Canada’s transition to low-emission energy sources is underway but it remains one of the most emission-intensive nations in the world, according to a report released April 25 by the National Energy Board.
The Canada’s Energy Transition report identifies that while energy and emissions-intensities have been declining, Canada still needs to substantially reduce its emissions intensity and energy use in order to transition to a low-carbon economy.
The ability for Canada to transition to a low-carbon economy will depend primarily on three key areas identified in the report: decarbonizing the electricity grid; transforming the transportation sector; and, increasing energy efficiency through behavioural and technological changes.
As Canada continues to use energy more efficiently while continuing to decarbonize the electricity sector, the trends of declining energy and emissions intensities are expected to continue.
According to the NEB report, the pace in which Canada transitions to a low-carbon economy is the largest uncertainty. This will be dictated by technological developments, consumer preferences and government policies.
The same day, Pollution Probe and QUEST announced the release of their own report, “Canada’s Energy Transformation – Evolution or Revolution?” A discussion paper for policymakers, utilities, regulators and other stakeholders on managing risk and creating opportunities in the development of low-emission energy systems, the report was made possible with the support of Natural Resources Canada.
As the Probe / QUEST discussion paper comments, “[W]hen it comes to managing the kinds of change now coming forward, Canada’s energy regulators, policymakers and utility leaders are almost unanimous in their view that our legislative regulatory frameworks are not flexible enough and don’t easily adapt to change.” Among other issues: when it comes to regulation, some new technologies present options and questions that just didn’t exist when the legislative frameworks were drawn up decades ago, such as DER and how to treat storage. Most regulatory frameworks do not systematically compare the value of investments in efficiency against investments in generation. Some energy experts have called for legislative frameworks to require the regulatory system to pay more attention to integrated planning and act faster. On the other hand, there has to be a balance between the need for speed and the intrinsic value of caution, prudence and full stakeholder input.
The NEB’s latest Energy Futures report projects that Canada’s fossil fuel use per dollar of GDP will fall 30 to 50 per cent by 2040, depending on assumptions on technology, policy and efficiency improvements.
The transportation sector accounts for about 65 to 70 per cent of Canada’s total oil demand while the oil and gas sector accounts for about 50 per cent of Canadian natural gas demand.