Biomass – Parker Gallant Energy Perspectives

Affordable Housing in Ontario and the Sky is Falling According to Eco-Warriors

According to the eco-warriors using 7,400 acres (0.37%) of the 2 million acres of the Greenbelt land for the creation of “affordable housing” is something that should never be allowed so about 200 of them joined together to sign a letter making their views known. While they have expressed some legitimate concerns with Bill 23 and its negative effects on “conservation authorities” they have failed to recognize the unaffordable nature of housing affecting so many Ontario families. The CBC reported that a request by the leader of the Ontario Green Party has gone to the Government of Ontario’s Integrity Commissioner asking for an investigation as to whether the plan has broken ethics rules. Those 7,400 acres could easily accommodate well over 74,000 homes or more in local municipalities and somewhat contain climbing house prices in the province but that goes against the wishes of those out to save the planet from “climate change” or what used to be referred to by them as “global warming”!

Many of those same eco-warriors back in the days of the McGuinty/Wynne led government(s) pushed for the creation of the Greenbelt. They were rewarded by the allocation of those 2 million acres as protected land even though large portions of it were close to communities where housing needs were growing. At the same time the “charitable” Greenbelt Foundation was created and supplied with Ontario taxpayer dollars which continues to this day.

The Greenbelt Foundation is a registered charity and their March 31, 2021 report indicates 89.4% ($4.079 million) of their gross revenue came from the Province ($3.828 million) and the Federal government ($251K). Only $12K came via receipted charitable donations despite their spending $479K on advertising and promotion and $1,677K on compensation.

Somewhat related to the foregoing pushback by the eco-warriors saw the Minister of Energy Todd Smith, recently receive a response from IESO (independent electricity system operator) in respect to his prior directive(s) to request a plan on how the province could achieve a full “decarbonization” of the electricity system. The minister had issued those directives even though the current electricity system in Ontario is already slightly over 92% emissions free.

The IESO responded with their December 15, 2022 Pathways to Decarbonization a 39 page report that predicts by 2050 Ontario’s capacity will be 88,000 MW (megawatts) versus what the report claims is now 42,000 MW. We assume the latter includes all DER (distributed energy resources) such as about 2,200 MW of solar, 600 MW of IWT (industrial wind turbines) small hydro, combined heat and power plants, battery storage, electric vehicles, and consumers who reduce electricity use on demand.

The ”Pathways” to get to that 88,000 MW include some interesting turnarounds by the Premier Ford led government who killed the GEA (Green Energy Act) enacted by former Premier McGuinty but now appears determined to make life for Ontarians much worse and more expensive. The plan put forward by IESO will mean by 2050 Ontario will be reputedly powered by the generation sources in the following chart!

IESO’s estimate of the costs are as low as $375 billion to a high of $425 billion including substantial expenditures on transmission systems. The report estimates electricity costs would rise to $200/$215/MWh. It is important to note IESO don’t hypothesize on the individual costs of the additional 68,793 MW by source such as the 15,000 MW of hydrogen or nuclear, but they do suggest the province had better start working soon as timelines for new transmission lines and the additional 17,800 MW of nuclear will be a long-drawn-out process. We should also be pretty sure their estimate on the cost of those 15,000 MW of hydrogen is more like a guess rather then a fact based estimate.

It is also interesting IESO includes an addition of 6,000 MW of solar capacity and 17,600 MW of IWT (industrial wind turbines) capacity as part of the “decarbonization” process as both are intermittent and frequently unreliable. IWT also have the bad habit of causing harm to humans as well as decimating birds and bats. It is likely those new planned IWT will receive considerable pushback by many municipalities throughout the province. The latter is a factor as municipalities now have the power to deny access. One should wonder if the Ford government will legislate; the power to deny access for IWT, is no longer an option for municipalities in their move to decarbonize the electricity sector?

Looking further at the planned addition of IWT and solar throughout the province will also mean the loss of considerable land for both farming and nature as both energy sources require either (or both) land clearing and/or farmland reductions.

Based on estimates of what land will be required for the additional wind and solar generation should make the eco-warriors very upset. Land required per MW of IWT varies from 2 acres/MW to 40 acres/MW of capacity so the 17,600 MW would need 35,200 acres on the low side to as much as 704,000 acres on the high side. The additional 6,000 MW of solar could require as little as 5 acres/MW on the low side or up to 10 acres/MW on the high side meaning as little as 30,000 acres or as much as 60,000 acres. What the foregoing suggests is both the additional IWT and solar could easily be accommodated on the Greenbelt’s 2 million acres.

We should wonder how those 200 eco-warriors, who signed the letter to stop “affordable housing” on the Greenbelt, would feel, if the foregoing is the eventual conclusion as to where those wind turbines and solar panels in IESO’s “decarbonization” plan are destined for?

Wouldn’t that make the Greenbelt even greener with all those carbon free generating sources?

Is Hydrogen the Answer to Reaching Net-zero—Apparently, it’s not!

The following was sent to me by a contact with the “knowledge, skills sets and experience to highlight the fallacies of pushing the green hydrogen agenda” and it’s related to the concepts of my prior articles about “energy storage”. NB: the knowledge he displays in the following are beyond the scope of yours truly!

Text from the contact!

“Hi Parker

Converting “excess” electrical generation by electrolysers (e.g. as built by Hydrogen Optimized in Owen Sound), will permit wind generators (like Enbridge, K2 Wind, etc.) to operate at maximum possible output even when the electrical demand is low (like at night), so that the proponents (like Enbridge at their “Power to Gas” pilot plant in Markham, or Calsun at their proposed plant at the former Bluewater Youth Detention Centre) can make BIG money producing “green” hydrogen, thereby ensuring lots of Government (i.e taxpayer) support.

The wind generators (like Enbridge) will be able to be paid full price for their power, approximately $135 a MWh or so, instead of the somewhat reduced rate paid for curtailed power. However, they will be able to buy the surplus at about $0 to $10 a MWh, to produce hydrogen, to add to their distribution system, so when electrical demand is high, they can sell it to natural gas generators to produce power to sell at maybe $200 a MWh. Yes, they certainly win.

The consumer, well, let’s see. We’ll pay $135 for the bought wind power, sell it for $10, and then buy it again at $200, so the consumer cost is maybe $125 + $ 200 = $325 a MWh. (About 4 x the price paid for nuclear generated power in Ontario). The more surplus we create, the more we’ll be able to sell at low price, and buy back at high price, so the cost for us will go up even more.

Winners = Enbridge, Hydrogen Optimized, Carlsun, and the Government policy hacks who want a hydrogen economy.

Losers = those who live near wind farms (present and future, as there will be more justified), the electrical consumers, and taxpayers.

You can do a google search for Forbes March, 29, 2022 for their article, “Gas Utilities are Promoting Hydrogen, but it could be a dead end for consumers and the climate.” Admittedly it is a biased article (every writer has their agenda) and in this case the writer’s agenda is that full electrification of the economy is better for the environment than burning natural gas.

Some highlights from the article, and the logical extension from them:

26 projects to add hydrogen to natural gas lines have been proposed across 12 states since 2020 (so, nearly everybody is doing it!).
BUT, the blend can only be from 5% to 20% hydrogen in the natural gas lines (elsewhere I read 7% max) as consumer appliances can only safely burn a blend up to that concentration.
It’s not clear what adding hydrogen to the natural gas lines at the Bluewater Detention Centre will mean to % hydrogen in the lines locally, but the amount added will probably not be huge.
Burning hydrogen (H2) produces less energy than natural gas (methane, or CH4) so a 20% blend would reduce greenhouse gas emissions only 6% to 7% as you lose energy in electrolysis.
price of green hydrogen will raise price of the blended fuel 2 to 4X above standard natural gas (good for Enbridge, bad for the consumer).
burning hydrogen produces water vapour (H2O), a more potent green house gas than CO2, but its residency in the atmosphere is less than CO2, so it is considered to have less impact. Burning methane (CH4) produces CO2, H2O, and nitrous oxide NOX. The results are complicated by the fact that methane (natural gas) leaks have an effect some 80X higher than CO2, but it has a less residency time in the atmosphere, so the overall result is considered to be only 25X as much. NOX has a higher impact yet. Let’s just say the overall impact of burning H2 is not zero, but it’s probably slightly better than burning CH4.

So is it realistic to consider we’ll have much impact on the environment by producing “green hydrogen”?

in 2020 Ontario’s energy usage was: (figures from Canada Energy Regulator – Provincial Energy Profile), converting all data to Peta Joules for equivalency comparison).

1435 Peta Joules from refined petroleum (gasoline and diesel mostly)
935 Peta Joules from natural gas
514 Peta Joules from electricity (58% nuclear, 24% hydro, 9% gas, 8% wind, <1% solar, < 1% biofuel)
37 Peta Joules from biofuels (wood mostly)
127 Peta Joules from other fuels (like coal & coke)

From the above, we see that in 2020, less than 1.5% of Ontario’s total energy consumption came from wind and solar. It gives a rough idea of the feasibility of moving all of Ontario “off oil and gas” to all “renewable sourced electricity” by 2050.

So, if we could convert 5% of the natural gas in the distribution system to hydrogen, that would be about 47 Peta Joules, or if we assume 15% loss in the conversion, needing 54 Peta Joules of electricity (more than 1/3 of the total electricity produced). Let’s just say that’s unlikely.

In passing, let’s just say the probability of converting all new vehicles bought in Canada by 2035 to electrical vehicles, or vehicles powered by hydrogen, to convert that 1435 Peta Joules that come from petrochemicals of gas and oil as called for by federal law is … well remote. Does anyone ever consider these things before passing laws? Does not appear so!

The Globe and Mail published an interesting article (attached below) Nov. 25, 2022, noting,“that while 72% of all new cars in Norway are electric vehicles, oil consumption in the country hasn’t changed.”

That should be enough numbers to set your heads spinning. Apologies, but every now and then a dose of reality is needed.

Let’s conclude that the governments are all “hell bent” on producing hydrogen and keep telling us it will make a BIG difference in climate change. Unh- unh, T’ain’t; gonna happen, but what WILL happen is that costs for consumers will go up drastically, the results will be minimal, and certain investors will become VERY rich.”

Why Wind and Solar Owners Love Energy Storage

Yesterday, November 26^th, 2022, demonstrated why Ontario’s numerous contracted wind and solar owners are so excited about the Ontario Minister of Energy’s objective to secure 1,500 MW of storage capacity be it pumped hydro or BESS (battery energy storage systems)!

Both IWT (industrial wind turbines) and solar panels generated lots of unneeded electricity over the day based on IESO daily generation report and it was more than they tell us: the reason why, is there are approximately 600 MW of IWT capacity and 2,200 MW of solar capacity that are DER (distributed energy resources) so those are not reported by IESO as their minimum reported capacity per generation source is 20 MW and DER’s generation is used by local distribution companies to supply power to communities they serve. They also include other generation sources such as small, hydro, natural gas, and biomass!

The day was atypical of Ontario’s spring and fall demand as reflected by the fact Ontario’s peak demand was a relatively low 16,345 MW and it occurred at Hour 18 (hour ending at 6 PM). Throughout the day the wind was blowing and resulted in IESO forecasting IWT would generate almost 76,600 MW but they only reported about 70,500 were accepted into the grid suggesting 6,100 MW were curtailed. The foregoing translates to a cost of $732,000 for curtailed generation and $9,518,000 for the grid accepted generation. This resulted in an average cost per MWh (megawatt hour) of $145.39 for IWT generation.

Over the day the HOEP averaged only $7.84/MWh and for hours 12 to 15 was $0.00/MW. In those 4 hours we saw our neighbours in Michigan, NY and Quebec receive 7,314 MW at zero cost which is about what 813 average Ontario households would annually consume and what 243,000 households would consume daily. If those MW we gave away were generated by ground mounted solar (contracts pay them $440/MWh) the cost would have been $3.2 million and if IWT generation the cost would be about $987,000!

Now, it is worth reflecting on how IWT and solar owners could further benefit from those low HOEP market prices.

If the BESS or pumped hydro storage units are owned by the same companies who generated that surplus power for which they were paid either $440/MWh or $135/MWh (sold for 0.00/MWh) turned around and simply scooped that power up via a licensed electricity trader and stored them they could simply hold them until the price jumped the next day or two.

All those “storage owners” would need to do is check the weather forecasts to see if the sun will shine or the wind will be blowing in the next day or two.

As it turns out today (November 27^th, 2022) is a perfect example of how they could increase their revenue at the expense of Ontario’s ratepayers. Today the wind is not blowing much, and the sun isn’t shining throughout the province. At Hour 7 AM today the HOEP jumped to $69.25/MWh and since then, has averaged $62.25/MWh meaning those 7,314 MWh at zero cost if sold back would have generated $455,297. The foregoing would simply add to the revenue those solar panels and IWT generated yesterday at the expense of Ontario’s ratepayers.

It should be recognized yesterday could have allowed them to generate a lot more revenue via storage as the example above only reflected the four hours of $0.00/MWh whereas the overall average for the full 24 hours was a paltry $7.84/MWh or 0.078 cents/kWh.

It seems obvious the IWT and solar generators recognize the unique ability to reach even deeper into Ontario ratepayers’ pockets but what is not obvious is if our Minister of Energy, Todd Smith and the IESO will prevent them from doing so.

Based on the directive to obtain “a minimum of 1,500 MW of storage” it appears the politicians and bureaucrats may well allow them to do exactly what those IWT and solar owners are hoping for and planning to do!

Winds Absence is a Good Thing as October 4, 2022, Demonstrates

Anyone who read the short article about the output of those IWT (industrial wind turbines) on October 2^nd when they operated at 52% of their capacity for the first 16 hours and cost us Ontario ratepayers/taxayers several million dollars for unneeded generation will be pleased with what happened yesterday!

Over the full 24 hours yesterday IWT were basically useless generating only 2,322 MW which was less than 2% of their capacity and averaged less than 100 MW per hour! Who knows, they may have been consuming more power than they produced?

The good news for Ontarians was the HOEP (hourly Ontario energy price) market price was fairly robust and over the 24 hours averaged $57.32/MWh versus the $1.57/MWh they averaged over the first 16 hours on the 2^nd meaning our losses on exported power (which was much less) was tiny in comparison.

One of the issues also impacting the price was total consumption was higher as was the peak Ontario demand hour which was Hour 19 reaching 16,753 MW versus the 15,320 MW at Hour 20 on October 2^nd. This latter point drives up demand for surplus generation when those intermittent and unreliable IWT fall flat meaning our neighbours in NY, Michigan and Quebec pay much higher prices for any power including that which may be surplus to our demand. The other good part of the foregoing is related to the cost paid for any exported natural gas generation as the price we pay is only fuel costs plus a small additional price per kWh (kilowatt hour). The latter is well below the average cost we pay daily per kWh!

We need more days like yesterday to stop the accumulation of taxpayer debt under the Ontario Electricity Rebate (OER) program which the Ford government launched. The FAO (Financial Accountability Office) estimated the OER will cost taxpayers $38.6 billion over the full remaining term of the renewable energy (wind, solar and biomass) contracts.

Perhaps the Ford government via the creation of the OER believes an electricity consumer and a taxpayer are two different individuals, but they are generally one and the same.

One would hope they will soon recognize the foregoing fact and rethink the push for net-zero due to its impact on current and future taxpayers and ratepayers.

For Cement Plants, Natural Gas is Out but Biomass, and Garbage is in as an Energy Source

It is apparent the “greening” of the world is upon us as the politicians and bureaucrats in charge continue to tell us about their belief in “climate change” and the necessity for mankind to contain the emission of CO 2 by eliminating the use of fossil fuels!

The weird thing is they wonder into pits that make absolutely no sense. The latter includes telling all sectors of our economy what they must do to contain those emissions. They have applied their stupidity now to the manufacturers of cement and presumably bricks. As it happens our township sits on an immense amount of limestone and a cement plant, Lehigh Hanson (LH), has operated here for decades as noted in an article about their contribution to the local hospital foundation. One should suspect the new hospital planned for the county will require a considerable amount of cement and bricks but depending on when the build starts the energy used to produce the cement will be the epitome of what eco-warriors consider “green” and reputedly non-emitting.

The following screenshot of part of a public announcement by LH discloses what their future energy source may be instead of natural gas.

According to the above, future energy used by LH to produce cement will be 200 tonnes per day of what are referred to as ALCF’s (Alternative Low Carbon Fuels) consisting of; wood from construction and demolitions, non-recyclable paper and plastic, textiles, tire fibre, fluff, as well as non-recyclable household waste. The “daily throughput” of 200 tonnes per day might mean the local community of less than 25,000 people will have to UP their generation of those “energy” sources to at least 3 tons of garbage per resident annually or will it be imported driving up the costs of producing the cement?

The other issue not mentioned, concerns what the emissions will be after conversion, versus those from the natural gas previously used and that may be a concern!

Residents of Bowmanville raised the alarm a year ago about the use of ALCF as noted in an article on DurhamRadioNews! “Some local residents say the Ministry of the Environment has failed to protect people living in Bowmanville, after St. Marys Cement plant was given the go-ahead to burn more types of waste as fuel.” The article went on to state; “The group says the cement plant is “putting out approximately 14 times more dioxin, 29 times more cadmium, 82 times more mercury, and 260 times more lead than Durham-York incinerator. They’re calling on local decision-makers to “find their voices” and fight against this expansion.”

Surely the local politicians in Bowmanville and those resident in the Provincial Government researched the potential pollutants before granting approval to St. Mary’s Cement or was it driven by the Federal Government who are pressing to eliminate natural gas due to its classification as a “fossil fuel”?

We should surmise it’s the Federal Government with PM Justin Trudeau and his minion, Steven Guilbeault, holding the title of Minister of the Environment and Climate Change, as the driver of this conversion!

The Summer Doldrums arrived and wind falls flat

Well, summer has finally arrived and as happens annually, wind falls off with the possible exception of the occasional hurricane’s arrival!

Once again, wind generations summer fail was evident as on July 7^th, 2022 Ontario’s industrial wind turbines (IWT) with a capacity of about 15.6% of total capacity in Ontario was at the bottom of the heap in respect to generation!

As one example Ontario’s peak demand occurred during a five-minute interval at Hour 17 reaching 19,638 MW and the 4,900 MW* capacity of wind generated only 332 MW at that hour representing 6.7% of it’s capacity and 1.7% of demand. To wit:

At peak, generation sources were producing the following:

Nuclear 9,529 MW

Hydro 5,222 MW

Natural Gas 4,336 MW

IWT 332 MW

Solar 207 MW

Biofuel 115 MW

Total 19,741 MW

As is obvious from the above the three sources of what are referred to as “new” and renewable (IWT, Solar, Biofuel) energy collectively delivered 654 MW or 3.3% of Ontario demand which clearly suggests without nuclear, hydro or natural gas generation Ontario’s households and businesses would have been living with rolling blackouts at the very least throughout the day.

IESO reported wind’s peak generation occurred at Hour 1 (hour ending at 1 AM) when it produced 462 MW of its capacity (9.4%) and it wasn’t needed as demand at that hour was falling below 13,000 MW. When morning arrived however and demand was increasing at 9 AM those IWT (industrial wind turbines) produced a miserly 57 MW (1.2% of their capacity).

As many Ontarians know IWT under the terms of their contracts have “first-to-the-grid” rights ranking ahead of all other generation sources and if their generation isn’t needed, they are still paid if IESO curtail them. It is worth noting the latter regularly occurs during the Spring and Fall seasons when peak demand is much lower but those Spring and Fall breezes are a part of our normal weather pattern.

As the Premier Ford led Ontario Government ruling party embark on their second majority governing term we should hope (and pray) he and his minions will actually do something to alleviate the mess in the energy sector created by the Ontario Liberal Party when they ruled the province!

Hopefully that is not too much to ask of Premier Ford or to expect during these times of rising inflation caused principally by rising energy costs!

*For some reason five (two are related) of Ontario’s IWT farms are still not yet commissioned even though they have been operating for a few years under contracts signed during the McGuinty/Wynne years. They are: Amherst Island (83 MW capacity), Bow Lake (two with a 58 MW capacity and Henvey Inlet (North & South with a 300 MW capacity).

Bruce Power took their Four “A” Units offline and no one Noticed

The OCAA (Ontario Clear Air Alliance) has been pushing the closure of Ontario’s nuclear plants for years in addition to their more recent effort to gain municipal support for the closure of our gas plants. They continually suggest the closure of both will not cause problems as we will get all the power those units now produce from Quebec’s excess hydro which is an outright lie. Quebec is a winter peaking province and pushes their residential and businesses to conserve power during that season. No doubt the OCAA will renew the claim with Bruce taking all four of their “A Units (3,144 MW capacity) offline as part of the requirement to do its Vacuum Building Outage. That will allow OCAA to suggest they weren’t missed!

The VBO is a regulation as noted in the Bruce press release: “All four operating units must be shut down once every 12 years to allow for inspections and maintenance to the vacuum building.” The units will come back on line before “summer peaking season” to ensure Ontario has the electricity supply needed.

What is interesting about the units being taken offline is to look at Hour 18 (hour ending at 6 PM) on May 12^th! That time reflects the “peak demand” hour for the day with it reaching 17,179 MW for a five-minute segment. At that hour nuclear generated 6,758 MW, hydro 6,176 MW and natural gas plants 3,666 MW. From the three renewables IESO report; solar contributed 97 MW, biomass 50 MW and those IWT (industrial wind turbines) 866 MW so collectively they provided 5.9% of peak hour needs.

Now try to imagine the blackouts we would experience without nuclear and gas or what Quebec might have provided to replace the 57% of generation those two sources did!

As a matter of interest, the IESO “Intertie report” disclosed Ontario even exported 1,408 MW to Michigan and imported 500 MW from New York. Quebec supplied 115 MW (less than solar and biomass combined at that hour)! Those imports and exports traded at an average rate of $81.06/MWh which is much closer to their actual cost than when the wind is blowing hard during low demand hours and days driving down the HOEP (hourly Ontario energy price)!

So, Mr. Gibbons, Chair of the OCAA, the “cheap and abundant” hydro you told us Quebec would supply if we shut down our nuclear and gas generation never appeared at Hour 18 so what makes you believe we would be able to do without Ontario’s nuclear and gas generation? You seem intent at wanting to cause widespread blackouts throughout Ontario!

The time has arrived for the OCAA and its supporters to back off from their spurious claims!

Grand Delusion: The Liberal Government’s Proposed “Clean” Electricity Standard

The captioned is a slightly edited version of the paper that Robert Lyman and I wrote on behalf of the CCMBC (Coalition of Concerned Manufacturers and Businesses of Canada) in response to the Federal Governments paper: “A Clean Electricity Standard in Support of a net zero electricity sector”.

The article is posted on the C2C Journal a great online publication that was founded in 2007.

I would encourage you to visit the site and either read or reread the report as the edited version has pictures and graphs that bring the report to life.

Find it here:

Grand Delusion: The Liberal Government’s Proposed “Clean” Electricity Standard

THE PROPOSED CLEAN ELECTRICITY STANDARD

Comments by the Coalition of Concerned Manufacturers and Businesses of Canada

April 15, 2022

by Robert Lyman and Parker Gallant

On March 8, 2022, the government of Canada published a document entitled, “A Clean Electricity Standard in Support of a net zero electricity sector”. The stated purpose of this document was “to send a clear signal that the Government of Canada intends to move forward with regulations to achieve a net-zero electricity system by 2035; to outline considerations related to this objective; and to solicit comments from Canadians regarding the scope and design of the CES”.

The Coalition of Concerned Manufacturers and Businesses of Canada (hereafter referred to as “the Coalition”) is a not-for-profit association that represents small- and medium-sized manufacturers and other businesses in Canada. The goal of the Coalition is to advance policies that promote economic growth and retain good jobs in Canada.

General Comments

Much of the current public discussion concerning future energy transitions is based on speculation about the timing, cost, and pace of commercialisation of new technologies. It would seem more prudent to base one’s judgments on what has actually happened in past energy transitions rather than try and predict the future.

The period from scientific discovery to widespread commercialisation of technologies has been much longer than is currently estimated by advocates of rapid decarbonisation. None of the steps in the innovation pathway – research, discovery, testing, demonstration, initial market development or widespread commercialisation – operates according to a fixed or predictable schedule.

Professor Vaclav Smil of the University of Manitoba, perhaps the world’s foremost expert on energy transitions, has argued that past transitions have been slow, painstaking and hard to predict. Existing technologies, both for generation and consumption of electricity, have a lot of inertia. Smil observes that the changes in technology and infrastructure required to decarbonise the world in a few decades as a ‘grand delusion’.

The proposed CES seems premised on the view that, in the face of high market costs and barriers, governments can force the pace of change and retain the support of the electorate in doing so. Outside of the centrally planned economies, however, no government has attempted to prescribe the timelines for commercialisation of new technologies or the dates by which a large share of society’s needs must be met by a new technology. ‘Picking winners’ may be an increasingly popular aspect of national industrial policy (despite its history of failures), but a prudent government should be hesitant about committing billions of taxpayers’ dollars to technologies that are not ready and cannot compete without permanent subsidies.

Those who pursue the net zero goal will be confronted with the reality that hydrocarbons are nature’s most efficient embodiment of primary energy. The combination of high energy density, abundance, stability, safety, portability, safe storage and affordability is unmatched by any other source of energy. Governments cannot wish those advantages away.

The electricity sector offers good examples of the immense barriers to net zero. Just meeting the additional generation requirements needed to power proposed conversion to electric vehicles would require a major expansion in the electricity generation capacity across Canada, sometimes estimated as the addition of 10,000 megawatts of capacity from today’s levels. The provinces of New Brunswick, Nova Scotia, Saskatchewan and Alberta still have coal fired capacity collectively totalling over 9,000 MW which will also require replacement, adding considerable additional costs.

The two largest power projects being built in Canada today, Site C in British Columbia and Muskrat Falls in Labrador, have a combined design capacity of 1,944 megawatts. To meet just the additional EV-related power demand, at least eight more projects of the same size would have to be built. It generally takes at least 15 to 20 years to bring such a project to production in Canada. There are none even being contemplated at this time.

Central to the vision on which the proposed CEP is based is the thesis that in future Canada must rely primarily on wind and solar power generation for incremental supply, notwithstanding that these sources are intermittent and frequently unreliable.

The Issue of Costs

The discussion paper presents the transformation of Canada’s electrical energy system from one which is predominately reliant on low- or zero-carbon dioxide emissions to one that has virtually no carbon dioxide emissions as though it can be accomplished at low cost. Indeed, considerations of cost seem barely to enter into the presentation of facts, which is a highly unrealistic approach.

Canadians’ experience with efforts to reduce greenhouse gas emissions from electricity systems in Ontario and Alberta have already revealed the significant economy-damaging costs of seeking to increase reliance on wind, solar and biomass energy. In Ontario, electricity rates for consumers doubled over the past decade and, according to the Ontario Auditor General, the cost of the move to increased wind and solar energy will be $90 billion over the life of the existing contracts.

Those who have studied the experience of other countries that have sought to increase reliance on renewable energy sources for electricity generation have found consistent patterns. These efforts bring about large increases in the actual prices that must be paid for electricity by consumers and businesses. Further, the price increases grow and accelerate as the percentage of electricity generated from intermittent renewables increases. This is due to the need for large and increasing amounts of costly backup and storage – things that are not needed at all in conventional hydrocarbons-based systems. Jurisdictions that increased generation from renewables up to as high as 30 per cent to total electricity supply have seen an approximate tripling in the price of electricity to ratepayers, except where a large portion of the increased costs is off-loaded to taxpayers.

In the remainder of these comments, the Coalition will address four specific aspects of the proposed CES:

The paper’s treatment of energy technology pathways
The paper’s proposal to minimize use of natural gas-fired generation
The cost of bulk electricity storage
Issues related to transmission

Technology Generation Pathways

The concept of technology is touted in the discussion paper as a way to achieve “net-zero” electricity for which wind turbines (onshore and offshore), solar (photovoltaic and concentrated), hydro and nuclear are considered to be zero emissions! It goes on to claim: “low and non-emitting generation technologies are becoming more cost-competitive, the pace of low-carbon electricity deployment must accelerate for Canada to reach NZ2035”.

The paper also opines favourably on possible energy sources under development such as SMR (small modular reactors), hydrogen fuel cells and carbon capture as zero emission. It also favours biomass (cogeneration and simple cycle) ahead of any form of natural gas generation.

Biomass: The treatment of biomass as low emissions flies in the face of reports from the UK where one of the world’s largest biomass power plants (DRAX)1. ranks third in the EU for emissions (if they were counted) and also received more than £800m in subsidies.

Solar photovoltaic is also a questionable source of energy in Canada (weak winter solar) and where it has been developed has cost more than estimated and produced considerably less power than forecast. The larger projects started on the Nevada deserts have had many problems and the State 2. is dependent for over 60% of its electricity needs on natural gas plants. It would also need storage which would add considerably to its costs.

SMR technology is in process in many locations around the world but to date only a small number are operating, with Russia’s Akademik Lomonosov,3. the world’s first floating nuclear power plant which began operation in May 2020 producing energy from two 35 MW SMRs. China’s Huaneng Group Co.’s 200-megawatt unit 1 reactor at Shidao Bay is now feeding power to the grid in Shandong province, the China Nuclear Energy Association 4. said in a December 2021 article. Other SMRs are under construction or in the licensing stage in Argentina, Canada, China, Russia, South Korea and the United States of America. SMR, dependent on costs, appears to be a possible “net-zero” energy source before several others but is unlikely to meet the targets committed to by the Canadian Federal Government at COP26.

Wind and solar are touted as playing a “key role”in reducing the electricity sector’s emissions but it will be very costly as demonstrated in Ontario5. where prices more than doubled in less than 10 years as they rose to represent over 15 per cent of capacity but generated only 9 per cent of demand, often when not needed. It must be recognized they receive “first-to-the-grid” rights meaning clean hydro is spilled and clean nuclear is steamed off to maintain grid stability and ratepayers are saddled with those costs in addition to what is paid to wind and solar developers. Due to their unreliable and intermittent nature they require backup from natural gas generation and ratepayers are saddled with that cost too.

Carbon capture utilization and storage (CCUS) is a major part of the discussion paper. Based on the following excerpt however it seems to be viewed as temporary: “Over time, however, natural gas coupled with CCUS will increasingly be in competition with other emerging options that are both non-emitting and flexible in the roles they can play in electricity systems.” The issue of CCUS has gained interest from the Government of Alberta 6. and six major oil patch participants who are seeking “carbon capture credits” to assist in recovering some of the costs. While Canada is a leader in the development of CCUS the costs involved will be billions of dollars. Those costs will add considerably to electricity generation costs from flexible fossil fuels required to back up intermittent and unreliable wind and solar generation. A report from June 2020 from Rutgers University 7. stated: “The analysis suggests coal-sourced CO2 emissions can be stored in this region at a cost of $52–$60 ton−1 , whereas the cost to store emissions from natural-gas-fired plants ranges from approximately $80 to $90.” Note the foregoing are US dollars and those costs will be added to each kWh delivered. Transferring part of these costs from emitters to taxpayers through the use of investment tax credits for CCUS will not reduce the cost to society.

Hydrogen blending with natural gas will raise consumer costs and risk public health while barely reducing emissions, a US think-tank 9. reported in a March 30, 2022 article. It goes on to state “A blend of 20% green hydrogen in natural gas would raise fuel costs for heating and cooking by a factor of two to four, as renewable H₂ is currently six to 14 times more expensive than fossil gas, the study explains. Green hydrogen prices would have to fall by roughly an order of magnitude to achieve parity with the price of natural gas for use in buildings.” The “Discussion Paper” suggests “releasing the Hydrogen Strategy for Canada to position Canada as a world-leading producer, user and exporter of clean hydrogen, and associated technologies”. It appears once again the blending of hydrogen and natural gas would further drive up the cost of electricity should this be cast as another regulation.

Natural Gas

Natural gas has long been favoured as a clean, efficient, plentiful and affordable source of energy supply for multiple uses. In absolute terms, natural gas is the fastest growing source of supply for energy consumers, and through the use of liquification one of the fastest growing sources of international energy trade. In the United States, the increasing domestic supply of natural gas and its affordability have allowed the US to convert a large amount of previously coal-fired electricity generation to the lower cost and cleaner fuel.

In Canada, natural gas is used both for reliable base-load power generation and a back-up source to help cope with the serious problems of intermittency that plague wind and solar generation sources that have been used for political reasons. According to Canada’s Emissions Inventory, published by Environment and Climate Change Canada, in 2019 natural gas fired generating plants produced 46,100 GWh of electricity, 8 per cent of Canada’s total, and emitted 22 megatonnes of carbon dioxide equivalent, 32 per cent of the emissions from power generation. This, however, is only illustrative of how extremely low greenhouse gas emissions already are from electricity generation in Canada. Emissions from natural-gas generated power are only 3 per cent of Canada’s total emissions.

Increasingly, natural gas electricity generation in most provinces will come to represent a backup source produced from plants constructed a decade or more ago. The Independent Electricity Systems Operator of Ontario (IESO) recently completed a study to determine the feasibility and cost of phasing out natural gas generation by 2030. The findings of that study are very relevant to the federal government’s consideration of the Proposed Clean Electricity Standard. These included the following:

Gas generation offers a set of services, including quick response time and assured availability, that keep the grid reliable and help balance the variability of wind and solar.
Completely phasing out gas generation by 2030 would lead to blackouts.
Replacing gas generation in Ontario by 2030 would require more than $27 billion to install new sources of supply and upgrade transmission infrastructure. This translates into a 60 per cent, or $100 per month, increase in the average monthly residential bill.
There are many other practical considerations that make a 2030 phase-out impossible, including the time that it takes to plan, get regulatory approvals for, and build new infrastructure and non-availability of storage as an alternative. Those impediments are likely to last well beyond 2030.

The IESO report did not address the fact that many natural gas generation facilities, including those operated by private firms (i.e. the so-called non-utility generators, or NUGs), while often signed to 20-year contracts, generally operate for much longer than that. In fact, it is not surprising to see them operating under 40-year contracts. The premature cancellation of these contracts could cost well over $600 million, which would also be added to consumers’ bills.

Anyone considering the termination of existing contracts across Canada and the construction of new generation, transmission and storage facilities to replace the services now provided by natural gas-fired generators would have to take these factors into account.

Storage

Battery Storage is only cited once in the Discussion Paper in the following context: “leveraging Canada’s competitive advantage in mining to build the Canadian battery and critical mineral supply chains”. The foregoing suggests the author(s) do not regard it as a means to significantly support the electricity sector, perhaps due to its high costs. A report from June 2021 by the US NREL 8. (National Renewable Energy Laboratory) estimated the cost as; “(e.g., a $300/kWh, 4-hour battery would have a power capacity cost of $1200/kW).” That translates to a cost of U.S.$1.2 million for just 1 MW (megawatt) of storage for 4 hours and if done to any scale would drive up electricity prices.

No jurisdiction has yet succeeded in getting the percentage of its electricity generated from intermittent renewables past 50 per cent on an annualized basis. As the reliance on renewables increases, the grid operator must rely more on coal or natural gas-fueled backup power, and where these are prohibited, on some form of storage, most likely from large batteries. The cost of batteries is high and increases with the period of time for which storage is required, and whether the storage is needed only to balance daily or seasonal variations in demand

The cost of batteries sufficient to power a jurisdiction of millions of people would be enormous. In jurisdictions where a calculation has been made, the costs of the batteries exceeds the full annual GDP of the jurisdiction, and implies an increase in the price of electricity by a factor of 15 or more. For example, according to a study by Roger Andrews[1], the total amount of storage needed to provide secure supply in California amounts to about 25,000 GWh per year, more than a full month’s current rate of usage. Even assuming a substantial reduction in current battery prices, the cost of that would be in the range of US $5 trillion. And these batteries would need to be replaced regularly. Ken Gregory[2], a Canadian engineer, has assessed the cost of electrifying the United States economy without hydrocarbon-based generation, including the cost of battery backup. Simply to meet 2020 demand for 31 days would require storage that would cost $77.4 trillion, almost four times current US annual GDP.

Bulk electricity battery storage is hopelessly insufficient, no matter the cost. David Wojick, a Virginia-based Ph.D. in the logic and philosophy of science, explains this well in his article “California secretly struggles with renewables” (January 19, 2021).

Here is an excerpt:

“California has hooked up a grid battery system that is almost ten times bigger than the previous world record holder, but when it comes to making renewables reliable it is so small it might as well not exist. The new battery array is rated at a storage capacity of 1,200 megawatt hours (MWh); easily eclipsing the record holding 129 MWh Australian system built by Tesla a few years ago. However, California peaks at a whopping 42,000 MW. If that happened on a hot, low wind night this supposedly big battery would keep the lights on for just 1.7 minutes (that’s 103 seconds). This is truly a trivial amount of storage…Barely time to find the flashlight, right? “This one reportedly utilizes more than 4,500 stacked battery racks, each of which contains 22 individual battery modules. That is 99,000 separate modules that have to be made to work well together. Imagine hooking up 99,000 electric cars and you begin to get the picture.”

Large-scale battery storage of electricity is still an infant industry, with enormous costs and technological risks, It is foolish in the extreme for Canada to commit to a pattern of electricity generation dependent on large-scale batteries for security of supply.

[1] Roger Andrews, The cost of wind and solar power: batteries included. Energy Matters, November 22, 2018

[2] Ken Gregory. The Cost of Net-Zero-Electrification of the USA. Friends of Science. December 20, 2021

Transmission Costs

The Discussion Paper notes; “Achieving net-zero electricity will require coordinated efforts. Provinces and territories hold jurisdiction over electricity planning and operation, while the federal government holds jurisdiction over emissions reduction regulations, interprovincial transmission projects, and international commitments, among others.”

What the foregoing infers is either conflict or agreement will occur between the two parties as to how to achieve “net-zero electricity” which will obviously depend on projected outcomes and the current generation sources in each province/territory.

One example is referenced as the “Atlantic Loop” project which aims to transmit hydro power from Muskrat and Churchill Falls (both located in Labrador) to other Atlantic regions, principally Nova Scotia which has 8 coal fired plants that federal regulations says they must close by 2030. No doubt Nova Scotia would be happy to replace those coal plants with hydro power but what cost would Quebec, Newfoundland and Labrador charge for that power? The other consideration is that Quebec is a winter peaking province so has little surplus energy available during that period meaning little or no generation from Churchill Falls.

To top things off, Muskrat Falls is way over budget, having ballooned from an estimated $7.2 billion to $13.1 billion. The Federal 10. government stepped in to provide up to $5.2 billion with $1 billion of that as a loan guarantee and another $1 billion for transmission costs. The latter $1 billion is 20 per cent of the estimated cost of the Atlantic Loop which in late January 2022 Intergovernmental Affairs Minister Dominic LeBlanc said his Ministry required more information before they could “justify a federal investment”.

Based on the comments in the Discussion Paper it appears the government is prepared now to “justify” that investment as it states: “The ‘Atlantic Loop’ project is an example of collaboration to bring clean power to where it’s needed in Eastern Canada. The Government of Canada and the Canada Infrastructure Bank are currently collaborating with provinces and regional partners to advance this intertie project, which could greatly reduce emissions and maintain electricity affordability in the Atlantic region.” So, Nova Scotians should now wonder what will the cost be for the power combined with the costs of the transmission. Will the cost of electricity be truly affordable? To top things off, GE 11. (who supplied the turbines) has been having problems with the software for the LIL (Labrador Island-link) slated to bring power to the Northeast Avalon.

High voltage transmission projects vary in terms of costs per kilometer. As one example the 301-kilometer Eastern Alberta Transmission Line 12. completed several years ago cost $1.8 billion or about $6 million per kilometer. Two major power lines under construction in northwestern Ontario are estimated to cost much less! Those are the East-West Tie Line, 13. a 450-kilometre line stretching from Wawa to Thunder Bay, at a cost of $777 million makes its projected cost per kilometer $1.7 million. The other project is the 1,800 kilometer Wataynikaneyap Power 14. line serving many small indigenous communities on its route. In total it will serve 15,000 people for a total cost of $1.9 billion or just over $1 million per kilometer and $126.6K per person and over $500K for a family of four.

An article in the Financial Post on March 31, 2022 penned by Francis Bradley, CEO of Electricity Canada titled “The clock is ticking on Canada’s electricity grid” 15. stated “Under net-zero, Canada will stop its reliance on fossil fuels by mid-century. However, by the government’s own estimation, to do so Canada will need two to three times the amount of electricity it produces now in order to decarbonize other sectors of the economy.” The article went on to note: “Transmission lines — the big power lines that move electricity long distances — are hugely complicated to survey and then build. Even making sure the electricity infrastructure on your street is ready for the increased load will take years of investment.” Mr. Bradley went on to say; “Decarbonizing Canada’s economy by 2050 will be a herculean task. Decarbonizing the electricity system in less than half that time will be doubly so. If either is to have any chance of succeeding, the electricity industry will need to do more, faster, as Prime Minister Trudeau has said. But that also works the other way. The countdown clock is ticking. And we’re still waiting for vital leadership.”

What the above illustrates is that just the costs associated with ensuring the transmission lines delivering the “clean green” renewable energy will require significant upgrades costing billions of dollars. Those costs coupled with those associated with the desire to eliminate fossil fuel generation will drive up power costs for families and businesses. It will affect the provinces of Nova Scotia, Alberta and Saskatchewan to a much greater degree due to their current use of fossil fuels in the generation of their electricity needs.

The foregoing suggests costs in the tens of billions of dollars which in turn will damage Canada’s ability to attract new business, it’s related capital and will decimate the economy and drive-up unemployment levels.

Conclusion

This analysis outlines the impossibilities of achieving the goals set by the Government of Canada within the proposed time frame. Any push towards the unrealistic outcomes included in the planned government policies will badly damage the Canadian economy. As well, they will lead to millions of Canadian households living in energy poverty, spending well over 10 per cent of disposable income on trying to stay warm in winter and cool in summer. It is no accident that Canadian government climate plans never include reputable, independent cost/benefit analyses, as to do so would reveal to Canadians just how unachievable and punitively costly the stated goals are.

It is important to recognize Canada’s total emissions in 2019 (last reported year) were 20 Mt lower than China’s emissions increased in the two years between 2019 and 2021 during the pandemic. China’s emissions reported by the IEA (International Energy Agency) rose to over 11.9 billion tonnes which represents 33 per cent of total global emissions. China was also the only major economy to experience economic growth in both 2020 and 2021, questioning the often-cited claim that “the environment and the economy go hand in hand”.

Sensible, measurable policies to achieve tangible benefits to the environment are welcomed by the Coalition. Unfortunately, the approach in the Clean Electricity Standard document does not qualify as either measurable or achievable.

Other related observations

Peak emissions occurred in 2007 at 752 megatons and our population was 32.89 million so per capita emissions were 22.86 tons per person.

Emissions in 2019 (latest from Government of Canada) were 730 megatonnes and our population was 38.19 million so our per capita emissions were 19.11 tons per person a drop of 16.4%.

https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions.html

Canada had wind capacity at the end of 2021 of 14,304 MW and 2,399 MW of solar which reputedly generated slightly less than 6% of total electricity of 647.7 TWh! https://www.cer-rec.gc.ca/en/data-analysis/canada-energy-future/2020/results/index.html From this “variable renewable energy (VRE) sources such as wind and solar. Figure R.21 shows that by 2050, total non-hydro renewable capacity in the Evolving Scenario is over triple 2018 levels. Total wind capacity rises to 40 GW and total solar capacity rises to 20 GW.” It also has a key uncertainty “Export market developments: Climate policies, fuel prices, electrification and power sector decarbonization in export markets could impact future projects and transmission intertie developments.”

The Liberal NDP/Cartel Working to Eliminate Billions in Tax Revenue by increasing Taxes

Many of Canada’s economists must be scratching their heads trying hard to follow the Trudeau/Singh marriage that seeks to overturn economic concepts by “Building Back Better” or via “The Great Reset”!

The basic premise; from the writer’s perception, seems to be; by further taxing fossil fuels they will create utopia eliminating its use and the future will see us all using only clean, green electricity. In order to achieve their goal, increasing taxes for using fossil fuels will not only create those “green” jobs and eliminate poverty but will also save the planet as we (Canada only) aim to achieve net-zero emissions.

Taxes (Levies) Imposed on Fossil Fuels

Natural Resources Canada have posted a chart referenced as “Fuel Consumption Levies in Canada” which sets out what should be called taxes as they simply raise the price of the fuel(s) for the benefit of the Federal and Provincial governments. The page is inclusive covering those “levies” for: gasoline, diesel, propane (motor vehicle), furnace oil and natural gas (for heating). The chart also includes the 2021 Federal and Provincial “Carbon Levies”. Funnily enough “biomass” and coal are not included in the chart, however, interestingly enough Canada is one of the 120 members of the “Powering Past Coal Alliance” and has committed “$275 million to the World Bank in December 2018 to create the Energy Transition and Coal Phase-Out Program.” Your tax dollars at work somewhere else in the world!

Annual Taxes (Levies) on Natural Gas

According to CIEC Data Canada’s average consumption of natural gas “was reported as 10.868 Cub ft/Day bn in Dec 2020”. That translates to 11,466.35 gigajoules and for a full year is just under 4.2 million gigajoules. Based on the current levy referenced as the Federal Carbon Charge the tax (Levy) would generate approximately $10.4 billion per annum. On a personal basis I noted on my latest natural gas bill: the Federal Carbon Charge (tax) was 45.7% of the “Gas Supply Charge” and coupled with the HST total taxes represented 80.3% of the cost of the natural gas our household consumed.

In the future we should wonder; how will the Federal and Provincial governments replace that $10.4 Billion of taxes/levies?

Annual Taxes (Levies) on Gasoline and Diesel Fuel

The number and amount of taxes and levies on gas and diesel fuel is mind-blowing and include; Federal Excise Tax, provincial fuel tax which can vary within each province (highest is Vancouver, BC at 27.5 cents/litre and lowest is the Yukon at 6.2 cents/litre), the carbon tax and of course, the PST and GST either combined (HST) or individual (Quebec).

So, lets look at the revenue those numerous taxes/levies generate annually from their consumption to get us to work and back, take our kids to school and to move goods and services across our very large country.

As it turns out the most recent information of consumption Statistics Canada posted is for 2020 which was the first year of the Covid-19 outbreak. The Covid outbreak created lockdowns, business and school closures, etc. and as a result our consumption of gasoline and diesel fuel fell from 2019. Gasoline consumption fell by 13.8% from 44.8 billion litres to 38.6 billion litres and diesel fuel consumption fell from 17.8 billion litres to 16.2 billion litres or 8.9%. Despite the drop in consumption the taxes/levies funds rolled into the Federal and Provincial coffers.

Based on the taxes levied if one does a simple calculation using fifty cents a litre (.50 cents/litre) which is approximately what they would be in Ontario one discovers those 38.6 billion litres would have generated approximately $19.3 billion from gasoline sales. Diesel taxes are slightly higher so at fifty-two cents a litre (.52cents/litre) the 16.2 billion litres would have generated about $8.4 billion. Collectively gasoline and diesel sales contributed around $27.7 billion dollars to Federal and provincial revenues.

Once again how will the provincial and Federal governments replace that $27.7 billion of taxes/levies they collected and spent?

Provincial kickbacks due to high fossil fuel costs

As if to make the potential drop in taxes more acute a few provinces have kicked back some of their taxes/levies as a response to the costs associated with fossil fuel consumption as the price of both gasoline and natural gas climbed to record levels. Ontario has dropped license fees no matter if you drive an EV (electric vehicle) or a vehicle labelled as an ICE (internal combustion engine) saving vehicle owners $120 per year. That will result in lost revenues of almost $1.1 billion annually based on over 9 million vehicles registered in the province. Alberta has dropped it’s .13 cents/litre fuel tax until the price of WTI (West Texas Intermediate) drops below $80/barrel! BC’s Premier Horgan, said vehicle owners insured with ICBC (a provincially owned monopoly) will be receiving $110 each to “relieve the pain at the pump” which should result in approximately a $400 million payout. What the foregoing suggests is those three provinces will be short of about $2 billion plus during the current year. As we get closer to the complete elimination of fossil fuel use to drive our ICE cars or to heat our homes, we should expect these kickbacks to disappear due to the billions of taxes/levies that will be lost along with the jobs they support.

The foregoing implies the Federal and Provincial Governments will miss the almost $40 billion dollars annually extracted from taxpayers for using fossil fuels! The $40 billion doesn’t even include the billions coming directly from the fossil fuel companies or the income taxes from those they employ!

Maybe it doesn’t make economic sense to raise taxes to eliminate taxes! Perhaps it’s time for many of our politicians to take an economics course or spend a little time with some of those impacted by their efforts to achieve “net-zero”!