Feds retreat from net-zero power grids by 2035 promise

The federal government has significantly weakened its clean electricity rules, which Environment and Climate Change Minister Steven Guilbeault says was a necessary trade off to protect power grid reliability. 

Originally aiming to have net-zero power grids coast to coast by 2035, the final regulations now allow fossil fuels to be used to generate electricity as far into the future as 2050. The rules will still push provinces and utilities to transition to clean electricity — a widely recognized prerequisite to decarbonize other sectors like transportation, buildings and heavy industry — but “flexibilities” to allow gas-fired power plants to operate well past 2035 are now baked into the country’s decarbonization efforts.

“What the regulations will do is they will help — not eliminate, I acknowledge that — but limit the role of natural gas in the coming years… and maximize the role of renewables,” Guilbeault told Canada’s National Observer.

The regulations announced Tuesday are years in the making. In the Liberals’ 2021 platform, Prime Minister Justin Trudeau pledged to introduce a clean electricity standard that would achieve a 100 per cent net zero grid by 2035. In the three years since, the federal government has solicited feedback on the design of the regulations from utilities, provincial and territorial governments, Indigenous groups, unions, civil society and more, and last year published draft regulations to finetune the rules. 

Specifically, the final regulations allow natural gas power plants to operate in emergency situations and use offset credits if they surpass their emission limits. The regulations also exempt some industries, like oilsands operations. That means the grid will continue to be an emitter and continue to warm the planet.

“Minister Guilbeault and Trudeau have done it again – watered-down climate solutions, caving to pressure from big oil CEOs,” NDP environment critic Laurel Collins said in a statement. “We should be taking strong action to tackle the climate crisis and the cost-of-living crisis, not caving to Conservative premiers and oil and gas CEOs who want to keep polluting without consequences.”

The federal government describes the regulations as built on three pillars: cutting emissions, protecting reliability and addressing affordability problems. Zero-emission renewables like solar and wind are already cheaper than fossil fuels and their use helps reduce electricity bills. However, there is a tug of war between those goals and reliability. 

“Could we be more aggressive on emission reductions? Theoretically we could,” Guilbeault said. But, “the last thing I want is for the lights to go off on January 1, 2035 because our regs are too stringent, and utilities can't comply with them.”

Age of electricity and provincial blowback

The weakened regulations follow months of pressure, primarily from Alberta and Saskatchewan — provinces largely reliant on gas currently to meet electricity demand — insisting it was simply not feasible to meet the 2035 clean power grid target laid out in the draft regulations. The Saskatchewan government said it wouldn’t comply with the rules over the summer, while Alberta Premier Danielle Smith last year invoked the Alberta Sovereignty Act to fight back against the clean electricity regulations. 

Guilbeault said the federal government designed the final regulations with court challenges in mind. By writing them in a way that focuses on emissions without instructing how those emissions reductions would be met, Ottawa is leaning on a 2021 Supreme Court of Canada ruling that gave the federal government jurisdiction over greenhouse gas emissions. However, a Supreme Court ruling last year about the constitutionality of the Impact Assessment Act led federal officials to be leery about straying too far into provincial jurisdiction. 

“By focusing on emissions, as we did, we feel we're on very solid legal ground,” Guilbeault said. “If [provinces] take this to court then it'll be up to the court to decide whether or not we got this right.”

When Guilbeault announced the draft regulations last year he told Canada’s National Observer the federal government wants to work collaboratively with all provinces and territories but not at the expense of climate action.

“Of course, we want to have a good and harmonious relationship as much as we can, but not at the cost of doing what we need to do … [and] what we committed to Canadians and our international peers [we would] do,” he previously said. 

Worldwide demand for fossil fuels is set to peak by the end of this decade, ushering in a new “age of electricity,” according to the International Energy Agency (IEA). The IEA also warns countries must recognize that locking in fossil fuels will have consequences for global emissions and affordability. 

However, the pressure from gas-reliant provinces proved insurmountable for federal efforts.

Last year, Smith reportedly said the federal government could avoid a legal battle by ditching the proposed 2035 net-zero goal. "Why don't we just work together on a 2050 target?" she said.

The weakened rules announced Tuesday are still too stringent for Electricity Canada, an organization representing utilities across the country. In a statement, the trade association said it was “disappointed” and the regulations will make electricity less reliable and affordable but stopped short of citing its evidence.

While industry representatives call the regulations too tough, civil society groups have had mixed reactions. In statements, Clean Energy Canada said the regulations strike a balance between reasonability and achievability, and the Canadian Climate Institute called them “pragmatic, flexible and achievable.” Environmental Defence took a tougher tone, accusing Trudeau of abandoning a promise to have net-zero power grids by 2035.

Stephen Thomas, clean energy manager with the David Suzuki Foundation, told Canada’s National Observer the regulations are a “keystone climate solution” that will help reduce hundreds of millions of tonnes of carbon pollution. 

“Unfortunately, the tens of millions of dollars in attack ads and lobbying that was spent by the fossil fuel industry and people working in their interest succeeded in getting some concessions — some weakening of this regulation,” he said. 

Thomas said while the regulations aren’t perfect, they’re worth celebrating. In his view, the regulations will help clean the country’s power grids and make rates more affordable by shifting to low cost renewables from costly, volatile fossil fuels. 

“Any politician who may block this transition will only hurt their constituents. The growth of wind and solar is going to happen no matter what,” he said. But if Canada is going to capitalize on the “unstoppable” energy transition, Thomas said collaboration between provinces, and between provincial and federal governments, is essential. 

As previously reported by Canada’s National Observer, geographic luck has positioned Canada relatively well to reap the benefits of clean electricity — but it will take coordination to phase some provinces off fossil fuels. 

Alberta, Saskatchewan, Nova Scotia and New Brunswick use coal and natural gas to supply between 30 per cent and 85 per cent of their power. However, each of those provinces neighbours a province with significant hydroelectric resources (British Columbia, Manitoba, Quebec and Newfoundland and Labrador) that can act like a battery to provide electricity when wind and solar can’t meet demand on their own.

Strengthening interprovincial transmission line links, called interties, is the most promising way to use provinces with hydropower as batteries to provide reliable, affordable and clean electricity to provinces who need it. 

Over the past two decades, steep emission reductions in the electricity sector have been achieved thanks to Ontario phasing out its coal fired power plants. Other provinces are in the process of doing so. But federal modelling showed that as electricity demand grows, provinces were planning on adding natural gas fired power plants to the grid leading to emissions to creep up without new regulations in place.