Scrapping coal-fired electricity costly, ineffective, says report
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Canada Coal Phase-Out Costs highlight Fraser Institute findings on renewable energy, wind and solar integration, grid reliability, natural gas backup, GDP impacts, greenhouse gas emissions reductions, nuclear alternatives, and transmission upgrades across provincial electricity systems.
Key Points
Costs to replace coal with renewables, impacting taxpayers and ratepayers while ensuring grid reliability.
✅ Fraser Institute estimates $16.8B-$33.7B annually for renewables.
✅ Emissions cut from coal phase-out estimated at only 7.4% nationally.
✅ Natural gas backup and grid upgrades drive major cost increases.
Replacing coal-fired electricity with renewable energy will cost Canadian taxpayers and hydro ratepayers up to $33.7 billion annually, with only minor reductions in global greenhouse gas emissions linked to climate change, according to a new study by the Fraser Institute.
The report, Canadian Climate Policy and its Implications for Electricity Grids by University of Victoria economics professor G. Cornelis van Kooten, said replacing coal-fired electricity with wind and solar power would only cut Canada’s annual emissions by 7.4%,
Prime Minister Justin Trudeau’s has promised a reduction of 40%-45% compared to Canada’s 2005 emissions by 2030, and progress toward the 2035 clean electricity goals remains uncertain.
The study says emission cuts would be relatively small because coal accounted for only 9.2% of Canada’s electricity generation in 2017. (According to Natural Resources Canada, that number is lower today at 7.4%).
In 2019, the last year for which federal data are available, Canada’s electricity sector generated 8.4% of emissions nationally — 61.1 million tonnes out of 730 million tonnes.
“Despite what advocates, claim, renewable power — including wind and solar — isn’t free and, as Europe's power crisis lessons suggest, comes with only modest benefits to the environment,” van Kooten said.
“Policy makers should be realistic about the costs of reducing greenhouse gas emissions in Canada, which accounts for less than 2% of emissions worldwide.”
The report says the increased costs of operating the electricity grid across Canada — between $16.8 billion and $33.7 billion annually or 1% to 2% of Canada’s annual GDP — would result from having to retain natural gas, consistent with net-zero regulations allowing some natural gas in limited cases, as a backup to intermittent wind and solar power, which cannot provide baseload power to the electricity grid on demand.
Van Kooten said his cost estimates are conservative because his study “could not account for scenarios where the scale of intermittency turned out worse than indicated in our dataset … the costs associated with the value of land in other alternative uses, the need for added transmission lines, as analyses of greening Ontario's grid costs indicate, environmental and human health costs and the life-cycle costs of using intermittent renewable sources of energy, including costs related to the disposal of hazardous wastes from solar panels and wind turbines.”
If nuclear power was used to replace coal-fired electricity, the study says, costs would drop by half — $8.3 billion to $16.7 billion annually — but that’s unrealistic because of the time it takes to build nuclear plants and public opposition to them.
The study says to achieve the federal government’s target of reducing emissions to 40% to 45% below 2005 levels by 2030 and net-zero emissions by 2050, would require building 30 nuclear power plants before 2030, highlighting Canada’s looming power problem as described by analysts — meaning one plant of 1,000-megawatt capacity coming online every four months between now and 2030.
Alternatively, it would take 28,340 wind turbines, each with 2.5-megawatts capacity, or 1,050 turbines being built every four months, plus the costs of upgrading transmission infrastructure.
Van Kooten said he based his calculations on Alberta, which generates 39.8% of its electricity from coal and the cost of Ontario eliminating coal-fired electricity, even as Ontario electricity getting dirtier in coming years, which generated 25% of its electricity, between 2003 and 2014, replacing it with a combination of natural gas, nuclear and wind and solar power.
According to Natural Resources Canada, Nova Scotia generates 49.9% of its electricity from coal, Saskatchewan 42.9%, and New Brunswick 17.2%.
In 2018, the Trudeau government announced plans to phase-out traditional coal-fired electricity by 2030, though the Stop the Shock campaign seeks to bring back coal power in some regions.
Canada and the U.K. created the “Powering Past Coal Alliance” in 2017, aimed at getting other countries to phase out the use of coal to generate electricity.
