The UCP’s bad faith — and bad math — on net-zero electricity

It’s one thing to quarrel with the analysis of an expert during an election campaign. It’s quite another to quarrel with the analysis of an expert your party paid to do the study. But that’s where the United Conservative Party and Danielle Smith find themselves right now after their misrepresentation of work done by Navius Research forced the firm to demand a clarification from its own client.

Their work involved modelling the economic impact of Alberta meeting the federal government’s net-zero target for electricity by 2035, one that came in at $35 billion over two decades. But the UCP decided to combine it with the estimated cost of actually building the zero-carbon alternatives in order to arrive at the $87-billion figure it used in a series of attack videos on Wednesday — one Navius said later that day was “not a fair representation of the costs.”

Welcome to the front line of the next major climate battle in Canada, one where the truth is an early casualty. It’s also a battle that was bound to happen in Alberta because while provinces like Quebec, Ontario and British Columbia should be able to reach the federal government’s 2035 target without too much difficulty, Alberta and Saskatchewan have some heavier lifting to do. Their existing grids rely more heavily on natural gas (and coal in Saskatchewan) and are therefore far more carbon-intensive than provinces with legacy hydro or nuclear assets.

That helps explain the UCP’s first major attack of the election — and its leader’s latest about-face. Back in 2021, she waxed poetic about the capacity of Alberta’s entrepreneurs to compete in the “race to net zero,” one she suggested they could win. “I don’t think the politicians understand just how much the industry is prepared to innovate or how quickly they’re prepared to get there.”

But now that she’s one of those politicians, Smith is suddenly far less bullish on Alberta’s capacity to innovate and adapt. Instead, she’s highlighting the cost of moving towards a net-zero electricity grid, describing it as “the most expensive campaign promise that has been put forward in this election.”

The math at work here, if you can even call it that, is dubious. According to the Navius report in question, the province’s GDP would decline by 0.03 per cent as a result of the transition to a net-zero grid by 2035. That results in the province’s GDP being $1.9 billion lower in 2030 and $3.2 billion lower in 2035, for a cumulative impact of $35 billion between 2020 and 2040. This 0.03 per cent hit to GDP is a rounding error on a rounding error. But the UCP bulked it up by adding it to the estimated $52-billion cost of building the necessary supply of zero-carbon energy sources to make it really stand out.

This is, as CBC Calgary’s Jason Markusoff said, like trying to add apples and ambulances. One is a reduction in GDP, while the other contributes positively to it. There’s also the fact that the capital cost estimate, done by Alberta’s Electric System Operator (AESO), uses assumptions about the economics of wind, solar and other renewable technologies that exaggerate their cost by as much as 200 per cent.

Oh, and guess what? Navius was apparently tasked with using these stale-dated figures in its own analysis. If you wanted to create the biggest number possible for the sole purpose of weaponizing it during an election, this is probably how you’d go about it.

For a more apolitical view of the future, take the February 2023 report from Clean Energy Canada — one that showed wind and solar are already cheaper than natural gas. “What’s more, costs are expected to decline by a further 40 per cent by 2035, compared to relatively flat costs for new gas deployments.”

Of course, wind and solar are intermittent sources, so what happens when you include the cost of battery storage? Well, they’re still cheaper — and poised to get much more so over the next decade. “Battery technologies stand to see significant declines in cost,” the report says, “as innovation in battery chemistries increases their effectiveness and we reach economies of scale.”

Sounds good, right? The problem is that you could fit all the Albertans who understand the intricacies of their province’s electricity market and renewable energy pricing inside a modest-sized lecture hall. That explains why the UCP doubled down on its messaging, despite complaints coming from Navius. Part of this is pure politics and a belief it’s better to double down on a lie than tell an uncomfortable truth. But part of it is the UCP’s loyal servitude to the fossil gas industry’s executive class and their refusal to accept the reality of decarbonization — and its impact on their business model.

In time, the economic realities of renewable energy will eventually overwhelm even the most ideologically hidebound holdout, as the explosive growth of wind and solar in places like Texas continues to show. But make no mistake: while the UCP and Smith will eventually lose this war, they may yet win the battle that’s being contested across Alberta right now. If they do, the federal government will have an even bigger fight on its hands going forward.