Members of the committee, thank you for the opportunity to speak with you today.
Energy for a Secure Future is a civil society initiative with two objectives.
First, it seeks to advance a national conversation about Canada's role in the energy security of our allies around the world.
Second, it aims to learn from experience and research on energy system transformation in order to propose a path for Canada to reduce its emissions and preserve prosperity.
In our 2024 report, “Getting Canada’s Energy Future Right: A Consumer Lens on Energy in Canada”, author Michael Cleland examined stationary end use energy in Canada between 2005 and 2022. He also looked at the Canada Energy Regulator's 2023 net-zero scenario and implications for Canada's electricity system and end use energy nationally. I'd like to highlight a few considerations.
First, it is important to have a framework for evaluating the merits of different energy policies and to guide decision-making. Our report suggests the following framework. It has to deliver on energy fundamentals: affordability, reliability, safety, security and resilience. It must have social acceptability—this is a country where Ontario gets 60% of its electricity from nuclear power, whereas in another province, British Columbia, nuclear power generation was banned by legislation in 2010. Finally, the system has to deliver on our environmental goals.
Solving these three together is a challenge, but I would suggest that the shaky support for many climate policies in the country reflects the fact that many of the policies were developed without adequate attention to energy fundamentals, which always reassert themselves.
A second consideration needs to be on the current energy mix in Canada. Today, electricity provides 22% of stationary end use energy. If you include transportation, then it's less than 20%. We're talking about replacing 70% to 80% of the energy currently used in Canada with the CER's combination of new electricity, new fuels and the elimination of about 15% of demand. This is not a fast or low-cost proposition, especially in a country that has taken over 10 years to build a one-gigawatt Site C dam.
A final consideration is how energy is used and the possibilities for substitution.
In Canada, 67% of end use energy is industrial. This includes manufacturing, agriculture, mining, etc. In some provinces, like Alberta, industrial energy use represents 80% of stationary energy end use. Industry's use of energy is what creates jobs, drives our international trade and underpins our quality of life.
Today, the majority of this industrial energy is not electricity—it is refined petroleum products and natural gas. These energy choices are driven by the nature of the industrial activity. Even in the CER's net-zero scenario, natural gas and refined petroleum products still make up a larger share of industrial energy use than electricity. It is worth noting that the increased electricity use and the use of emerging fuels envisioned in that scenario is energy that currently does not exist.
When one examines what the CER proposes for changes to all end use energy in Canada, combined with our other national goals of population growth, re-shoring of manufacturing and becoming a player in AI, then we are talking about the doubling or tripling of our current electricity system and related infrastructure. While this may be theoretically possible to do in 25 years—assuming we overcome issues around availability of skilled labour, material supply chains and regulatory approvals on the required scale—“Who pays?” remains the big question. Both households and businesses will have a limit to their ability to pay. We don't have a lot of good answers on this.
We have a couple of recommendations. Number one, solve for the trilemma. As political decision-makers, you need to answer to the public for energy fundamentals, the acceptability issues and the environment. Number two, start by producing more electricity. We don't have enough electricity today. In 2023, as was mentioned, B.C. was about two Site C dams short. In Quebec, in winter, Hydro-Québec reported that they are about three Site C dams short.
Before we ban natural gas home heating or the internal combustion engine, let's make more power available, see what it takes to do that, see how those costs are absorbed and then keep going.
Finally, the issue is emissions, so let's focus on emissions. We have a lot of gas infrastructure in Canada, and we have pore space for carbon capture. Leveraging existing assets will bend the cost curve and buy us time to build those new systems while preserving energy security and affordability.
Thank you so much.