Canada’s Clean Energy Transition: Win-Win for the Economy and the Environment

According to the Global Cleantech Innovation Index, Canada just moved from the seventh to the fourth position, and 13 Canadian companies have been named on the cleantech 100 list. What do you attribute these results to?

This is great news. It really goes to show that Canada does have the talent to thrive in today’s low carbon economy. There has often been a sense that we rely on our natural resource sector and some sections of the population believe that it is all we have. However, we are proving that we are good at innovation and new technologies. The latest numbers from Statistics Canada that were released in December show that 274,000 Canadians are now working in the clean energy and cleantech fields. So this clean energy transition is not something we are just planning for the future, it is already happening today and we need to capitalize on it.

“We are at close to 80% clean electricity, which is far ahead of most countries. So we have a real opportunity in Canada to shift to nearly 100% clean electricity and use that to power our manufacturing sector, our industries like mining and forestry, and produce low carbon products.”

Seven of the 13 companies on the Global Cleantech 100 list, a separate ranking released this past January, are from B.C. The province has had the longest carbon price, and it has been effective at not only reducing carbon pollution but also driving the innovation sector in pollution reduction. Companies that have developed technologies, which help reduce carbon pollution, are selling it overseas. These technologies are the new export product for Canada and that is good news.

Clean Energy Canada recently published a report entitled ‘Stuck in Neutral: Tracking the Energy Revolution’, in which it argues that Canada lags behind other G7 nations in its adoption of electric vehicles (EVs). If we are doing quite well in other areas, why are we not doing well in this one?

The problem is policy; we do not have enough policies in Canada. Ottawa offers no federal EV incentives and we are one of the two G7 nations without a national or a federal incentive program. Only three provinces are offering rebates: Ontario, Quebec and BC. A recent study from Simon Fraser University, looking at polices on EVs in Canada, awarded Canada an overall grade of a C-. That means the policy we have has a marginal impact on long-term EV sales. Quebec has just put in policy design to increase EV availability, because that has proven to be a real challenge. Many auto dealers in English-speaking Canada do not even stock electric cars. We heard from Ford and Toyota that they are going to be sending their entire EV stock for Canada to Quebec because of the policy there. This demonstrates that if you put in place good policies, you are going to be driving the uptick. That is what we need in Canada.

“The global clean energy industry will require large amounts of metals and minerals, which could be coming from Canada.”

Interestingly, the most recent public opinion research done for Natural Resources Canada by Environics Research revealed that roughly 2/3 of Canadians are interested in electric cars. So we need leadership at all levels of government not just for EV infrastructure but other programs like the Zero Emission Vehicle policy and incentives. These policies are going to be short-term programs because the cost of EVs is coming down very quickly. The variety of EVs available is expanding so that they meet the needs of different types of families. In the short-term, we need some support to get the EV uptake going but it is not going to need to be a long-term strategy for Canada; the transition will start to happen on its own sometime in the next 10 years.

You have said electrification is imperative for a low-carbon future. In this context, what do you think about the controversial Site C project that was recently greenlighted by the BC Government?

We are supporters of electrification because it is a key part of the energy transition. We are going to need more clean energy in the future, so whether it comes from Site C or renewables, we really need to build more. If you take into account any demand forecast that looks at hitting British Columbia’s 2030 and 2050 climate targets seriously, there is no question we need to switch away from fossil fuels, whether they power cars or heat homes, and switch to electricity.

“Large energy producers and consumers such as the US, Europe and China are looking for good technologies, not just in renewables but also in energy storage systems and energy efficiency.”

To meet our Paris commitments, we are going to need to have zero-emission electricity and it will need to be 100% zero-emission electricity. How we choose to do that, whether it is renewables, large hydro, or other means, is going to go through the filters of what is cost competitive, what is environmentally sound and what is reliable and affordable. We are not choosing, we are just saying fossil fuels are where the carbon pollution is coming from, and we need to switch to zero-emission electricity. Canada is in a fairly good position right now. We are at close to 80% clean electricity, which is far ahead of most countries. So we have a real opportunity in Canada to shift to nearly 100% clean electricity and use that to power our manufacturing sector, our industries like mining and forestry, and produce low carbon products. An example would be the aluminum from Rio Tinto in Kitimat. The metal from the Kitimat Aluminum Smelter, which is powered by BC Hydro’s clean electricity – or carbon-free electricity – is now being sold to Tesla at a premium. This is because Tesla wants its EVs to be made with clean materials. So this aluminum produced with clean electricity in BC is now selling at a premium, and we have opportunities to do that in other Canadian sectors as well. There is going to be a need for a lot of metal and minerals to power this low carbon or clean energy transition.

Which opportunities emerging from the clean energy transition should Canada focus its efforts on? What are the risks for our existing industries?

We modeled the impact of a clean fuel standard, which is what the government committed to. We found that it would create 31,000 jobs and increase economic activity in clean fuels. Yes, there would be less growth in fossil fuel production over the next decade, but we are not talking about job losses. If you look at the biofuel, biodiesel and renewable gas sectors, jobs will be created there. Essentially, jobs would grow more in one part of the economy as opposed to another.

“We have to build our skills, our technologies and these clean energy technology sectors to be able to compete internationally as well as right at home.”

I think there are lots of opportunities for Canada to succeed through this clean energy transition but we need to put in place the right programs, incentives and policies now to put the country on that trajectory. We will be building companies here that excel in the goods and services needed in the clean energy economy such as energy efficiency technologies for buildings or industry, EV component parts, electric bus technologies, smart grids and the technology supporting the digitization of the electricity system. There is a huge number of new areas, such as energy storage, where Canada’s talents and innovation can be used. This will not only help our own energy transition with Made-in-Canada companies, but also provide new Canadian exports for the growing global market.

Moreover, the global clean energy industry will require large amounts of metals and minerals, which could be coming from Canada. But it also wants them to be sustainably sourced and we as Canadians should want that too. For Canada to succeed, we should set a leading environmental standard that all of our mining companies need to adhere to. Moreover, we need a transparent process for them to demonstrate that they are meeting that high environmental standard. If they do, this growing demand for clean metals to build the clean energy economy is going to be more accessible to Canadian mining companies. So there is a big opportunity but the mining companies are going to need to step up and ensure that they are meeting both environmental and social justice practices that are of the highest standards.

“Canada could do much better in this realm: wasting less energy.”

Large energy producers and consumers such as the US, Europe and China are looking for good technologies, not just in renewables but also in energy storage systems and energy efficiency. For example, Ballard Power from British Columbia is selling zero-emission fuel cells for electric buses, which cities worldwide are adopting. So we have to build our skills, our technologies and these clean energy technology sectors to be able to compete internationally as well as right at home. This is where the puck is going.

So, Canada has a competitive advantage in our technologies, our services such as digitization and smart grids, and our policy expertise. While we have a solid foundation in these areas, there is still a lot more work to be done.

How do you imagine the future and the way to the future? And what role does Canada’s current oil and gas industry play within it?

According to recent data from Environics Research, 84% of Canadians are concerned about the energy industry’s impact on the environment. There is three times higher support for solar energy than there is for oil or gas. Research by Ottawa-based Abacus Data shows that 2/3 of Canadians say we should prioritize other ways of growing our economy over oil and gas. So the Canadian public is concerned about the impact of energy on the environment and wants us to start diversifying and strengthening our economy in areas outside of the traditional oil and gas sector. That is consistent with what we are seeing in the global economy as well. That is not to say that we are going to stop producing or using oil and gas in this decade, but you have to look at where the puck is going.

In terms of how I see the future, our oil and gas sector would be diversified. We should be thinking, “Instead of burning oil and gas, what kind of petrochemical products can we be making with that?” It is a resource that has value but we have been only focused on thinking of it as a fuel. We must figure out how we can turn it into other products that are not burned, which are being demanded by the global economy. In addition, the oil and gas system that remains will be much cleaner by using clean electricity and being much more efficient.

“2/3 of Canadians say we should prioritize other ways of growing our economy over oil and gas.”

I see a much more efficient economy where we use less energy. So we should first strive to meet the types of efficiency achieved in Germany and other European countries. That means buildings and homes that produce as much energy as they use. It means much more efficiency in industry, so that we use less energy and probably less water. Canada could do much better in this realm: wasting less energy.

Secondly, we would have an electrified economy. By 2050, Canada could easily have 100% zero-emission electricity, meaning a lot more solar, wind and other forms of renewables powering our grid and our transportation. In the transportation sector, I see more transit and trains, more electrification of all our transportation, and an EV charging network from coast to coast. In addition, the liquid fuels that we are still using will have a much higher percentage of renewable gas and renewable fuels combined with biofuels and biodiesels.

“We should be thinking, “Instead of burning up oil and gas, what kind of petrochemical products can we be making with that?””

If you think of the integrated energy system and you think of a city in 2050, it is going to be much more compact and the urban design is going to be much more pedestrian, bike and transit-friendly. People are going to be working differently; working from home offices and telecommuting. Digitization is going to transform a lot of our energy demands wherein we are much more in control of when we use power and how our power systems are working.