‘Net-zero’ electricity policies promise high costs, scant benefits
It’s no secret that the Trudeau government wants Canada to be “net-zero” by 2050—meaning Canada’s greenhouse gas (GHG) emissions to the atmosphere will be offset by other activities, which will essentially withdraw GHGs from the atmosphere.
Among other things, the government’s plan calls for Canada to replace electricity produced by fossil fuels (currently, about 20 per cent of the overall total) with electricity from other power sources including wind, solar, nuclear, hydro, geothermal and biofuels.
Because just about everyone agrees it would be good to see humanity’s net GHG emissions reduced, this “net-zero” plan may look benign. But it’s not. These new electricity sources, tapped to replace fossil-fuel generation, will be costlier and less reliable. And will still require fossil-fuel generated backup power kept on standby, boosting overall system costs still higher. And given the relatively tiny contribution Canada’s electricity production has on global climate, Canadians will receive no measurable benefit from those higher costs—that is, the changes will not help meaningfully affect climate change nationally or globally.
So basically, Ottawa’s net-zero policies will make energy more expensive for most Canadians and hurt the economic competitiveness of Canadian exports, (which depend on large steady inputs of lower-cost high-reliability electricity) with no discernable environmental benefit.
How do we know this energy will be expensive? Because renewable power (particularly wind and solar) is increasing in cost, partly due to its own successful deployment.
For example, the costs of rare materials needed to create wind turbines and solar panels have risen steadily as the market demands more of those materials, while production of those materials has lagged due in part to other environmental imperatives that make rare mineral extraction more difficult and more costly. This is also true of some not-so-rare materials needed to build giant wind turbines, which require steel, copper and concrete. Finally, inflation and rising transportation costs, partly caused by efforts to suppress GHG emissions, have put even more upward pressure on energy costs.
An recent article in World Oil magazine observed that last year “prices for solar panels have surged more than 50%. Wind turbines are up 13%, and battery prices are rising for the first time ever.” According to research firm Rystad Energy, “Raw materials now account for 70% of the cost of finished [Solar power] modules, leaving suppliers with almost no room to trim expenses.” Adding insult to injury, global shipping costs have also increased.
This dynamic is not much in dispute. Here at home, Canadian Solar, one of the world’s largest panel makers, acknowledged that solar power costs would not decline in the future: “There’s a cost for going green and carbon neutrality.”
So where should we go from here?
Canada’s governments, including the federal government, would do well to scrap their fixation on controlling climate risk through GHG emission reductions and consider more proven ways to protect Canadians from the risks of manmade climate change—whether it’s seen as warming, cooling, drought or flooding—such as increasing the resilience of our infrastructure and production sectors to climate variability. Continuing attempts to control the world’s thermostat via greenhouse gas controls remains a quixotic pursuit that will only leave Canadians worse off.