Power bills to double by 2030 in Ontario

By Toronto Star


High Voltage Maintenance Training Online

Our customized live online or in‑person group training can be delivered to your staff at your location.

  • Live Online
  • 12 hours Instructor-led
  • Group Training Available
Regular Price:
$599
Coupon Price:
$499
Reserve Your Seat Today
Homeowners can expect their electricity bills to double in the next 20 years under a new $87 billion long-term energy plan unveiled recently.

The much-anticipated blueprint from Energy Minister Brad Duguid is almost 50 per cent more costly than a similar $60 billion plan sidelined three years ago.

The new effort predicts home energy bills will increase 3.5 per cent annually until 2030, taking into account a 10 per cent price break starting in January for five years.

Industrial power rates will rise 2.7 per cent a year until 2030 under the plan.

It envisions new nuclear plants and refurbished reactors to keep atomic power supplying half the province's electricity, while increasing conservation efforts substantially and increasing wind, solar and bioenergy to 13 per cent of supply within eight years, up from 3 per cent now.

The cost for that green power is estimated at $27 billion — almost one-third the cost of the entire effort, which will come with a mix of public and private investment.

As per earlier plans, coal-fired plants will be closed by 2014 but two coal units at Nanticoke will be phased out in 2011, three years earlier than forecast.

“While the essential increases we are making are causing electricity prices to rise, more than half of these increases will support clean energy and clean air,” said Duguid, who along with Premier Dalton McGuinty has been under heavy fire for rapidly rising electricity rates.

“These investments will get new, clean renewable generation online. After five years, once this transition is largely completed, prices are expected to level off.”

The government noted the prices of water, fuel oil and cable TV have all risen faster than electricity in the last 20 years.

But parts of the plan appear vague or subject to potentially higher costs than budgeted.

The government doesn't have a firm price for its plan to build two new nuclear reactors at the Darlington plant owned by Ontario Power Generation near Oshawa.

That part of the plan has been delayed with the future ownership of federally held Atomic Energy of Canada Ltd. still up in the air. Ontario must negotiate a price with the new owner, but forecast the new plants and 10 refurbished reactors at $33 billion.

A previous price from AECL to build the new Darlington reactors came in at $26 billion and was rejected as too high.

Ambitious conservation targets of 7,100 megawatts by 2030 — up from 1,800 megawatts now — are promised through $12 billion in “innovative energy efficiency programs” and “next-generation” building code updates and tougher standards for appliances, among other things.

One energy industry insider said anyone reading the plan should do so in the context of the provincial election October 6.

“Take it all with a grain of salt. Few in the industry are taking the announcement as seriously as the government is,” the insider said.

“This is a political document meant for the next nine months, not 20 years. Whoever wins the election next fall will 'adjust' the plan.”

The plan will be posted for public comment on the provincial Environmental Registry until January 7 and then is followed by more consultations before submission to the Ontario Energy Board next summer, followed by a review by the board until 2012 — after the next election.

To face down a growing consumer rebellion over rising hydro prices, the government has already announced a 10 per cent discount on bills starting in January for five years. And rates for time-of-use customers on smart meters will go to off-peak rates at 7 p.m. on weekdays starting in May — two hours earlier than now.

Related News

Opinion: The awesome, revolutionary electric-car revolution that doesn't actually exist

Ecofiscal Commission EV Policy Shift examines carbon pricing limits, endorsing signal boosters like subsidies, EV incentives, and coal bans, amid advisory changes and public pushback, to accelerate emissions cuts beyond market-based taxes and regulations.

 

Key Points

An updated stance recognizing carbon pricing limits and backing EV incentives, subsidies, and rules to reduce emissions.

✅ Carbon pricing plus subsidies, EV incentives

✅ Advisory shift; Jack Mintz departs

✅ Focus on emissions cuts, coal power bans

 

Something strange happened at the Ecofiscal Commission recently. Earlier this month, the carbon-tax advocacy group featured on its website as one of its advisers the renowned Canadian economist (and FP Comment columnist) Jack M. Mintz. The other day, suddenly and without fanfare, Mintz was gone from the website, and the commission’s advisory board.

Advisers come and advisers go, of course, but it turns out there was an impetus for Mintz’s departure. The Ecofiscal Commission in its latest report, dropped just before Canada Day, seemingly shifted from its position that carbon prices were so excellent at mimicking market forces that the tax could repeal and replace virtually the entire vast expensive gallimaufry of subsidies, caps, rules and regulations that are costing Canada a fortune in business and bureaucrats. As some Ecofiscal commissioners wrote just a few months ago, policies that “dictate specific technologies or methods for reducing emissions constrain private choice and increase costs” and were a bad idea.

But, in this latest report, the commission is now musing about the benefits of carbon-tax “signal boosters”: that is, EV subsidies and rules to, for instance, get people to start buying electric vehicles (EVs), as well as bans on coal-fired power. “Even well designed carbon pricing can have limitations,” rationalized the commission. Mintz said he had “misgivings” about the change of tack. He decided it best if he focus his advisory energies elsewhere.

It’s hard to blame the commission for falling like everyone else for the electric-car mania that’s sweeping the nation and the world. Electric cars offer a sexiness that dreary old carbon taxes can never hope to match — especially in light of a new Angus Reid poll last week that showed the majority of Canadians now want governments to shelve any plans for carbon taxes.

So far, because nobody’s really driving these miracle machines, said mania has been limited to breathless news reports about how the electric-vehicle revolution is about to rock our world. EVs comprise just two-tenths of a per cent of all passenger vehicles in North America, despite the media’s endless hype and efforts of green-obsessed governments to cover much of the price tag, like Ontario’s $14,000 rebate for Tesla buyers. In Europe, where virtue-signalling urban environmentalism is the coolest, they’re not feeling the vehicular electricity much more: EVs account for barely one per cent of personal vehicles in France, the U.K. and Germany. When Hong Kong cancelled Tesla rebates in April, sales fell to zero.

Going by the ballyhoo, you’d think EVs were at an inflection point and an unstoppable juggernaut. But it’s one that has yet to even get started. In his 2011 State of the Union address, then president Barack Obama predicted one million electric cars on the road by 2015. Four years later, there wasn’t even a third that many. California offered so many different subsidies for electric vehicles that low-income families could get rebates of up to US$13,500, but it still isn’t even close to reaching its target of having zero-emission vehicles make up 15 per cent of California auto sales by 2025, being stuck at three per cent since 2014. Ontario’s Liberal government last year announced to much laughter its plan to ensure that every family would have at least one zero-emission vehicle (ZEV) by 2024, and Quebec made a plan to make ZEVs worth 15.5 per cent of sales by 2020, while Ottawa’s 2035 EV mandate attracts criticism too. Let’s see how that’s going: Currently, ZEVs make up 0.16 per cent of new vehicle sales in Ontario and 0.38 per cent in Quebec.

The latest sensational but bogus EV news out last week was France’s government announcing the “end of the sale of gasoline and diesel cars by 2040,” and Volvo apparently announcing that as of 2019, all its models would be “electric.” Both announcements made international headlines. Both are baloney. France provided no actual details about this plan (will it literally become a crime to sell a gasoline car? Will hybrids, run partly on gasoline, be allowed?), but more importantly, as automotive writer Ed Wiseman pointed out in The Guardian, a lot will happen in technology and automotive use over the next 23 years that France has no way to predict, with changes in self-driving cars, public car-sharing and fuel technologies. Imagine making rules for today’s internet back in 1994.

Volvo, meanwhile, looked to be recycling and repackaging years-old news to seize on today’s infatuation with electric vehicles to burnish its now Chinese-owned brand. Since 2010, Volvo’s plan has been to focus on engines that were partly electric, with electric turbochargers, but still based on gasoline. Volvo doesn’t actually have an all-electric model, but the gasoline-swigging engine of its popular XC90 SUV is, partly, electrical. When Volvo said all its models would in two years be “electric,” it meant this kind of engine, not that it was phasing out the internal-combustion gasoline engine. But that is what it wanted reporters to think, and judging by all the massive and inaccurate coverage, it worked.

The real story being missed is just how pathetic things look right now for electric cars. Gasoline prices in the U.S. turned historically cheap in 2015 and stayed cheap, icing demand for gasless cars. Tesla, whose founder’s self-promotion had made the niche carmaker magically more valuable than powerhouses like Ford and GM, haemorrhaged US$12 billion in market value last week after tepid sales figures brought some investors back to Earth, even as the company’s new Model 3 began rolling off the line.

Not helping is that environmental claims about environmental cars are falling apart. In June, Tesla was rocked by a controversial Swedish study that found that making one of its car batteries released as much CO2 as eight years of gasoline-powered driving. And Bloomberg reported last week on a study by Chinese engineers that found that electric vehicles, because of battery manufacturing and charging by fossil-fuel-powered electricity sources, emit 50-per-cent more carbon than do internal-combustion engines. Still, the electric-vehicle hype not only continues unabated, it gets bigger and louder every day. If some car company figures out how to harness it, we’d finally have a real automotive revolution on our hands.

Kevin Libin, Financial Post

 

Related News

View more

Putting Africa on the path to universal electricity access

West and Central Africa Electricity Access hinges on utility reform, renewable energy, off-grid solar, mini-grids, battery storage, and regional grid integration, lowering costs, curbing energy poverty, and advancing SDG7 with sustainable, reliable power solutions.

 

Key Points

Expanding reliable power via renewables, grid trade, and off-grid systems to cut energy poverty and unlock inclusive growth.

✅ Utility reform lowers costs and improves service reliability

✅ Regional grid integration enables clean, least-cost power trade

✅ Off-grid solar and mini-grids electrify remote communities

 

As commodity prices soar and leaders around the world worry about energy shortages and prices of gasoline at the pump, millions of people in Africa still lack access to electricity.  One-half of the people on the continent cannot turn on a fan when temperatures go up, can’t keep food cool, or simply turn the lights on. This energy access crisis must be addressed urgently.

In West and Central Africa, only three countries are on track to give every one of their people access to electricity by 2030. At this slow pace, 263 million people in the region will be left without electricity in ten years.  West Africa has one of the lowest rates of electricity access in the world; only about 42% of the total population, and 8% of rural residents, have access to electricity.

These numbers, some far too big, others far too small, have grave consequences. Electricity is an important step toward enhancing people’s opportunities and choices. Access is key to boosting economic activity and contributes to improving human capital, which, in turn, is an investment in a country’s potential.  

Without electricity, children can’t do their schoolwork at night. Businesspeople can’t get information on markets or trade with each other. Worse, as the COVID-19 pandemic has shown so starkly, limited access to energy constrains hospital and emergency services, further endangering patients and spoiling precious medicine.  

What will it take to power West and Central Africa?  
As the African continent recovers from COVID-19 impacts, now is the critical time to accelerate progress towards universal energy access to drive the region’s economic transformation, promote socio-economic inclusion, and unlock human capital growth. Without reliable access to electricity, the holes in a country’s social fabric can grow bigger, those without access growing disenchanted with inequality.  

Tackling the Africa region’s energy access crisis requires four bold approaches. 

First, this involves making utilities financially viable. Many power providers in the region are cash-strapped, operate dilapidated and aging generation fleet and infrastructure. Therefore, they can’t deliver reliable and affordable electricity to their customers, let alone deliver electricity to those that currently must rely on inadequate alternatives to electricity. Overall, fewer than half of the utilities in Sub-Saharan Africa recover their operating costs, resulting in GDP losses as high as four percent in some countries.

Improving the performance of national utilities and greening their power generation mix is a prerequisite to lowering the costs of supply, thus expanding electricity access to those currently unelectrified, usually lower-income and often remote households. 

In that effort — and this a critical second point — West and Central African countries need to look beyond their borders and further integrate their national utilities and grids to other systems in the region. The region has an abundance of affordable clean energy sources — hydropower in Guinea, Mali, and Cote d’Ivoire; high solar irradiation in the Sahel — but the regional energy market is fragmented. 

Without efficient regional trade, many countries are highly dependent on one or two energy resources and heavily reliant on inefficient, polluting generation sources, requiring fuel imports linked to volatile international oil prices.

The vision of an integrated regional power market in countries of the Economic Community of West African States (ECOWAS) is coming a step closer to reality thanks to an ambitious program of cross-border interconnection projects. If countries take full advantage of this grid, the share of the region’s electricity consumption traded across borders would more than double from 8 percent today to about 17 percent by 2030. Overall, regional power trade could lower the lifecycle cost of West Africa’s power generation system by about 10 percent and provide greener energy by 2030. 

Third, electrification efforts need to be open to private sector investments and innovations, such as renewables like solar energy and battery storage, which have made a tremendous impact in enabling access for millions of poor and underserved households.  Specifically, off-grid solar systems and mini-grids have become a proven reliable way to provide affordable modern electricity services, powering homes in rural communities, healthcare facilities, and schools.

Burkina Faso, which enjoys one of the best solar radiation conditions in the region, is a successful example of leveraging the transformative impact of solar energy and battery storage. With support from the World Bank, the country is deploying solar energy to power its national grid, as well as mini-grids and individual household systems. Solar power with battery storage is competitive in Burkina Faso compared to other technologies and its government was successful in attracting private sector investments to support this technology.

Last, achieving universal electricity access will involve significant commitment from political leaders, especially developing policies and regulations that can attract high-quality investments.  

A significant step in that direction was achieved at the World Bank’s 2020 Annual Meetings with a commitment to set up the Powering Transformation Platform in each African country. Through the platform, each government will set their country-specific vision, goals and metrics, track progress, and explore and exchange innovative ideas and emerging best practices according to their own national energy needs and plans. 

This platform will bring together the elements needed to bring electricity to all in West and Central Africa and help attract new financing.

Over the last 3 years, the World Bank has doubled its investments to increase electricity access rates in Central and West Africa.  We have committed more than $7.8 billion to support 40 electricity access programs, of which more than half directly support new electricity connections. These operations are expected to provide access to 16 million people. The aim is to increase electricity access rates in West and Central Africa from 50 percent today to 64 percent by 2026.

However, World Bank’s financing alone is not enough. Our estimates show that nearly $20 billion are required for universal electrification across Sub-Saharan Africa, aligning with calls to quadruple power investment to meet demand, with about $10 billion annually needed for West and Central Africa. 

Closing the funding gap will require mobilizing traditional and new partners, especially the private sector, which is willing to invest if enabling conditions are in place, as well as philanthropic capital, that can fill in the space in areas not yet commercially attractive. The World Bank is ready to play a catalytical role in leveraging new investments. 

This is vital as less than a decade remains to reach the 2030 SDG7 goal of ensuring electricity for all through affordable, reliable, and modern energy services. As headlines worldwide focus on soaring energy prices in the developed world, we cannot lose sight of the vast populations in Africa that still cannot access basic energy services. This is the true global energy crisis.  

 

Related News

View more

This kite could harness more of the world's wind energy

Autonomous Energy Kites harness offshore wind on floating platforms, using carbon fiber wings, tethers, and rotors to generate grid electricity; an airborne wind energy solution backed by Alphabet's Makani to cut turbine costs.

 

Key Points

Autonomous Energy Kites are tethered craft that capture winds with rotors, generating grid power from floating platforms.

✅ Flies circles on tethers; rotors drive generators to feed the grid.

✅ Operates over deep-sea winds where fixed turbines are impractical.

✅ Lighter, less visual impact, and lower installation costs offshore.

 

One company's self-flying energy kite may be the answer to increasing wind power around the world, alongside emerging wave power solutions as well.

California-based Makani -- which is owned by Google's parent company, Alphabet -- is using power from the strongest winds found out in the middle of the ocean, where the offshore wind sector has huge potential, typically in spots where it's a challenge to install traditional wind turbines. Makani hopes to create electricity to power communities across the world.

Despite a growing number of wind farms in the United States and the potential of this energy source, lessons from the U.K. underscore how to scale, yet only 6% of the world's electricity comes from wind due to the the difficulty of setting up and maintaining turbines, according to the World Wind Energy Association.

When the company's co-founders, who were fond of kiteboarding, realized deep-sea winds were largely untapped, they sought to make that energy more accessible. So they built an autonomous kite, which looks like an airplane tethered to a base, to install on a floating platform in water, as part of broader efforts to harness oceans and rivers for power across regions. Tests are currently underway off the coast of Norway.

"There are many areas around the world that really don't have a good resource for renewable power but do have offshore wind resources," Makani CEO Fort Felker told Rachel Crane, CNN's innovation correspondent. "Our lightweight kites create the possibility that we could tap that resource very economically and bring renewable power to hundreds of millions of people."

This technology is more cost-efficient than a traditional wind turbine, which is a lot more labor intensive and would require lots of machinery and installation.

The lightweight kite, which is made of carbon fiber, has an 85-foot wingspan. The kite launches from a base station and is constrained by a 1,400-foot tether as it flies autonomously in circles with guidance from computers. Crosswinds spin the kite's eight rotors to move a generator that produces electricity that's sent back to the grid through the tether.

The kites are still in the prototype phase and aren't flown constantly right now as researchers continue to develop the technology. But Makani hopes the kites will one day fly 24/7 all year round. When the wind is down, the kite will return to the platform and automatically pick back up when it resumes.

Chief engineer Dr. Paula Echeverri said the computer system is key for understanding the state of the kite in real time, from collecting data about how fast it's moving to charting its trajectory.

Echeverri said tests have been helpful in establishing what some of the challenges of the system are, and the team has made adjustments to get it ready for commercial use. Earlier this year, the team successfully completed a first round of autonomous flights.

Working in deeper water provides an additional benefit over traditional wind turbines, according to Felker. By being farther offshore, the technology is less visible from land, and the growth of offshore wind in the U.K. shows how coastal communities can adapt. Wind turbines can be obtrusive and impact natural life in the surrounding area. These kites may be more attractive to areas that wish to preserve their scenic coastlines and views.

It's also desirable for regions that face constraints related to installing conventional turbines -- such as island nations, where World Bank support is helping developing countries accelerate wind adoption, which have extremely high prices for electricity because they have to import expensive fossil fuels that they then burn to generate electricity.

Makani isn't alone in trying to bring novelty to wind energy. Several others companies such as Altaeros Energies and Vortex Bladeless are experimenting with kites of their own or other types of wind-capture methods, such as underwater kites that generate electricity, a huge oscillating pole that generates energy and a blimp tethered to the ground that gathers winds at higher altitudes.

 

Related News

View more

P.E.I. government exploring ways for communities to generate their own electricity

P.E.I. Community Energy Independence empowers local microgrids through renewable generation, battery storage, and legislative reform, enabling community-owned power, stable electricity rates, and grid-friendly distributed generation across Island communities with wind, biomass, and net metering models.

 

Key Points

A program enabling communities to generate and store renewable power under supportive laws and grid-friendly models.

✅ Legislative review of Electric Power and Renewable Energy Acts

✅ Community microgrids with wind, biomass, and battery storage

✅ Grid integration without raising rates via Maritime Electric

 

The P.E.I. government is taking steps to review energy legislation and explore new options when it comes to generating power across Island communities.

Energy Minister Steven Myers said one of those options will be identifying ways for Island communities to generate their own energy, aligning with a federal electrification study now examining how electricity can reduce or eliminate fossil fuels. 

He said the move would provide energy independence, create jobs and economic development, and save the communities on their energy bills, as seen with an electricity bill credit in Newfoundland that eased costs for consumers.

But the move will require sweeping legislative changes, that may include the merging of the Electric Power Act and the Renewable Energy Act, similar to an electricity market overhaul in Connecticut seen in other jurisdictions.  

Myers said creating energy independence should ensure a steady supply of electricity while also ensuring costs remain reasonable for P.E.I. residents, even as a Nova Scotia electricity rate hike highlights regional cost pressures.   

"We have communities that are looking to generate their own electricity for their own needs," said Myers, adding the province will not dictate what energy sources communities can invest in. 

He also said the province wants to find new community-based models that will complement existing services.

"How do we do that in a way that we don't impact the grid, that we don't impact the service that Maritime Electric is delivering, mindful of a seasonal rate backlash in New Brunswick that illustrates consumer concerns, that we don't drive up the rates for all other Islanders."

Last fall, a group of P.E.I. MLAs traveled to Samsø, a small Danish island, where they learned about renewable and sustainable energy systems being used there.

The province is looking at storage options so it can store power generated during the day to be used in the evening when electricity use is at its highest. (CBC)
Samsø produces 100 per cent of its electricity from wind and biomass, and utilities like HECO meeting renewable goals early show how quickly transitions can occur. The P.E.I. government said the Island produces 25 per cent of its electricity from wind. 

Following the trip, Myers said he was impressed by the control the island had over its energy production and would like to see if a similar model could work on P.E.I. 

Myers said the legislative review will also look at different ways to store energy on the Island. 

He said that will allow communities to sell that excess energy into the provincial electricity grid, and those revenues could be redirected into that community's priorities. 

'For the survival and the future of their community'
"This is kind of a model that we had suggested that would be in place that would allow people in their own community to produce a revenue stream for themselves that they could then turn into projects like rinks, or parks, or tennis courts or whatever it is that community thinks is the most important thing for the survival and the future of their community," said Myers. 

Energy Minister Steven Myers says creating energy independence could create a steady supply of electricity while also ensuring costs remain reasonable for P.E.I. residents. (Randy McAndrew/CBC)
The province said Maritime Electric, Summerside Electric and the P.E.I. Energy Corporation will be involved in the review, recognizing that a Nova Scotia ruling on rate-setting powers underscores regulatory limits 

Government also wants to hear from Islanders and will be accepting written submissions beginning Monday. Myers said the province is also planning to host public consultations, but because of COVID-19, those will be held virtually in mid-June.

Myers calls this a major move, one that will take time. He said he doesn't expect the legislation to be made public until the spring of 2021.

"I want to make sure we take our time and do the proper consultation."

 

Related News

View more

Idaho Power Settlement Could Close Coal Plant, Raise Rates

Idaho Power Valmy Settlement outlines early closure of the North Valmy coal-fired plant in Nevada, accelerated depreciation recovery, a 1.17% base-rate increase, and impacts for customers, NV Energy co-ownership, and Idaho Public Utilities Commission review.

 

Key Points

A proposed agreement to close North Valmy early, recover costs via a 1.17% rate hike, and seek PUC approval.

✅ Unit 1 closes 2019; Unit 2 closes 2025 in Nevada.

✅ 1.17% base-rate hike; about $1.20 per 1,000 kWh monthly bill.

✅ Idaho PUC comment deadline May 25; NV Energy co-owner.

 

State regulators have set a May 25 deadline for public comment on a proposed settlement related to the early closure of a coal-fired plant co-owned by Idaho Power, even as some utilities plan to keep a U.S. coal plant running indefinitely in other jurisdictions.

The settlement calls for shuttering Unit 1 of the North Valmy Power Plant in Nevada in 2019, with Unit 2 closing in 2025, amid regional coal unit retirements debates. The units had been slated for closure in 2031 and 2035, respectively.

If approved by the Idaho Public Utilities Commission, the settlement would increase base rates by approximately $13.3 million, or 1.17 percent, in order to allow the company to recover its investment in the plant on an accelerated basis.

That equates to an additional $1.20 on the monthly bill of the typical residential customer using 1,000 kilowatt-hours of energy per month.

Idaho Power, which co-owns the plant with NV Energy, maintains that closing Valmy early rather than continuing to operate it until it is fully depreciated in 2035, will ultimately save customers $103 million in today's dollars.

The company said a significant decrease in market prices for electricity has made it uneconomic to operate the plant except during extremely cold or hot weather, when the demand for energy peaks, a trend underscored by transactions involving the San Juan Generating Station deal elsewhere. The company also said plant balances have increased by approximately $70 million since its last general rate case in 2011, due to routine maintenance and repairs, as well as investments required to meet environmental regulations.

The proposed settlement reflects a number of changes to Idaho Power's original proposal regarding Valmy, and comes in the wake of discussions with interested parties in February and April, against the backdrop of a broader energy debate over plant closures and reliability.

In its initial application, filed in October, Idaho Power proposed closing both units in 2025. The original proposal would have increased base rates by $28.5 million, or about 2.5 percent, in order to allow the company to recover its costs associated with the plant's accelerated depreciation, decommissioning and anticipated investments, with cautionary examples such as the Kemper power plant costs illustrating potential risks.

Concurrently, Idaho Power asked for commission approval to adjust depreciation rates for its other plants and equipment based on the result of a study it conducts every five years, as outlined in Case IPC-E-16-23. The adjustment would have led to a $6.7 million increase to base rates.

The two requests filed in October would have increased customer costs by a total of $35.2 million or 3.1 percent, leading to a $3.08 increase on the bills of the typical residential customer who uses 1,000 kilowatt-hours per month.

The proposed settlement submitted to the Commission on May 4 calls for $13,285,285 to be recovered from all customer classes through base rates until 2028, all related to the Valmy shutdown. That is an increase of 1.17 percent and would result in a $1.20 increase on the bills of the typical residential customer who uses 1,000 kilowatt-hours per month.

 

Related News

View more

Ottawa making electricity more expensive for Albertans

Alberta Electricity Price Surge reflects soaring wholesale rates, natural gas spikes, carbon tax pressures, and grid decarbonization challenges amid cold-weather demand, constrained supply, and Europe-style energy crisis impacts across the province.

 

Key Points

An exceptional jump in Alberta's power costs driven by gas price spikes, high demand, policy costs, and tight supply.

✅ Wholesale prices averaged $123/MWh in December

✅ Gas costs surged; supply constraints and outages

✅ Carbon tax and decarbonization policies raised costs

 

Albertans just endured the highest electricity prices in 21 years. Wholesale prices averaged $123 per megawatt-hour in December, more than triple the level from the previous year and highest for December since 2000.

The situation in Alberta mirrors the energy crisis striking Europe where electricity prices are also surging, largely due to a shocking five-fold increase in natural gas prices in 2021 compared to the prior year.

The situation should give pause to Albertans when they consider aggressive plans to “decarbonize” the electric grid, including proposals for a fully renewable grid by 2030 from some policymakers.

The explanation for skyrocketing energy prices is simple: increased demand (because of Calgary's frigid February demand and a slowly-reviving post-pandemic economy) coupled with constrained supply.

In the nitty gritty details, there are always particular transitory causes, such as disputes with Russian gas companies (in the case of Europe) or plant outages (in the case of Alberta).

But beyond these fleeting factors, there are more permanent systemic constraints on natural gas (and even more so, coal-fired) power plants.

I refer of course to the climate change policies of the Trudeau government at the federal level and some of the more aggressive provincial governments, which have notable implications for electricity grids across Canada.

The most obvious example is the carbon tax, the repeal of which Premier Jason Kenney made a staple of his government.

Putting aside the constitutional issues (on which the Supreme Court ruled in March of last year that the federal government could impose a carbon tax on Alberta), the obvious economic impact will be to make carbon-sourced electricity more expensive.

This isn’t a bug or undesired side-effect, it’s the explicit purpose of a carbon tax.

Right now, the federal carbon tax is $40 per tonne, is scheduled to increase to $50 in April, and will ultimately max out at a whopping $170 per tonne in 2030.

Again, the conscious rationale of the tax, aligned with goals for cleaning up Canada's electricity, is to make coal, oil and natural gas more expensive to induce consumers and businesses to use alternative energy sources.

As Albertans experience sticker shock this winter, they should ask themselves — do we want the government intentionally making electricity and heating oil more expensive?

Of course, the proponent of a carbon tax (and other measures designed to shift Canadians away from carbon-based fuels) would respond that it’s a necessary measure in the fight against climate change, and that Canada will need more electricity to hit net-zero according to the IEA.

Yet the reality is that Canada is a bit player on the world stage when it comes to carbon dioxide, responsible for only 1.5% of global emissions (as of 2018).

As reported at this “climate tracker” website, if we look at the actual policies put in place by governments around the world, they’re collectively on track for the Earth to warm 2.7 degrees Celsius by 2100, far above the official target codified in the Paris Agreement.

Canadians can’t do much to alter the global temperature, but federal and provincial governments can make energy more expensive if policymakers so choose, and large-scale electrification could be costly—the Canadian Gas Association warns of $1.4 trillion— if pursued rapidly.

As renewable technologies become more reliable and affordable, business and consumers will naturally adopt them; it didn’t take a “manure tax” to force people to use cars rather than horses.

As official policy continues to make electricity more expensive, Albertans should ask if this approach is really worth it, or whether options like bridging the Alberta-B.C. electricity gap could better balance costs.

Robert P. Murphy is a senior fellow at the Fraser Institute.

 

Related News

View more

Sign Up for Electricity Forum’s Newsletter

Stay informed with our FREE Newsletter — get the latest news, breakthrough technologies, and expert insights, delivered straight to your inbox.

Electricity Today T&D Magazine Subscribe for FREE

Stay informed with the latest T&D policies and technologies.
  • Timely insights from industry experts
  • Practical solutions T&D engineers
  • Free access to every issue

Live Online & In-person Group Training

Advantages To Instructor-Led Training – Instructor-Led Course, Customized Training, Multiple Locations, Economical, CEU Credits, Course Discounts.

Request For Quotation

Whether you would prefer Live Online or In-Person instruction, our electrical training courses can be tailored to meet your company's specific requirements and delivered to your employees in one location or at various locations.