Converting Canada’s Coal Plants to Gas Would Lock In Emissions for Decades

Canada’s new performance standards for natural gas power plants, released last month in the shadow of a much higher-profile coal phaseout regulation, will lock in high greenhouse gas emissions for decades and defeat the federal government’s goal of seeing the country produce 90% of its electricity from carbon-free sources by 2030, according to an analysis by DeSmog Canada.

The regulation doesn’t apply to existing power generators, or to so-called natural gas “peaker” plants that produce electricity when demand is highest. For new plants outside the “peaker” category, it sets a maximum output of 420 tonnes of carbon dioxide or equivalent per gigawatt-hour of electricity.

With those provisions, “the regulation effectively gives the go-ahead for provinces transitioning away from coal—Alberta, Saskatchewan, and Nova Scotia—to replace a lot of their lost generation capacity with natural gas. And that seriously undermines the country’s ability to decarbonize its electricity system anytime soon,” DeSmog reports.

“Having a grid that relies 70% on natural gas by 2030 is definitely not compatible with a strong climate policy,” even though that’s the target in Alberta’s climate plan, said Pembina Institute analyst Benjamin Israel. “That’s a very huge concern.”

DeSmog cites a recent EnviroEconomics-Navius Research report that shows non-emitting generation increasing just marginally across Canada, from 78 to 80%, between 2014 to 2030. Over that time, natural gas generation is set to double. While it’s a step in the right direction to replace coal-fired generation, with CO2 output above 800 tonnes per GWh, with natural gas plants that come in as low as 370 tonnes/GWh, “wind, solar, and nuclear facilities have an average operating emissions intensity of literally zero,” DeSmog notes. “It doesn’t take a math nerd to know that 370 is a lot more than zero!”

Gas plants are also vulnerable to price fluctuations that can lead to spiking electricity prices, and tie future electricity supplies to the environmental impacts of natural gas fracking and dangerous releases of climate-busting methane. As well, locking in a 30- or 40-year investment in new natural gas infrastructure leads to “a serious risk of creating stranded assets and having to compensate owners.”

“As we’ve seen with coal, if you’re looking at stranding those assets, that usually involves some form of compensation that ratepayers or taxpayers are footing the bill for,” said Clean Energy Canada Policy Director Dan Woynillowicz. New natural gas plants would risk “repeating mistakes of the past,” he added, if they turned out to be “inconsistent with other objectives that have been set, and therefore require compensation.”

DeSmog points to alternative scenarios that call for heavier reliance on wind power for Canada’s next increment of electricity supply, with “innovations in energy storage and demand flexibility [that] can be used to ‘balance’ the system. All of this would be greatly accelerated by a higher carbon price or more rapidly-tightened output-based allocation framework.”

Woynillowicz said a clear price signal in that direction might “drive some competition from alternative sources of supply that don’t have carbon emissions.” Economist Brett Dolter also pointed to high-voltage direct current (HVDC) transmission lines as a centerpiece of a low-carbon future.

“Because we have so much hydro in Canada, if you can connect hydro jurisdictions and non-hydro jurisdictions and start to use the hydro to balance the wind,” he told DeSmog, “a lot more becomes possible.” He added that “there’s no politics in our model, so it’s easy for us to assume that this could be built.” But “generally, we’re finding it’s going to cost less if we can act together.”