Canadian investments in pipelines and other fossil megaprojects “could be at high risk of becoming economically unviable as prices of renewable electricity further decline,” according to a federal government think tank report obtained under access to information and reported by CBC earlier this week.
“It is increasingly plausible to foresee a future in which cheap renewable electricity becomes the world’s primary power source and fossil fuels are relegated to a minority status,” Policy Horizons Canada concludes in the March 3 discussion draft, titled Canada in a Changing Energy Landscape. Looking a decade into the future, the report foresees rapid emergence of a “new global energy ecosystem” in which energy competition is based on technology rather than resources, fossil fuel markets splinter, oil as a transportation fuel declines faster than expected, and certain key minerals become strategic assets.
“The shift to an electricity-dominated global energy mix will be accelerated, as decreasing costs combine with increasing government and private sector concerns over climate change, energy security, and air pollution, particularly in developing countries where the need for additional energy capacity is greatest,” the report states.
“In combination, these drivers could lead to renewable-sourced electricity replacing fossil fuels as the dominant form of primary energy used in the global economy for most industrial, commercial, and personal activity.”
The report cites renewable energy cost reductions, the digital economy, and the twin realities of climate change and air pollution as the drivers for a far more rapid shift in energy systems than many government or fossil industry models are predicting.
CBC cites two energy industry analysts, one in Alberta and the other in British Columbia, who found little to criticize in the report.
“It’s absolutely not pie in the sky,” said Michal Moore of the School of Public Policy at the University of Calgary. “These folks are being realistic. They may not be popular, but they’re being realistic.”
“You could nit-pick a couple of items,” said Marty Reed, CEO of Vancouver-based Evok Innovations. “But at a high level, I would say the vast, vast majority of what they wrote is not even controversial. It’s very well accepted.”