Opinion: Sask. must ditch knee-jerk reaction to clean electricity

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The revised federal Clean Electricity Regulations conform to the stated goals of Saskatchewan’s government and SaskPower, but are still inciting opposition.

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The government of Saskatchewan and SaskPower have clearly stated a commitment to transitioning Saskatchewan’s electricity system to net zero emissions by 2050. The finalized Clean Electricity Regulations released by the federal government are aligned with the same mid-century timeline.

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The regulations come into effect on Jan 1, 2035 and set an annual emissions limit of 65 tonnes of CO2 per GWh of capacity for new build gas-fired generators. Existing units can continue to operate to the end of their life or 25 years from commissioning.

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Under the regulations, the recently completed Great Plains Power Station can continue to operate to 2049. Planned gas plants, such as the 370-megawatt Aspen Power Station, can operate until Dec. 31, 2049. As such, the regulations are designed to minimize the costs associated the net-zero 2050 transition.

Under a separate set of long-standing regulations, unabated coal-fired generators must be shut down prior to Jan. 1, 2030.

The revised standard accommodates new gas plants equipped with carbon capture and storage along with existing and new gas “peaker plants.” Peaker plants are important contributors to balancing and providing backup to the supply coming from intermittent renewables.

The flexibility built into the regulations along with storage and interprovincial flows of electricity will guarantee the reliability of supply as the system transitions to net-zero electricity.

The regulations were released along with a Regulatory Impact Analysis Statement. The impact statement utilized state-of-the art modelling of the full spectrum of economy-wide transitions costs over the next 25 years.

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These costs include the build out of supply and transmission infrastructure to meet a projected doubling of demand for electricity.

The models predict that the combination of flexible federal regulations, along with federal assistance for funding clean electricity projects, will avoid any burden of cost imposed on the rate payers of Saskatchewan.

Further, overall household energy expenditures are projected to decrease over time as people switch from fossil fuels to more efficient technologies like electric vehicles and heat pumps.

Yet the government of Saskatchewan “categorically rejected the Clean Electricity Regulations published by the federal government.” In rejecting the regulations, the provincial government referred to its own study completed by the Saskatchewan Economic Impact Assessment Tribunal.

However, the tribunal report is irrelevant since it was based on a draft of the federal regulations that was intended to be a consultation document. The flexibility and allowances build into the final version of the regulationss were designed to reduce costs of implementation.

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In addition, the economic impacts highlighted by the tribunal study were primarily due to assumed differences in carbon pricing and federal support that favoured non-compliance with the regulations.

A recent detailed and objective study from the Department of Economics at the University of Regina concluded that compliance with the regulations would have a marginal impact on electricity rates in Saskatchewan.

This finding is in agreement with the conclusions of the four independent energy-economy models of clean electricity transition described in the federal government’s impact analysis.

The regulations are aligned with the stated goals to SaskPower and the government of Saskatchewan to transition the electricity sector to net-zero emissions by 2050.

Further, models of the energy mix to generate electricity under compliance with the regulations resemble the future energy mix forecasted in SaskPower’s own long-range plans. Realistically, only modest adjustments are required to SaskPower’s plans to comply with the final version of the regulations.

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The flexibility built into the regulations and associated federal investment tax credits will ensure a realistic and progressive cut in emissions from electricity generation over the next 25 years without compromising the reliability of supply or imposing a burden of costs on the citizens of Saskatchewan.

Industry and consumers have a clear preference for cost-effective clean electricity. The time has come for the government of Saskatchewan to cease with the knee-jerk rejection to this federal initiative and get on with the job of transitioning to a clean electricity supply for the people of Saskatchewan.

David Maenz is the chief policy analyst with the Saskatchewan Coalition for Sustainable Development and the author of the book The Price of Carbon.

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