The report, Path of Most Resistance, argues the province’s proposed pathway to net-zero electricity emissions by 2050 depends largely on natural gas plants equipped with carbon capture and storage (CCS), hydrogen fuel and future nuclear technologies such as small modular reactors (SMRs).

Those technologies could eventually play a role in reducing emissions, the Calgary-based think tank says, but relying on them as the backbone of the power system represents a series of “risky bets.”

The analysis comes as Alberta negotiates with Ottawa over the future of electricity regulation under a Canada–Alberta memorandum of understanding signed last November.

Under the agreement, the federal government has indicated it could suspend its Clean Electricity Regulations in Alberta if the province can demonstrate that its own policies would achieve equivalent emissions reductions.

Pembina says that outcome should depend on whether Alberta presents a credible and detailed alternative plan.

Heavy reliance on uncertain technologies

The report argues Alberta’s current strategy places a large share of its emissions reductions on technologies that remain expensive, uncertain or years away from widespread deployment.

Carbon capture has been demonstrated at only a handful of power plants globally. Small modular reactors are still under development, with most projects not expected to come online until the 2030s or later.

Hydrogen, which Alberta officials have promoted as a potential fuel for power generation, also faces significant economic and technical hurdles, including high production costs and transportation challenges.

According to Pembina researchers, relying on these technologies to decarbonize Alberta’s grid could delay emissions reductions and increase costs if they fail to scale as expected.

Renewable growth slowed by policy changes

At the same time, the report says provincial policy decisions over the past two years have slowed the development of wind and solar power.

In 2023 the Alberta government imposed a seven-month moratorium on approvals for new renewable energy projects while regulators reviewed land-use rules and grid impacts. The government later introduced new regulations governing renewable development.

Since the moratorium began, nearly 11 gigawatts of wind, solar and energy storage projects have left the Alberta Electric System Operator’s development queue, according to Pembina analysis.

That amount of capacity exceeds Alberta’s average electricity demand.

The province had been a national leader in renewable energy development earlier in the decade, attracting the majority of new wind and solar investment in Canada.

But analysts say regulatory uncertainty and shifting market rules have made developers more cautious about building projects in Alberta.

Government emphasizes reliability

The Alberta government has defended its approach, arguing intermittent power sources such as wind and solar must be balanced with reliable generation to maintain grid stability and keep electricity affordable.

Provincial officials have pointed to natural gas, nuclear and emerging technologies as key components of a reliable, low-emissions electricity system.

However, the Pembina report suggests Alberta could reduce emissions more quickly and at lower risk by accelerating renewable deployment while expanding grid connections with neighbouring provinces.

Greater electricity trade with hydro-rich provinces such as British Columbia and Manitoba could help balance renewable generation by using hydroelectric reservoirs as a form of large-scale energy storage.

Industrial self-generation — including rooftop solar, geothermal and on-site wind generation — could also help reduce demand on the grid while cutting emissions from heavy industry.

Negotiations with Ottawa could shape future

The negotiations between Alberta and the federal government could determine how the province’s electricity sector evolves over the coming decades.

If Alberta can demonstrate a credible pathway to reduce emissions while maintaining reliability and affordability, Ottawa may allow the province to regulate its electricity sector independently through an equivalency agreement.

But if the province’s strategy relies too heavily on technologies that take decades to scale, Pembina warns Alberta could risk missing emissions targets while other jurisdictions move ahead with cleaner power systems.

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By Norman W. Park

The demand for electricity is growing rapidly as the world transitions from fossil fuels to low carbon-emitting forms of energy. However, making this transition will be difficult.

Ontario is projected to require 75 per cent more electricity by 2050, spurred by increasing demand from the industrial sector, data centres, electric vehicle (EV) adoption and households, according to the Independent Electricity System Operator (IESO).

To meet this demand, Ontario Energy Minister Stephen Lecce has proposed transforming the province into an “energy superpower” by aggressively expanding nuclear energy and natural gas while cutting support for wind and solar renewable energy.

This plan was spelled out in a policy directive from Lecce instructing the IESO to consider bids from all energy sources, opening the door to allow bids from natural gas and nuclear energy.

This is a departure from previous policies. Previously, under former Energy Minister Todd Smith, the IESO had stipulated bids for the electrical grid should only be from wind, solar, hydro or biomass.

The Ontario government should reconsider these plans. Non-renewable energy sources are costly, rely on new, expensive technologies, ignore the harm to human health and ignore the consequences for global warming.

Expanding nuclear

A central pillar of the Ontario government’s energy plan is the aggressive expansion of nuclear power. The province has committed to refurbishing 14 CANDU reactors at Bruce, Darlington and Pickering, and has proposed constructing new reactors at Bruce.

Ontario is also the first jurisdiction in the world to contractually build a BWRX–300 small modular reactor project at Darlington, despite not knowing its projected cost.

The cost of this small modular reactor may be much higher than similarly sized solar, wind and natural gas projects. This is unsurprising, given that the costs of nuclear projects are often much higher than projected.

Ontario encountered a similar issue when the Darlington nuclear generating station was constructed. The actual costs of nuclear projects were more than double projected costs and took almost six years longer to complete than projected.

Given these historical challenges and uncertainties, the province’s push for nuclear expansion is a cause for concern.

Opposition to wind and solar

Despite significant cost reductions in utility-scale wind and solar farms, which makes them less expensive than nuclear and fossil fuels in many parts of the world, Ontario’s recent policy directive reduced support for these non-emitting renewable energy sources.

The directive is a continuation of the government’s antipathy to wind and solar energy. Shortly after winning its first election in 2018, the Doug Ford government cancelled 750 renewable energy contracts at a cost of $230 million to Ontario residents. Ford defended this decision by saying it saved taxpayers $790 million and that wind turbines had “destroyed” Ontario’s energy file.

Unsurprisingly, growth of wind and solar energy in Ontario has stalled since the Ford government gained power. This slowdown has put it at odds with international trends. Between 2018 and 2023, the global growth of solar and wind energy nearly doubled and is projected to continue growing.

By curtailing support for renewable energy, Ontario risks missing out on the economic, environmental and technological benefits these energy sources offer. In other words, it may hinder the province’s ability to transition to a cleaner and more sustainable energy future.

Support for natural gas

Instead of investing in wind and solar to power Ontario’s electrical grid, the province has increased its reliance on natural gas. This expansion has tripled the percentage of energy provided by gas-fired turbines from four per cent in 2017 to 12.8 per cent in 2023. It’s projected to grow to 25 per cent by 2030.

Burning more natural gas increases the risk of premature death and emits more greenhouse gas compared to wind and solar energy.

According to Health Canada, outdoor air pollution has a total economic cost in Canada of $120 billion per year, and it resulted in 6,000 premature deaths per year in Ontario and 15,300 deaths in Canada. That’s about eight times higher than the annual number of motor vehicle fatalities in Canada.

Shifting focus from natural gas to cleaner energy sources like wind and solar could reduce these environmental and health impacts in Ontario.

Reconsidering Ontario’s energy transition

Ontario’s energy transition must involve supplying more energy to an expanding electrical grid while ensuring it remains reliable and resilient. The current government’s plans to turn the province into an “energy superpower” will commit Ontario to decades of costly expenditures and relies on unproven new technologies.

The government’s proposal to increase natural gas to supply the electricity grid and new buildings will increase the risk of premature death and serious illness to Ontarians and will increase greenhouse gas emission, undermining efforts to combat global warming.

Lecce should reconsider his current policy directive to the IESO. Future bids for the electrical grid should instead be evaluated for their impacts on the health of Ontario residents and climate change.

Ontario’s energy policies should also be guided by knowledgeable experts outside of government, rather than solely by politicians. Establishing a blue-ribbon committee comprising energy scientists and environmental specialists would provide needed oversight and ensure the province’s energy strategy is cost-effective, technologically sound and aligned with climate goals.

Ontario has an opportunity to lead by example in balancing energy needs with environmental and health priorities.

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By Mitchell Beer

Ontario’s newly-minted energy minister Stephen Lecce is coming under fire for recent musings about turning the province into a “clean energy superpower”, with analysts scorching his decision to include nuclear generation in the mix and calling for some coherent system planning before making that decision.

In an interview with the Globe and Mail’s Adam Radwanski not long after he took over his new portfolio June 6, Lecce “touted initiatives he inherited, including the country’s largest investment to date in grid-scale battery storage, and a coming procurement of wind and solar power,” Radwanski wrote late last month. Those words “might come as a relief to people who worried his appointment to the job last month might signal a return to the anti-decarbonization positioning of Premier Doug Ford’s early days in office.”

But Lecce also “signalled an enhanced focus on nuclear power,” Radwanski added. “That means not just refurbishments and construction of a small modular reactor (SMR), which are under way, but also building new large-scale reactors—all of which he framed as essential to domestic needs and export opportunities.”

At a Canada-U.S. nuclear meeting on the sidelines of last month’s NATO summit, “energy security was at the core—an issue that overwhelmingly unites Democrats and Republicans in the U.S.,” Lecce told Radwanski. “There is an acute awareness that, now more than ever, we must decouple our dependence on despotic regimes abroad.”

He said that meant an “opportunity to emphasize that, among nations who share democratic values, Ontario has the technological expertise and capability to build, refurbish, and expand nuclear, on time and on budget.”

“It really underscores both Canada and the U.S.’s national and economic interests—that we work together to harness this capability to produce clean energy,” Lecce told The Canadian Press, adding that Russia’s invasion of Ukraine had cast a light on Canada as a reliable supplier of uranium.

Lecce’s “superpower” language wasn’t very different from the line of argument he would have used in a former job, after then-prime minister Stephen Harper hired him out straight of university to serve as his deputy director of communications, then his director of media relations.

Here We Go Again

While the refurbishment project now under way at the Darlington nuclear station east of Toronto has been making headlines by apparently running on time and on budget, that’s precisely because it’s so unusual for nuclear plants of any kind to avoid serious delays and cost overruns.

Last year, Corporate Knights Research Director Ralph Torrie recalled the more than C$10 billion in written-off costs for the original Darlington construction project that essentially bankrupted Ontario Hydro, then the second-largest power utility in North America—based on projections of future electricity demand that never materialized in the real world.

“History continues to outrun electricity planning in Ontario, as it has been doing for decades now, and we all pay for the overshoots and malinvestment that result,” Torrie wrote at the time. “We cannot afford another round of ill-conceived commitments to multi-billion-dollar megaprojects that will be left half-built and stranded just as technology, market forces, and common sense converge on a smarter, less expensive, more distributed and renewables-based energy system.”

Energy system analysts Mark Winfield of York University and David Schlissel of the Institute for Energy Economics and Financial Analysis said they see no prospect that an expanded nuclear program in Ontario will stay within budget, compete with more affordable renewable energy and energy efficiency options, or deliver in time to meet a rapid decarbonization deadline. (Mark Winfield and Evan Pivnick, quoted below, are both members of the community sounding board for The Energy Mix’s Heat & Power edition.)

Experience with recent conventional nuclear projects in North America and Western Europe “points to a continuing pattern of massive cost overruns and delays on the time scales of decades,” Winfield told The Energy Mix in an email. “One of the core problems with nuclear is that it does not see a significant learning curve—costs just keep going up, unlike renewables and storage, where you see performance improve and costs fall as experience is gained, and supply chains and project management and construction become more efficient.”

A ‘Rational Approach’

Given serious uncertainties around Ontario’s path to decarbonization and how much electricity the province will eventually need, Winfield said a more “rational approach” would deploy “lower-risk, lower-impact, and more flexible and scalable options” like demand-side management, energy efficiency, distributed energy resources (DERs), and renewable energy with energy storage, “and only consider higher-risk, higher-impact, high lock-in resources after that.”

But he said that won’t happen in a province that has “no planning process within which these options can be assessed in an open and independent manner.”

“You want to do the cheapest thing first, right?” Schlissel agreed in an interview this week. “And you want to have flexibility if the big, future demand that is being projected today is not realized.”

By contrast, while Ontario is being “very closed-mouthed” about the small modular nuclear reactor (SMR) under construction at Darlington, costs elsewhere are already rising, making the technology far more expensive than renewables.

“It’s clear the cost has gone up dramatically, and there’s no reason to expect the future will be any different than the past,” he said. “Is it possible? Yes, it’s possible that some (SMRs) will get online. Is it possible that they’ll be cheap? Yes. But what standard of proof do you have? Yes, it’s possible, but there’s a lot of evidence arguing against that happening.”

While nuclear proponents have been talking about their technology co-existing with renewables, Schlissel said new nuclear capacity would be more likely to crowd cheaper, cleaner renewables out of the system.

“Nuclear plants are not economical unless you run them flat out,” he explained. Given the high cost of those projects, and the need to protect ratepayers from higher electricity rates to the extent possible, “there will be none of this about supplementing wind and solar, that when the sun doesn’t shine or the wind doesn’t blow we’ll crank up the nuke.”

Where the Rubber Hits the Road

Evan Pivnick, clean energy program manager at Clean Energy Canada, said Lecce is sending the right overall message. But that’s not the same thing as delivering results.

“In general, I think the ambition and the rhetoric around positioning Ontario as a clean energy superpower and highlighting the role of clean electricity for households or industry is actually what we want to see more and more provinces do,” he said. But “where the rubber hits the road, Ontario has a little bit more of a mixed record.”

While Ontario’s Independent Electricity System Operator (IESO) commissioned a pathways assessment to map a cost-effective energy future for the province, “it’s unclear how many of those scenarios centred net-zero by 2050,” he said. And since then, “despite some meaningful and truly credible forward steps on clean electricity, they still haven’t connected the dots between climate targets and energy.” So the same province that launched Canada’s biggest-ever energy storage procurement and committed to 5,000 megawatts of new renewable energy capacity also overturned an independent regulator’s bid to protect new homeowners from the long-term cost of building new gas infrastructure.

The 40-year payback on those gas lines “takes us well past 2050,” Pivnick said. “This is where we’ve been pushing for quite a while for an energy strategy that features net-zero by 2050 at the very least. Then we know what we’re aiming for and we can hold the decisions we’re making against that. Rather than relying on rhetoric that is quite positive, we get to make sure those actions are actually supported.”

Pivnick said there’s “no question nuclear will play a role, and possibly an expanding role,” as electricity demand increases. But those decisions begin with what amounts to a least-cost energy strategy.

“In other jurisdictions around the world, the approaches that best protect affordability and cost start out with maximizing the role of energy efficiency, distributed energy resources, and renewables,” he said. “Where those are unable to meet energy or reliability needs, long-term and cost-effectively, we then start to move up the list of other, more costly sources.”

Through that lens, he said it’s fine to experiment with SMRs that might have a future role to play. But “predicating our future on making nuclear the first tranche or approach? That has potential risk to it, and we’ve been pretty clear that if this government is going to centre nuclear as they are, they need to have a backup plan.” That would mean developing the ability to “build out renewables, focus on energy efficiency, demand-side management, DERs, that will actually bring down the cost for consumers and offer new ways to drive affordability. And then we’ll see” what the system needs.

The future Ontario should want to avoid, he added, is the one where the need for electricity rises so fast that consumer demand competes against industrial uses for the available electrons.

“In that scenario where you have room for real take-off (of demand), there’s going to be room for everything,” and if SMRs can be cost effective “then, yeah, they may very well play a role,” he said. But that will make it all the more important to sequence the various options, with first call on the ones that cost the least. Last year, analysis by Clean Energy Canada concluded that solar and wind farms with battery backup were already cheaper to build than new gas plants in Ontario and Alberta, much less nuclear projects, with the cost of renewables expected to fall sharply this decade.

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By Scott White

As Canada grapples with the imperative to meet its net-zero carbon emission targets, a new player has emerged on the energy scene: Small Modular Reactors (SMRs). These compact reactors present a modern twist on traditional nuclear technology, which has languished without significant new developments for three decades.

By promising faster construction, lower costs and enhanced safety, SMRs are not just another alternative energy source. They represent a potential game-changer in our energy landscape.

But is this the solution Canada has been waiting for in our quest for net-zero?

In my academic career exploring the energy transition — from researching energy efficiency in low-income households  to fostering renewable energy co-operatives and decentralized energy systems — the most common hurdle I have observed is achieving the right scale and speed of deployment.

SMRs offer an intriguing proposition, potentially overcoming deployability challenges due to their uniquely scalable and flexible implementation. But as with any emerging technology, their promise comes with uncertainties.

What are small modular reactors?

SMRs offer a compact alternative to nuclear power, with outputs much smaller than traditional reactors, usually in the range of 10 to a few hundred megawatts — enough to indefinitely power approximately 10,000 to 300,000 homes. This smaller scale and modularity allows for more flexible site placement and potentially faster, more cost-effective construction.

Unlike large-scale renewables, SMRs provide a less visually intrusive and space-consuming option, making them suitable for diverse locations, including remote areas.

The overall life-cycle emissions of SMRs are significantly lower than those of fossil fuels, and comparable to other low-carbon energy sources like wind and solar power.

Emerging technology concerns

The primary concerns with SMRs are their largely untested nature on a commercial scale and the speculative nature of their economic projections. The actual costs of building, operating and maintaining these reactors could differ significantly from initial estimates. For instance, the recently approved Oregon-based NuScale cancelled their project, citing concerns related to its escalating costs.

Read more: Small nuclear power reactors: Future or folly?

Regulatory hurdles also present a challenge, necessitating the development of new regulations and standards, which can be a time-consuming and complex process.

Canada’s approach to managing waste from SMRs echoes its policy for conventional nuclear plants, addressing a key concern in the nuclear debate.

The strategy, shaped by the Nuclear Waste Management Organization, integrates community input and focuses on sustainable, long-term disposal solutions. This reflects Canada’s proactive stance on responsible and environmentally conscious nuclear waste management.

For SMRs to succeed in Canada, it’s essential to establish a supportive regulatory environment, ensure financial viability and leverage existing nuclear expertise while focusing on safety and environmental sustainability.

Economic and environmental potential

Economically, SMRs present a promising avenue for growth. A recent report from the Conference Board of Canada projects that building and operating a fleet of four SMRs could contribute approximately $15.3 billion to Canada’s GDP, with a notable $13.7 billion impact on Ontario’s economy.

According to the Conference Board, this initiative is also expected to sustain 2,000 jobs annually over the next 65 years, marking a significant stride in job creation.

Read more: Nuclear power: Why molten salt reactors are problematic and Canada investing in them is a waste

Environmentally, SMRs stand out for their potential in reducing greenhouse gas emissions, particularly in the heavy industrial sector. Projections suggest that by 2050, SMRs could reduce these emissions by 18 per cent, signifying a considerable step towards Canada’s net-zero goals.

SMRs, alongside renewable energy sources like solar and wind, as well as advancements in energy efficiency, are crucial components to reduce emissions at the scale necessary to reach our national targets.

The current state

The journey towards SMR development is marked by strategic initiatives and significant investment.

The Canadian government’s Enabling Small Modular Reactors Program underscores this commitment with its funding pool of $29.6 million over the next four years.

Financing provided by the Canada Infrastructure Bank for the Darlington SMR project in Clarington, Ont. further positions Canada at the forefront of commercial SMR deployment. Meanwhile, Ontario has received approval for the development of the first SMR in Canada, the GE BWRX-300, by 2028.

At this crossroads, SMRs represent more than an innovative clean energy solution; they offer a chance for Canada to assert global leadership in a rapidly evolving energy landscape.

As the world races to mitigate climate change and energy security, Canada has the opportunity to pioneer a technology that could make significant strides to advance the energy transition.

A collaborative approach

Amid tensions surrounding Canada’s carbon tax, SMRs are emerging as a point of collaborative progress.

The Canadian federal government has shown substantial support for SMRs. The SMR Action Plan was launched in December 2020 with significant progress across sectors: from utilities, municipalities, provincial governments, vendors and universities to Indigenous organizations.

Together, Ontario, Saskatchewan, New Brunswick, and Alberta have made a joint strategic plan for SMRs and an inter-provincial Memorandum of Understanding. These commitments — and more — show strong collaboration.

As Canada ventures into developing SMRs, we find ourselves at a pivotal juncture — a now-or-never moment in our energy transition. This exploration isn’t merely about embracing a new technology; it’s a crucial opportunity to assert leadership in global clean energy innovation and make tangible strides toward our net-zero targets.

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