By Trevor McLeod and Catherine Gao
In the Globe and Mail

July 2, 2016

In its intrepid plan to hasten Canada’s transition to a low-carbon economy, the federal government is looking to invest in truly transformative infrastructure projects. One such investment is staring it in the face: an integrated western electricity grid.

Such a grid would boost two western provinces’ ambitions to get off conventional coal by 2030, while also moving Canada dramatically down the field toward the emission goals it set at the Paris Climate Summit.

Although Canada’s electricity grid is one of the cleanest in the world, the electricity sector still contributes 11 per cent of Canada’s greenhouse gas (GHG) emissions. The vast majority of these emissions come from coal and natural gas used in Saskatchewan and Alberta.

Conventional coal supplies 55 per cent of electricity in Alberta and 32 per cent in Saskatchewan. Displacing coal or capturing emissions in these two provinces will virtually eliminate emissions from electrical generation nationwide. In 2014, more than 80 per cent of the electricity generated in this country was produced with no emissions (62 per cent from hydro and 16 per cent from nuclear).

Going a step further, the government of Justin Trudeau is keen to make a dent in transportation emissions (23 per cent of the Canadian total). The widespread adoption of electric vehicles (EVs) would drive up demand for electricity, making it even more important that electricity comes from non-emitting sources. Widespread adoption of EVs could be hastened if potential buyers are no longer deterred by the incongruity of buying a clean vehicle only to see it powered by electricity from a high-emitting source.

Alberta and Saskatchewan have ambitious plans to shift away from conventional coal-fired generation. While they have pursued different approaches, both provinces seem to have landed on wind as the best source for the majority of their renewable capacity.

Favouring wind is understandable. Indeed, some research on the levelized cost of electricity, which measures the lifetime costs of producing power from different sources, suggests that wind is the cheapest form of renewable power. However, a new report by the Canada West Foundation shows that hydro outperforms wind on a long-term cost basis. Put simply, if hydro and wind facilities were constructed at the same time, the wind turbines would need to be replaced four times during the life of the hydro plant.

Hydro is also as reliable as coal; it is the only renewable that can provide the constant baseload power needed to drive our prairie economies. If the amount of renewable power mandated by Alberta’s climate plan were supplied by intermittent sources – like solar and wind – the province would come dangerously close to falling short of meeting peak baseload demand by 2030.

No one wants rolling brown outs.

Here’s the thing: Hydro from Manitoba and/or B.C. could meet a significant portion of the demand in Saskatchewan and Alberta while cleaning the grid and maintaining system reliability. And it can do it at a lower cost than wind. The high upfront capital costs of hydro and the challenges associated with building linear infrastructure in this country, however, mean it will likely take federal support and investment in transmission lines to connect the western provinces.

There could be competition for Manitoba’s electricity. The Three Amigos agreed this week to collaborate on cross-border electrical transmission projects. One such project, Great Northern, would open the door to increased exports south from Manitoba. Consideration must to given to how much of Manitoba’s power goes south and how much goes west.

There is precedent for federal support for more infrastructure in Canada: The previous federal government provided a loan guarantee of more than $1-billion to help clean the eastern grid by moving hydro from Newfoundland to Nova Scotia. The current government, which is clearly serious about taking steps to engineer a low-carbon economy, should take a close look at hydro’s potential in the West.

For a government focused on reducing emissions, an integrated western grid is a gift. And, if Ottawa has earmarked big money for infrastructure anyway, we should insist it be spent on infrastructure that actually reduces global emissions and improves our competitiveness.

The idea of an integrated western grid is not new, but its time has come. Ottawa should step up.

Trevor McLeod is the director of the Centre for Natural Resources Policy and Catherine Gao is an intern at the Canada West Foundation in Calgary.