Ottawa’s clean electricity regulations put consumers at risk, Alberta’s electricity operator says

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The Alberta Electric System Operator says the province cannot decarbonize its grid in the time frame spelled out in Ottawa’s proposed Clean Electricity Regulations without putting consumers and businesses at risk of blackouts and surging power rates.

The agency, which is in charge of planning and running Alberta’s electricity network, is calling for the target to be pushed back to 2050 from 2035, as spelled out in the draft federal regulations. This is in lockstep with the assessment of Alberta Premier Danielle Smith, who says her government has no intention of meeting the deadline and has launched an $8-million countrywide advertising blitz to convince Canadians to back her position.

Even with a booming renewable-energy industry, Alberta is at a disadvantage to other jurisdictions because it has no nuclear generation or major hydro projects to provide carbon-free foundational power, relying instead on natural-gas-fired stations, Michael Law, AESO’s chief executive officer, said on Thursday.

“Regardless of how much intermittent wind and solar Alberta has, the provincial grid will need sufficient dispatchable generation to meet the cold, dark winter nights that we have in this province and form our peak load conditions,” Mr. Law told a news conference. “As the operator of Alberta’s electricity system, we cannot and will not let that happen.”

Meeting the federal target as it stands would leave the province without sufficient power to satisfy demand after 2035, forcing the operator to impose “brownouts,” or temporary power reductions, he warned. In addition, AESO’s analysis showed wholesale energy costs would be $118-billion more under a 2035 target than a 2050 one, Mr. Law said.

He said emission-abatement technology such as carbon capture and hydrogen production – which are heavily promoted by Ms. Smith’s government and the Alberta oil sands industry as key to decarbonization – are still too financially and technically risky to provide a reliable and affordable route to meeting the target.

Electricity is just one sector in which Alberta is at odds with the federal Liberals on the climate front. It is also pushing back against emission-reduction targets for its influential oil and gas industry. Both policies, Ms. Smith and her UCP government argue, would put the province in financial jeopardy.

Ottawa says it intends to meet its international commitments, and the energy industry is the largest emitter, setting the stage for much more federal-provincial tension.

Federal Environment Minister Steven Guilbeault has offered flexibility, including allowing continued use of fossil fuels when consumer demand is highest, and grandfathering existing gas-fuelled power plants, but the Alberta Premier said on Thursday such measures will not eliminate the risk of blackouts.

Ms. Smith said her government is readying a motion under the provincial Sovereignty Act, which could set up a constitutional battle if Prime Minister Justin Trudeau’s government does not soften its stance. It passed the legislation last year as a bulwark against federal policies it perceives to be detrimental to provincial interests. How effective it is has yet to be tested.

She has created controversy within the province as well, mandating a freeze on new wind and solar power applications until next year, so regulators can study the impact of the renewables rush on the grid and agricultural land. Alberta leads the country in new wind and solar farms, and the industry has strong support within the province.

Mr. Law said the provincial electricity industry has reduced its emissions by 44 per cent since 2005, largely on the phaseout of coal-fired power. But the next stage is the most difficult if it aims to maintain reliability. Even with the increase in renewables, Alberta still relies on natural gas for 72 per cent of its needs. Increased energy storage and more ties with other provinces will help deal with high demand and variable supply, but won’t account for all of the needs by 2035 as the economy increasingly electrifies.

More time will allow the province to adopt carbon capture as well as small modular nuclear plants and utility-scale power storage, which will require technology improvements and long approval periods, he said.

Electricity researchers criticized the AESO’s conclusions, saying the agency has not provided pricing or investment data to back up its contentions and that it contradicted its own previous reports, which had laid out pathways for Alberta to achieve a 2035 carbon-neutral grid. Jason Wang, senior analyst at the Pembina Institute, an environmental think tank, said the information offered on Thursday doesn’t meet an acceptable standard for an independent electric system operator.

“Their conclusions lack transparency; they were not technology-neutral and they deviated from the conclusions of previous assessments,” said Mr. Wang, whose organization published a study in June that showed how the grid could decarbonize by 2035 while saving consumers money. That report said interconnections with other provinces and energy storage would go a long way to helping meet that goal.