Canada is a country rich in technical know-how and innovation, as well as a resource-rich nation and a global heavyweight in energy. Like much of the world, we are currently undergoing an energy transition. As we undertake a massive global shift toward more sustainable forms of energy and decarbonization, Canada has great potential to help lead the way to addressing the challenges this transition presents.
There are many moving parts to the global energy transition, but the crux of our global challenge is this: we need to provide reliable and affordable energy that underpins our economies and builds our communities, whilst removing 30 Gt of carbon from the atmosphere. As Canada has committed to removing 304 Mt of CO2 equivalent but even if we implement all identified reduction measures, there is still a 77 Mt gap between this goal and the current projected estimates.
To underline the magnitude of this challenge, this target represents pre-1990 levels of carbon, when the global population was 30 per cent lower than today, and we will need to reach these targets at a date where the global population will be 30 per cent larger than it is now. With just eight years to meet these ambitious targets, we seem to have banked our future on heavy electrification. Is it really the solution?
Reimagining our relationship with hydrocarbons
Can we simply remove hydrocarbons from the energy mix? In recent years, spending on Canadian hydrocarbon projects has dropped substantially, with the vast majority of megaprojects being indefinitely deferred or cancelled. Taking a closer look, this cannot be wholly attributed to the greening of Canadian energy. This precipitous drop is due to numerous complex factors including high development and construction costs in Canada, and a drop in U.S. demand for non-domestic production of oil as fracking technology transformed them into a net exporter.
Even in a business environment that increasingly seems less attractive for hydrocarbons, the world consumes 1,157 barrels of oil every second and by all measures will continue to do so for the next decade. To illustrate this, a brilliant leader in clean technologies, Audrey Mascerenhas, calculated the following. To replace oil as an energy source, we would need to develop:
50 nuclear plants each year for the next 50 years; or
33,000 wind turbines a year for the next 50 years; or
91 million solar panels a year for the next 50 years
There is no doubt that oil demand will continue to fall as transportation needs evolve and electric vehicles proliferate. Additionally, Canada has a leadership role in the energy transition, with our strengths in renewables, clean technologies like carbon capture, and the ability to harness our massive resources in natural gas to displace more carbon-intensive fuels like coal elsewhere in the world while providing the most viable bridge to the issues of dispatchability and intermittency.
The acceleration of electrification
To slash emissions, we are already seeing big shifts: in transportation toward electric vehicles, in buildings toward heat pumps, and a huge amount of electrification of data – from Netflix to Bitcoin. But decarbonization isn’t as simple as just replacing coal or replacing oil with one silver-bullet solution. Canada has one of the cleanest electricity grids in the world, with over 67 per cent of our electricity coming from renewable sources. Despite the great promise of some alternative energy innovations, there is no single remedy to reduce emissions.
The saying that, “there is no such thing as a free lunch,” holds when it comes to electrification. Here are some issues that present large risks:
Carbon-intensive energy sources Although countries are increasing the use of renewable energy generation, much of the global mix is still highly reliant on coal and oil. As described before, these cannot be converted to non-emitting sources by 2030.
Strained electrical infrastructure The massive rollout of electric vehicles and renewable power generation has huge implications to the financials of operators and utilities, as they deal with the exponential rise to wear and tear on ageing infrastructure across switch-gear, transformers, breakers and transmission lines.
Hidden carbon costs of electrical infrastructure Something that is not also discussed is the role of sulphur hexafluoride (SF6), the world’s worst greenhouse gas that is 23,500 times more potent than CO2, as a vital component of the electrical network. Already emitting the CO2 equivalent of 100 million cars, this electrical insulator is expected to grow in use by 75% by 2030. Unlike CO2, SF6 has no natural sink – it will not be absorbed by the oceans and forests.
Lifecycle costs of electrification From batteries to electronics, these increase the use critical minerals and various rare-earth elements from around the world. As well, once these batteries and devices are at end-of-life, there are costs associated with recycling and disposal.
Non-intermittent, dispatchable and sustainable energy
Electrification is not decarbonization. Creating sustainable, net-zero energy is a multifaceted challenge, like solving a Rubik's cube. As you solve one side, it creates issues with the others. We need to look at it from all angles. Multi-variable and multi-dimensional problems need to be solved by reimagining solutions that address the political, social, environmental and financial aspects simultaneously. Decarbonization will be a matter of finding the right combination of solutions to cut our emissions while still generating a reliable and economically feasible energy mix.
To reach our emission reduction goals by 2030, we don’t have the time to implement untested technologies — we need to find innovative ways to deploy technologies we already have. That’s going to look like more solar, more wind, more carbon capture, the reduction of waste methane, battery storage, green and blue hydrogen. It will also include encouraging a circular economy with waste-to-energy projects, distributed generation with more smart grids, microgrids, and global cooperation in carbon credits.
To reach our emission reduction goals by 2030, we don’t have the time to implement untested technologies — we need to find innovative ways to use what we already have.
Additionally, we need to address the aspect of waste – 60 percent of energy is lost through waste. Energy is lost across transmission and distribution, energy conversion, inefficient systems, heating, venting and flaring – we are squandering energy. Methane reduction is absolutely essential. If we improve the efficiency of systems, we can make a huge dent in emissions.
Canada’s energy journey is simply a microcosm of the global energy transition. Emissions know no borders. With our background as an energy innovator, our steps forward with renewables, potential for hydrogen production, nuclear SMRs, coupled with our massive resources in natural gas, and our capacity to export LNG to displace coal, Canada has a significant leadership role to play. As we continue to move forward with renewables, to scale new technologies that demonstrate a future-ready mindset, to model complex interconnected systems, and to improve efficiency and reduce waste, we can stay on the leading edge of a cleaner, greener global energy sector.
The Rubik's cube is ours to solve, togehter, and the clock is ticking.
To learn more about how WSP is reimagining Canada from coast to coast, please visit our campaign page.
