Wheatland couple turns to wind for electrical needs

Nunavut electricity rate increase sees QEC raise domestic electricity rates 6.6% over two years, affecting customer rates, base rates, subsidies, and kWh overage charges across communities, with public housing exempt and territory-wide pricing denied.

Key Points

A 6.6% QEC hike over 2018-2019, affecting customer rates, subsidies, and kWh overage; public housing remains exempt.

✅ 3.3% on May 1, 2018; 3.3% on Apr 1, 2019

✅ Subsidy caps: 1,000 kWh Oct-Mar; 700 kWh Apr-Sep

✅ Territory-wide base rate denied; public housing exempt

Ahead of the Nunavut government's approval of the general rate increase for the Qulliq Energy Corporation, many Nunavummiut wondered how the change would impact their electricity bills.

QEC's request for a 6.6-per-cent increase was approved by the government last week. The increase will be spread out over two years, a pattern similar to BC Hydro's two-year rate plan, with the first increase (3.3 per cent) effective May 1, 2018. The remaining 3.3 per cent will be applied on April 1, 2019.

Public housing units, however, are exempt from the government's increase altogether.

The power corporation also asked for a territory-wide rate, so every community would pay the same base rate (we'll go over specific terms in a minute if you're not familiar with them). But that request was denied, even as Manitoba Hydro scaled back increases next year, and QEC will now take the next two years reassessing each community's base rate.

#google#

So, what does this mean for your home's power bill? Well, there's a few things you need to know, which we'll get to in a second.

But in essence, as long as you don't go over the government-subsidized monthly electricity usage limit, you're paying an extra 3.61 cents per kilowatt hour (kWh).

To be clear, we're talking about non-government domestic rates — basically, private homeowners — and those living in a government-owned unit but pay for their own power.

The basics

First, some quick terminology. The "base rate" term we're going to use (and used above) in this story refers to the community rate. As in, what QEC charges customers in every community. The "customer rate" is the rate customers actually pay, after the government's subsidy.

The first thing you need to know is everyone in Nunavut starts off by paying the same customer rate, unlike jurisdictions using a price cap to limit spikes.

That's because the government subsidizes electricity costs, and that subsidy is different in every community, because the base rate is different.

For example, Iqaluit's new base rate after the 3.3 per cent increase (remember, the 6.6 per cent is being applied over two years) is 56.69 cents per kWh, while Kugaaruk's base rate rose to 112.34 cents per kWh. Those, by the way, are the territory's lowest and highest respective base rates.

However, customers in both Iqaluit and Kugaaruk will each now pay 28.35 cents per kWh because, remember, the government subsidizes the base rates in every community.

Now, remember earlier we mentioned a "government-subsidized monthly electricity usage limit?" That's where customers in various communities start to pay different amounts.

As simply as we can explain it, the government will only cover so much electricity usage in a month, in every household.

Between October and March, the government will subsidize the first 1,000 kilowatt hours, and only 700 kilowatt hours from April to September. QEC says the average Nunavut home will use about 500 kilowatt hours every month over the course of a year.

But if your household goes over that limit, you're at the mercy of your community's base rate for any extra electricity you use. Homes in Kugaaruk in December, for instance, will have to pay that 122.34 cents for every extra kilowatt hour it uses, while homes in Iqaluit only have to pay 56.69 cents per kWh for its extra electricity.

That's where many Nunavummiut have criticized the current rate structure, because smaller communities are paying more for their extra costs than larger communities.

QEC had hoped — as it had asked for — to change the structure so every community pays the same base rate. So regardless of if people go over their electricity usage limits for the government subsidy, everyone would pay the same overage rates.

But the government denied that request.

New rate is actually lower

The one thing we should highlight, however, is the new rate after the increase is actually lower than what customers were paying in 2014.

For the past seven months, customers have been getting power from QEC at a discount, whereas Newfoundland customers began paying for Muskrat Falls during the same period, to different effect.

That's because when QEC sets its rates, it does so based on global oil price forecasts. Since 2014, the price of oil worldwide has slumped, and so QEC was able to purchase it at less than it had anticipated.

When that happens, and QEC makes more than $1 million within a six month period thanks to the lower oil prices, it refunds the excess profits back to customers through a discount on electricity base rates — a mechanism similar to a lump-sum credit used elsewhere — the government subsidy, however, doesn't change so the savings are passed on directly to customers.

Now, the 6.6 per cent increase to electricity rates, is actually being applied to the discounted base rate from the last seven months.

So again, while customers are paying more than they have been for the last seven months, it's lower than what they were paying in 2014.

Lastly, to be clear, all the figures used in this story are only for domestic non-government rates. Commercial rates and changes have not been explored in this story, given the differences in subsidy and rate application.

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US Grid Pandemic Response coordinates control rooms, grid operators, and critical infrastructure, leveraging hydroelectric plants, backup control centers, mutual assistance networks, and deep cleaning protocols to maintain reliability amid reduced demand and COVID-19 risks.

Key Points

US Grid Pandemic Response encompasses measures by utilities and operators to safeguard power reliability during COVID-19

✅ Control rooms staffed on-site; operators split across backup centers

✅ Health screenings, deep cleaning, and isolation protocols mitigate contagion

✅ Reduced demand and mutual assistance improve grid resilience

Control rooms are the brains of NYPA’s power plants, which are mostly hydroelectric and supply about a quarter of all the electricity in New York state. They’re also a bit like human petri dishes. The control rooms are small, covered with frequently touched switches and surfaces, and occupied for hours on end by a half-dozen employees. Since social distancing and telecommuting isn’t an option in this context, NYPA has instituted regular health screenings and deep cleanings to keep the coronavirus out.

The problem is that each power plant relies on only a handful of control room operators. Since they have a specialized skill set, they can’t be easily replaced if they get sick. “They are very, very critical,” says Gil Quiniones, NYPA president and CEO. If the pandemic worsens, Quiniones says that NYPA may require control room operators to live on-site at power plants to reduce the chance of the virus making it in from the outside world. It sounds drastic, but Quiniones says NYPA has done it before during emergencies—once during the massive 2003 blackout, and again during Hurricane Sandy.

Meanwhile, PJM is one of North America’s nine regional grid operators and manages the transmission lines that move electricity from power plants to millions of customers in 13 states on the Eastern seaboard, including Washington, DC. PJM has had a pandemic response plan on the books for 15 years, but Mike Bryson, senior vice president of operations, says that this is the first time it’s gone into full effect. As of last week, about 80 percent of PJM’s 750 full-time employees have been working from home. But PJM also requires a skeleton crew of essential workers to be on-site at all times in its control centers. As part of its emergency planning, PJM built a backup control center years ago, and now it is splitting control center operators between the two to limit contact.

Past experience with large-scale disasters has helped the energy sector keep the lights on and ventilators running during the pandemic. Energy is one of 16 sectors that the US government has designated as “critical infrastructure,” which also includes the communications industry, transportation sector, and food and water systems. Each is seen as vital to the country and therefore has a duty to maintain operations during national emergencies.

“We need to be treated as first responders,” says Scott Aaronson, the vice president of security and preparedness at the Edison Electric Institute, a trade group representing private utilities. “Everybody's goal right now is to keep the public healthy, and to keep society functioning as best we can. A lack of electricity will certainly create a challenge for those goals.”

America’s electricity grid is a patchwork of regional grid operators connecting private and state-owned utilities. This means simply figuring out who’s in charge and coordinating among the various organizations is one of the biggest challenges to keeping the electricity flowing during a national emergency, according to Aaronson.

Generally, a lot of this responsibility falls on formal energy organizations like the nonprofit North American Electric Reliability Corporation and the Federal Energy Regulatory Commission. But during the coronavirus outbreak, an obscure organization run by the CEOs of electric utilities called the Electricity Subsector Coordinating Council has also served as a primary liaison between the federal government and the thousands of utility companies around the US. Aaronson says the organization has been meeting twice a week for the past three weeks to ensure that utilities are implementing best practices in their response to the coronavirus, as well as to inform the government of material needs to keep the energy sector running smoothly.

This tight-knit coordination will be especially important if the pandemic gets worse, as many forecasts suggest it will. Most utilities belong to at least one mutual assistance group, an informal network of electricity suppliers that help each other out during a catastrophe. These mutual assistance networks are usually called upon following major storms that threaten prolonged outages. But they could, in principle, be used to help during the coronavirus pandemic too. For example, if a utility finds itself without enough operators to manage a power plant, it could conceivably borrow trained operators from another company to make sure the power plant stays online.

So far, utilities and grid operators have managed to make it work on their own. There have been a handful of coronavirus cases reported at power plants, but they haven’t yet affected these plants’ ability to deliver energy. The challenges of running a power plant with a skeleton crew is partially offset by the reduced power demand as businesses shut down and more people work from home, says Robert Hebner, the director of the Center for Electromechanics at the University of Texas. “The reduced demand for power gives utilities a little breathing room,” says Hebner.

A recent study by the University of Chicago’s Energy Policy Institute found that electricity demand in Italy has plunged by 18 percent following the severe increase in coronavirus cases in the country. Energy demand in China also plummeted as a result of the pandemic. Bryson, at PJM, says the grid operator has seen about a 6 percent decrease in electricity demand in recent weeks, but expects an even greater drop if the pandemic gets worse.

Generally speaking, problems delivering electricity in the US occur when the grid is overloaded or physically damaged, such as during California wildfires or a hurricane.

An open question among coronavirus researchers is whether there will be a second wave of the pandemic later this year. During the Spanish flu pandemic in the early 20th century, the second wave turned out to be deadlier than the first. If the coronavirus remerges later this year, it could be a serious threat to reliable electricity in the US, says John MacWilliams, a former associate deputy secretary of the Department of Energy and a senior fellow at Columbia University’s Center on Global Energy Policy.

“If this crisis extends into the fall, we're going to hit hurricane season along the coasts,” MacWilliams says. “Utilities are doing a very good job right now, but if we get unlucky and have an active hurricane season, they're going to get very stressed because the number of workers that are available to repair damage and restore power will become more limited.”

This was a sentiment echoed by Bryson at PJM. “Any one disaster is manageable, but when you start layering them on top of each other, it gets much more challenging,” he adds. The US electricity grid struggles to handle major storms as it is, and these challenges will be heightened if too many workers are home sick. In this sense, the energy sector’s ability to deliver the electricity needed to keep manufacturing medical supplies or keep ventilators running depends to a large extent on our ability to flatten the curve today. The coronavirus is bad enough without having to worry about the lights going out.

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U.S. Energy Crunch disrupts fuel and power markets, driving natural gas price spikes, coal resurgence, utility mix shifts, supply chain strains for EV batteries, and inflation pressures, complicating climate policy, OPEC outreach and LNG trade

Key Points

Supply-demand gaps raise fuel costs, revive coal, strain EV materials, and complicate U.S. climate policy and plans.

✅ Natural gas spikes shift generation from gas to coal

✅ Supply chain shortages hit nickel, silicon, and chips

✅ Policy tensions between price relief and decarbonization

A global energy crunch is creating pain for people struggling to fill their tanks and heat their homes, as well as roiling the utility industry’s plans to change its mix of generation and complicating the Biden administration’s plans to tackle climate change.

The ripple effects of a surge in natural gas prices include a spike in coal use and emissions that counter clean energy targets. High fossil fuel prices also are translating into high prices and a supply crunch for key minerals like silicon used in clean energy projects. On a call with investors yesterday, a Tesla Inc. executive said the company is having a hard time finding enough nickel for batteries.

The crisis could pose political problems for the Biden administration, which spent the last few months fending off criticism about rising fuel prices and inflation (Energywire, Oct. 14).

“Energy issues at this moment are as salient to the American public as they have been in quite some time,” said Christopher Borick, who directs the Muhlenberg College Institute of Public Opinion in Pennsylvania, where Biden stopped yesterday to pitch his infrastructure plan.

While gasoline prices have gotten headlines all summer, natural gas prices have risen faster than motor fuels, more than doubling from an average $1.92 per thousand cubic feet in September 2020 to $5.16 last month. By comparison, gasoline prices have risen about 55 percent in the last year, to $3.36 per gallon nationwide this week, according to AAA.

The roots of the problem go back to the beginning of the pandemic and the recession in 2020. Oil and gas prices fell so fast then that many producers, particularly in the U.S., simply stopped drilling.

Oil companies began predicting a few months later that the abrupt shutdown would eventually lead to shortages and price spikes when the economy recovered. Those predictions turned out to be accurate.

With the economy beginning to recover, demand for gas has gone up, but there’s not enough supply to go around.

While the U.S. energy crunch isn’t as severe as Europe’s energy crisis today, and analysts predict that gas prices will gradually fall next year, consumers could be in for a rough couple of months.

Here’s four ways the global energy crisis is impacting the United States, from the electricity sector to the political landscape:

What are the political repercussions?
For the Biden administration, the energy price hikes come amid fears of rising inflation and persistent supply bottlenecks at the nation’s ports as its climate ambitions face headwinds in Congress.

“The confluence of energy prices, logistical challenges and the need to move on climate have raised this to the top tier,” said Borick, who in the past has polled on energy and environmental issues in Pennsylvania.

Borick noted the administration is facing counterpressures: Even as it pushes to decarbonize the nation’s electric system, it wants to keep gas prices in check. High gasoline prices have been linked to declining political approval ratings, including for presidents, even if much of the price hikes are beyond their control.

White House press secretary Jen Psaki said earlier this month that the administration can take steps to address what it called “short-term supply issues,” but also needs to focus on the long term — and climate.

In hopes of capping prices, the White House has spoken with members of OPEC about increasing oil production — though OPEC has little control over natural gas prices. And earlier this month, the administration talked to U.S. oil and gas producers about helping to bring down prices.

That comes even as environmentalists have pushed Biden to ban federal fossil fuel leasing and drilling and stop new projects.

The moves to curb prices have prompted ridicule from Republicans, who have accused Biden of declaring war on U.S. energy by canceling the Keystone XL pipeline.

“The Biden administration won’t say it out loud, yet let’s admit it: There is a crisis,” Sen. John Barrasso (R-Wyo.) said this week on the Senate floor. “It is one that Joe Biden and his administration has created. It is a crisis of Joe Biden’s own making.”

The situation has also resurfaced comparisons to former President Carter, who struggled politically in the 1970s with gasoline shortages and other energy pressures. Some political scientists say, though, the comparison between the two isn’t apples to apples.

"In 1979, the crisis began with the Iranian Revolution, producing a supply shortage. In the USA, some states rationed the supply. That’s not occurring now. Oil prices were also regulated, another difference, “ said Terry Madonna, a senior fellow in residence for political affairs at Millersville University.

A Morning Consult poll released yesterday carried warning signs for Democrats with worries about the economy on the rise across the political spectrum.

Voters, however, were evenly split on how Biden is handling energy. Forty-two percent of respondents approve of Biden’s energy policy, compared with 45 percent who disapproved. The margin of error is 2 percentage points.

Will the electricity mix change?
Higher gas prices are giving coal a boost in some markets.

Atlanta-based Southern Co. told CNBC earlier this week, for instance, that coal was about 17 percent of the company’s power mix last year. That has changed in 2021.

“The unintended consequence of high gas prices is that coal becomes more economic, and so my sense is … our coal production has bumped up above 20 percent,” Southern CEO Tom Fanning said. “Now, how long that’ll persist, I don’t know.”

Fanning said “what we’re seeing right now, and the real challenge in America, is this notion of energy in transition.”

But the U.S. power sector has been evolving for years, with more renewables and less coal on the grid, and experts say the current energy crunch won’t change long-term utility trends in the industry.

“In general, I wouldn’t place too much emphasis on short-term fluctuations,” Jay Apt, a professor at Carnegie Mellon University, said in an email. “There is still a robust supply chain for most components needed for low-pollution power, including renewables.”

In fact, elevated fossil fuel prices, and high natural gas prices in particular, could accelerate the move toward wind, solar and batteries in some areas. That’s because power plants that run on coal and natural gas can be affected by rising and volatile fuel prices, as illustrated by the recent move in commodities globally. That means higher costs to run the facilities, even if power prices often climb along with gas prices.

“If I were a utility planner, this would cause me to double down on new generation from [wind] and solar and storage as opposed to building additional natural gas plants where, you know, I could be having these super high and volatile operating costs,” said Bri-Mathias Hodge, an associate professor in the Department of Electrical, Computer and Energy Engineering at the University of Colorado, Boulder.

Ed Hirs, an energy fellow at the University of Houston, said the current global situation doesn’t change the U.S. power sector’s overall move toward generation with lower operating costs.

For example, he said nuclear and coal plants can require hundreds of employees, and both have fuel costs. Hirs said a gas facility also needs fuel and may need dozens of employees. Wind and solar facilities often need a smaller number of workers and don’t require fuel in their operations, he noted.

“Eventually the cheap wins out,” Hirs said.

That isn’t even factoring in climate change — the reason world leaders are seeking to slash greenhouse gas emissions. Indeed, lowering emissions remains a priority among many states and big companies in the U.S.

Over the next 10 to 15 years, Hirs said, a key question will be whether battery technology can compete economically in terms of backing up renewables. He said a national carbon price, if enacted, would aid renewables and enhance returns on batteries.

“The real battle is going to be between natural gas and battery storage,” Hirs said.

Apt and M. Granger Morgan, who’s also a Carnegie Mellon professor, noted in a Hill piece last month that the U.S. gets about 40 percent of its power from carbon-free sources, including nuclear.

“Modelers and many power system operators agree that it is possible that renewables can cost-effectively make up roughly 80% of electricity generation,” the professors wrote, adding that other sources could include “storage and gas turbines powered with hydrogen, synfuels, or natural gas with carbon capture.”

What about EVs and renewables?
As for electric vehicles, executives with Tesla said on a call yesterday that supply-chain problems are the major brake on production for both vehicles and batteries.

Chief Financial Officer Zachary Kirkhorn said that the company’s factories aren’t running at full capacity because of an ongoing shortage of semiconductor chips. Customers are waiting longer for vehicles, he said, and wait lists are growing.

The challenges extend to raw materials. In batteries, Kirkhorn said, the company is having trouble finding enough nickel, and in vehicles, it is scrounging for aluminum. He said the problem is "not small," and that prices may rise as supply contracts come up for renewal.

The supply problems are creating "cost headwinds," he said, and so are rising labor costs. Tesla is not immune from the worker shortages that are plaguing the entire U.S. economy.

The production woes aren’t limited to Tesla: Automakers around the world have have had their output crimped by the chip shortage that accompanied the economic rebound after pandemic lockdowns. Unlike many other automakers, Tesla hasn’t been forced to pause its factory lines.

Tesla said it is poised to greatly expand its production of batteries for the electric grid — with a caveat.

Last month, Tesla broke ground on a new California factory to make Megapack, its 3 megawatt-per-hour lithium-ion batteries for use by power companies. That future factory’s capacity, 40 gigawatt per hour a year, is vastly more than the 3 GWh it made in the last calendar year.

However, today’s supply-chain problems are braking the making of both Megapack and Powerwall, Tesla’s battery for homes, Kirkhorn said. He added that production will increase "as soon as parts allow us."

Other advocates for EVs and renewable power expressed little concern about the supply crunch’s meaning for their industries, noting that higher prices alone don’t automatically trigger a broader green revolution on their own.

Those problems likely wouldn’t change the immediate course of the energy transition, researchers said.

"Short-term trends, week to week or even month to month, don’t matter much for investors or policy makers," wrote John Graham, a former budget official with the Bush administration and professor at Indiana University’s O’Neill School of Public and Environmental Affairs, in an email to E&E News.

The crunch may give policymakers a glimpse of the future, however, according to one minerals analyst.

"This isn’t going to be an outlier. I think increasingly you’re going to see pockets of the world start to feel these strains," said Andrew Miller, product director at Benchmark Mineral Intelligence, which focuses its research on battery minerals and battery supply chains.

The U.S. and its allies are only now beginning to develop their own supply chains for batteries and other key clean energy technologies, he noted. "The issue you’re facing, and this is one coming over time, is to have the platform in place. You have to have the supply chain of raw materials," he said.

"I think you’re going to see the most turbulence over the coming decade. … It’s not going to be a smooth transition,” added Miller.

How long will gas prices stay high?
The gap between natural gas demand and supply has led to severe price spikes in Europe, where utilities and other gas buyers have to compete against China for cargoes of liquefied natural gas, according to a research note from IHS Markit Ltd.

Here in the U.S., the causes are the same, but the results aren’t as extreme. Less than 10 percent of domestic gas production is exported as LNG, so American customers don’t have to compete as much against overseas buyers.

Instead, gas-hungry sectors of the economy have run into another problem, IHS analyst Matthew Palmer said in an interview. Gas producers have been cautious about increasing their output, largely because of pressure from investors to limit their spending.

“That theme has really put a governor on production,” he said.

The disconnect will likely mean higher home gas bills and higher electric prices this winter, although deep freeze events or warm weather could disrupt the trend, he said. The U.S. Energy Information Administration is predicting that average heating bills for homes that use gas furnaces will rise 30 percent this winter.

This comes as U.S. gas supply remains high, according to a biennial assessment from the Potential Gas Committee, a group of volunteer geoscientists, engineers and other experts.

Including reserves, future gas supply in the U.S. stands at a record 3,863 trillion cubic feet, up 25 tcf from levels reported in 2019, the group said Tuesday at an event co-hosted with the American Gas Association.

Of that total, so-called technically recoverable resources — or those in the ground but not yet recovered — are 3,368 tcf, the PGC said, down less than 0.2 percent from the last assessment.

The amount of technically recoverable gas went relatively unchanged from year-end 2018 for several reasons, including a lack of company activity in exploration efforts last year due to COVID, said Alexei Milkov, the group’s executive director.

Another factor is that basins mature and shale plays “cannot increase in resources forever,” said Milkov, also a professor of geology and geological engineering at the Colorado School of Mines.

Still, Milkov added, “We cannot tell you right now if we are on a new plateau, or if we are going to start seeing more growth in gas resources again, right, because it’s a complex issue.”

The EIA predicts that gas production will increase and prices will begin to drop in 2022.

David Flaherty, CEO of the Republican polling firm Magellan Strategies in Colorado, said prices could particularly hit seniors. But he said he expected the energy crunch to ease in the U.S. well before the election.

“By early summer, this is likely to be behind us,” he said.

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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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Germany Industrial Electricity Price Subsidy weighs subsidies for energy-intensive industries to bolster competitiveness as Germany shifts to renewables, expands grid capacity, and debates free-market tax cuts versus targeted relief and long-term policies.

Key Points

Policy to subsidize power for energy-intensive industry, preserving competitiveness during the energy transition.

✅ SPD backs 5-7 cents per kWh for 10-15 years

✅ FDP prefers tax cuts and free-market pricing

✅ Scholz urges cheap renewables and grid expansion first

Germany’s three-party coalition is debating whether electricity prices for energy-intensive industries should be subsidised in a market where rolling back European electricity prices can be tougher than it appears, to prevent companies from moving production abroad.

Calls to reduce the electricity bill for big industrial producers are being made by leading politicians, who, like others in Germany, fear the country could lose its position as an industrial powerhouse as it gradually shifts away from fossil fuel-based production, amid historic low energy demand and economic stagnation concerns.

“It is in the interest of all of us that this strong industry, which we undoubtedly have in Germany, is preserved,” Lars Klingbeil, head of Germany’s leading government party SPD (S&D), told Bayrischer Rundfunk on Wednesday.

To achieve this, Klingbeil is advocating a reduced electricity price for the industry of about 5 to 7 cents per Kilowatt hour, which the federal government would subsidise. This should be introduced within the next year and last for about 10 to 15 years, he said.

Under the current support scheme, which was financed as part of the €200 billion “rescue shield” against the energy crisis, energy-intensive industries already pay 13 cents per Kilowatt hour (KWh) for 70% of their previous electricity needs, which is substantially lower than the 30 to 40 cents per KWh that private consumers pay.

“We see that the Americans, for example, are spending $450 billion on the Inflation Reduction Act, and we see what China is doing in terms of economic policy,” Klingbeil said.

“If we find out in 10 years that we have let all the large industrial companies slip away because the investments are not being made here in Germany or Europe, and jobs and prosperity and growth are being lost here, then we will lose as a country,” he added.

However, not everyone in the German coalition favours subsidising electricity prices.

Finance Minister Christian Lindner of the liberal FDP (Renew), for example, has argued against such a step, instead promoting free-market principles and, amid rising household energy costs, reducing taxes on electricity for all.

“Privileging industrial companies would only be feasible at the expense of other electricity consumers and taxpayers, for example, private households or the small trade sector,” Lindner wrote in an op-ed for Handelsblatt on Tuesday.

“Increasing competitiveness for some would mean a loss of competitiveness for others,” he added.

Chancellor Olaf Scholz, himself a member of SPD, was more careful with his words, amid ongoing EU electricity reform debates in Brussels.

Asked about a subsidised electricity price for the industry at a town hall event on Monday, Scholz said he does not “want to make any promises now”.

“First of all, we have to make sure that we have cheap electricity in Germany in the first place,” Scholz said, promoting the expansion of renewable energy such as wind and solar, as local utilities cry for help, as well as more electricity grid infrastructure.

“What we will not be able to do as an economy, even as France’s new electricity pricing scheme advances, is to subsidise everything that takes place in normal economic activity,” Scholz said. “We should not get into the habit of doing that,” he added.

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World Bank Energy Policy debates financing for coal, oil, gas, and renewables to fight energy poverty, expand grid reliability, ensure baseload power, and balance climate goals with development finance for affordable, reliable electricity access.

Key Points

It outlines the bank's stance on financing fossil fuels and renewables to expand affordable, reliable electricity.

✅ Focus on energy access, baseload reliability, and poverty alleviation

✅ Debate over coal, gas, and renewables in development finance

✅ Geopolitics: China and Russia fill funding gaps, raising risks

Why isn’t the World Bank using all available energy resources in its global efforts to fight poverty? That’s the question I’ve asked World Bank President David Malpass. Nearly two years ago, the multilateral development bank decided to stop supporting critical coal, oil and gas projects that help people in developing countries escape poverty.

Along with 11 other senators, and as a member who votes on whether to give U.S. taxpayer dollars to the World Bank, I am pressing the bank to lift these restrictions. Developing countries desperately need access to a steady supply of affordable, reliable clean electricity to support economic growth.

The World Bank has pulled funding for critical electricity projects in poor countries, including high-efficiency power stations that are fueled by coal, even as efforts to revitalize coal communities with clean energy have grown.

Despite Kosovo having the world’s fifth-largest reserves of coal, the bank announced it would only support new energy projects from renewable sources going forward. Kosovo’s Minister of Economic Development Valdrin Lluka responded: “We don’t have the luxury to do such experiments in a poor country such as Kosovo. … It is in our national security interest to secure base energy inside our country.”

The World Bank’s misguided move comes as 840 million people worldwide are living without electricity, including 70 percent of sub-Saharan Africa, and as the fall in global energy investment may lead to shortages.

Even more troubling, nearly 3 billion people in developing countries rely on fuels like wood and other biomass for cooking and home heating, resulting in serious health problems and premature deaths, and the pandemic saw widespread electricity shut-offs that deepened energy insecurity. In 2016, household smoke killed an estimated 2.6 million people.

The World Bank’s mission is to lift people out of poverty. The bank is now compromising that mission in favor of a political agenda targeting certain energy sources.

With the World Bank blocking financing to affordable and reliable energy projects, Russia and China are stepping up their investments in order to gain geopolitical leverage.

President Vladimir Putin is pursuing Russian oil and gas projects in Mozambique, Gabon, and Angola. China’s Belt and Road Initiative is supporting traditional energy resources, with 36 percent of its power projects from 2014 to 2017 involving coal. South Africa had to turn to the China Development Bank to fund its $1.5 billion coal-fired power plant.

There are real risks for countries partnering with China and Russia on these projects. Developing countries are facing what some are calling China’s “debt trap” diplomacy. These nations have also raised concerns over safety compliance, unfair business practices, and labor standards.

As the bank’s largest contributor, the United States has a duty to make sure U.S. taxpayer dollars are used wisely and effectively. Every U.S. dollar at the World Bank should make a difference for people in the developing world.

My colleagues and I have asked the bank to pursue an all-of-the-above energy strategy as it strives to achieve its mission to end extreme poverty and promote shared prosperity. We will take the bank’s response into account during the congressional appropriations process.

The United States is a top global energy producer. And yet Democrats running for president are pursuing anti-energy policies that would hurt not only the United States but the entire world, with implications for U.S. national security as well.

Utilizing our abundant energy resources has fueled an American energy renaissance and a booming U.S. economy, even as disruptions in coal and nuclear have strained the grid, with millions of new jobs and higher wages.

People who are struggling to survive and thrive in developing countries deserve the same opportunity to access affordable and reliable sources of power.

As Microsoft founder and global philanthropist Bill Gates has noted of renewables: "Many people experiencing energy poverty live in areas without access to the kind of grids that are needed to make those technologies cheap and reliable enough to replace fossil fuels."

Ultimately, there is a role for all sources of energy to help countries alleviate poverty and improve the education, health and wellbeing of their people.

The solution to ending energy poverty does not lie in limiting options, but in using all available options. The World Bank must recommit to ending extreme poverty by helping countries use all of the world’s abundant energy resources. Let’s end energy poverty now.

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