The cost to convert Canadian power grids to 'net-zero' is $1.7 trillion: report

Alberta Premier Danielle Smith renewed her party's warning Wednesday evening on the costs, predicting a 200% to 500% increase in electricity prices.

  • By Alex Dhaliwal
  • July 20, 2023
  • News
The cost to convert Canadian power grids to 'net-zero' is $1.7 trillion: report
Facebook/ Danielle Smith and Scott Moe
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Alberta's UCP forewarned voters in May of the "costly" shift to a "net-zero" electricity grid by 2035. UCP Energy Minister Brian Jean claimed the policy would cost billions and decimate the economy.

Now an independent, third-party report has confirmed those suspicions true. It's far worse than the party initially predicted.

According to a report by the Public Policy Forum (PPF), the cost of the federal government expediting a 'net-zero' electricity transition would exceed the country's entire economic output. It would cost $1.7 trillion, more than the country's expected GDP in 2023. 

In May, the Alberta Electric System Operator (AESO) report estimated the transition for Alberta only would cost between $44 billion and $52 billion over the next decade, with power generation costs exceeding $92.2 billion over the same period.

"It is the most expensive political promise ever made in Alberta history," Jean told reporters on May 3. 

The following day, a reporter asked Smith to clarify the AESO report.

"The report says the [transition] would have a largely negligible impact on GDP growth. What is your response to that?" asked the reporter. Smith replied: "It would result in a cumulative reduction of $35 billion." 

"We have two reports — the AESO report that said we would have to invest $52 billion to get to a net zero power grid, and then Navius [Research]...said it would have a cumulative effect of reducing GDP by $35 billion," she said.

Alberta Premier Danielle Smith renewed her party's warning Wednesday evening on the costs, predicting a 200% to 500% increase in electricity prices following the release of the PPF report.

"Imagine your home or business power bill increasing by 200% — 500% or even more over the next decade. I can't afford that. Can you? Let's bring some logic and reason to this conversation and modernize our grid in an affordable and environmentally responsible manner," she tweeted.

Affordability and Utilities Minister Nathan Neudorf denounced the plan as "one more example of the federal government increasing costs on Alberta families when they can least afford it."

ATCO CEO Nancy Southern called the energy transition "inflationary by nature," claiming it would strain an overburdened system. "[It is] painfully clear that the transition for energy will not be easy, nor will it be cheap." 

Smith and Southern concurred that the solution is "affordable" and "reliable energy." 

Since Alberta started phasing out coal-powered electricity, the province has observed a build-up in their grid's transmission system, prompting increased transmission and distribution costs for power bills. 

The results of the PPF report will worsen the impact on affordability. For each unit of natural gas displacing a unit of coal, emissions fell 50%, it said.

"After people got over this most recent winter season, a lot of the NDP decisions are coming home to roost," claimed Smith in May. "They phased out coal early to natural gas, and billions in stranded costs were worked into ratepayers' bills."

Smith said residents saw their electricity costs skyrocket 40% this past winter. "That's not going to be affordable for people on fixed incomes and everyday families." 

A 2022 Enbridge study pegged the costs for Ontario at $700 billion to achieve 'net-zero' electrification, despite having a 93% 'clean energy' grid. 

Ontario Energy Minister Todd Smith said the province would look into the viability of wind and solar power infrastructure. If approved, he hopes to complete their construction by 2050 to achieve a "100% clean grid."

"Hopefully, the federal government can get on board with our intentions to build this clean generation as quickly as possible," said Todd Smith, adding they hope to lessen their dependence on natural gas moving forward. 

To add context, its energy sector contributes roughly 2% to the province's annual GDP. It would take 100% of its economic output to pull off the transition promptly.

The system operator put the costs for Alberta's transition at $44.1 billion to $57.1 billion by 2041.

"It is not just the scale of change that is breathtaking. It is the pace as well," the report reads.

Between 2010 and 2020, the electricity grid's capacity grew by 13%. The Canadian Energy Regulator said growth needs to triple by 2050, and by as much as six times as fast, added the Canadian Climate Institute. 

"The path ahead involves adding more installed capacity in the next quarter-century than we have in the 101 years since the Adam Beck station began large-scale generation at Niagara Falls," continued the report.

"The unique characteristics of different provinces and the values of affordability and reliability existing alongside a clean grid make it imperative."

Rebel News asked Smith if a re-elected UCP government would consider keeping its coal plants open short-term to keep electricity costs down. She replied: "We are based principally on natural gas, and Saskatchewan is based on a combination of coal and natural gas.

"Alberta is in a different position than Saskatchewan because of a 'very aggressive' transition to natural gas. I understand the last conversions will be finished this year or next."

"Emissions reduction has to happen at the industrial level…but the number one targets [for the UCP] are reliability and affordability," she said.

"To move too quickly, as Europe discovered even before the invasion of Ukraine, is to put consumers and industry at risk," added the forum. 

For Ontario, natural gas is still needed when renewable energy is not available, given it generates about 10% of the province's electricity. Their Tory government said it would keep its nuclear power plants open, which provide the province with nearly 60% of its electricity.

Alberta Canada news Danielle Smith Expose The Reset
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