The Folly of our Rush to Electrify Canada

Post 51 | Will Net Zero Make Us Go Dark?

The recent computer outage caused by CrowdStrike’s security platform laid bare the fragility of our digital world. A small glitch in software designed to protect against cyberattacks was the cause of global business system failures including banks, airlines and insurance companies. Direct damage estimates have been pegged north of $5 billion and the indirect costs including lawsuits will likely dwarf that number.

It recalls the 2022 Rogers cellular outage that paralyzed 12 million Canadian mobile users, reminding of our dependency on technology and its underlying infrastructure.

That topic of infrastructural fragility came to mind recently for something more critical than computers or mobile phones – electricity. As I drove one day past miles of decrepit hydro poles, sagging power lines and encroaching vegetation I pondered how we are just one storm, overload, accident or intentional attack away from a disabled power grid.

And in a country where we are reducing fossil fuels for energy and rushing into full electrification, the results could be catastrophic.

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Of all the basic services that keep our modern life humming along, electricity has the most impact and may be the most precarious. If you think that losing your computer function or phone service is an issue, wait until the power underlying them goes dark.

To our peril, the Canadian government has put the cart before the horse in mandating changes to our energy mix and infrastructure driven by a rush to decarbonization, while unsupported by adequate planning to ensure resilience of our power systems that serve as the backbone of everything we do.

The Liberal government continues to make announcements that throttle fossil fuels, mandate electrification and promise big dollars toward the latter’s future. And we regularly hear the grand vision of a country overflowing with clean, affordable and reliable electricity. Yet declarations, press releases and promises have no relation to the reality of something happening without proper planning and execution.

Canada is so far behind in generating new electricity and creating additional transmission and distribution infrastructure to support it, these promises are more hollow words. Meanwhile, our existing infrastructure is barely holding together to meet current demand.

The move to electrification is driven mostly by the climate change and net zero movements – with their narrative of a world burning, flooding and dying because of fossil fuels use. And the massive green industry driving and benefiting from this continues hoovering up government money faster than it can be doled, while results have been nowhere near commensurate to the spend.

Regular readers will know my critical view of the net zero movement with previous articles having laid out a case against their misleading narrative, highlighted the realities of our long term dependence on fossil fuels, detailed the lack of critical minerals to support the storage needs of an electrified world, and advocated for Canada’s clean fossil fuels to be actively marketed to the world over the coming decades. I will not re-litigate these issues except to repeat my contention that the foundational reasoning for our move away from Canada’s clean fossil fuels and towards hyper-electrification is errant and ill-guided.

But let’s look at what lies ahead.

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We are turning our country upside down in the pursuit of electric vehicles (EVs) and 2035 remains the target after which no further combustion engines will be sold to consumers. Yet if Canada were to make a wholesale move overnight to passenger EVs we would contribute no more than a 0.15% reduction of global carbon dioxide emissions. And Natural Resources Canada recently estimated this shift to EVs will cost Canada $300 billion dollars by 2040, though this estimate seems thin.

Meanwhile, dominos in the EV world are falling fast. The big manufacturers are scaling back production including Ford Canada’s announcement delaying their new EV plant retooling until at least 2027, General Motors’ significant scale back of North American EV production and other manufacturers’ slowing or reversal of new development. Then, two weeks ago Belgium’s Umicore pulled out of a $2.7 billion battery plant commitment in Ontario, citing demand shortfalls. Let’s await what shoe next drops regarding our $44 billion bet on battery plants from Stellantis/LG, Volkswagen and Northvolt.

Along with swooning new consumer sales, a recent McKinsey poll uncovered the tenuousness of EV repurchase loyalty. It found 46% of existing American EV owners and 49% in Australia are inclined to shift back to a gas powered car for their next vehicle purchase. Along with results from Brazil (38%) and six other countries that average to 29% this tells a powerful story of true market demand despite mandates, incentives, gaslighting and fanciful storytelling. Canadians were not polled but our numbers are likely similar to the US.

Our charging infrastructure remains comically inadequate. As of March, Canada had 27,000 charging ports, a mere 3.2% of Natural Resources Canada’s projections of 830,000 needed by 2040.

Meanwhile millions of condo, apartment and non-garage owning Canadians remain unable to access residential chargers, and home charging setup is prohibitively expensive for many.

Even if forcing every Canadian to drive an EV could save the world, we evidently don’t want them and our charging infrastructure is nowhere near ready - but we forge ahead nonetheless into the electrified world.

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Let’s examine the electricity needed to drive this folly.

Consensus view of Canada’s electricity demand by 2050 is that we’ll need to triple our current capacity – put another way we need a 300% increase of what we currently struggle to generate and reliably distribute.

We face major challenges on that path, the first being regulatory impediments.

According to advocacy group Electricity Canada, new electrical projects require coordination with up to 80 regulatory bodies across federal/provincial jurisdictions, while facing increasing delays and costs from mandated indigenous consultations. And since 2019 the federal Impact Assessment Act (IAA) (declared unconstitutional in 2023 by the Supreme Court) has further added mountains of paperwork, cost, time and complexity. According to Electricity Canada, at least six major electricity-generating projects have recently voluntarily paused due to the costs and complications caused by the IAA.

It can take up to ten years for a single new electrical generation project to wind its way through our regulatory gauntlet – similar to the massive lag in bringing new mines online to extract minerals for the millions of required storage batteries. And it takes four years on average to gain federal approval for new transmission lines to be built that will shuttle this new energy – that is four years before a shovel even hits the ground.

Increasing our electricity by 3X is going to require a major reduction in regulations, cross-jurisdictional co-operation, fast decision making and efficient construction. But we are moving in the wrong direction on all counts while adding more rules, processes, bureaucracy and costs that dissuade companies from developing projects or that delay existing ones. Unless this changes in dramatic ways, tripling our electricity capacity is unachievable.

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In 2022, approximately 60% of Canada’s electrical generation came from more than 110 hydropower dams across Canada, with a large proportion in Quebec. About 15% of total production came from nuclear sources with almost all of that in Ontario, while wind and solar collectively produced about 7%. This totals to 82% of electricity generation from non-GHG sources. The remaining 18% comes primarily from natural gas and some remaining coal plants, both mostly in Alberta and Saskatchewan.

From a decarbonizing perspective these are impressive numbers and this inherited infrastructure is heavily touted by government to burnish their green credentials. But these sources will not scale similarly in the future, so what will generate all the new required power?

Let’s first talk nuclear.

Despite Canada’s 1950’s development of the revolutionary Canada Deuterium Uranium (CANDU) reactor and our being the world’s second largest producer of uranium, our nuclear uptake has been abysmal. Nuclear is the most dense and arguably the most storable, cleanest and reliable energy source. Yet our last nuclear reactor came online more than two decades ago, and Nexgen in Saskatchewan is still waiting after seven years for regulatory approval to begin building a nuclear facility. The past year we’ve heard big talk of a renaissance in nuclear and an intention to bring modular units online quickly with less red tape, but so far no progress has been made.

Nuclear remains the most viable energy source for Canada and it defies all logic as to why we haven’t jumped back on that train long ago. We possess the technology, own the raw materials under our feet and boast a history of reliability and safety with Ontario generating more than 50% of its energy from this source. And it is the ultimate answer to all the net zero dreams, free of carbon emissions. Perhaps there are just too few hands making money in the nuclear energy world to generate support from the green industry.

If there were a concerted effort to truly streamline regulations and begin developing new nuclear facilities in the next two years, I might start to believe in our capacity to triple Canada’s energy capacity.

The world produces about 22% of its electricity from natural gas. Coal remains the highest volume global feedstock at around 34%. Canada could generate massive electricity volumes from natural gas plants while feeding the world with much cleaner fuel as they transition away from coal. But given our federal government’s hatred of fossil fuels, that will not happen. We sit atop one of the world’s largest natural gas deposits yet we won’t use it and won’t sell it to others.

Meanwhile, don’t rely on major new hydroelectric power to come online anytime soon. The last major reservoir dam was built in the 1990s, though numerous smaller river dams have been constructed since albeit not without challenges. For instance, BC’s Site C dam on the Peace River slated to increase the province’s electricity by 8% has been under construction since 2015 but still not operational. And the past twelve years of Newfoundland’s Muskrat Falls overruns (rising from $7.4B to $13.5B) and numerous technical issues will likely put a damper on any major new hydropower projects in Canada for some time – at least those large enough to put a dent in future energy needs.

That takes us to wind and solar – two sources that have generated more hype, promises and government subsidies than actual energy - topping out at 7% of total production. These sources suffer from site selection limitations, intermittency and inefficiency in Canada’s winter months. And the dirty secret is they are not particularly green due to the required material inputs and manufacturing process, but also the challenges of disposal and lack of recycling. To believe these sources will ever be more than small contributors to Canada’s burgeoning energy needs is magical thinking.

Hydrogen holds promise, though that has been the case for years now, with intractable technical issues always in the way. If they could be overcome then it may change the energy landscape, but hydrogen remains perennially in pilot phase with no measurable input to our current energy count.

So this leaves us bereft in figuring out how to generate the massive new energy capacity Canada apparently needs to sail into the decarbonized world. We have great options at our disposal but refuse to use them while talking about a future with no practical plan to get there.

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This takes us back to the start of our story for discussion of a final challenge when moving into a heavily electrified world - that of fragility and reliability.

Over the past twelve months our home has been without power for 66 total hours, across multiple events in summer and winter. I know this figure thanks to the gas-powered, whole home generator I indulgently installed a few years ago after being irritated by repeated outages. I don’t know how this stacks up to the reliability in your own neighbourhood, but I know we are far from the worst.

The woeful state of our hydro company’s vegetation management is partly to blame along with the aging poles that remain shockingly upright while groaning under the weight of a rat’s nest of wires. And absent of newer housing developments where wires are buried underground (which apparently costs 11 times more than overhead wires), this is far from a unique reality. Just look up while walking or driving over the next while and be amazed at the crumbling state of the infrastructure tenuously keeping your power on.

Hydro companies don’t have the funds or manpower to conduct even the most critical vegetation management of distribution lines in neighbourhoods to meet legal setback requirements, complicated by homeowners who don’t want their trees cut. And the same applies to what should be cyclical replacement of poles beyond their replacement date. The problem is amplified in transmission corridors where the cost of a tree fall-in or fire can affect hundreds of thousands at a time.

This is even further complicated by a recent Health Canada ban on pentachlorophenol (PENTA), a chemical used to preserve utility poles, without the government approving an alternative treatment. Canada collectively replaces about 100,000 poles per year, many of those part of emergency repairs. But hydro companies are now facing a shortage of poles so are now even more judiciously replacing them as part of a regular maintenance cycle, which adds to system fragility.  

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Where does that leave us?

A major driver of our future electricity needs is electric vehicles, despite us not really wanting them, production waning and our not having adequate infrastructure to support them.

We have an aging and fragile infrastructure, across which we’ll be delivering an apparently inadequate supply of electricity unless we create up to three times more in a fraction of the time it took us to create the current load.

Our lack of new electricity generation is hamstrung by the net zero movement that demonizes fossil fuels which we have in abundance for energy, as well as our baffling disregard for nuclear energy.

We are badly lagging in developing infrastructure to serve any new supply, mostly due to regulatory impediments. And our existing infrastructure is shaky, at best.

Mandated electrification, particularly EVs, will increase the load on this already fragile system and put at risk our electrical needs for the basics of life - light, heat, cooling and power – all at a time when we’re ratcheting down our use of fossil fuels as a viable alternative.

And even modest estimates put the price tag in the trillions to drive Canada’s collective move to an electrified world - goodness knows from where that will come.

There are five things we can do to arrest this foolish trajectory.

Slow the ideologically driven death march to 2035 EV totality and let the market drive the pace of adoption

Ensure we have in place an adequate, resilient and well tested infrastructure to handle the next fifty years of electricity demand

Significantly deregulate and streamline the pathways for new energy projects - generation, transmission and distribution

Prioritize nuclear to generate new load

Reinvigorate our commitment to natural gas as feedstock for on demand load generation, while helping liberate the world of coal by selling them our clean fuel

Otherwise we will not like the darkness upon awakening one day - though my generator will kick in just fine - til they ban natural gas.

Stay tuned and stay pragmatic