The Canadian Climate Institute’s Big Switch
Release Date: 08/29/2022
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Summer Rewind: The Canadian Climate Institute’s Big Switch Reaching Canada’s net zero goals is a bit like solving a national puzzle. There are many pieces that need to fit together, including doubling or tripling the amount of zero-emissions electricity Canada currently produces to meet future demand for widespread electrification. Caroline Lee, senior researcher with the Canadian Climate Institute, walks us through the Big Switch report, which highlights three crucial changes required by Canada’s electricity sector in order to hit the country’s net zero goals. Related links Website:...info_outline Summer Rewind: The 2030 EV Action Plan with Electric Mobility Canada
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Reaching Canada’s net zero goals is a bit like solving a national puzzle. There are many pieces that need to fit together, including doubling or tripling the amount of zero-emissions electricity Canada currently produces to meet future demand for widespread electrification. Caroline Lee, senior researcher with the Canadian Climate Institute, walks us through the Big Switch report, which highlights three crucial changes required by Canada’s electricity sector in order to hit the country’s net zero goals.
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Dan Seguin 00:06
This is thinkenergy. The podcast that helps you better understand the fast changing world of energy through conversations with game changers, industry leaders, and influencers. So join me, Dan Seguin as I explore both traditional and unconventional facets of the energy industry. Hey everyone, welcome back. According to the Canadian Climate Institute, the country's leading climate change policy research organization, all roads to net zero pass through electricity. I know we've mentioned this many times on the show, but it bears repeating how Canada produces some of the cleanest electricity in the world. 80% of the electricity generated across Canada comes from sources completely free of greenhouse gas emissions in Ontario's electricity sector is one of the cleanest producing 94% of its electricity from non emitting sources. So there's still work to be done to make Canada's electricity sector even cleaner. But in essence, the electricity sector isn't the problem when it comes to climate change. But according to the Canadian Climate Institute's recent report called The Big Switch, it is the solution. So what does contribute to Canada's emissions, refined petroleum, primarily used for transportation, natural gas, which is used primarily to heat our homes and buildings and the energy processes involved in industries particularly steel, cement, and chemical industries. According to the big switch report, our country needs to reduce its reliance on these fossil fuels, if we hope to achieve Canada's Net Zero targets by 2050. But that's only a piece of the national puzzle. The big switch report suggests that we must double or even triple the amount of zero emissions electricity that we currently produce to meet future demand for widespread electrification. The Canadian Climate Institute highlights three critical changes to Canada's electricity sector, make it bigger, cleaner, and smarter. So here's today's big question. What are the key ways that Canada's electricity system can evolve and improve in order to replace fossil fuels and better align with net zero targets? We're going to dig into all of that on today's show. Established by Environment and Climate Change Canada, the Canadian Climate Institute provides independent and expert driven analysis to help Canada move toward clean growth in all sectors and regions of the country. Today, our guest is Caroline Lee, Senior Research Associate at the Canadian Climate Institute. Caroline holds a Master's Degree in Resource Management from Simon Fraser University and has previously held positions with International Energy Agency, the government in New Brunswick and Navius Research. Caroline, welcome to the show. Now, the Big Switch summary report is based on two other detailed reports, bigger, cleaner, smarter, and electric federalism, which we're going to discuss on the show today. But in essence, what is the premise behind your report the big switch? What are you referring to? And what does the report aimed to outline or chief?
Caroline Lee 03:57
Well, in simple terms, you know, we call this report the Big Switch, because we wanted to refer to this switch away from using fossil fuel energy, which as we know, generates greenhouse gas emissions towards using clean electricity. So the technical term for this is electrification. And this Big Switch is really important we saw because it really underpins the reductions of emissions, really across Canada's economy, and ultimately, it underpins Canada's achievement of our climate goals. So that's really why we undertook this project because we saw the importance of moving towards electricity in meeting Canada's climate goals as so central. And we wanted to understand what needs to happen at the system's level to support those changes. So when I say systems, I'm talking about the supply, the transmission, the distribution, how do those systems need to be changing, so that they can be equipped to support the shift towards electricity as we use more EVs as we use more heat pumps and so on.
Dan Seguin 04:59
Here's a follow up question for you, Caroline. Your report references unabated fossil fuels, wondering if you could explain and elaborate.
Caroline Lee 05:07
Yeah, it is a technical term. So unabated simply means that it's not equipped with technology to reduce the associated emissions. So for us that technology is carbon capture, utilization and storage, the technical acronym is CCUS. So there are ways for example, to continue burning fossil fuels, while reducing significantly the emissions associated with them if we equip that type of generation with CCUS. But what we see in our analysis is that if you're not equipping fossil fuels with CCUS, ultimately, the fate of unabated fossil fuels is very clear that significant generation associated with unabated fossil fuels, fossil fuels that don't have CCS equipped is going to have to be largely phased out. So when we looked at all of the analysis, all the studies that model netzero transitions in electricity, what we found is that at most 1%, of all generation by 2050, is associated with unabated fossil fuels. So we have to largely phase out that kind of electricity generation.
Dan Seguin 06:17
That's very interesting. Now, Caroline, what do you mean, when you say that all roads to net zero passes through electricity? Why does electricity play a central role?
Caroline Lee 06:30
It's a good question. And it's a good basic question that I'm very happy to answer. So maybe I can start with this first. First explanation around what the net zero goal actually means, you know, Canada, just recently committed to achieving net zero emissions by 2050. And this is an ambitious goal. And what that means is that Canada, has agreed to really zero out our emissions to get our emissions as close as we can to zero. And then whatever emissions are very expensive, or technically very difficult to get out of the economy, then we offset in some way. So again, this is an ambitious goal, there's a lot that needs to be done, especially in electricity to support that goal. And the reason why we say all roads to netzero pass through electricity is that when we looked at all the studies that model, a trajectory for Canada reaching net zero, there really was no credible path, without this switch towards electricity. And without making the generation of electricity cleaner. So we really saw tackling electricity as being critical to the achievement of Canada's net zero goals. And maybe I can just say it and in simple terms, three key reasons why that switch is so important. So first of all, electricity itself it when you use it, it doesn't burn fossil fuel, of course, so therefore, it doesn't release greenhouse gas emission. So we all know that if you're driving an Eevee, you're not generating greenhouse gas emissions directly. Now, of course, we know also that the production of electricity can generate emissions. So we can use fossil fuels like coal and natural gas to generate electricity. So that's where you can get some emissions. But what's really positive news in Canada and really around the world is that we're making quite significant progress, especially here in Canada, to reducing those emissions associated with producing electricity. And now that the federal government has a commitment to achieve net zero electricity by 2035, the country now has a clear mandate that we're going to be eliminating, by and large those emissions associated with producing electricity. So that's a really big thing is that electricity in the future could really be this conduit for using fully non emitting electricity from the beginning to the end. And then a third reason why electricity is so important is that it's just more efficient. So driving an electric vehicle is actually three to four times more efficient than using fossil fuels to drive that vehicle. And that's because you lose so much more heat. There's a lot of energy that's wasted when you're combusting fossil fuels. So because of those three reasons, electricity does seem to play a really critical role in achieving our climate goals.
Dan Seguin 09:29
Now, I've got a follow up question again. Your report also refers to electricity systems plural. Was that intentional, and what are you capturing?
Caroline Lee 09:42
It was indeed intentional. And that's because we recognize that Canada doesn't actually have a national electricity grid. We have a whole bunch of provincial regional grids and that's in large part because electricity is managed by provinces and territories. It's not directly managed by the federal government. So we wanted to to recognize the kind of regional uniqueness of all of these systems and that there isn't a single kind of unified grid across the country.
Dan Seguin 10:12
So we're really talking about transforming Canada's electricity system, and how every Canadian will use energy in the future. What is Canada doing right now right now that you feel makes this achievable?
Caroline Lee 10:28
Well, I can talk about a couple of things. One thing on the demand side, so in terms of how we're using electricity, and then another thing on the supply side, so how we're generating electricity. Now in terms of how we're using electricity, we're seeing quite favorable policies now to support the use of more electricity using technologies things like EVs. We've seen now the ban of the sale of internal combustion engines, within just about a decade, in Canada. So this is going to really accelerate I think, the shift towards electric vehicles in Canada in at least passenger vehicle fleets. So that's really promising. There are lots of other things we need to be doing in terms of driving electrification in other types of uses. So not only in cars, but for example, in how we heat our homes, in industrial processes. So there's more work to be done there. But the progress on electric vehicles I think is promising on the supply side, so how we're generating electricity. Canada has now as I said earlier, committed to achieving net zero electricity by 2035. So that's just over one decade, we've committed to having basically clean electricity across the board across the country. And that is quite an ambitious target. And it aligns with a lot of these scenarios that we looked at, for achieving broader net zero goals across Canada. So government policy actually seems in that regard to be following what's actually necessary to get us to net zero in electricity.
Dan Seguin 12:06
The report says that the switch is going to make Canadians better off. Can you expand on that? And also, how inequity could be addressed?
Caroline Lee 12:18
There are so many ways that I can answer this question, I think, from one dimension, we can think about the move towards electricity, this Big Switch, as making energy more affordable for Canadians. So our analysis actually found that overall, as a share of income, energy costs will actually decline as a result of using more electricity. And that's in part because electricity is more efficient, we're also seeing so therefore, the the operating cost over the entire lifetime, for example of an EV is going to be lower than the lifetime cost of owning an internal combustion engine, a gasoline vehicle. And we see the initial costs of these technologies also going down over time. So we know even you know, you probably know this quite well, the cost of buying an Eevee, even five years ago was significantly higher than it is today. And we expect those costs to continue to drop. And so this big switch can actually make energy overall more affordable for Canadians. And that's good news for everybody, I would say. But beyond the costs themselves to individual consumers, we see also quite significant opportunities for economic development. So one example here is that as Canada develops more clean electricity supplies, so we're we're producing electricity in cleaner ways. That gives us the opportunity to supply that clean energy to industries that traditionally use quite a lot of electricity, we think of for example, steelmaking that can increase their carbon competitiveness where consumers are increasingly thinking, okay, I want to I prefer to purchase steel, from a steel company that has a lower carbon footprint than a higher carbon footprint steel company. So using clean electricity in Canada to produce some of our industrial goods can actually give us a competitive leg up internationally. So there are some real carbon competitiveness benefits that we see. And then, thirdly, in terms of opportunities for Indigenous Reconciliation, I mean, this speaks to your question around equity. We know that Indigenous Peoples are in many ways marginalized because of historic racism, oppression, by non settler Canadians, we know that. So one way in which we think this big switch can help with the reconciliation and self determination of Indigenous Peoples is by allowing we know this already, actually, that Indigenous Peoples are already owners and co-owners of a lot of clean energy projects and we only see that trend increasing. So that allows them to be very much a part of this transition, take advantage of the economic opportunities, and also determine their own paths in terms of how they want to pursue this. This next wave of, of energy transition.
Dan Seguin 15:16
Thanks, Caroline. There was a reference to defraying the cost of electricity system investments away from customers by using public funds. Can you explain a bit about that? And why that would be favorable?
Caroline Lee 15:31
Yeah, I think this is worth digging into a little bit. So currently, the costs of generating electricity are paid for by the ratepayers. So whoever uses electricity pays for those investments, at least indirectly. What we're proposing in our report is that it's not only the rate base of the people that are using electricity, that help share the cost of electricity system investments, but that those costs get shared more broadly to taxpayers at large. And the reason why we think that could be really critical is that I'll just say three reasons here. First of all, the benefits of electricity systems investments are actually shared more broadly than across ratepayers. And that's because electricity, as I said earlier, is so essential for Canada to meet its climate change net zero targets, that the benefits are shared more widely, as well. So if the benefits are shared widely, we think there's justification for having the cost shared more widely as well. We also think of electricity really, as something like, you know, it's critical infrastructure in this day and age, you can think of it like hospitals, we need electricity, to run our lives and to, and to support Canadians day to day. And because we see electricity as such critical infrastructure, we see also that there's justification to support the maintenance and the in the kind of enhancement of that infrastructure through the tax base. And then last reason is a little bit more wonky. But when we defray these costs of the electricity systems investments through taxes, instead of the rate payer base, that can be a more progressive way of distributing that costs. And by progressive, what I mean is that it doesn't hit low income households as much as it does when you distribute those costs through rates. So overall, I think there, we think there is justification for having those costs spread out more evenly across society at large and Canada.
Dan Seguin 17:40
Now, let's move to the next big report. Bigger, cleaner, smarter pathways. Now, Caroline, I really want to tackle your report, word by word. Let's start with the word bigger. What does your evidence and research say about meeting future demand due to widespread electrification? And when you say big, how big are we talking about?
Caroline Lee 18:10
The first report is titled bigger, cleaner and smarter. And that summarizes the three critical ways in which we see electricity systems having to change and transform in order to support net zero. So in terms of that first change bigger. Yes, we see electricity systems having to grow because there is going to be increasing demand for electricity as we move into net zero world as we use more EVs, more heat pumps, and so on. And so we expect that demand when we look across all the studies that try to project how much electricity is needed, what we see is that anywhere between 1.6 to 2.1 times more demand is going to be required by 2050 compared to today. So you can think of it as an about a doubling of electricity demand by 2050, compared to today, and what that means in terms of the capacity of the electricity system. So in essence, the physical infrastructure, the size of the system that's required to produce that amount of energy that has to grow even more. So we're seeing installed capacity of electricity, more than doubling if not more than tripling by 2050 compared to today.
Dan Seguin 19:24
Okay, so let's talk about 2050. Are we on track to meet? How can we accelerate to meet the goal?
Caroline Lee 19:33
In short, I don't believe we are on track today. One stat that we have from our analysis is that if we want to be meeting these capacity needs these supply needs for 2050. Canada broadly has to be building capacity three to six times faster to 2050 than it has in the last decade. So the pace that we've been building capacity is not is falling short of the pace that's required to support all of this electrification. What do we do to get there? I mean, there are lots of things we've identified really a range of barriers that are preventing us from building clean energy at the pace that we need. There are barriers in terms of local opposition. I think sometimes community members don't feel like they're, they're consulted enough. And they don't feel like they're a part of the project approval processes. So community members can oppose local projects. We're seeing supply chain blitz right now. I mean, that is one reason why we're seeing higher renewable energy prices, because the markets are having trouble kind of keeping up with the demand for clean energy projects. So there are an array of barriers that we had identified, that we think need to be addressed in order to pick up the pace on increasing clean energy supply.
Dan Seguin 20:54
Moving on to the next word cleaner. Okay, where will the majority of cleaner electricity capacity come? Your report actually says solar wind storage, what's involved in growing these cleaner electricity sources and phasing out those that are polluting or emitting greenhouse gases.
Caroline Lee 21:16
So maybe I can divide my answer in two in terms of what's involved in growing that cleaner component, and then what's involved in phasing out the polluting sources. In terms of the clean energy sources, the sources that we saw that grew by far the fastest in any net zero scenario, as you say, We're solar and wind, if you add storage into the mix, those comprise really the majority of all new capacity that has to be built in Canada. So what we saw is that in the next decade, so from now to 2030, anywhere between 63 and 96% of capacity that's added to Canadian grids has to be from those sources in order to be compatible with net zero. So generally, whatever we're putting onto the grids, it should be wind, solar, or storage, to support netzero goals. Now, there are lots of things that stand in the way as I said in my previous answer to this rapid building, and deployment of clean energy projects. So there are lots of things that we need to be doing from a technical perspective. But also from a social and institutional perspective. I think bringing people on board, making sure the markets that are in the systems that our electricity systems operate in, are aligned with those broader netzero goals. tackling some of these really sticky challenges around enhancing the integration of grids across regions, all of these things are going to have to be tackled in order to build solar and wind in particular, as quickly as we need to know in terms of your the second component of phasing out polluting sources, the federal government already has policy in place to phase out unabated coal generation, so coal generation that's not equipped with CCUS. But the next frontier now is tackling natural gas and natural gas is a fossil fuel, it burns cleaner than coal. But currently, we don't have at least a policy that's been implemented to address natural gas that's consistent with net zero. So the federal government has now committed to what's called a clean electricity standard. They've committed to finding a way to develop a policy, essentially to meet that 2035 netzero electricity goal. We'll see how the details of that are rolled out. But it's promising that that policy is already in development. So I'm actually seeing quite a lot of progress on that front in terms of phasing out polluting sources. And I think so long as the federal government policy is robust and applies, really across the country, I think we should be in good standing to meet the target of phasing out polluting sources.
Dan Seguin 24:13
Okay. Now, what about our existing renewable energy sources like hydro, and nuclear? Will they still be vital and play a major role? What's the plan or recommendations for them?
Caroline Lee 24:28
It's a great question. I mean, oftentimes, the story is about solar and wind. And we forget about Canada's strong existing base of non emitting power, which is hydro and nuclear. And so I would say that in terms of getting cleaner, we talked about growing clean energy, we talked about phasing out polluting sources, but there's a third element that's really critical, which is maintaining what we already have that's working quite well. So the studies that we looked at for the most part, they still see large hydro and large nuclear are playing a strong, continuing strong role in Canada's netzero future. There are some studies that want to test what happens if we phase those out. What happens if we let you know at the end of their useful life, we fail to refurbish them. In most cases, what that means is you have to simply rely even more on other non emitting sources like solar and wind to grow even faster. So it puts the pressure on other sources to grow even faster. So that's, of course, a decision that has to be made by Canadians by decision makers, what is the energy future that we want? But again, if we allow our strong base of hydro nuclear to decline, then we need to be really accelerating the deployment of other types of energy.
Dan Seguin 25:47
Now, how about we address the next word- smarter? What is the smartest way to make our electricity system more flexible and supportive of variable supply from renewable sources? Can you maybe talk more about what it means to make electricity systems smarter?
Caroline Lee 26:10
By a smarter what we actually mean is more flexible. So that's what you alluded to in your question. And there isn't a single way to enhance flexibility. I think that's actually the good news story. First of all, why don't I take this take a step back to say that flexibility is so important, it's not something that we talk about a lot, but it's going to become increasingly important as we move to integrate more shares of solar and wind onto our grids. Solar and wind, as we know, produce electricity in more variable and more intermittent ways. So flexibility in electricity system is something that can help accommodate higher shares of solar and wind onto our grid. So that's important for that reason, flexibility is also really important because we're also seeing, say increased demand for electricity and changing load patterns as a result of more EV uptake. If everybody comes home and charges their EVs at the same time, that's going to change the level and the timing of electricity demand. So the ability for the system to respond to those is also really useful. And let me just say a last reason why flexibility is so important is to respond to disruptions due to extreme weather events. I think we know this extremely well here in in Ottawa, I bet you know this better than most people, the cost, and the losses that can be associated with extreme weather events, and, and the and the terrible implications, essentially, of extreme weather on electricity systems. So flexibility is another thing that can help us better respond to those things. So broadly, we see kind of four groups of measures that can help us build more flexibility into our electricity systems. And the good news is, is that different regions are going to be relying on different types of measures. And there's no single bullet that there's really a toolkit, there's an array of measures that different regions can draw on. So things like for example, on the supply side, using more dispatchable types of generation generation that can be called upon on demand to generate like hydro, like natural gas with CCS. Also, things like enhancing the integration of grids across regions, those types of things help different provinces and territories better share resources across borders, things like hydropower, that can be really valuable in helping to balance variable sources like solar and wind, a third set of measures around storage, deploying storage, including short term storage, but more emerging long term storage solutions as well. And then a last basket of measures around making demand itself more flexible. So traditionally, we have seen demand is being fixed, you know, you consume demand when you consume it. But now we're seeing all kinds of possibilities, for example, to shift demand to times when it makes more sense. So for example, to defer the charging of EVs to the middle of the night when it puts puts less stress on the system.
Dan Seguin 29:19
You've just provided me with a great segue. Given climate change and extreme weather events becoming more commonplace, what does boosting resiliency of our electricity system look like for the future?
Caroline Lee 29:33
I think resiliency is only going to become more of a priority not only in electricity systems, but broader energy systems as we see the growing incidence and magnitude of extreme weather events. So you're exactly right that this is this is a an important thing to talk about. I think traditionally when we think about building resilience in our electricity systems, we think about hardening infrastructure. So we think about measures to Do, for example, strengthen transmission and distribution lines or maybe even underground lines and poles, to withstand extreme weather to avoid those things. But what I would say is that while those buckets have met that bucket of measures is really important. The concept of resilience is broader than that. So it's not only about avoiding or withstanding extreme weather events, for instance. But it's also to the extent that we can minimize our exposure to them, but also accepting that there will be inevitably, some disruptions along the way that we can't 100% avoid them, and then shifting also to learning how to manage them, and then recover very quickly from them. So they're not as disruptive. So from that perspective, and in addition to hardening infrastructure, I think we also need to be prioritizing emergency response and recovery. So thinking about as soon as we see some anticipate a disruption, how do we respond really quickly? And how do we make sure that we're deploying, that we have the resources to deploy emergency response when those things happen. And then, another thing I would highlight is that whole bucket of measures around flexibility that I was talking about. So flexibility is really great, because it helps us achieve our climate goals. It helps us accommodate more solar and wind onto our grids. But it also helps us better respond to extreme weather events. So there's an adaptation a climate change, adaptation benefit, too. And so flexibility, for example, you know, you think about storage, if you have a solar panel, and a battery in your house, that is good for reducing greenhouse gas emissions, because solar panels are a clean source of energy. But also that storage can be really beneficial as a backup source of energy when your lights go out. So you can kind of think of some of these flexibility measures as killing two birds with one stone where there's a emissions reductions benefit as well as a resilience benefit.
Dan Seguin 32:00
Okay, now, it's time to move to the next report, the Electric Federalism, that's a policy report. Now, Caroline, one of the key takeaways from your bigger cleaner, smarter report, is that in order to successfully align Canada's electricity system for net zero, both orders of government must drive change through policy. This brings us to the next report, electric federalism, what is Electric Federalism? And why is it so important?
Caroline Lee 32:34
Great question. So we think of this report as the, the how report and the first report as the what so bigger, cleaner, smarter is like what needs to happen from a technical perspective and electricity system. And electric federalism is well, how do we accelerate and support those changes? So electric federalism is this concept? Based on the fact that yes, we all we live in Canada, Canada is a decentralized Federation, which means that, as I was saying earlier, provinces and territories carry significant power and jurisdiction over many issues, including energy and electricity. So the federal government, of course, has has some power to drive, electricity systems transformation, but a lot of those levers, a lot of those policy levers actually reside within provinces and territories. So electric federalism is a way of moving forward on transforming electricity within this context, where we see multiple orders of government having complementary roles to play, we're trying to figure out how can those different orders of government work together? How can we make the most of the respective policy levers that the different orders carry?
Dan Seguin 33:44
Something fascinating in the report, is the call for greater inter regional coordination, and the integration of Canada's provincial and territorial electricity systems. Those of us in the electricity industry know that there are a lot of regulatory roadblocks, but also that folks are very territorial about their electricity system. Can you walk our listeners through the vision? And what would be required for this to become a reality?
Caroline Lee 34:20
You know, you are so right in recognizing the long entrenched barriers that exist to enhancing the integration of grids across our regions. The current state of electricity systems, as I was saying earlier, is that we really operate mostly in siloed systems. There's a little bit of trade between provinces and territories, but it's actually quite modest, even especially in relation to the trade that we have with the US. So we can think of, of Canada's electricity system as largely balkanized and siloed right now, and the reason why we wanted to really tackle this issue is that we've always known the benefits of integrating with neighboring regions. But now that we have this net zero goal, this climate change agenda that's so much more ambitious than it was before the benefits of integration have increased. So significantly. So the barriers that we identified to, for example, enhancing inter ties between Ontario and Quebec, we've got a long laundry list of what's preventing that from happening. Things like even self sufficiency, mandates from utilities, utilities, in some cases are mandated to have enough electricity within their borders to take care of themselves to be completely self sufficient. And so having too much trade or too much integration with neighboring regions would actually be going directly against that mandate. So there are some formal barriers like that. But then exactly as you touched on, there are all kinds of informal barrier. So political, social barriers, we don't really consider as electricity in the same way as other goods that can be easily traded across borders, I mean, electricity is often thought of as something that that is closely ident, closely connected to a provinces identity. So we have a harder time, I think, thinking about the trade of electricity. And then a last barrier I would mention is that because Canada's systems are so balkanized. Even market barriers and institutional barriers can be really important. So the fact that for instance, in BC, there's one type of electricity system, right next to it, Alberta has a very different type of electricity market. The the misalignment between how different provinces manage and regulate electricity can also be a barrier. So what we're saying is that we have our eyes wide open in terms of a realistic goal on enhancing integration. It's not about instantaneous integration, and a national grid tomorrow, we think that is not realistic and pragmatic. But what we do think is that there are ways of kind of testing and advancing integration and incremental ways across willing regional partners. And I would highlight in this circumstance, the Atlantic provinces, who are now pursuing this project of the Atlantic loop, they're thinking about integrating all of themselves better with Quebec, to better exploit, essentially, Quebec hydropower. So those regions that region rather those provinces have said, we are interested in taking those steps forward, there might be other provinces that are different stages of readiness. So we recognize it is ultimately up to provinces to decide yes, I want to pursue more integration or not. We think there's a few things that provinces can do, though, we think there's a lot more work that can be done to simply quantify those benefits of integration. So in an integrated resource plan, so when an electricity utility is planning for the next few years of how it's going to meet demand, having knowing how much the benefit of integration would be, and if they decide not to pursue it, having a justification for why they left that off the table, I think could be really important. Even things like collaborating on the development of those integrated resource plans with neighboring jurisdictions, not doing them formally, necessarily together. But having a little bit more consultation with neighbors can be really important. Things like sharing reserved margins across borders, those kinds of things, province provinces can do together. But then I will also mention the federal government is not without power here, the federal government has significant spending powers, they have significant convening powers. So the federal government can use the financial spending power that it has to support, even the building of transmission infrastructure between provinces. In terms of convening, the federal government has recently announced this Grid Council in its last climate plan, to be able to pursue more integration across different provinces so they can bring people together, they can bring provinces together, share best practices help organize some of these integration projects.
Dan Seguin 39:33
That's great insight, Caroline, let's continue. In the Electric Federalism Report, it's recommended that the Federal Government work with provinces and territories to negotiate climate policies and electricity agreement. Has this been done before? And what are some of the advantages for Canadians with this approach? It's probably similar to health care and the recent childcare agreement that The Federal Government just introduced with the provinces.
Caroline Lee 40:03
So this idea is really trying to, as I was saying earlier, to leverage the respective powers and policy levers of different orders of government. So it's possible that we can transform electricity systems with the federal government moving in its direction with provinces and territories moving in their own direction, that's possible. But we think that we have a greater chance of success when people work together when different orders of government collaborate and coordinate. So that's why we have this proposal of the federal government essentially tying financial support to the fulfillment of high level conditions on the part of the provincial governments. So for example, I'll give you some examples of what we think those conditions could be. So we would ask, for example, that provinces could change the mandates of key institutions in their electricity systems to align with net zero. Currently, utilities, for instance, are pursuing climate change goals, but it's not necessarily explicitly in their mandate to make investments that are consistent with net zero. So making and formalizing the netzero mandate, we think could be really important. The federal government could also ask provinces and territories to develop comprehensive energy plans. So thinking about what is the future for electrification in that province? How might we meet that demand? What is the future for integration, thinking about energy in a more holistic way across different energy sources could provide some more consistency and more foresight, essentially, for utilities as they make investments and make decisions towards net zero. And then thirdly, the federal government can ask provinces to participate in working groups essentially like to propose grid council. So the idea of this of this proposal is not to be too prescriptive in terms of the federal government requiring provinces to do XYZ. implement policies that look like this, this this, but rather simply fulfill these high level principles, fulfill them in a way that they see fit based on their provincial circumstances. And that way that would give greater assurance that we would all provinces and territories and the federal government together would be moving in the same direction towards net zero. And so as you said in your question, we've already done similar negotiating systems like this on health care, recent childcare agreements, essentially, the federal government has said, we will provide financial report, financial support, rather to provinces, if you fulfill these certain high level principles, so we're proposing a similar thing with regards to electricity.
Dan Seguin 42:49
Now, Caroline, we always end our interviews with some rapid fire questions. We've got some new ones for you. Are you ready?
Caroline Lee 42:58
Dan Seguin 43:00
What are you reading right now?
Caroline Lee 43:02
It's a book called Crying in the H Mart. It's it's written by a, an American Korean pop star, and she writes about her mom struggle with cancer. So it's, it's really good so far.
Dan Seguin 43:16
Cool. Now, what would you name your boat? If you had one?
Caroline Lee 43:22
The Sweet Caroline?
Dan Seguin 43:23
Now a simple question here, Caroline. Who is someone that you really admire?
Caroline Lee 43:30
I admire my parents,
Dan Seguin 43:32
What is the closest thing to real magic that you've witnessed?
Caroline Lee 43:37
This is so cheesy, but the birth of my two children is, is the most miraculous thing I've ever witnessed.
Dan Seguin 43:44
The next one- what has been the biggest challenge to you personally, since the pandemic began?
Caroline Lee 43:51
I think the social isolation has been particularly challenging, I think, not only for me, but for lots of people.
Dan Seguin 43:58
Okay, we've all been watching a lot of Netflix and TV lately. What is your favorite show or movie? And why?
Caroline Lee 44:07
I think one show that I found that helped kind of buoy my mood was Ted Lasso. So I don't know if you've watched this show. But the positivity of the show, I really especially valued I think, during the pandemic.
Dan Seguin 44:21
Lastly, what is exciting you about your industry right now,
Caroline Lee 44:27
I think in climate policy, in the climate policy world, it's so easy to feel depressed about our prospects for succeeding in tackling this most this huge climate challenge. But I think on the positive side, we're seeing progress, like we've never seen in history of Canada or really in the world. In terms of energy transition in terms of policy implementation. We're seeing renewable energy growing faster than we've ever seen it grow and we expect it to grow even faster. We're seeing the phase out of polluting fossil fuels faster than we've ever seen. So I think there's no question a long way to go in terms of meeting our climate targets. But the progress I think that we're seeing in energy transitions is a reason for hope.
Dan Seguin 45:14
Well, Caroline, this is it. We've reached the end of another episode of The thinkenergy podcast. If our listeners want to learn more about you and your organization, how can they connect? How can they learn more,
Caroline Lee 45:26
Feel free to reach out to me directly. My email is clee, C L E [email protected]. And you can go to our website directly climateinstitute.ca To learn more about us and get more contact information.
Dan Seguin 45:41
Again, Caroline, thank you so much for joining me today. I hope you had a lot of fun.
Caroline Lee 45:46
It was great. Thanks so much for the invite.
Dan Seguin 45:49
Thanks for tuning in to another episode of The thinkenergy podcast. And don't forget to subscribe and leave us a review wherever you're listening. And to find out more about today's guests, or previous episodes, visit thinkenergypodcast.com. I hope you'll join us again next time as we spark even more conversations about the energy of tomorrow.