil fuel markets and supply chains. Even in Canada, as one of the largest producers of oil and gas in the world, the price of fuels depends on global and regional market forces rather than government policy or market design. Thus, the average monthly price for gasoline in Canada hit a record high of CAD 2.07 per litre in May 2022 (Figure 1), and natural gas prices surged to a record CAD 7.54 per MMBtu in May 2022 (Figure 2).  

Energy price increases of this magnitude are more than enough to strain Canadian household budgets. But on top of that, oil and gas prices have accelerated inflation more broadly as it has become more expensive to produce, transport, and store goods, including food and other basic commodities (Global News, 2022).  

Renewable Energy Is More Affordable 

In contrast to oil and gas, renewable energy can reliably deliver affordable energy, as shown by falling wholesale electricity prices in markets with growing clean power. This is a unique and positive aspect of today’s energy crisis compared to historical crises: options for electrification and renewable-based electricity systems are both available and cost-effective.  

For new power capacity, wind and solar are now cheaper than any other source, and wind power is making gains as a competitive source in Canada. According to Equinor (2022), wind and solar were already cheaper than gas-based power in 2020. This means that renewable energy was already the cheaper option for new power before the recent natural gas price spikes. As illustrated in Figure 3, the cost of new renewable energy has dropped so dramatically that, for many countries, it is cheaper to install new solar or wind infrastructure than to keep operating existing fossil fuel-based power plants (International Renewable Energy Agency, 2021). This means that replacing fossil-based electricity generation with renewables would save money and reduce emissions. Wind and solar prices are expected to continue their downward trends as more countries increase deployment and learn how to best integrate these sources into the grid. 

Renewable Energy Is Reliable 

To deliver on the uninterrupted availability side of the energy security equation, renewable power must remain reliable even as more variable energy sources, like wind and solar, are added to the system, and regional leaders such as the Prairie provinces will help anchor this transition. For Canada and other countries to achieve high energy security through electrification, grid system operations must be able to support this, and pathways to zero-emissions electricity by 2035 are feasible.  

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Western Lithium Supply Localization is accelerating as EV battery makers diversify from China, boosting lithium hydroxide sourcing in North America and Europe, amid Covid-19 disruptions and rising prices, with geothermal brines and local processing.

Key Points

An industry shift to source lithium and processing near EV hubs, reducing China reliance and supply chain risk.

✅ EV makers seek North American and European lithium hydroxide

✅ Prices rise amid Covid-19 and logistics constraints

✅ New extraction: geothermal and oilfield brine projects

The global outbreak of coronavirus will accelerate efforts by western carmakers to localise supplies of lithium for electric car batteries, according to US producer Livent.

The industry was keen to diversify away from China, which produces the bulk of the world’s lithium, a critical material for lithium-ion batteries, said Paul Graves, Livent’s chief executive.

“It’s a conversation that’s starting to happen that was not happening even six months ago,” especially in the US, the former Goldman Sachs banker added.

China produced about 79 per cent of the lithium hydroxide used in electric car batteries last year, according to consultancy CRU, a supply chain that has been disrupted by the virus outbreak and EV shortages in some markets.

Prices for lithium hydroxide rose 3.1 per cent last month, their first increase since May 2018, according to Benchmark Mineral Intelligence, due to the impact of the Covid-19 bug.

Chinese lithium producer Ganfeng Lithium, which supplies major carmakers from Tesla to Volkswagen, said it had raised prices by less than 10 per cent, due to higher production costs and logistical difficulties.

“We can get lithium from lots of places . . . is that really something we’re prepared to rely upon?” Mr Graves said. “People are going to relook at supply chains, including battery recycling initiatives that enhance resilience, and relook at their integrity . . . and they’re going to say is there something we need to do to change our supply chains to make them more shockproof?”

General Motors last week said it was looking to source battery minerals such as lithium and nickel from North America for its new range of electric cars that will use cells made in Ohio by South Korea’s LG Chem.

“Some of these critical minerals could be challenging to obtain; it’s not just cobalt you need to be concerned about but also battery-grade nickel and lithium as well,” said Andy Oury, a lead engineer for batteries at GM. “We’re doing all of this with an eye to sourcing as much of the raw material from North America as possible.”

However, George Heppel, an analyst at CRU, warned it would be difficult to compete with China on costs. “China is always going to be the most competitive place to buy battery raw materials. That’s not likely to change anytime soon,” he said.

Livent, which extracts lithium from brines in northern Argentina, is looking at extracting the mineral from geothermal resources in the US and also wants to build a processing plant in Europe.

The Philadelphia-based company is also working with Canadian start-up E3 Metals to extract lithium from brines in Alberta's oil and gasfields for new projects in Canada.

“We’ll look at doing more in the US and more in Europe,” said Mr Graves, underscoring evolving Canada-U.S. collaboration across EV supply chains.

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California Community Choice Aggregators are reshaping electricity markets with renewable energy, solar and wind sourcing, competitive rates, and customer choice, challenging PG&E, SDG&E, and Southern California Edison while advancing California's clean power goals.

Key Points

Local governments that buy power, often cleaner and cheaper, while utilities handle delivery and billing.

✅ Offer higher renewable mix than utilities at competitive rates

✅ Utilities retain transmission and billing responsibilities

✅ Rapid expansion threatens IOU market share across California

Nearly 2 million electricity customers in California may not know it, but they’re part of a revolution. That many residents and businesses are getting their power not from traditional utilities, but via new government-affiliated entities known as community choice aggregators. The CCAs promise to deliver electricity more from renewable sources, such as solar and wind, even as California exports its energy policies across Western states, and for a lower price than the big utilities charge.

The customers may not be fully aware they’re served by a CCA because they’re still billed by their local utility. But with more than 1.8 million accounts now served by the new system and more being added every month, the changes in the state’s energy system already are massive.

Faced for the first time with real competition, the state’s big three utilities have suddenly become havens of innovation. They’re offering customers flexible options on the portion of their power coming from renewable energy, amid a broader review to revamp electricity rates aimed at cleaning the grid, and they’re on pace to increase the share of power they get from solar and wind power to the point where they are 10 years ahead of their deadline in meeting a state mandate.

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But that may not stem the flight of customers. Some estimates project that by late this year, more than 3 million customers will be served by 20 CCAs, and that over a longer period, Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric could lose 80% of their customers to the new providers.

Two big customer bases are currently in play: In Los Angeles and Ventura counties, a recently launched CCA called the Clean Power Alliance is hoping by the end of 2019 to serve nearly 1 million customers. Unincorporated portions of both counties and 29 municipalities have agreed in principle to join up.

Meanwhile, the city of San Diego is weighing two options to meet its goal of 100% clean power by 2035, as exit fees are being revised by the utilities commission: a plan to be submitted by SDG&E, or the creation of a CCA. A vote by the City Council is expected by the end of this year. A city CCA would cover 1.4 million San Diegans, accounting for half SDG&E’s customer demand, according to Cody Hooven, the city’s chief sustainability officer.

Don’t expect the big companies to give up their customers without a fight. Indeed, battle lines already are being drawn at the state Public Utilities Commission, where a recent CPUC ruling sided with a community energy program over SDG&E, and local communities.

“SDG&E is in an all-out campaign to prevent choice from happening, so that they maintain their monopoly,” says Nicole Capretz, who wrote San Diego’s climate action plan as a city employee and now serves as executive director of the Climate Action Campaign, which supports creation of the CCA.

California is one of seven states that have legalized the CCA concept, even as regulators weigh whether the state needs more power plants to ensure reliability. (The others are New York, New Jersey, Massachusetts, Ohio, Illinois and Rhode Island.) But the scale of its experiment is likely to be the largest in the country, because of the state’s size and the ambition of its clean-power goal, which is for 50% of its electricity to be generated from renewable sources by 2030.

California created its system via legislative action in 2002. Assembly Bill 117 enabled municipalities and regional governments to establish CCAs anywhere that municipal power agencies weren’t already operating. Electric customers in the CCA zones were automatically signed up, though they could opt out and stay with their existing power provider. The big utilities would retain responsibility for transmission and distribution lines.

The first CCA, Marin Clean Energy, began operating in 2010 and now serves 470,000 customers in Marin and three nearby counties.

The new entities were destined to come into conflict with the state’s three big investor-owned utilities. Their market share already has fallen to about 70%, from 78% as recently as 2010, and it seems destined to keep falling. In part that’s because the CCAs have so far held their promise: They’ve been delivering relatively clean power and charging less.

The high point of the utilities’ hostility to CCAs was the Proposition 16 campaign in 2009. The ballot measure was dubbed the “Taxpayers Right to Vote Act,” but was transparently an effort to smother CCAs in the cradle. PG&E drafted the measure, got it on the ballot, and contributed all of the $46.5 million spent in the unsuccessful campaign to pass it.

As recently as last year, PG&E and SDG&E were lobbying in the legislature for a bill that would place a moratorium on CCAs. The effort failed, and hasn’t been revived this year.

Rhetoric similar to that used by PG&E against Marin’s venture has surfaced in San Diego, where a local group dubbed “Clear the Air” is fighting the CCA concept by suggesting that it could be financially risky for local taxpayers and questioning whether it will be successful in providing cleaner electricity. Whether Clear the Air is truly independent of SDG&E’s parent, Sempra Energy, is questionable, as at least two of its co-chairs are veteran lobbyists for the company.

SDG&E spokeswoman Helen Gao says the utility supports “customers’ right to choose an energy provider that best meets their needs” and expects to maintain a “cooperative relationship” with any provider chosen by the city.

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Site C Dam Update outlines hydroelectric budget overruns, geotechnical risks, COVID-19 construction delays, BC Hydro timelines, cancellation costs, and First Nations treaty rights concerns affecting renewable energy, ratepayers, and Peace Valley impacts.

Key Points

Overview of Site C costs, delays, geotechnical risks, and concerns shaping BC Hydro hydroelectric plans.

✅ Cost to cancel estimated at least $10B

✅ Final budget now about $16B; completion pushed to 2025

✅ COVID-19 and geotechnical risks drove delays and redesigns

The cost to cancel a massive B.C. energy development project would be at least $10 billion, provincial officials revealed in an update on the future of Site C.

Thus the project will go ahead, Premier John Horgan and Energy Minister Bruce Ralston announced Friday, but with an increased budget and timeline.

Horgan and Ralston spoke at a news conference in Victoria about the findings of a status report into the hydroelectric dam project in northeastern B.C.

Peter Milburn, former deputy finance minister, finished the report earlier this year, but the findings were not initially made public.

$10B more than initial estimate
On Friday, it was announced that the project's final price tag has once again ballooned by billions of dollars.

Site C was initially estimated to cost $6 billion, and the first approved budget, back in 2014, was $8.775 billion. The budget increased to $10.8 billion in 2018.

But the latest update suggests it will cost about $16 billion in total.

And, in addition to a higher budget, the date of completion has been pushed back to 2025 – a year later than the initial target.

Among the reasons for the revisions, according to the province, is the impact of COVID-19. While officials did not get into details, there have been multiple cases of the disease publicly reported at Site C work camps.

Additionally, fewer workers were permitted on site to allow for physical distancing, and construction was scaled back.

Also cited as a cause for the increased cost were "unforeseeable" geotechnical issues at the site, which required installation of an enhanced drainage system.

Speaking to reporters Friday, the premier deflected blame.

“Managing the contract the BC Liberals signed has been difficult because it transfers the vast majority of the geotechnical risk back to BC Hydro,” said Horgan.

Former Premier Christy Clark vowed to get the project to a point of no return, and in 2017 the NDP decided to continue with the project because of the cost of cancelling it.

The Liberals now say the clean energy project should continue, but deny they shoulder any of the blame.

“Someone has to take ownership – and it's got to be government in power,” said MLA Tom Shypitka, BC Liberal critic for energy. 

There are also several reviews underway, including how to change contractor schedules to reflect delays and potential cost impacts from COVID-19, and how to keep the work environment safe during the pandemic.

A total of 17 recommendations were made in Milburn's report, all of which have been accepted by BC Hydro and the province.

Among these recommendations is a restructured project assurance board with a focus on skill-specific membership and autonomy from BC Hydro.

Cost of cancelling the project
The report looked into whether it would be better to scrap the project altogether, but the cost of cancelling it at this point would be at least $10 billion, Horgan and Ralston said.

That cost does not include replacing lost energy and capacity that Site C's electricity would have provided, according to the province.

A study conducted in 2019 suggested B.C. will need to double its electricity production by 2055, especially as drought conditions are forcing BC Hydro to adapt power generation. 

The NDP government says the cost to ratepayers of cancelling the project would be $216 a year for 10 years. Going forward will still have a cost, but instead, that payment will be split over more than 70 years, the estimated lifetime of Site C, meaning BC Hydro customers will pay about $36 more a year once the site goes live, the NDP says, even as cryptocurrency mining raises questions about electricity use.

“We will not put jobs at risk; we will not shock people's hydro bills,” said Horgan.

"Our government has taken this situation very seriously, and with the advice of independent experts guiding us, I am confident in the path forward for Site C," Ralston said.

"B.C. needs more renewable energy to bridge the electricity gap with Alberta and electrify our economy, transition away from fossil fuels and meet our climate targets."

The minister said the site is currently employing about 4,500 people.

Arguments against Site C
While there are benefits to the project, there has also been vocal opposition.

In a statement released following the announcement that the project would go ahead, the Union of B.C. Indian Chiefs suggested the decision violated the premier's commitment to a UN declaration.

"The Site C dam has never had the free, prior and informed consent of all impacted First Nations, and proceeding with the project is a clear infringement of the treaty rights of the West Moberly First Nation," the UBCIC's secretary treasurer said.

Kukpi7 Judy Wilson said the UN's Committee on the Elimination of Racial Discrimination has called for a suspension of the project until it has the consent of Indigenous peoples.

"B.C. did not even attempt to engage First Nations about the safety risks associated with the stability of the dam in the recent reviews," she said.

"It is unfathomable that such clear human rights violations are somehow OK by this government."

Chief Roland Wilson of the West Moberly First Nation said he was disappointed the province didn’t consult his and other communities prior to making this announcement. In an interview with CTV News, he said he was offered an opportunity to join a call this morning.

“We signed a treaty in 1814,” he said. “Our treaty rights are being trampled on.”

Wilson said his nation has ongoing concerns about safety issues and the plans to flood the Peace Valley. West Moberly is in a bitter court battle with the province.

At the BC Legislature, Green Party Leader Sonia Furstenau slammed the government’s decision.

“It is an astonishingly terrible business case in any circumstances, but considering that we lose the agricultural land, the biodiversity, the traditional treaty lands of Treaty 8, this is particularly catastrophic,” she told reporters.

She went on to accuse the NDP government of keeping bad news from the public. She alleged the NDP knew of serious problems before last fall’s unscheduled election, but chose not to release information.

Prior to the decision former BC Hydro president and a former federal fisheries minister are among those who added their voices to calls to halt work on the dam.

They were among 18 Canadians who wrote an open letter to the province calling for an independent team of experts to explore geotechnical problems at the site.

In the letter, signed in September, the group that also included Grand Chief Stewart Phillip of the UBCIC wrote that going ahead would be a "costly and potentially catastrophic mistake." 

According to Friday's update, independent experts have confirmed the site is safe, though improvements have been recommended to enhance oversight and risk management.

Earlier in the project, a B.C. First Nation claimed it was a $1-billion treaty violation, though an agreement was reached in 2020 after the province promised to improve land management and restore traditional place names in areas of cultural significance.

The Prophet River First Nation will also receive payments while the site is operating, and some Crown land will be transferred to the nation as part of the agreement. 

Additionally, residents of a tiny community not far from the site is suing the province over two slow-moving landslides they claim caused property values to plummet.

Nearly three dozen residents of Old Fort are behind the allegations of negligence and breach of their charter right to security of person. The claim is tied to two landslides, in 2018 and 2020, that the group alleges were caused by ground destabilization from construction related to Site C.

One of the landslides damaged the only road into the community, leaving residents under evacuation for a month.

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Manitoba Electricity Demand Drop reflects COVID-19 effects, lowering peak demand about 6% as businesses and offices close, impacting the regional grid; recession-like patterns emerge while Winnipeg water consumption stays steady and peak usage shifts later.

Key Points

An observed 6% decline in Manitoba peak electricity during COVID-19 due to closures; Winnipeg water use remains steady.

✅ Daily peak load down roughly 6% provincewide

✅ Business and office shutdowns drive lower consumption

✅ Winnipeg peak water time shifts to 9 a.m., volume steady

The COVID-19 pandemic has caused a drop in the electricity demand across the province, according to Manitoba Hydro, mirroring the Ontario electricity usage decline reported elsewhere in Canada.

On Tuesday, Manitoba Hydro said it has tracked overall electrical use, which includes houses, farms and businesses both large and small, while also cautioning customers about pandemic-related scam calls in recent weeks.

Hydro said it has seen about a six per cent reduction in the daily peak electricity demand, adding this is due to the many businesses and downtown offices which are temporarily closed, even as residential electricity use has increased in many regions.

"Currently, the impact on Manitoba electricity demand appears to be consistent with what we saw during the 2008 recession," Bruce Owen, the media relations officer for Manitoba Hydro, noting a similar Ottawa demand decline during the pandemic, said in an email to CTV News.

Owen added this trend of reduced electricity demand is being seen across North America, with BC Hydro pandemic load patterns reported and the regional grid in the American Midwest – an area where Manitoba Hydro is a member.

While electricity demand is down, BC Hydro expects holiday usage to rise and water usage in Winnipeg has remained the same.

The City of Winnipeg said it has not seen any change in overall water consumption, but as Hydro One kept peak rates in Ontario, peak demand times have moved from 7 – 8 a.m. to 9 a.m.

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