Analysis: Mission possible? Power companies more hopeful of Trudeau climate goal than Alberta premier
03/08/2023 11:00
By Rod Nickel
WINNIPEG, Manitoba, Aug 3 (Reuters) - Prime Minister
Justin Trudeau is aiming to turn Canada's power grid net-zero by
2035, a goal that the premier of oil and gas-producing Alberta
says she will defy, charging it is unrealistic before 2050.
But power-generating companies in the country's highest
greenhouse gas-emitting province are more optimistic and say
they are looking to eliminate or offset direct emissions well
ahead of Alberta's target, even if they are not committing to
Trudeau's either.
Progress in Alberta is critical to Trudeau's chances of
electrifying Canada's vehicles and buildings with clean power,
the backbone of global efforts to reduce dependence on fossil
fuels and slow climate change. Ottawa plans to unveil
regulations this summer forcing power generators to move to
net-zero.
Alberta, which generates the third-most electricity among
provinces, produced half of Canada's emissions from generation
in 2020. Trudeau's goal of a national net-zero grid by 2035 is a
stretch in Alberta since the province burns natural gas for most
power.
But executives at Alberta power generators TransAlta TA.TO
and Heartland Generation told Reuters they may come close to
net-zero by 2035.
Capital Power CPX.TO may reach neutrality by 2045, its CEO
said, which would miss Trudeau's goal, but would achieve
net-zero five years earlier than Alberta Premier Danielle
Smith's 2050 target.
"I'm optimistic that we're going to get close for 2035,"
said Shana Boyd, Heartland's vice president of energy
transition, which currently produces all of its electricity from
burning natural gas. "It's going to require a lot of work and a
lot of pieces to fall into place."
For Heartland, reaching net-zero depends on how quickly it
can build and replicate facilities that use hydrogen to produce
electricity and sequester the carbon, Boyd said. It is planning
a final decision on its first such facility next year.
Heartland first needs policy to ensure the monetary value of
carbon remains attractive beyond any future change in federal
government, Boyd said. Trudeau's government is working with
industry on a mechanism to do that, called a contract for
differences.
Alberta requires an aggressive build-out of renewables,
including battery storage to address the intermittency of wind
and solar, to reach net-zero by 2035, TransAlta CEO John
Kousinioris said.
Regulatory agencies will need to speed up permitting, he
said.
"We can get close and I think the industry here is pretty
determined to see decarbonization occur while balancing
affordability and reliability," he said, adding that tens of
billions of investment dollars are needed.
Capital Power CEO Avik Dey said net zero is unrealistic by
2035 without compromising the grid's reliability. The company is
aiming for net-zero by 2045, a goal that depends on building
carbon capture for natural gas plants that provide base-load
power, offsets and longer-term, direct air capture to remove
carbon from the atmosphere.
"There's going to be parts of that grid that you just can't
decarbonize until you bring other technologies up," he said,
citing the example of small modular nuclear reactors.
Over 80% of Canada's electricity already comes from
non-emitting sources.
Alberta's premier, Smith, has vowed to oppose Trudeau's 2035
goal.
"We cannot support regulations that set unreachable targets
and unfeasible approaches for reaching net-zero by 2035," said
Andrea Farmer, spokesperson for Alberta's utilities minister.
Federal Natural Resources Minister Jonathan Wilkinson
expressed optimism, saying that Alberta has moved faster on
cutting grid emissions than any other province by nearly
eliminating coal-burning power.
A net-zero grid by 2035 looks feasible, said Grant Arnold,
CEO of wind and solar generator BluEarth Renewables.
"We've lived this change and see how fast it can go."
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(Reporting by Rod Nickel in Winnipeg, Manitoba
Additional reporting by Steve Scherer in Ottawa
Editing by Denny Thomas and Matthew Lewis)
((rod.nickel@tr.com; Twitter: @RodNickel_Rtrs;))