Natural Resources Committee on Sept. 25th, 2024

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

I'll direct this question to Ms. Joseph.

We made the transition from coal to gas, and there was a lot of effort to make sure that happened, but then the government and other groups started moving the goalposts, so now we have to get rid of gas. We have to go back to these other areas.

You talked about the need for four more Site C dams if we wish to come anywhere close. I don't imagine building dams in Canada is any easier to get through for folks than building more gas plants. I think that's one of the problems.

Of course, if you also look at the doubling and tripling of the infrastructure that is required.... We're talking right now about how you can transfer it across provinces and how you can get the energy from one spot to the other, but then you are also talking about how you're going to get it into communities and into homes. We've heard people talk about the doubling or tripling of the costs that will be required to make that happen. The big question becomes who pays.

Right now, we're demonizing big oil. Eventually, it will be big wind and it will be big sun. There will be billions of dollars being made in that industry, so they are going to be the ones paying. They're also going to be the ones filling their pockets with a lot of money from this.

I wonder if you could talk about how we can transition through this in a logical fashion so that we can assist in getting electrification to where it needs to be, but stop this demonizing of what we have and the idea that the only way you'll ever get things to happen is if you cut out oil and gas.

[Shannon Joseph]

Thank you.

I would echo the comments made by Ms. Collins about really trying to respect the provinces and letting them lead the approach to transforming electricity systems. They have the strongest sense of where they're starting from and what some of the local lessons learned have been.

When I hear, “We have to electrify everything as soon as possible”, there's a real risk of asymmetry between the load going up and the supply not being available to meet it. I'll give the example of Hydro-Québec. It's announced plans to spend between $152 billion and $185 billion to enhance its electricity system. Somebody has to pay for that. Multiply that across the country and it's very significant.

Again, for the current needs we have and the current end use we have, we don't have enough electricity. We need to start building more, absorbing those costs and taking further steps.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

One of the other things you've also spoken of is the stationary end use that is required. This is where you generally have an industry that is compact, and then it's easy to move that energy around.

One of the options, of course, is small modular reactors. There again, you're going to find the same group of people who don't like anything else and who are also going to be against that, so that again becomes one of the issues. We need to have industry; that's the thing that is going to pay for all of these things. There has to be a balance.

How do you think governments can look at that balance? Somewhere along the line, you have to simply say to those who don't want to see any development other than.... I'm curious as to how they think it's going to work. How is that going to come to fruition?

[Shannon Joseph]

The CER estimates that we need to get from 152 gigawatts of capacity to 350 gigawatts. This is massive.

Again, if we are not able to manage how those costs pour out to either the ratepayer or the taxpayer, we're going to have serious competitiveness issues, because those things have to be paid for, assuming we have the labour, etc. Sequencing these things and having them locally driven, and allowing the provinces to work with industry and with communities, mayors and municipalities on how to pace things, I think is going to be vitally important.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now proceed to Mr. Jowhari for six minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

I'd like to welcome all our witnesses, both online and in person here.

Thank you for focusing on this.

I'm going to start my line of questioning with Clean Energy Canada.

I want to point to a report that came out in February 2023 entitled “A Renewables Powerhouse”. It says, “New research finds that wind and solar power with battery storage is set to produce cheaper electricity than natural gas in Alberta and Ontario”.

In your opening remarks, Mr. Pivnick, I think you briefly touched on the potential. Currently, it's cheaper, but it's going to go down further. Can you quickly touch on that before I go to some recommendations that I'm trying to get clarification on?

[Evan Pivnick]

Absolutely. I think this report came about because when we look around the world, wind and solar are by far the cheapest way that you can generate electricity today. Our premise was, how can we maximize that role? That starts with understanding what those costs are here in Canada. Right now, we're heavily reliant on studies out of the U.S. to tell us what the capital costs are and what the operating costs are.

In this study, looking at Ontario and Alberta, where we have seen significant renewable development, we went in and said, let's go talk to companies, look at the research and build Canadian-based cost estimates for what this costs us, so we can have an informed conversation about how we can get renewables to play as much of a role as they will be.

Most studies point, in a net-zero Canada, to 30% to 40% that could be coming from renewables. How do we ensure we're able to achieve this? How do we ensure we can maximize the role of the cheapest way we can generate electricity, especially, as others have pointed out, as we have a very significant build-out to occur in a short period of time?

[Majid Jowhari, Liberal, Richmond Hill, ON]

With 30% to 40% coming from renewables—and the leading renewables naturally are solar and wind—what is the pricing? How do you see that price as compared to that of gas, let's say?

[Evan Pivnick]

In every single jurisdiction, you're going to have slightly different prices. Right now, you're looking at wind and solar being able to come in at somewhere between 5¢ and 10¢ per kilowatt hour. When you look at natural gas, again, it's probably up into.... Certainly, natural gas at times can be around the same price or upwards, above 10¢ into 15¢.

When we look at the full picture, though, we're talking about needing a full suite of options available to us. Renewables are where we need to start. We need to think about how we can maximize the cheapest available, and then look at how we address the other pieces, because reliability and security.... This is the only way this build-out is going to work.

[Majid Jowhari, Liberal, Richmond Hill, ON]

The way I understood it, Ms. Joseph talked about how we need to look at gas as a bridge until we figure out many other things, including skills and having the right skill set, having the right investment and having the right model for being able to finance all of this. What are your thoughts on that?

Ms. Joseph, do you want to answer that?

[Shannon Joseph]

Reports have come out on this. Basically, infrastructure you don't have to build is free. We have a lot of infrastructure that can be leveraged, such as gas infrastructure into which you could blend hydrogen and other things. At least you have something delivering while you're building up lots of additional capacity needed on the electricity side. If you can use this while you do something else, it lowers the cost, because you didn't have to build something else. That's what I mean.

[Majid Jowhari, Liberal, Richmond Hill, ON]

To me, that's a bridging.

[Shannon Joseph]

Sure.

[Majid Jowhari, Liberal, Richmond Hill, ON]

There's an aspect to this that at some point, once you build that capacity, it needs decommissioning. Then you're left with a certain asset.

What are your thoughts on that?

[Shannon Joseph]

As long as you can deliver on your energy fundamentals.... Those systems will be decommissioned when the new system can deliver what it's supposed to.

There's a long road there. As I said, the CER says it's a 130% increase in our electricity. We're just starting.

[Majid Jowhari, Liberal, Richmond Hill, ON]

You're suggesting the timing would be such that, when we start to commission, we are sunsetting some of the others.

[Shannon Joseph]

The sequencing of that will be determined by the utilities, which are responsible for safety.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I'll go back to Clean Energy Canada.

I believe you had four recommendations in your report. I'd like to focus on the second recommendation, which specifically talks about sending the right signal and creating policy certainty. I want to touch on policy certainty and get your point of view. I think Dr. Collins also touched on the need for policy certainty. Can you share what you mean by “policy certainty” and what we can do, specifically, as a recommendation? Think about this: At the end of this study, we're going to put forward recommendations, and one of those recommendations has to be policy certainty. What would that look like?

[Evan Pivnick]

Certainty, especially with the scale of investment we're talking about, is absolutely essential. That's everything from the investment and fiscal instruments the federal government uses to the regulations it sends. We need clear, proactive publication of those when it comes to ITCs, making sure the rules are clear so everyone knows exactly what's required in order to make sure capital can move. When it comes to pollution regulations, make sure the details are clear, well developed and flexible to meet jurisdictions. More than anything else, be clear about where we're going.

The clearest one, from a signal perspective, is what we see from provinces. Almost every province in the country has set net zero as a clear target. That provides an anchor for where we need to go. That certainty is essential.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now go to Mr. Simard for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

I think Ms. Collins has left—I don't see her anymore—but I would like to comment on something she said.

She said that there is currently no Canada-wide electricity grid and that, in any case, it is a provincial responsibility.

I completely agree with her. That said, if that responsibility applies to electrical grids, then presumably it also applies to pipeline networks. For example, a province can decide not to run pipelines through its territory. You may have heard that the Conservatives are trying to reach an agreement to build a pipeline extending to Quebec. If a pipeline can be rejected, I think the same logic applies.

Could we have a quick comment from Ms. Collins on that?

[The Chair, Liberal, George Chahal]

Mr. Simard, we've had some technical difficulties with Ms. Collins.

[Mario Simard, Bloc, Jonquière, QC]

She can get back to us in writing.

[The Chair, Liberal, George Chahal]

Ms. Collins, can you note any questions you get? Then you can provide a written response to the committee on that specific question.

Thank you.