Two years ago, I wrote a piece for BOE report, on the cost to decarbonize the world’s economy.
It can be found in the archives.
In that article, my estimate came out to about $300 trillion dollars, or $10 trillion per year, more than 10% of the world’s GDP spread out over 30 years. While governments that are now calling for “Net Zero” rarely mention cost, some observers are coming out with numbers in the trillions for annual expenditures, foreshadowing the vast sums that would be required.
So what exactly is Net Zero? Most policymakers would define it as the elimination of coal, oil and natural gas in the production of energy. Although there are ways to reduce carbon emissions from the current mix of hydrocarbons, like carbon sequestration or green hydrogen, many people who believe there is a looming climate emergency don’t have patience for the incremental reductions that are happening in petroleum company operations.
The reality is that even if our energy could be sourced in other ways, we still need coal for steel and solar panels, oil for sunscreen and toothpaste, and natural gas for SpaceX’s fleet of Starships. The net part of Net Zero implies that we can still use hydrocarbons, as long as it is balanced out by approved green energy, with complex carbon accounting rules involving offsets and credits.
So for now, the task for signatories to the UN’s climate agreements is to create enough non-carbon emitting energy to equal the amount of carbon-emitting energy and retire the latter. The usual approach is to incentivize wind, solar, electric vehicles, and battery storage, and hope that if we did enough of that the books would balance and the economy would still run.
These green technologies do reduce carbon emissions, in indirect ways. Wind and solar serve to conserve fuel in natural gas-fired power plants, but are more expensive at present than the natural gas they displace. Electric vehicles shift primary power demand from oil to natural gas. And electrical storage serves to reduce the need for new peak power plants, which are typically natural gas-fired. Because these new technologies demand a lot of resources, they produce a lot of emissions during manufacturing and construction which hinders their effectiveness in the short term.
So the green plan could mostly work, if enough money and raw materials (copper, lithium, aluminum, cement, cobalt etc) and the oil, gas and coal needed to build the new infrastructure was found and diverted into the new Net Zero economy. My previous article used solar and storage as the key energy production elements to arrive at a total cost.
But unfortunately for Canada, solar works best in temperate climates found closer to the equator. While it could make some contribution, solar plus storage will not supply all energy needs in Calgary, Winnipeg, or Halifax.
Canada is unique in that it has the coldest average temperature of anywhere on earth except for Antarctica. With an average annual land temperature of -5dC, it is even colder than Russia, with both countries having nearly half of their land area frozen in permafrost.
The biggest problem with wind and solar is that they have serious shortcomings in cold and icy weather. While heat kills more people than cold in Mumbai, cold kills far more than heat in Canada, as in all cooler countries.
In colder climates, the most important function of the energy system is to meet the peak power requirements demanded on the coldest darkest day of the year, while the opposite is true in hotter climates. In tropical areas, solar panels are quite useful to provide power for peak daytime air conditioning loads.
We are starting to see panic set in already in colder Northern European countries that have curtailed nuclear, coal and natural gas, only to find that wind and solar are failing to meet their intended goal of replacement.
So then, with wind and solar not a viable option, how could Canada achieve Net Zero?
With the only other proven energy source, nuclear fission.
Canada already has 19 operating nuclear plants, with a capacity of 13.5 GW (Gigawatts).
Power generation by source for Canada is shown below:(out of date but illustrative).
The largest primary energy sources are oil and natural gas. Canada currently consumes about 2 million barrels of oil per day, and 12 Bcf of natural gas. We have both in abundance, and export almost as much as we use to the US.
In order to replace the energy generated by coal, gas and oil, we would need to add about 300 1 GW nuclear plants over the next 28 years, at a rough cost of $10B Cdn per plant.
Add in another 33% for storage and transmission to move and manage the energy and it works out to an annual cost of $143 billion/year($3800/per capita) to get to Net Zero with nuclear by 2050.
Nuclear can be built in Canada for about $10/watt. My previous scenario, using solar plus storage as a base technology, came in at more than double that, at $22.5/ watt, so the nuclear option would actually cost less as well as being far more reliable. Fuel is not a problem, as Canada is a uranium superpower, exporting more fuel energy than what we would need domestically to satisfy the new nuclear fleet.
Can Canada afford to spend almost $150 billion dollars per year on new energy projects?
That level of spending has proven to be possible in the short term with deficit financing, as it is about half of the $300 billion that the country spent on Covid over the last year. This would represent about 7% of Canada’s total GDP, compared to the 14% directed to Covid presently.
The bigger problem is the permitting and licensing process. A year ago, I would have said getting a nuclear reactor built anywhere in Canada would make building the Energy East pipeline across Quebec look easy. (Not so in China, which is adding 15 GW of nuclear in addition to 40 GW of coal annually).
But we have all witnessed an astounding change in Canadian politics. If the majority are convinced that there is truly an emergency afoot, there is nothing that can’t be pushed through.
Invoking emergency powers, controlling news organizations, and cancelling social media critics have been proven to work very well to bring in agendas thought impossible a couple of years ago.
If “Nuclear Deniers” faced the same large fines and imprisonment as “Covid Deniers”, it would dampen out the anti-nuclear protests considerably.
Will Net Zero happen in Canada? It seems the only viable technical solution that would provide reliable service is nuclear. It would require a very robust campaign to motivate the electorate into seeing the climate emergency as every bit as frightening as the Covid emergency.
Regardless of how many wind farms and solar projects get approved, we can only be sure of a functional energy system in our harsh climate when we start seeing 10 large (or 100 small modular) nuclear reactors getting built every year, if we really want to get to Net Zero on energy.
Larry Weiers has extensive experience in many areas of the energy sector. His most recent role before retiring was VP of Energy Technology and Innovation with a senior North American integrated Petroleum company. His e-book is titled “Sustainability of the Modern Human Economy”