Cheap oil contagion is clear and present danger to Canada

New England oil-fired generation surges as ISO New England manages a cold snap, dual-fuel switching, and a natural gas price spike, highlighting winter reliability challenges, LNG and pipeline limits, and rising CO2 emissions.

Key Points

Reliance on oil-burning power plants during winter demand spikes when natural gas is costly or constrained.

✅ Driven by dual-fuel switching amid high natural gas prices

✅ ISO-NE winter reliability rules encourage oil stockpiles

✅ Raises CO2 emissions despite coal retirements and renewables growth

New England is relying on oil-fired generators for the most electricity since 2018 as a frigid blast boosts demand for power and natural gas prices soar across markets. 

Oil generators were producing more than 4,200 megawatts early Thursday, accounting for about a quarter of the grid’s power supply, according to ISO New England. That was the most since Jan. 6, 2018, when oil plants produced as much as 6.4 gigawatts, or 32% of the grid’s output, said Wood Mackenzie analyst Margaret Cashman.  

Oil is typically used only when demand spikes, because of higher costs and emissions concerns. Consumption has been consistently high over the past three weeks as some generators switch from gas, which has surged in price in recent months. New England generators are producing power from oil at an average rate of almost 1.8 gigawatts so far this month, the highest for January in at least five years. 

Oil’s share declined to 16% Friday morning ahead of an expected snowstorm, which was “a surprise,” Cashman said. 

“It makes me wonder if some of those generators are aiming to reserve their fuel for this weekend,” she said.

During the recent cold snap, more than a tenth of the electricity generated in New England has been produced by power plants that haven’t happened for at least 15 years.

Burning oil for electricity was standard practice throughout the region for decades. It was once our most common fuel for power and as recently as 2000, fully 19% of the six-state region’s electricity came from burning oil, according to ISO-New England, more than any other source except nuclear power at the time.

Since then, however, natural gas has gotten so cheap that most oil-fired plants have been shut or converted to burn gas, to the point that just 1% of New England’s electricity came from oil in 2018, whereas about half our power came from natural gas generation regionally during that period. This is good because natural gas produces less pollution, both particulates and greenhouse gasses, although exactly how much less is a matter of debate.

But as you probably know, there’s a problem: Natural gas is also used for heating, which gets first dibs. Prolonged cold snaps require so much gas to keep us warm, a challenge echoed in Ontario’s electricity system as supply tightens, that there might not be enough for power plants – at least, not at prices they’re willing to pay.

After we came close to rolling brownouts during the polar vortex in the 2017-18 winter because gas-fired power plants cut back so much, ISO-NE, which has oversight of the power grid, established “winter reliability” rules. The most important change was to pay power plants to become dual-fuel, meaning they can switch quickly between natural gas and oil, and to stockpile oil for winter cold snaps.

We’re seeing that practice in action right now, as many dual-fuel plants have switched away from gas to oil, just as was intended.

That switch is part of the reason EPA says the region’s carbon emissions have gone up in the pandemic, from 22 million tons of CO2 in 2019 to 24 million tons in 2021. That reverses a long trend caused partly by closing of coal plants and partly by growing solar and offshore wind capacity: New England power generation produced 36 million tons of CO2 a decade ago.

So if we admit that a return to oil burning is bad, and it is, what can we do in future winters? There are many possibilities, including tapping more clean imports such as Canadian hydropower to diversify supply.

The most obvious solution is to import more natural gas, especially from fracked fields in New York state and Pennsylvania. But efforts to build pipelines to do that have been shot down a couple of times and seem unlikely to go forward and importing more gas via ocean tanker in the form of liquefied natural gas (LNG) is also an option, but hits limits in terms of port facilities.

Aside from NIMBY concerns, the problem with building pipelines or ports to import more gas is that pipelines and ports are very expensive. Once they’re built they create a financial incentive to keep using natural gas for decades to justify the expense, similar to moves such as Ontario’s new gas plants that lock in generation. That makes it much harder for New England to decarbonize and potentially leaves ratepayers on the hook for a boatload of stranded costs.

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Canada Electrification Costs: report estimates $580B-$1.4T to scale renewable energy, wind, solar, and storage capacity to 2050, shifting from natural gas toward net-zero emissions and raising average household energy spending by $1,300-$3,200 annually.

Key Points

Projected national expense to expand renewables and electrify energy systems by 2050, impacting household energy bills.

✅ $580B-$1.4T forecast for 2020-2050 energy transition

✅ 278-422 GW wind, solar, storage capacity by 2050

✅ Household costs up $1,300-$3,200 per year on average

The Canadian Gas Association says building renewable electricity capacity to replace just half of Canada's current fossil fuel-generated energy, a shift with significant policy implications for grids across provinces, could increase national costs by as much as $1.4 trillion over the next 30 years.

In a report, it contends, echoing an IEA report on net-zero, that growing electricity's contribution to Canada's energy mix from its current 19 per cent to about 60 per cent, a step critical to meeting climate pledges that policymakers emphasize, will require an expansion from 141 gigawatts today to between 278 and 422 GW of renewable wind, solar and storage capacity by 2050.

It says that will increase national energy costs by between $580 billion and $1.4 trillion between 2020 and 2050, a projection consistent with recent reports of higher electricity prices in Alberta amid policy shifts, translating into an average increase in Canadian household spending of $1,300 to $3,200 per year.

The study, prepared by consulting firm ICF for the association, assumes electrification begins in 2020 and is applied in all feasible applications by 2050, with investments in the electricity system, guided by the implications of decarbonizing the grid for reliability and cost, proceeding as existing natural gas and electric end use equipment reaches normal end of life.

Association CEO Tim Egan says the numbers are "pretty daunting" and support the integration of natural gas with electric, amid Canada's race to net-zero commitments, instead of using an electric-only option as the most cost-efficient way for Canada to reach environmental policy goals.

But Keith Stewart, senior energy strategist with Greenpeace Canada, says scientists are calling for the world to get to net-zero emissions by 2050, and Canada's net-zero by 2050 target underscores that urgency to avoid "catastrophic" levels of warming, so investing in natural gas infrastructure to then shut it down seems a "very expensive option."

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Germany Energy Price Hikes are driving electricity tariffs, gas prices, and heating costs higher as wholesale markets surge after the Ukraine invasion; households face inflationary pressure despite relief measures and a renewables levy cut.

Key Points

Germany Energy Price Hikes reflect surging power and gas tariffs from wholesale spikes, prompting relief measures.

✅ Electricity tariffs to rise 19.5% in Apr-Jun

✅ Gas tariffs up 42.3%; heating and fuel costs soar

✅ Renewables levy ends July; saves €6.6 billion yearly

Record prices for electricity and gas in Germany will continue to rise in the coming months, the dpa agency, citing estimates from the consumer portal Verivox.

According to him, electricity suppliers and local utilities, in whose area of ​​responsibility there are 13 million households, made an announcement of tariff increases in April, May and June by 19.5%. Gas tariffs increased by an average of 42.3%.

According to Verivox, electricity prices in Germany have approximately doubled over the year - a pattern seen as European electricity prices rose more than double the EU average - if previously a household with a consumption of 4,000 kWh paid 1,171 euros a year, now the amount has risen to 1,737 euros. Gas prices have risen even more, though European gas prices later returned to pre-Ukraine war levels: last year, a household with a consumption of 20,000 kWh paid 1,184 euros in annual terms, and now it is 2,787 euros. 

Energy costs for the average German household are 52 percent higher than a year ago, adding to EU inflation pressures, according to energy contract sales website Check24. In a press release, the company said the wholesale electricity price was at €122.93 per megawatt-hour in February 2022, compared to €49 this time last year, while in the United States US electricity prices climbed at the fastest pace in 41 years. In addition, electricity prices on the power exchange haven been rising rapidly since Russian troops invaded Ukraine, comparison portal Strom Report said. Costs for heating rose the most, triggered by the high gas price (105 euros per megawatt-hour on the wholesale market) and around 100 USD per barrel of oil – its highest price since 2014. Driving also became more expensive with costs for petrol up 25 percent and diesel 30 percent, Check24 said.

The German government has decided on relief measures for low-income households, including a 200 billion euro energy shield, in response to high consumer energy costs. In July, it will abolish the renewables levy on the power price, saving consumers around €6.6 billion annually. In a reform proposal released this week, the ministry for economy and climate also detailed how it will legally oblige power suppliers to reduce their power bills when the levy is abolished.

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Ontario Electricity Demand 2020 shows a rare decline amid COVID-19, with higher residential peak load, lower commercial usage, hot-weather air conditioning, nuclear baseload constraints, and smart meter data shaping grid operations and forecasting.

Key Points

It refers to 2020 power use in Ontario: overall demand fell, while residential peaks rose and commercial loads dropped.

✅ Peak load shifted to homes; commercial usage declined.

✅ Hot summers raised peaks; overall annual demand still fell.

✅ Smart meters aid forecasting; grid must balance nuclear baseload.

Demand for electricity in Ontario last year fell to levels rarely seen in decades amid shifts in usage patterns caused by pandemic measures, with Ottawa’s electricity consumption dropping notably, new data show.

The decline came despite a hot summer that had people rushing to crank up the air conditioning at home, the province’s power management agency said, even as the government offered electricity relief to families and small businesses.

“We do have this very interesting shift in who’s using the energy,” said Chuck Farmer, senior director of power system planning with the Independent Electricity System Operator.

“Residential users are using more electricity at home than we thought they would and the commercial consumers are using less.”

The onset of the pandemic last March prompted stay-home orders, businesses to close, and a shuttering of live sports, entertainment and dining out. Social distancing and ongoing restrictions, even as the first wave ebbed and some measures eased, nevertheless persisted and kept many people home as summer took hold and morphed into winter, while the province prepared to extend disconnect moratoriums for residential customers.

System operator data show peak electricity demand rose during a hot summer spell to 24,446 megawatts _ the highest since 2013. Overall, however, Ontario electricity demand last year was the second lowest since 1988, the operator said.

In all, Ontario used 132.2 terawatt-hours of power in 2020, a decline of 2.9 per cent from 2019.

With more people at home during the lockdown, winter residential peak demand has climbed 13 per cent above pre-pandemic levels, even as Hydro One made no cut in peak rates for self-isolating customers, while summer peak usage was up 19 per cent.

“The peaks are getting higher than we would normally expect them to be and this was caused by residential customers _ they’re home when you wouldn’t expect them to be home,” Farmer said.

Matching supply and demand _ a key task of the system operator _ is critical to meeting peak usage and ensuring a stable grid, and the operator has contingency plans with some key staff locked down at work sites to maintain operations during COVID-19, because electricity cannot be stored easily. It is also difficult to quickly raise or lower the output from nuclear-powered generators, which account for the bulk of electricity in the province, as demand fluctuates.

READ MORE: Ontario government extends off-peak electricity rates to Feb. 22

Life patterns have long impacted overall usage. For example, demand used to typically climb around 10 p.m. each night as people tuned into national television newscasts. Livestreaming has flattened that bump, while more energy-efficient lighting led to a drop in provincial demand over the holiday season.

The pandemic has now prompted further intra-day shifts in usage. Fewer people are getting up in the morning and powering up at home before powering down and rushing off to work or school. The summer saw more use of air conditioners earlier than normal after-work patterns.

Weather has always been a key driver of demand for power, accounting for example for the record 27,005 megawatts of usage set on a brutally hot Aug. 1, 2006. Similarly, a mild winter and summer led to an overall power usage drop in 2017.

Still, the profound social changes prompted by the COVID-19 pandemic _ and whether some will be permanent _ have complicated demand forecasting.

“Work patterns used to be much more predictable,” the agency said. “The pandemic has now added another element of variability for electricity demand forecasting.”

Some employees sent home to work have returned to their offices and other workplaces, and many others are likely do so once the pandemic recedes. However, some larger companies have indicated that working from home will be long term.

“Companies like Facebook and Shopify have already stated their intention to make work from home a more permanent arrangement,” the operator said. “This is something our near-term forecasters would take into account when preparing for daily operation of the grid.”

Aggregated data from better smart meters, which show power usage throughout the day, is one method of improving forecasting accuracy, the operator said.

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Ontario Gas Plant Expansion aims to boost grid reliability as nuclear refurbishments proceed, using natural gas to meet electricity demand, despite critics urging renewables, energy storage, and efficiency to reduce carbon emissions, protecting investment growth.

Key Points

Ontario plan to expand gas plants for reliability during nuclear outages, sparking debate on emissions and clean options.

✅ IESO data: gas share rose from 4% (2017) to 10.4% (2022).

✅ Government cites nuclear refurbishments and demand growth.

✅ Critics propose storage, wind, solar, and efficiency.

The Ontario government is preparing to expand gas-fired power plants in Ontario; a move critics say will make the province's electricity system dirtier and could eventually leave taxpayers on the hook.

The province is currently soliciting bids for additional gas-fired electricity generation, which means new gas plants get built, or existing gas plants get expanded. 

It's poised to be Ontario's biggest increase in the gas-fired power supply in more than a decade since the previous Liberal government scrapped two gas plants, in Mississauga and Oakville, at a cost the auditor general pegged at around $1 billion. 

Doug Ford's energy minister, Todd Smith, says Ontario needs gas plants now to help meet an expected surge in demand for electricity as the province faces a supply shortfall in the coming years and to provide power while some units of the province's nuclear stations are down for refurbishment. 

"It's really important to have natural gas as an insurance policy to keep the lights on and provide the reliability that we need," Smith said in an interview. 

"We need natural gas for the short term, especially to get us through these refurbishments."

The portion of Ontario's electricity supply that comes from natural gas matters for the environment and the province's economy. Manufacturing companies increasingly seek clean power that emits as little carbon dioxide as possible. 

The portion of Ontario's electricity supply that comes from natural gas matters for the environment and the province's economy. Manufacturing companies increasingly seek a power supply that emits as little carbon dioxide as possible. 

Increasing the amount of gas-fired generation in the electricity system puts Ontario's ability to attract such investments at risk as it complicates balancing demand and emissions across the grid, says Evan Pivnick, program manager with Clean Energy Canada, a think tank. 

"Building new natural gas (power plants) in Ontario today should be seen as an absolute last resort for meeting our energy needs," said Pivnick in an interview. 

Ontario's electricity system has among the lowest rates of CO2 emissions in North America, with roughly half of the annual supply provided by nuclear power, one-quarter from hydro dams, and one-tenth from wind turbines. 

However, Ontario's gas plants have produced a growing amount of electricity in recent years, despite an early report exploring a gas halt by the minister, and that trend will continue if new gas plants are built. 

In 2017, gas- and oil-fired generation provided just four percent of Ontario's electricity supply, according to figures from the provincial agency that manages the grid, the Independent Electricity System Operator (IESO). 

By 2022, that figure reached 10.4 percent. 

Ontario doesn't need new gas plants to meet the electricity demand, says Bryan Purcell, vice president of policy and programs at The Atmospheric Fund. This agency invests in low-carbon projects in the Greater Toronto and Hamilton Area. 

"We're quite concerned about where Ontario's electric grid is going," said Purcell. "Thankfully, there's still time to adjust course and look at other options." 

According to Purcell and Pivnick, those options to avoid gas could include power storage (in which excess generated energy is stored for later use when electricity demand rises), wind and solar projects, or energy efficiency and conservation programs.

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Canada Critical Infrastructure Cyber Risks include state-sponsored actors probing the electricity grid and ICS/OT, ransomware on utilities, and espionage targeting smart cities, medical devices, and energy networks, pre-positioning for disruptive operations.

Key Points

Nation-state and criminal cyber risks to Canada's power, water, and OT/ICS, aiming to disrupt, steal data, or extort.

✅ State-sponsored probing of power grid and utilities

✅ OT/ICS exposure grows as systems connect to IT networks

✅ Ransomware, espionage, and pre-positioning for disruption

State-sponsored actors are "very likely" trying to shore up their cyber capabilities to attack Canada's critical infrastructure — such as the electricity supply, as underscored by the IEA net-zero electricity report indicating rising demand for clean power, to intimidate or to prepare for future online assaults, a new intelligence assessment warns.

"As physical infrastructure and processes continue to be connected to the internet, cyber threat activity has followed, leading to increasing risk to the functioning of machinery and the safety of Canadians," says a new national cyber threat assessment drafted by the Communications Security Establishment.

"We judge that state-sponsored actors are very likely attempting to develop the additional cyber capabilities required to disrupt the supply of electricity in Canada, even as cleaning up Canada's electricity remains critical for climate goals."

Today's report — the second from the agency's Canadian Centre for Cyber Security wing — looks at the major cyber threats to Canadians' physical safety and economic security.

The CSE does say in the report that while it's unlikely cyber threat actors would intentionally disrupt critical infrastructure — such as water and electricity supplies — to cause major damage or loss of life, they would target critical organizations "to collect information, pre-position for future activities, or as a form of intimidation."

The report said Russia-associated actors probed the networks of electricity utilities in the U.S. and Canada last year and Chinese state-sponsored cyber threat actors have targeted U.S. utility employees. Other countries have seen their industrial control systems targeted by Iranian hacking groups and North Korean malware was found in the IT networks of an Indian power plant, it said.

The threat grows as more critical infrastructure goes high-tech.

In the past, the operational technology (OT) used to control dams, boilers, electricity and pipeline operations has been largely immune to cyberattacks — but that's changing as manufacturers incorporate newer information technology in their systems and products and as the race to net-zero drives grid modernization, says the report.

That technology might make things easier and lower costs for utilities already facing debates over electricity prices in Alberta amid affordability concerns, but it comes with risks, said Scott Jones, the head of the cyber centre.

"So that means now it is a target, it is accessible and it's vulnerable. So what you could see is shutting off of transmission lines, you can see them opening circuit breakers, meaning electricity simply won't flow to our homes to our business," he told reporters Wednesday.

While the probability of such attacks remains low, Jones said the goal of Wednesday's briefing is to send out the early warnings.

"We're not trying to scare people. We're certainly not trying to scare people into going off grid by building a cabin in the woods. We're here to say, 'Let's tackle these now while they're still paper, while they're still a threat we're writing down.'"

Steve Waterhouse, a former cybersecurity officer for the Department of National Defence who now teaches at Université de Sherbrooke, said a saving grace for Canada could be the makeup of its electrical systems.

"Since in Canada, they're very centralized, it's easier to defend, and debates about bridging Alberta and B.C. electricity aim to strengthen resilience, while down in the States, they have multiple companies all around the place. So the weakest link is very hard to identify where it is, but the effect is a cascading effect across the country ... And it could impact Canada, just like we saw in the big Northeastern power outage, the blackout of 2003," he said.

"So that goes to say, we have to be prepared. And I believe most energy companies have been taking extra measures to protect and defend against these type of attacks, even as Canada points to nationwide climate success in electricity to meet emissions goals."

In the future, attacks targeting so-called smart cities and internet-connected devices, such as personal medical devices, could also put Canadians at risk, says the report. 

Earlier this year, for example, Health Canada warned the public that medical devices containing a particular Bluetooth chip — including pacemakers, blood glucose monitors and insulin pumps — are vulnerable to cyber attacks that could crash them.

The foreign signals intelligence agency also says that while state-sponsored programs in China, Russia, Iran and North Korea "almost certainly" pose the greatest state-sponsored cyber threats to Canadian individuals and organizations, many other states are rapidly developing their own cyber programs.

Waterhouse said he was glad to see the government agency call out the countries by name, representing a shift in approach in recent years.

"To tackle on and be ready to face a cyber-attack, you have to know your enemy," he said.

"You have to know what's vulnerable inside of your organization. You have to know how ... vulnerable it is against the threats that are out there."

Commercial espionage continues
State-sponsored actors will also continue their commercial espionage campaigns against Canadian businesses, academia and governments — even as calls to make Canada a post-COVID manufacturing hub grow — to steal Canadian intellectual property and proprietary information, says the CSE.

"We assess that these threat actors will almost certainly continue attempting to steal intellectual property related to combating COVID-19 to support their own domestic public health responses or to profit from its illegal reproduction by their own firms," says the "key judgments" section of the report.

"The threat of cyber espionage is almost certainly higher for Canadian organizations that operate abroad or work directly with foreign state-owned enterprises."

The CSE says such commercial espionage is happening already across multiple fields, including aviation, technology and AI, energy and biopharmaceuticals.

While state-sponsored cyber activity tends to offer the most sophisticated threats, CSE said that cybercrime continues to be the threat most likely to directly affect Canadians and Canadian organizations, through vectors like online scams and malware.

"We judge that ransomware directed against Canada will almost certainly continue to target large enterprises and critical infrastructure providers. These entities cannot tolerate sustained disruptions and are willing to pay up to millions of dollars to quickly restore their operations," says the report.

Cybercrime becoming more sophisticated 
According to the Canadian Anti-Fraud Centre, Canadians lost over $43 million to cybercrime last year. The CSE reported earlier this year that online thieves have been using the COVID-19 pandemic to trick Canadians into forking over their money — through scams like a phishing campaign that claimed to offer access to a Canada Emergency Response Benefit payment in exchange for the target's personal financial details.

Online foreign influence activities — a dominant theme in the CSE's last threat assessment briefing — continue and constitute "a new normal" in international affairs as adversaries seek to influence domestic and international political events, says the agency.

"We assess that, relative to some other countries, Canadians are lower-priority targets for online foreign influence activity," it said.

"However, Canada's media ecosystem is closely intertwined with that of the United States and other allies, which means that when their populations are targeted, Canadians become exposed to online influence as a type of collateral damage."

According to the agency's own definition, "almost certainly" means it is nearly 100 per cent certain in its analysis, while "very likely" means it is 80-90 per cent certain of its conclusions. The CSE says its analysis is based off of a mix of confidential and non-confidential intelligence and sources. 

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