Modernizing the Electrical Grid in Canada and Beyond

Canada and governments around the world sit today on the precipice of an incredible opportunity. Most of the world’s electrical grids are insufficient to support growing demand for electrification that will be necessary to support economic and population growth in the decades to come. Forward looking governments can create an environment wherein new businesses and new technologies can thrive while meeting the needs of their constituents.

Canada’s Electrical Grid

In the 2023 budget, the federal government forecast that demand for clean electricity will double between 2023 and 2050. Canada Energy Regulator has concurred with the assessment presented in the budget, forecasting a shift from Unabated Fossil Fuel production to Low and Non-Emitting sources over the same period.

Per Electricity Canada, meeting this demand growth is likely to be a logistical challenge with the electricity sector impacted by “more than 90 regulations across dozens of statutes” at the Federal level and similar regulatory hurdles in place at the provincial level. Approvals for projects can be years in the making with proponents required to invest substantial amounts of capital without ever knowing if their projects will be approved. Billions of dollars of project opportunities have already been lost in the United States to local areas restricting permit approvals. Streamlining this process is critical to meeting the needs of the country over the coming decades.

A Plea for Regulatory Efficiency

Efficiency needs to come at multiple levels of government, with coordination between them. Hoping for such efficiency may be overly optimistic – especially with respect to the cooperation of multiple levels of government – given the disparate views of the parties and levels of government across Canada. However, there are areas of agreement where efficiency can be found. First, on funding. One finds few doubters that the Federal and Provincial governments have a role to play in helping fund the transition to a cleaner grid. While those governments don’t always agree on the specifics of their roles, they generally at least agree that they want to have influence in the process.

One critical piece that has historically been missing in Canada and could make a positive difference is funding for the demonstration of new technologies. The SR&ED program provides vast support for Canadian companies working to develop new technologies during the R&D stage, but very little funding exists to subsequently bridge the gap from concept to commercialized product. This gap is critical as it can often be when small businesses need help the most. Commercializing a new product can be prohibitively expensive and programs such as Sustainable Development Technology Canada (SDTC) do an inadequate job of supporting this endeavour. If the government is truly interested in supporting the adoption of new products and technologies within the electricity sector, programs need to reflect a shortened process with less bureaucracy. A business seeking to commercialize a potentially successful new technology cannot wait months or even years to find out whether or not they have financial support from existing programs.

“If the government is truly interested in supporting the adoption of new products and technologies within the electricity sector, programs need to reflect a shortened process with less bureaucracy”

Brian Roth

At the provincial level, there is a need for breaking the utility companies of their relative monopoly positions, holding undue power over the development of private clean energy production projects.

Even at the municipal level, there is room for regulatory changes in how projects get approval for construction. Project developers cannot wait months or years to find out whether they’ll be able to build, often with inflation driving the project economics to a worse place than if the projects had been expeditiously reviewed and approved.

Technology Solutions

Renewable energy solutions have been evolving at a rapid pace over the last decade or more. From wind turbines become larger and more efficient to solar panels continuing, to increase their output per square foot, to growth in tidal and other technologies, there is little doubt that with enough resources, more than enough power could be produced to meet demand. Additionally, the development of hydrogen as a fuel and other creative energy storage technologies has potential to alleviate the concerns about timing differences between production and demand.

A recent emphasis at Three Sixty Solar has been in working to solve one of the greatest challenges in solar – the enormous space requirements for large scale deployment. To address this issue, Three Sixty Solar has developed a solar tower that goes up instead of out, enabling developers to put solar closer to where it’s needed and reducing the amount land required by as much as 90%.

With Three Sixty Solar’s vertical solar towers, there has been a strong uptake in the market from behind-the-fence operators who can offset existing power use with their own renewable generation. Further, with the architecture of the tower, there are opportunities for additional technology deployment such as broadband internet and telecommunication equipment, enabling both “smarter” electricity production and servicing of local communities with more than just power.

Technology advances, like Three Sixty Solar’s, are what Canadians need to take more advantage of to succeed in expanding our clean electricity generation capacity. There is no one-size-fits-all approach, and everything from solar to wind to tidal should be explored, along with a renewed enthusiasm for small-scale nuclear technology, hydrogen, and other energy storage technologies. We can be most successful by creating the most diverse power production system in the world.

Economics

There is, of course, an economic argument for the status quo. The reality is that most of the technologies identified above cost more than generating power with coal, natural gas, or existing hydro facilities. What this argument ignores is that most of these legacy industries have been heavily subsidized for years because there was a national interest in doing so. Doing so built thousands of businesses across the country and established economies in parts of the country that are now deeply entrenched. While it is challenging to demand that governments shift their resources to different technologies and sub-sectors of the energy industry, the cost of not doing so is enormous. Global demand for clean energy technologies is growing and Canada is in a position today to capitalize on that. Providing financial support to these new technologies as they commercialize will enable the true costs to decrease to the point where they are naturally competitive with “old” technologies in power production. Furthermore, supporting the clean renewables sector will bring jobs, economic growth, and the necessary tax base to subsequently support the next generation of technology development and the one after that.

References

https://www.cer-rec.gc.ca/en/data-analysis/canada-energy-future/2021/key-findings.html
https://www.electricity.ca/knowledge-centre/the-grid/regulatory/barriers-to-building-infrastructure/
https://www.reuters.com/world/us/us-solar-expansion-stalled-by-rural-land-use-protests-2022-04-07/
https://threesixtysolar.com/