implications of climate change initiatives on the ... · table prepared by the library of...
TRANSCRIPT
-
Implications of Climate Change Initiatives on the Electricity Sector
May 8, 2017Devin McCarthyVP Public Affairs & U.S. Policy
-
CEA’s Corporate Utility Members
Page 2
-
CEA Corporate Partners Program Membership
Page 3
http://www.pwc.com/gx/en/index.jhtml?ld=nohttps://www.itron.com/http://www.hatch.ca/
-
CEA Corporate Partners Program Membership
Page 4
http://www.alstom.com/Home/http://www.ge.com/ca/en/http://www.amec.com/http://www.aeso.ca/index.htmlhttp://www.landisgyr.com/en/pub/home.cfm
-
CEA Corporate Partners Program Membership
Page 5
-
Context Setting
Page 6
• Clean energy is the future and electricity is Canada’s clean energy solution
• Electricity mix already over 80% non-emitting Second largest producer of hydroelectricity in the world Tremendous clean resource potential found across the
country The sector has reduced emissions by over 30% since 2005
• Canada must achieve GHG emission reductions while maintaining industrial competitiveness and affordability for families
• Electrification represents significant opportunity for the electricity sector; not without its challenges
-
Canada’s GHG Emission Trajectory
Page 7
-
Emission Projections by Sector
Page 8
2005 2014 2020 2030Oil & Gas 159 192 201 233Electricity 118 78 64 34Transportation 171 171 168 157Emissions Intensive and Trade Exposed Industries
88 76 85 97
Buildings 85 87 89 94Agriculture 70 73 72 74Waste & Others 56 54 51 53
Total 747 732 731 742Emission Target 523Difference (219)
Table prepared by the Library of Parliament using data obtained from Environment and Climate Change Canada, Canada’s 2016 Greenhouse Gas Emissions Reference Case. Note: Includes new federal, provincial and territorial government measures that have legislative or funding certainty as of 1 November, 2016.
-
Pan-Canadian Climate Framework GHG Emission Reduction Plan
Page 9
-
Electricity Sector Initiatives
Page 10
• Phase out of conventional coal assets• Pricing carbon• Electrification• Federal funding mechanisms to support
infrastructure investment and innovation
-
Electricity Generation in Canada by Fuel Type, 2015 (Utilities & Industry)
Page 11
*Numbers may not sum to 100 percent due to rounding.Source: Statistics Canada, CANSIM Table 127-0007, 127-0006, 2015
Retrieved November, 2016
Chart1
Hydro
Nuclear
Steam from Waste Heat
Wind
Solar & Tidal
Coal
Diesel & Oils
Natural Gas
0
0
Total Electricity Generated by Utilities & Industry in Canada, 2015 = 631.7 TWh
Generation Amount
Steam from Waste Heat 0.1%
373844826
95682425
7528839
17112276
356992
61628555
3477224
38468971
Sheet1
Generation TypeGeneration Amount
Hydro373,844,826
Nuclear95,682,425
Steam from Waste Heat7,528,839
Wind17,112,276
Solar & Tidal356,992
Coal61,628,555
Diesel & Oils3,477,224
Natural Gas38468971
retrieved April 22. 2013
To resize chart data range, drag lower right corner of range.
-
Electricity Generation in Canada by Province and Fuel Type, 2015 (Utilities & Industry)
Page 12
Total Electricity Generation in Canada, 2015 = 631.68 TWh
Source: Statistics Canada, Electric power generation, by class of electricity producer, annual (CANSIM Table 127-0007), 2015
Retrieved October, 2016
82.769.9
36.314
41.9
0.9
153
10.2
199
23.4
*Point Lepreau nuclear generating station resumed power production on November 23, 2012, nuclear has been re-established as a major source (about 30%) of electricity in New Brunswick.
Chart1
BCBCBCBCBCBC
ABABABABABAB
SKSKSKSKSKSK
MBMBMBMBMBMB
ONONONONONON
QCQCQCQCQCQC
NB*NB*NB*NB*NB*NB*
NSNSNSNSNSNS
PEIPEIPEIPEIPEIPEI
NFLDNFLDNFLDNFLDNFLDNFLD
Hydro
Total Combustibles
Nuclear
Wind
Tidal
Solar
Generation (TWh)
60.3
5.8
0
1.53
0
0.03
1.73
75.43
0
4.1
0
0
3.425
19.4
0
0.62
0
0
34.8
0.44
0
1.1
0
0
35.2
19.62
91.41
5
0
0.3
194.55
1.4
0
2
0
0
2.61
6.1
4.27
1
0
0
1.2
8.4
0
0.08
0.012
0
0
0.09
0
0.83
0
0
39.69
1.9
0
0.28
0
0
Sheet1
2014BCABSKMBONQCNB*NSPEINFLDYukonNWT
Hydro60.301.733.4334.8035.20194.552.611.200.0039.694.201.60
Nuclear0.000.000.000.0091.410.004.270.000.000.000.000.00
Total Combustibles5.8075.4319.400.4419.621.406.108.400.091.900.257.40
Wind1.534.100.621.105.002.001.000.080.830.280.070.30
Tidal0.000.000.000.000.000.000.000.010.000.000.00
Solar0.030.000.000.000.300.000.000.000.000.000.000.14
69.8382.6523.4336.27153.02197.9714.0010.220.8441.864.489.62
-
Implications for Electricity Sector
Page 13
• October 2016 report by EDC Associates put a price tag of $4 billion to $8 billion on 2030 coal phase-out in Alberta
• Many variables still at play: Equivalency agreements in SK, NB, NS Coal-to-gas conversions
• Provincial flexibility is key to constraining costs
-
Electricity Prices in Ontario
Page 14
-
Carbon Price Impacts (back-of-the-envelope)
Page 15
78 MT (2014) 64 MT (2020) 34 MT (2030)$10 $780 $640 $340$20 $1,560 $1,280 $680$30 $2,340 $1,920 $1,020$40 $3,120 $2,560 $1,360$50 $3,900 $3,200 $1,700$75 $5,850 $4,800 $2,550$100 $7,800 $6,400 $3,400$150 $11,700 $9,600 $5,100$200 $15,600 $12,800 $6,800
Electricity sector carbon costs at various pricing and emission levels ($ million)
-
Carbon Price Cost Impacts
Page 16
• Very difficult to model due to investment and dispatch decision impacts, plus offset market availability
• Modest costs nationally: $2B in 2020 on 650 TWh is about $0.003 per KWh
• Regional impacts more significant. • Canadian Manufacturers and Exporters
report from August 2016 projects a 15% rate increase for NS on carbon price of $30
-
Energy Use by Fuel Type, 2013
Page 17
*Other includes coke, coal, coke oven gas, natural gas liquids and steam and waste.
-
Deep Decarbonization Report
• Published by the Low Carbon Pathways Group of CMC
• Part of a 16-nation decarbonization pathways study led by Jeffrey Sachs, Columbia University
• “Low-emitting electricity captures a much larger share of total energy use across the entire economy and provides a low-cost fuel-switching path for currently fossil fuel-based end uses.”
• Investment per year in the electricity sector increases by $13.5 billion
Page 18
-
Electrification Abatement by Sector and Action
Page 19 Source: Pathways to Deep Decarbonization in Canada, CMC, 2015
-
Federal Support to Help Mitigate Impacts of Transition to Cleaner Energy Systems
Page 20
-
The Canada Infrastructure Bank (CIB)• Description: Will be an arms-length
crown corporation responsible for investing in large infrastructure projects that result in economic growth and attract private investment.
• Funding: Responsible for investing an eventual $35 billion. $20 billion will be available for equity investments and for loans. Has been capitalized immediately with $15 billion, spread evenly over the following buckets:
• Transport ($5 billion)• Green Infrastructure ($5 billion)• Trade and Transport ($5 billion)
*Funding be released in stages until 2028
Page 21
*Legislation being reviewed by the Standing Committee on Finance (review will be done by mid-June)
-
CIB Contd.• Funding Mechanisms: Will be granted via
a competitive process, and will allow for various forms of support, including:
• Direct Investment• Loans (including low-cost loans)• Loan Guarantees• Equity Investments• Hybrids of all the above
• Eligibility: TBD; initial conversations indicate that projects must have a private investor and be revenue generating assets. Transmission projects, and specifically “green energy transmission” and“electricity grid interconnections”.
• Timeline: TBD
Page 22
From left to right: Minister Morneau (Finance), Minister Sohi (Infrastructure), Mr. Boissonnault (MP for Edmonton Centre)
-
Integrated Bilateral Agreements (IBAs)with Provinces and Territories• Description: As part of the government’s infrastructure build-out ~32.7
billion has been set aside for integrated bilateral agreements (IBAs) with provinces. This funding is being released in a number of phases, with four funding “buckets” established for the current Phase II. Money will flow until 2028.
• Funding: The four buckets that have received funding are: Public Transit (~$20.1 billion) Rural and Northern Communities ($2 billion) Green Infrastructure (~$9.2 billion) Social Infrastructure (~$1.3 billion)
• Funding Mechanisms: The Rural and Northern Communities ($2 billion) and Green Infrastructure (~$9.2 billion) are of greatest interest to the electricity industry. Each Province/Territory will receive an allocation of funding. Provinces/Territories are to prioritize projects submitted to them.
Page 23
-
IBAs Contd.• Funding Mechanisms (Contd.):
IBAs can fund up to 30% of projects put forward by municipalities, up to 50% of those by provinces, and up to 75% of those by territories.
• Eligibility: You must submit your projects to the department in your province/territory responsible for overseeing infrastructure lists. If unsure of department, contact CEA and we can connect (usually infrastructure).
• Timeline: Submit projects to your provincial/territory ASAP. Money for Phase II will flow as early as 2018-2019.
Page 24
Phase 1 Investment Tracker – Infrastructure Canada (Provincial/Territorial Lists are Key)
-
Off-Diesel Initiatives1) South of the 60th Parallel • Description: Budget 2017
proposes $220 million to reduce the reliance of rural and remote communities south of the 60thparallel on diesel fuel and to support the use of more sustainable renewable power solutions.
• Timeline: This funding is set to flow in the 2018-2019 fiscal year and end in 2023-2024.
*Specifics TBD as program design unfolds. CEA will continue to follow.
Page 25
Communities by province/territory not connected to the North American grid (NRCan 2011)
-
Off-Diesel Initiatives (Contd.)2) The Arctic Energy Fund (North of the 60th parallel)• Description: Budget 2017 proposes $400 million for the renewal and
replacement of energy systems in northern communities, so that remote communities can reduce their reliance on diesel. This $400 million will “begin this work by addressing energy security for communities north of the 60thparallel, including indigenous communities.”
• Eligibility: Investments will be made via bilateral agreements with provinces and territories, and will have flexible terms.
• Funding & Timeline: $400 million will flow beginning in 2018-2019 out to 2027-2028. This program will be administered by Natural Resources Canada (NRCan).
*Specifics TBD as program design unfolds. CEA will continue to follow.
Page 26
-
Off-Diesel Initiatives (Contd.)
Page 27
• 3) The Northern Responsible Energy Approach for Community Heat and Electricity Program (REACHE)
• Description: To support the deployment of renewable energy projects in communities that rely on diesel for electricity and heating, Budget 2017 proposes to provide $21.4 million to Indigenous and Northern Affairs Canada (INAC) to continue REACHE.
• Funding & Timeline: $21.4 million to be spread over four years, starting in 2018–19 to 2021-2022. Applications reviewed on an ongoing basis.
• Further information, including application contact can be found here.
Eligible Entities Eligible Technologies (Must
be “proven”)• First Nation & Inuit
Communities (including development corps.)
• Municipalities• Indigenous Orgs.• Territorial Govts. &
Orgs.• Regional Govts.• Modern Land
Claim Orgs.• First Nation self-
Govts.
• Solar• Wind• Energy Storage• Hydro• Biomass Heating• Residual Heat
Recovery• LED Lighting
https://www.aadnc-aandc.gc.ca/eng/1481305379258/1481305405115
-
Innovation Funding Mechanisms
• Superclusters ($950 M)• Smart Grid, Storage & Clean
Technology ($100 M)• Emerging Renewable Energy
Technologies ($200 M)• Electric Vehicles & Alternative
Fuels ($120 M)• Sustainable Development
Technology Canada ($400 M)• Energy Efficient Building Codes
($120 M)
Page 28
• NRCan Energy Efficiency Programs ($67.5 M)
• Disaster Mitigation & Adaptation Fund ($2 B)
• Canadian Centre for Climate Services ($73.5 M)
• Impact Canada Fund ($375 M)• Financing for Cleantech Firms
($1.4 B)• Clean Growth Hub (TBD) • Strategic Innovation Fund ($1.26
B)
-
Devin McCarthyVP, Public Affairs & U.S. [email protected]
Page 29
Implications of Climate Change Initiatives on the Electricity Sector CEA’s Corporate Utility Members CEA Corporate Partners Program MembershipCEA Corporate Partners Program MembershipCEA Corporate Partners Program MembershipContext SettingCanada’s GHG Emission TrajectoryEmission Projections by SectorPan-Canadian Climate Framework GHG Emission Reduction PlanElectricity Sector InitiativesElectricity Generation in Canada by Fuel Type, 2015 (Utilities & Industry)Electricity Generation in Canada by Province and Fuel Type, 2015 (Utilities & Industry)Implications for Electricity SectorElectricity Prices in OntarioCarbon Price Impacts (back-of-the-envelope)Carbon Price Cost ImpactsEnergy Use by Fuel Type, 2013Deep Decarbonization ReportElectrification Abatement by Sector and ActionFederal Support to Help Mitigate Impacts of Transition to Cleaner Energy SystemsThe Canada Infrastructure Bank (CIB)CIB Contd.Integrated Bilateral Agreements (IBAs)�with Provinces and TerritoriesIBAs Contd.Off-Diesel InitiativesOff-Diesel Initiatives (Contd.)Off-Diesel Initiatives (Contd.)Innovation Funding MechanismsDevin McCarthy�VP, Public Affairs & U.S. Policy�613-688-2960�[email protected]��