The federal government needs to invest more money to move the electricity grid to reach Ottawa’s climate goals, say experts in the field.
Last week the federal government released its annual budget, setting aside $600 million for electricity transmission upgrades, which Morinville-St. Albert MLA and Associate Minister of Natural Gas and Electricity Dale Nally says isn’t enough.
“That would build one line in Alberta, and so the true cost to upgrade the transmission in Alberta alone will be multiple billions of dollars,” Nally said, adding that to upgrade the whole country it will cost even more.
“[The federal government] has not been transparent about the true cost of their de-carbonization aspirations.”
Nally said the industry has zero confidence Alberta can achieve the climate goals set out for the electricity grid — net zero by 2035 — and the announcement amounts to “an unworkable plan.”
“It is childlike ambition,” Nally said, adding the province wasn’t consulted on any of the goals or plans, and the industry didn’t receive any meaningful consultation.
Binnu Jeyakumar, director of clean energy at the Pembina Institute, said if the federal government wants to be ambitious with its climate goals, it must invest much more in clean electricity over the next five years.
“I think we can be a lot more ambitious in terms of the magnitude of investment,” Jeyakumar said.
The Pembina expert said Alberta has one of the dirtiest grids in Canada, and still has a long way to go reach the federal government’s goal of de-carbonizing the grid by 2035. Right now, Alberta has a generation intensity of 602 g CO2 eq/kWh — a ratio measuring CO2 emissions from public electricity production —compared to a national average of 120 g CO2 eq/kWh
Alberta has dramatically accelerated the phase-out of coal power, which is set to be phased out by 2023, Jeyakumar said, even though the goal was 2030.
“One of the things that has facilitated this fast transition is that we are fuel switching from burning coal to burning natural gas. That’s made it easier to take that first step, but now we have to deal with all these natural-gas assets,” Jeyakumar said.
“In a de-carbonized grid, you cannot have natural-gas assets that don’t have [carbon capture, utilization, and storage] attached to them.”
Now the question for Alberta is how to replace natural gas, the expert said, and the province faces unique challenges.
Alberta has fewer electricity ties with other provinces compared to most provinces, making it more difficult to share the resource inter-provincially, Jeyakumar said. Alberta also has a large industrial load that must be catered to, which is a challenge.
The best way to reach the net-zero target by 2035 would require a plan by the provincial government, which Jeyakumar said isn’t happening, although the Alberta Electricity System Operatory has started to explore a pathway to get there.
But Nally said the province, which has the only deregulated electricity market in Canada, will continue to support a market-based approach to solving challenges with the electricity grid.
“[Companies] built significant investments based on the market-based approach and to change that now, it would be it would be disastrous for investors to make significant investments based on a particular market and then, all of a sudden, government decides that they’re not going to have a free and open market,” Nally said.
The free and open market has made Alberta a destination for renewable energy companies, and Nally said and there is no need to change that right now.
“Our market is working. We’ve got more generation coming online, much of it is renewable,” Nally said.
Along with investing in enhancing the electricity grid, the federal government has started a Pan-Canadian Grid Council to establish national standards, best practices, and incentives to promote infrastructure investments, smart grids, grid integration, and electricity sector innovation, with the goal of making Canada the most reliable, cost-effective, and carbon-free electricity producer in the world.
Jeyakumar said the move will be a good one, because electricity is currently a provincial jurisdiction, and the council will help propose policy solutions to deal with a divided electricity grid across Canada.
Ottawa has also set aside $25 million in regional strategic initiatives to promote any kind of regional collaborations between provinces that share borders.
“Together, all of this is a good first step to get to a clean grid,” Jeyakumar said.
Nally said the province is still doing some analysis on the regional and national initiatives, because the province is the only deregulated market in Canada. Nally said Alberta wants to make sure any regional initiatives don’t reduce generation that is available to the Alberta consumer, because that will mean higher costs for ratepayers.
Right now in Alberta, roughly 65 per cent of the maximum capacity on the grid is coming from gas, with coal making up 7.6 per cent of the generation. Some 25 per cent of the maximum capacity on the grid is generated through renewable sources such as hydro, solar, and wind.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
