Natural Resources Committee on Oct. 7th, 2024

[Scott MacDougall]

Yes, since the moratorium was announced, which I think was the trigger for the sort of chill in investments, we found that there was an initial surge of applications in Alberta for renewables projects trying to get grandfathered under prior rules, but since then, about 55 projects announced cancellations. When you turn that into a rate based on the number of projects in the queue, that's a record high level of cancellations. It worked out, if memory serves, to about $33 billion in potential investment.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thirty-three billion dollars was lost.

We were certainly talking to people who were saying they were taking their money stateside, but are there other provinces stepping in to take what would have been the Alberta advantage?

[Scott MacDougall]

Yes. Looking at British Columbia, for example, B.C. Hydro's call for renewable projects in general saw three times more energy proposals being brought forward than what they were looking for. That was fairly successful.

Quebec just announced 1.5 gigawatts of wind projects that were successful in their recent call.

In the period since the moratorium was triggered in Alberta, if you look at the United States compared to Alberta—you have to scale for the population size, the U.S. being about 100 times bigger than Alberta—you see that they saw 10,000 times more investments in renewables than Alberta did.

[Charlie Angus, NDP, Timmins—James Bay, ON]

We've heard from some witnesses here that, if we invest in clean energy, we're going to be stuck with rotating brownouts.

Alberta couldn't keep the lights on in January. Was that because of clean energy?

[Scott MacDougall]

No, that was primarily record-high demand.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm wondering, because Quebec hydroelectricity is seven cents a kilowatt-hour; Manitoba, 10¢ a kilowatt-hour; British Columbia, 11¢ a kilowatt-hour; Ontario, 14¢ a kilowatt-hour; and Alberta, 26¢ a kilowatt-hour. People are paying an awful lot of money, yet they couldn't keep the power on with natural gas.

I question the Alberta advantage here and the lack of vision. We see Texas now—40% of its energy is being generated through clean energy with huge cost savings for families. Are we just missing the boat here?

[Scott MacDougall]

Yes, I think so. That's one of the reasons we're working on a jurisdiction scan, because I think we lose track of what's going on in other places.

Alberta went from 5% to 18% in 10 years on renewable energy on the grid. In the same period, California went from 13% to 36%. Texas went from 12% to 36%, and Ireland, 25% to 42%. I can go on, but there—

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm going to switch to Mr. Kabbara on that same point.

What we've heard from some of our witnesses is that, if we invest in renewables, we're going to chase away all our heavy industry and the end of the world is going to come—and the frogs and the locusts and stuff.

California, which is moving towards 100% renewable, has an economy that's 1.7 times greater than Canada's. A lot of that's being driven now by the battery revolution. Is it just too difficult for Canada to compete?

If California, in five years, increased their battery storage capacity 10 times, are we just ragging the puck here?

[Moe Kabbara]

The battery industry and the investment attraction that we've done in Canada for the battery sector highlight the importance of transforming the auto sector here in Canada, essentially in southern Ontario.

Including additional types of generation to ensure reliability and affordability, including batteries for firming up capacity, is something that we're seeing in all jurisdictions. That definitely comes with a cost. We need to recognize that. We need to be very clear about the additional costs. When we're looking at wind without batteries, it's much cheaper. If we want to add firm capacity, it will increase the cost.

One thing that is happening is that we're seeing a level of innovation happening in battery technology that is quite fast relative to other types of technology. That's mainly because batteries are modular, and there's an economy of scale that happens that you can't really get with large, one-off projects. Investing in battery innovation, specifically grid battery innovation, is going to be critical to ensuring we can still provide clean but also affordable electricity.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you very much.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Angus.

We'll now go to Mr. Falk for five minutes.

[Ted Falk, Conservative, Provencher, MB]

Thank you very much.

Thank you to all of our witnesses for their presentations.

Mr. Kabbara, I'd like to start with you. You just made a comment that wind on its own is pretty cheap, but if you put it in combination with battery storage it significantly increases. How much does that cost increase with wind and battery?

[Moe Kabbara]

There's no single number. It really depends on the system level. Definitely, we need to ensure that, when we're talking about the cost of wind or the cost of solar, we're differentiating that from wind plus batteries.

[Ted Falk, Conservative, Provencher, MB]

At today's cost for producing batteries and storing energy in batteries, what does it cost? How much does it add to the cost?

[Moe Kabbara]

I can't give you a single number. It really depends on the type of system that you're operating on.

[Ted Falk, Conservative, Provencher, MB]

Is it a lot, a little? Does it double the cost?

[Moe Kabbara]

It does not double the cost.

[Ted Falk, Conservative, Provencher, MB]

It doesn't double it.

[Moe Kabbara]

It depends. It's somewhere in between 20% to 50%.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Dr. Exner-Pirot, thank you for your comments.

I'm looking at the brief that you submitted here. You indicated that, in 2014, there were 223 projects, and that has dropped now to 182 projects in the construction of electricity production. Is that because projects have been completed, or is there another reason for that drop?

[Dr. Heather Exner-Pirot]

There were probably multiple reasons, and I think that Electricity Canada has a pretty good brief on some of the headwinds facing them.

I think one is that, again, the cheapest hydroelectricity or the best hydroelectricity resources have been exhausted, so we aren't building as much hydroelectricity as we used to. There was quite a sharp decline in hydroelectricity. Nuclear also faced some headwinds, so there were not a lot of nuclear builds, but that's increasing. That is one bright spot, I would say, in Canada's electricity grid right now: the refurbishments in Ontario.

Also, there are permitting and transmission costs. All those kinds of things have provided headwinds. As well, there was probably more industrial demand in 2014. That was a period of relative economic boom in Canada. There was a significant heavy industry, with a lot of build-out, for example, in the oil sands, and that has decreased over the last 10 years.

It's some combination of all those factors.

[Ted Falk, Conservative, Provencher, MB]

When you look at Canada's electricity grid and consider the two different components of it, one in electricity generation and the other in electricity transmission, where do you see that the focus should be today?

[Dr. Heather Exner-Pirot]

Again, one part that I think is often missing from our discussions on Canada's electricity grid and energy systems is independence—energy security independence. There is certainly a role for solar and wind. In a sunny place like Texas or California, solar is good.

We've already seen the Government of Canada—and this has happened with bipartisan support—place tariffs on Chinese wind turbines, on Chinese solar panels, on Chinese electric vehicles, and probably on some battery components and critical minerals coming up. The United States has already done that.

Seeing where the puck is going geopolitically and wanting to make sure that we are insulated and drawing on our strengths.... Canada has tremendous strengths. We have very rich deposits of uranium. Our nuclear supply chain is almost fully domestic. We have incredible natural gas. If we can get carbon capture prices down, then natural gas will become extremely competitive also. We need to play to our strengths rather than rely on global supply chains, which are highly vulnerable.

[Ted Falk, Conservative, Provencher, MB]

I'm wondering whether you have done an analysis on the cost of production, taking into consideration both the capital costs and the operating costs of the different sources of electricity. Do you have a scale on what types of energy costs, what amount...?

I understand that there are some geographical differences, but when you look at Canada as a whole, do you have a chart that would show the different costs of production, including the capital costs, between coal, gas, wind turbine, hydroelectricity and nuclear?

[Dr. Heather Exner-Pirot]

I do. The Macdonald-Laurier Institute recently commissioned a paper from Edgardo Sepulveda, an economist in Ontario. It is focuses on Ontario, but the nice thing about Ontario—it's great—is that it is very diversified. It has all these different sources.

There is a chart. They're looking at the different costs of different kinds of electricity. Certainly, hydro is very cheap. Nuclear is the next cheapest, then gas, then wind and then solar. Looking at the costs being paid today—