Electrification and Climate I: Scale of the Challenge
Many elements have to come together if Canada is to significantly reduce its greenhouse gas (“GHG”) emissions. There is now a technical consensus that “electrification” – the replacement of fossil fuels with electricity as an energy source – is a necessary condition for decarbonization, and that electrification will require that zero/low-emission electricity generation double or triple by 2050. In this first of a series of electricity-oriented climate-related posts, I summarize the electrification modelling evidence and analyse it in historical context.
In the doom and gloom of current climate news, electrification is a relatively good news story. From the supply side, it shows that deep decarbonization (reductions of 80% or more in GHG) is feasible at current GDP and population growth rates. Because of its energy-efficiency and other conservation measures, electrification would result in reduced energy use while providing us with the same level of “energy services”. However, while there is an appreciation of electrification among many decision-makers and analysts, it has not yet led to significant action (like so many other aspects of climate policy). Some of the reasons are the same political economy challenges to any climate action. But other reasons relate to disagreements among stakeholders on how decarbonization should occur. I discuss these aspects after I summarize the models.
Energy Models and a Hypothetical Example
Climate models have been instrumental in driving the policy discussion about the need for decarbonization. The models I review here are not climate models. Rather, they are economy-wide models that forecast energy demand across sectors (residential, transportation and industrial) and then “construct” electricity and carbon infrastructure to estimate GHGs. Such models can either be calibrated to achieve a determined level of GHGs or can simulate the impact of specific policies.
I present the following hypothetical electrification example to assist lay readers in understanding these models. According to the 2019 National Inventory Report, Canada’s 24 million “light-duty” internal combustion engine (“ICE”) cars/SUVs/trucks account for 83 Mt of GHGs (11.6% of the total of 716 Mt) and use 1,080 Peta Joules (PJ)/year of energy (gasoline and diesel). On average, each vehicle is driven about 16,000 km/year, which equals about 384 billion vehicle-kilometres travelled (“VKT”)/year. What would be the electricity, emissions and energy impact of electrifying overnight the “energy services” provided by those 384 billion VKTs? There are a couple of ways of calculating the electricity impact. One is to multiply the average energy use of an EV (about 0.19 Wh/km) times 384 billion VKTs, which equals about 73 TWh of electricity. Another is to multiply the annual average electricity use of an EV (3.06 MWh) times 24 million vehicles, which also equals about 73 TWh. This amount of electricity would be an increase of 11.2% from Canada’s 2017 generation of 650 TWh. The emissions impact would be an elimination of 83 Mt, assuming the additional electricity is zero-emission. Electric motors are more energy efficient than ICEs, which is why we see EVs would use only one-quarter (263 PJ = 73 TWh) of the energy used by ICE vehicles (1,080 PJ), and would result in a 9.9% reduction in Canada’s final energy use.
This simple example shows the promise and challenges of electrification. To decrease GHGs by 11.6%, while maintaining the same level of “energy services”, we would need to add 11.2% of electricity, which would result in 9.9% economy-wide energy savings. One could see how aggregating this process across the economy would lead to decarbonization.
Summary of Decarbonization Models for Canada
These types of decarbonization models reached their policy apex in Canada via the Federal Government’s November 2016 “Mid-Century Long-Term Low-GHG Strategy” that noted that based on the results of a handful of such models (see below), achieving 80% GHG reductions by 2050 was technically possible via electrification. The Mid-Century Strategy was not a blueprint for action, but rather one of many inputs into Government’s “Pan-Canadian Framework” issued later that year.
Table 1 provides a summary of selected deep decarbonization models. It includes the three Canada-specific models included in the Mid-Century Strategy, and two later models. For context, it also includes three global models. Table 1 includes the 2050 electricity generation and the technology mix.
The first global model is in fact a series of models from last year’s IPCC “Global Warming of 1.5C” special report (“SR15”) that noted “the electrification of energy end use” was a common element of the 85 model scenarios (pathways) that were most most likely to keep global warming at or below 1.5C. Chapter 2 of the SR15 shows that the median increase in electricity generation of these 85 pathways is 125%. Note also that the IPCC’s median technology mix includes a “balanced” portfolio of non-emitting hydro, non-hydro renewables (wind, solar and others) and nuclear, as well as some residual fossil fuels.
This is where we get to introduce one of the main policy discussions among energy and environmental stakeholders. In the real-world where there is no perfect zero-emission technology, there are sharp differences between proponents of traditional “baseload” hydro and nuclear technologies and “intermittent” wind and solar and other newer technologies. Such disagreements are highlighted by the second and third models in Table 1 by Mark Jacobson et al (2017) and Sven Teske et al (2019), two prominent “100% Renewables” (“100%R”) modellers. Both models exclude nuclear generation as a matter of principle and use some existing hydro dams for “load balancing”. The differences are stark between Balanced and 100%R models. Under the median IPCC pathways hydro and nuclear account for 56% of global generation while non-hydro renewables for 28%. The ratios for Jacobson and Teske are reversed, averaging 7% and 93%, respectively. While this is an important discussion, it deserves its own separate treatment, which I will address in a subsequent post.
But the main message remains – regardless of whether they are “Balanced” or 100%R – global models show that electrification is a necessary condition for decarbonization, and that electrification will require electricity generation to double or triple (or more) by 2050.
The same conclusions apply for the USA and Canada. Focussing on Canada, Table 1 shows five models, the first three of which were included in the Mid-Century Strategy and two newer models, the Trottier Institute’s 2018 model and Jacobson’s Canada-specific results. Taken together, these five models indicate that decarbonization will require an increase in electricity generation to between 1,500 and 2,100 TWh in 2050; in effect, more than double or triple the 2017 generation of 650 TWh.
Canada’s current technology mix is already comparatively low-emission, with hydro and nuclear accounting for 76%, non-hydro renewables 7% and fossil fuels the remaining 17%. Looking forward, however, the policy differences embedded in the models are clear. For the four Balanced models, hydro and nuclear average 72% and non-hydro renewables 26%, in effect maintaining the current hydro and nuclear ratio while replacing all fossil fuels with non-hydro renewables. These figures are reversed under the Jacobson modelling, at with hydro at 15% and non-hydro renewables at 81%.
The Electrification-80%GHG Mitigation Pathway
For ease of presenting what the electrification process may look like and putting it in historical context, I use the mean of the five Canada models in Table 1 (1,760 TWh) to construct a representative “Electrification-80GHG” scenario. A further research contribution in this segment is my compilation and presentation of historical data from 1945 (data from Statistics Canada, other than earlier energy data from Richard Unger’s “Energy Consumption in Canada in the 19th and 20th Centuries“) to provide a more fulsome historical perspective.
Figure 1 presents historical electricity generation for Canada and the Electrification-80%GHG scenario to 2050. For comparative purposes I include the “Business as Usual” (“BAU”) projections based on the “Reference” scenario in the National Energy Board’s “Canada’s Energy Future”. The BAU scenario has a very modest increase of 0.5%/year, equal to an increase of 105 TWh by 2050. In contrast, the Electrification-80% scenario increases generation by 3.3%/year and adds 1,100 TWh by 2050. For simplicity, I focus on the 2050 end-point and “straight-line” growth from 2020 to 2050.
Figure 1 shows that while the 3.3%/year growth of the Electrification-80%GHG scenario constitutes a significant change from the modest 1.0%/year growth of the last three decades, it would be relatively modest compared to the 5.9%/year increase achieved in the four decades after 1945.
This kind of utility-scale growth has been achieved in the past and is technically feasible now, but as noted above, there is no policy consensus that would facilitate the broader societal consensus needed to move forward. Long-standing “in principle” opposition by some environmental stakeholders to all hydro and nuclear projects would block a consensus on the expansion of the zero-emission technologies that account for 66% of Canada’s current generation and 56% of IPCC’s global generation by 2050. Conversely, there is opposition among some energy analysts to the expansion of wind and solar, because of its intermittent nature and other attributes. Further, with respect to siting, there is already strong opposition among affected rural residents to many of the 300 wind farms that include Canada’s current 6,600 wind turbines. Both Jacobson and Trottier (2018) indicate that between 45% to 50% of electricity generation in 2050 could be wind-generated, which Jacobson estimates would require about 60,000 5MW turbines (proportionately larger compared to the current 2MW average). That is a nine-fold increase, compared to an increase of two or three times for hydro or nuclear under a Balanced growth scenario.
Interwoven into technology preferences are preferences over how the electricity should be delivered. There is a continuing tension between the household or community-controlled ideal of “distributed” energy self-sufficiency and the economies of scale associated with distant utility-scale provision that is delivered to urban areas over transmission wires. Electrification will provide policy space for both types of systems. By way of example, the most common form of distributed generation is rooftop solar. Current maximum residential potential (solar panels on every rooftop) in Canada is currently about 100 TWh (Jacobson (2017) estimates 125 TWh for 2050). Under the BAU scenario where additional generation to 2050 would be 105 TWh, there could be a legitimate policy discussion as to what proportion the distributed and utility systems would contribute. But we cannot achieve decarbonization under BAU. The Electrification-80%GHG scenario calls for an increase of 1,100 TWh. Even with solar panels covering every residential rooftop in Canada, that would account for only 10% of our incremental electricity needs. The vast majority of the new zero-emissions electricity will hence have to be provided at scale, whether at distant solar or wind “farms”, hydro dams or nuclear stations.
Another implication of the modelling is that we cannot “conserve” our way to decarbonization. All models already include aggressive efficiency and conservation measures, which become evident when we take a broader view of efficiency to include energy as a whole. For example, the upper portion of Figure 2 shows historical and projected final energy use. The BAU estimates are from the NEB and the Electrification-80%GHG is a constructed average of Trottier (2018) and Jacobson. Figure 2 shows that under BAU total energy use would continue to increase but would decrease by -0.3%/year under the Electrification-80%GHG scenario, resulting in significant energy savings (about 2,000 PJ by 2050). The lower portion of Figure 2 shows electricity’s relative share of final energy and shows that it has increased from about 10% after WWII and plateaued in the mid-1980’s at around 28%, a level that would be continued under the BAU scenario. In contrast, electricity would reach about 80% by 2050 in my constructed scenario. The bottom line is that in terms of energy, electricity would increase by less than fossil fuels would decrease, resulting in lower energy use.
Figures 3 and 4 shows electricity and energy intensity and per capita use. Intensity is measured with respect to GDP (real 2012 – based on the NEB’s long-term GDP increase of 1.8%/year), and per capita use with respect to population (from the NEB’s long-term increase of 0.8%/year).
Figure 3 shows that electricity intensity increased after 1945 by 1.5%/year, until about 1979, after which it declined by -1.3%/year. The BAU scenario sees electricity intensity continue to decrease by -1.3%/year, while the Electrification-80%GHG scenario sees an increase of 1.5%/year. Electricity use per person would also increase under Electrification-80%GHG, averaging 2.5%/year to 2050.
Figure 4 shows that, relative to historical trends, energy intensity would decline further under the Electrification-80%GHG scenario (-2.0%/year) than the BAU, and would have decreased by about 46% from 2020 to 2050. That would indeed be a “de-linking” of the economy-energy nexus. Per person energy use would also decline from 2020 to 2050, by about 28% under the Electrification-80%GHG scenario, resulting in usage levels not seen since the early 1960’s.
The promise of electrification is that decarbonization is technically feasible. A new societal consensus would have to emerge to facilitate the expansion of utility-scale electricity generation infrastructure that would displace most carbon infrastructure. However, there is no consensus among stakeholders that favour deep decarbonization about how it should proceed. The last decades of slow or stable electricity growth has resulted in a type of “zero-sum” game where proponents are not satisfied in advocating for their preferred technology but also attempt to block competing zero-emissions options. If we are to take decarbonization seriously, electrification would require an “all hands on deck” approach. In this respect, for instance, I am somewhat encouraged by the very recent Suzuki Foundation report that qualitatively reviewed some of the same models as this post. While the report advocates for a certain type of electricity (distributed 100%R), it does not shy away from reporting the broader modelling consensus that Canada’s low-carbon economy of 2050 would require 2.5 to 3 times more electricity.
In addition to the technology issue, in subsequent posts I also aim to deal with policy and regulatory matters, including the challenge of matching supply and demand over time. In a nutshell, an increase in generating capacity is the necessary supply side response to meet increased demand induced by policy and regulation. To date, policy has focussed on demand-side measures, including the carbon tax. But these measures have been tardy and modest and have not been applied consistently. The resulting lack of demand certainty is problematic for the electricity sector because it requires long lead-times to build supply. No Government or private investor wants to finance generation assets that will operate under-capacity because electrification-related demand was delayed or never materialized. In effect, national and provincial electricity regulators have taken a conservative approach; while they have modelled electrification, they generally have not included it in their long-term resource planning forecasts. So we fall further behind on the supply side. One could advocate for improved policy and regulatory commitments on the demand side, but such indirect measures may not be sufficient; a more direct policy approach on the supply-side may be appropriate and necessary. Stay tuned.
I would first comment that electricity is NOT an energy source. That is a common misperception. You cannot dig up electricity or grow it.
Electricity is merely an energy transfer medium: From an actual primary energy source generating electricity to the load that utilizes that energy. It is merely an element in an energy conversion system.
I don’t want to sound pedantic, but when terms are sloppily thrown around, they tend to obscure the real issue. Which is, are we as a society going to abandon the fossil fuel consumed by individual transportation units and replace them with periodically recharged batteries?
Because, other uses for electricity are unlikely to change much in principle through 2050, although increased efficiency in usage of the delivered energy is a constant challenge to tackle.
I worked for an electrical utility, and the System Planning Department was where the eggheads went. Their analyses would make this analysis of yours look rather elementary, I’m afraid.
It seems redundant for an economist to re-invent the wheel on System Planning, simply because the engineering technical aspects that colour eventual decisions are not an area of expertise an economist is trained for. The money aspect is at the forefront of all planning but the rest can be mind-boggingly complicated even for a trained engineer initially unfamiliar with the niche these planners occupy.
In your preparation of this report, did you contact the major electrical utility in your province and ask for their advice, facts and opinion? They are not unapproachable. The Canadian Electrical Association is the trade association where utilities come together to discuss planning and standards for all areas of the electrical generation industry. They can also provide overviews for you, or direct you to where the information lies.
My area of expertise was metering, which involved liaision with rate setting, planning and the regulatory body. It became increasingly obvious a few decades ago that persons with no real knowledge of how the electrical system was integrated, decided it was all simple really, and that they could proffer useful advice without having a clue as to the consequences. It was painful to listen to some of the submissions at public regulatory hearings from people without a clue lecturing experts on their job, because they had neither the background or experience to understand why their brilliant ideas weren’t adopted on the spot. Apparently, paid professionals were supposed to fall down in amazement and croak “Why didn’t we think of that?!”
Since I’m retired now, I wonder how society/electricity generation and supply industries will get along in the future. There is certainly no need for fustiness to encroach on utliity thinking, which a quick reminder now and then helps to keep at bay. For many companies the reality of some dimwitted politician interfering is an added obstacle they have to navigate around. BC Hydro seems to have been a political football for years, for example.
But I see little gain to be made in having parallel external analyses performed that don’t take into account physical and operational realities either. Economically, you might well re-consider the theories of marginal cost electricity pricing prevalent in the late 1970s. That’s where the marginal cost of adding a new customer to the system is entirely charged to that customer. Instead, we lump all costs together and divide by the number of customers in a given rate class. So new customers get a deal, and old customers get to provide the costs for adding the new customers. The effect of a unit of system expansion is thereby not properly costed or accounted for, and encourages greater use overall.
Perhaps your work is policy at such a high level that you can overlook the mundane aspects; however, it’s not possible for me to assess that.
The overview is that Canada’s electricity is currently about 60% provided by hydro power. We’re lucky. Environmental analyses decades ago found that damming waterways and creating huge reservoirs materially changed regional climate significantly. But as a society, we went ahead anyway and accepted the consequences. There are no obvious big hydro projects left to tap, and society is against them for obvious reasons. Look at the two last major projects currently mired in hopeless difficulties, Site C and Muskrat Falls.
So if electricity generation is somehow going to be tripled by 2050, then solar and wind are not going to materially assist in the endeavour as you say. That leaves only fossil-fuel-thermal and nuclear as primary electrical energy sources – there’s no escaping it. The very latest thermal power plants, of which there are only four in the world, actually provide exhaust gas emissions at levels comparable to modern cars, and have perhaps 45% efficiency before transmission. Older plants are not good at all at pollution control compared to modern IC engines, and to me, it’s a joke that the typical 36 to 40% thermal to electricity efficiency of a power plant, reduced by typically 10% by line losses in transmission and distribution, is then applied by not very efficient chargers to EV batteries. It’s a dystopia of a fundamental kind, where loss of the basic commonsense we used to have societally has been thrown away by sloganeering and sloppy thinking into pushing some scheme as the saviour of us all. Everyone wants a pat answer, right now, this minute.
Where I see fundamental analysis missing is in the overview of all pollution from energy sources providing the needed totality. We need to minimize that. Sulphur dioxide, oxides of nitrogen, heavy metals and other poisonous emissions are just as important, if not more so, than CO2 output. Yet the ratio of such poison generation by obsolete thermal power plants compared to modern IC engines is never analysed. Assumptions are made off the cuff, and then it’s time for lunch.
Repeating my position: If using fossil fuel sources for electricity generation, nobody to my knowledge has analysed total pollution, including noxious outputs and not merely the inevitable CO2, as it relates to electrical energy end use. Agendas are pushed to obscure whether EVs are actually less polluting in poisonous emissions beyond mere CO2 compared to burning refined fuels in a vehicle. In Canada as a whole, our current hydro advantage means, yes, EVs are indeed worthwhile. Other countries do not share our advantage on that score.
However, ultimately, I feel we will all have to pull our horns in and accept a “lower standard” of living. I can see no reason for the huge aviation industry beyond turning precious natural resources to entropic junk for profit. There is no need for most of it, it’s a polluting luxury that doesn’t reflect the environmental damage it causes – that marginal cost pricing issue comes to the forefront for that industry. Aviation will be scale-back number one if anyone has any sense.
Personal vehicles just keep getting bigger for no good reason as well. Drone delivery of packages and air taxis seem a fad with no upside. New housing at least seems to be much more energy efficient than past efforts.
As I said, I’m old and all I see is rampant consumption and the encouragement to be ever more rapacious in the here and now, so I just shake my head. Enough is never enough until there’s nothing left to have. Perhaps the forthcoming environmental collapse will concentrate minds, but until the last moment, nobody will get serious about things, based on history.
Good luck that the society of 2050 is some mere progression of what we have now and that current analyses projecting so far out in the future will have much relevance then. I’ll be gone, not even a footnote, so my best wishes to the prognosticators of today provided they are not blinkered into pursuing only one avenue of thought to the exclusion of all else.
I hope I’ve raised some valid points and not annoyed you. But this a serious matter and a co-ordinated approach by all involved parties is required. So far, I see little sign of that. That’s my opinion, for what it’s worth.
Thanks for this useful analysis. It’s important that the admirable and essential goal of decarbonization doesn’t give a free pass to holdover dinosaur projects like BC’s Site C.
You’re welcome, Paul.
In this first post I had wanted to focus on the technical consensus of the need to increase generation capacity. By a lot; two or three times what we now have. So give priority on the amount of electricity, not on which particular technology, let alone project, is generating that electricity.
For my next post I am researching how electricity regulators are dealing with the idea of electrification.
For example, in reviewing Site C, the BCUC decided that electrification – the “uplift” in demand related to decarbonization – should NOT be included in BC Hydro’s demand forecast for Site C resource planning purposes. The BCUC argued that while the “effects of electrification on BC Hydro’s load forecast could potentially be significant, the timing and extent of those increases remain highly uncertain”. So BCUC’s final report was based on an analysis that did NOT include any additional demand from potential electrification initiatives related to decarbonization.
So from that narrow regulatory perspective, at least the BCUC in its Final Report did not give Site C a “free pass” because of decarbonization. But we both know that the BC Government ultimately approved the continuation of Site C.
Quite separete from Site C, but as an electricity sector decision, I consider this element of BCUC’s Final Report as another example of a decarbonization-related failure. It is not the BCUC’s fault either, but rather a collective and shared failure at the federal and provincial levels to have credible electrification policy that would allow the BCUC to include the corresponding additional demand for resource planning purposes… Anyway, stay tuned.