Natural Resources Committee on May 9th, 2024

[Debbie Scharf]

I don't know if I can answer that question. I think it would depend on the nature of the project.

[Ted Falk, Conservative, Provencher, MB]

It's for the same project, the Keeyask Project.

[Debbie Scharf]

I can't opine on that question. I'm not a regulator.

[Ted Falk, Conservative, Provencher, MB]

Okay.

I'd like to hand over the rest of my time to my colleague from Calgary Centre.

[The Chair, Liberal, George Chahal]

Of course.

Mr. McLean, go ahead.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

Thank you, colleagues.

Thanks for the interesting testimony today. I do have some questions, but first of all, let's acknowledge that energy consumption in Canada is rising, as it is everywhere in the world, and technology consumption is a large part of that. If we're going to have a technological economy going forward, we're going to have to produce more energy, because technology consumes more energy as we continue to deploy more of it.

Really, there are three sources of energy in Canada. There's electricity, which is about 40% of the consumption of energy. There's industrial power, which is mostly natural gas. It's about 30% of the energy consumed in Canada. Then there are motive fuels, which represent the other about 30%. I'm challenged to see how we're going to get, in 11 years, to a grid that does away with natural gas and does away with motive fuels. It effectively loads up the 40% of power with an additional 2.5 times or 1.5 times additional electricity, when we have barely grown electricity at all in the last handful of years. Can you please explain how this equation squares at the end of the day?

[Debbie Scharf]

I can say that the provinces that manage their markets are actively thinking about how they are going to grow generation, transmission and distribution within their grids. I will reference, although not in detail, studies like the IESO in Ontario, which did an energy pathways analysis to understand how they would have to grow which sources of electricity and what types of investments they'd need to make in transmission.

Quebec, of course, has recently done a study that highlights the figures and the investments required. British Columbia recently did one as well, so they're very attuned to that.

If I have the statistic right, between the years 1950 and 2000, the grid in Canada grew by three times. Over the preceding 20 years, there were major investments in decarbonization, and now we're back to expansion.

The utilities and the system operators know how to do this.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

With respect, the grid grew that much, but the consumption of every other source of energy also grew at the same rate. Now we're talking about displacing those energy sources while the power consumption continues to grow in Canada.

You have a bit of a riddle here about how you're going to meet that equation of growing energy demand while supposedly cutting down on the energy sources.

I think those are words in the air. I don't think they actually land for people who are actually looking at putting this equation together, with all due respect. We're talking about a lot of money.

To follow up on what my colleague Mr. Angus said, yes, about 35% of Alberta's capacity is supplied by wind and solar. That has meant a doubling in the cost of consumers' electricity rates in Alberta over the last decade. In addition, those provide only 7% of the energy in Alberta. The other 93% of power comes from hydrocarbons.

Here's a riddle for you. If we're going to have carbon capture, utilization and storage at a place like the Shepard plant in Calgary, it's going to require 30% of the plant's power in order to put the carbon underground. Therefore, we're going to have to expand that plant by 30%. Can you tell me how that's going to work as far as filling the grid goes?

[Drew Leyburne, Assistant Deputy Minister, Department of Natural Resources]

I'm happy to jump in on this one.

I think it's just an extension of what my colleague said: There is going to have to be a rapid increase in the amount of electricity produced. However, one element that hasn't come through as clearly, which I can emphasize, is that there's a lot more work to be done on energy efficiency and producing the technologies—

[Greg McLean, Conservative, Calgary Centre, AB]

Okay, so there has to be a lot more electricity produced. Where, in the equation that we have on the table in front of us, in Canada is that electricity going to come from? I don't see any sites coming up. Site C is already spoken for. Muskrat Falls is an economic boondoggle. It's 28.5¢ per kilowatt hour and grossly subsidized by two levels of government. Where are we going? Where is this power going to come from?

[The Chair, Liberal, George Chahal]

Mr. McLean, we have to stop there because your time is up, but you can continue on that line of questioning on the next opportunity you get.

I will go over to Mr. Jowhari for five minutes. The floor is yours, sir.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Thank you to the officials for being here today.

Madam Scharf, you talk about a one and a half to three times growth of the electricity that we need. You talk about the timeline of 25 years. We are nearly at 2025. Our target is 2050, and you said that we are well on our path of decarbonization. There are still some challenges, but we'll see a light at the end.

However, when it comes to growth challenges and capacity building, I would like to get an understanding: As a federal government, do we have a 25-year road map showing threefold growth that is going to come from these sources of energy by jurisdiction?

I commend the government for rolling out a lot of programs, which, to me, are a lot of project-based programs. However, I think the fundamental foreign investments needed are only secured when we have a solid road map so that we can clearly demonstrate that regardless of this new program that's rolled out, whether it's over two years or three years, Canada has a solid road map for doubling or tripling its energy sources, from generation to transmission to distribution, and is really focusing on building that infrastructure, whether it's on storage or distribution.

Do we have something like that?

[Debbie Scharf]

At the federal level, there was modelling done, for example, with the Canada Energy Regulator's energy futures report, which was released in 2023—there will be another one coming next year—and which provided insights into how much an electricity system may grow by 2050, given the decarbonization of the economy and what some of those sources might be.

Ultimately, though, it is the decision of the provinces to decide what generation they are going to build and what the inflection points will be. As a federal official, I would be very happy if every province were engaged in that type of energy planning and the development of those types of energy road maps. We've seen them starting to emerge, and I'm going to refer back to Ontario, Quebec and British Columbia, which have now done that.

To the previous member's comment, the Province of Ontario, for example, noted the need for 18,000 megawatts of new nuclear required by 2050, and then turned around very shortly afterwards and announced 4,800 new megawatts at the Bruce Power site, which was in direct reflection of the fact that they understood they were going to need that power.

However, you need to do the road maps and the planning, and the provinces are starting to move in that direction. We'd be very happy, at the federal level, to see each and every one of them do that.

[Majid Jowhari, Liberal, Richmond Hill, ON]

You talk about the federal government convening power. Is there anything planned for us to play that role, to sit down and say that as a country we have to come together, whether it's building that infrastructure or breaking some of the intraprovincial and interprovincial barriers to really have that road map?

I strongly believe that for us to get what we need and also account for some extra that we're going to need as a result of other technological advancements that we need, we really need to have that road map.

Really, when are we going to use that convening power to do this?

[Debbie Scharf]

I'll mention once again that we do have our clean electricity advisory council, which is just about to finish its year of work and produce a report with quite a number of recommendations that I think are going to help catalyze that conversation even further. Once again, I think that its work will be very useful for this committee's study, and the work is likely going to be completed in the next month.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I have about 45 seconds.

I personally welcome that report.

Can you give me an order-of-magnitude amount of dollar investment that will be needed to get our capacity built? Just at a high level, we talked about two to three times and we talked about 25 years. Give me a dollar value.

[Michael Paunescu, Director, Renewable and Electrical Energy, Department of Natural Resources]

Thanks for the question.

There are a number of recent studies putting the number in the range of $1 trillion to $2 trillion by 2050, split between generation, transmission and distribution assets.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I'm sorry. How much was it?

[Michael Paunescu]

It's $1 trillion to $2 trillion. It's a range.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay, good. Thank you.

Thank you, Mr. Chair.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now move to Mr. McLean for five minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you once again.

Following up on my last question about two-and-a-half times more electricity in Canada within 11 years, can anybody tell me where that's going to come from?

[Mark Cauchi]

I'll jump in quickly.

You said within 11 years, but that statistic is more like a 2050 horizon, or at least that's what I think the Canada Energy Regulator is looking at. It's more of a long-term demand requirement of two to three times more electricity. That accords, of course, with population growth, economic growth and increased consumer demand, as the member rightly pointed out.

[Greg McLean, Conservative, Calgary Centre, AB]

Okay. Thank you.

Are there any sites being developed now to produce electricity on a large scale?

[Mark Cauchi]

I think there are several sites under development across jurisdictions.