Kim Brunhuber’s article is another in a line of comments suggesting the electrification of our energy use would be straightforward. We at the Canadian Gas Association disagree. To put some independent analysis into the discussion we commissioned ICF to examine electrification under various scenarios in Canada. The conclusions of their work make it clear that electrification would be extremely expensive, and of limited benefit for emission reductions versus a more cost-effective approach that would integrate both gas and electric energy delivery systems.
In Canada, electricity currently represents roughly 20 per cent of energy end-use with natural gas delivering 35 per cent and the balance coming from liquid fuels (40 per cent) and biomass/other fuels (5 per cent). The ICF analysis looked at electrifying roughly half of the non-electric portion, so that we would have approximately 60 per cent of end-use energy being met by electricity (to go to 100 per cent electrification was deemed too challenging a prospect at present). At a 60 per cent level, electrification presents some daunting numbers:
Electrification will require a massive build out of new infrastructure: Fuel switching to electricity of an additional 40 per cent of our end use would require an expansion from 141 gigawatts (GW) of generating capacity today, to between 278 GW and 422 GW of capacity by 2050, depending on the electrification strategy deployed. That represents as much as a tripling of generation capacity to meet peak demand on the energy system. That is the equivalent of hundreds of nuclear reactors.
The infrastructure required will be enormously expensive: The expansion, along with the associated incremental costs of energy, electric technology adoption, new transmission infrastructure, etc, could increase national energy costs by between $580 billion and $1.4 trillion over the 30 year period between 2020 and 2050. That is a conservative assessment – and again, does not represent total electrification.
The expense for the average Canadian household will be very large: The cost is equivalent to increasing average Canadian household spending by $1,300 to $3,200 per year. The study used cost-conservative assumptions related to the improvement of electric technologies (e.g., heat pumps) and assumed steep reductions in the heating loads of residential and commercial buildings: so in fact the capacity requirements and associated costs could be significantly higher.
Environmental policy goals can be pursued at significantly lower cost through a multi-grid approach that integrates natural gas solutions with the electric system rather than an electric-only option: GHG reduction policies that entirely favour electricity over multi-grid approaches are significantly more costly (at $289 /tCO2 for electric alone vs $129 /tCO2 for integrated systems). Canada’s existing natural gas and electricity systems and existing infrastructure working together can be optimized for a reliable, affordable, low emissions solution.
With the study complete, we at the CGA want to broadcast the results and start a conversation about what they mean as we look to our energy future. What we know today is that the Canadian energy market is demonstrating a strong demand for continued and expanded use of natural gas. This isn’t a surprise: heating with it saves homes and businesses a lot of money – as much as $3,000 per year over alternatives for the average family. In addition, natural gas infrastructure is incredibly reliable – it wasn’t gas customers in California or Nova Scotia who lost service in recent outages because of fires and hurricanes – it was electricity customers. And, the emissions from gas use are declining today, in part because of how we focus on energy efficiency (a home today uses 30 per cent less natural gas than one just 15 years ago, with more reductions anticipated), and in part because other innovations in fuel options (renewable natural gas and hydrogen) and other technologies (like CO2 recovery) are a priority.
Add to that the great promise for Canada’s natural gas in other areas: in transportation markets where we are deploying compressed and liquefied natural gas (CNG and LNG) in marine, trucking, rail and off-road applications; in the use of LNG and CNG to deliver reliable, affordable, low-emission energy in northern communities and industries; and of course in global markets, where Canadian natural gas can help bring millions out of poverty and deliver clean air benefits.
There is much talk of crisis around energy and environmental questions in Canada today – talk that is rarely helpful. What Canadians deserve is more talk of practical cost-effective solutions to real challenges. Natural gas delivery offers just such a solution. It is critical today, and will be valuable for the long-term as part of an energy future for Canada where emissions continue to decline, prices stay affordable for families and businesses, and our know-how takes opportunity to the world.
Timothy M. Egan
President and CEO
Canadian Gas Association