In 2012, Conservative Prime Minister Stephen Harper implemented a federal coal regulation with a mandate of phasing out the fossil fuel from provincial electricity mixes by 2061. Fast forward to today and 7/10 provinces are coal free with the remaining coal burning provinces on track to be off coal by 2030 — three decades earlier than Harper’s original timeline.
As the current federal government is working to implement a similar, but more flexible regulation for phasing down emissions from gas on provincial grids, it’s worth revisiting Harper’s 2012 coal phaseout mandate. Then, as now, provinces argued against the feasibility of phasing out coal. But Ontario dusted off its coal covered hands and got to work, becoming the first province to phaseout coal in 2015 and showing other provinces it could be done. Most recently, Alberta repowered its last coal plant and joined the ranks of Canada’s coal free provinces.
The coal regulations have been an important tool, offering policy certainty to provinces and providing direction for electricity grid development decisions. It has also provided investment certainty to industry and business.
The federal Clean Electricity Regulations (CER) currently under development offer a similar certainty to provinces, industry, business and utilities. Like the coal regulations, the CER defines timelines for emissions reductions from gas-fired electricity but will do so with important flexibilities. Rapid and significant declines in the cost of wind, solar and batteries, paired with a rising carbon price, is already driving investment away from fossil fuel power generation and toward cleaner sources of power. However, even as gas use declines, flexibilities granted under the CER will allow for it to continue to play a role in maintaining the reliability of a 21st Century electricity grid and economy.
The CER is one of many tools in Canada and the provinces' repertoire. Aside from market forces that often favor renewables investment, large emitter trading systems offer another major source of incentives for electricity emissions reductions. Research shows those systems will do most of the heavy lifting to encourage provinces to reduce electricity emissions. But incentives alone leave the timing of those emission reductions uncertain. That’s where the CER comes in.
It is imperative that Canada implements the CER to avoid the costly lock-in of gas-fired electricity emissions and further environmental and health consequences from burning fossil fuels. Doing so with a flexible approach (and following years of consultation), means environmental objectives can be balanced with reliability and affordability needs while simultaneously growing a clean electricity portfolio that attracts investment.
The goal of the CER is not, and never has been, to outright ban fossil fuel power generation in Canada. Rather, it seeks to provide certainty around the timelines of emission reductions and investment needs. Market forces are already demonstrating the cost competitiveness of wind, solar and batteries relative to fossil fuels. Added certainty will help ensure grid planning and modernization efforts align with the inevitable transition to cleaner sources of power, with consumers benefitting from the reliable, lower cost electricity.
Our electricity needs are changing, and Canada and the provinces need to work towards modernizing their grids. Clean electricity offers multiple co-benefits for industry, Canadians and the environments and is the cornerstone of a clean economy. If we want to remain competitive in a low-carbon world, we must decarbonize our electricity sector. And regulations can help us get there sooner, rather than later.
