Is Canada on track to meeting net zero targets by 2050?
Canada's target of net zero greenhouse gas emissions by 2050 is extremely ambitious. However, we are confident that wind, solar and storage are going to play a central role in achieving it. Wind and solar represent about 6% of Canadian electricity supply today. A summary of Canadian net-zero pathways studies, however, has concluded that getting to net-zero will require wind and solar to produce somewhere between a third and three quarters of Canada’s electricity by 2050 - in a system that is twice as big as it is today. We need that electricity to help decarbonize transportation, heavy industry, and buildings across the economy.
Are we moving fast enough? No. Is the challenge still enormous? Yes. But do we see signs of progress that we have not seen historically? Absolutely.
At least in the Canadian context, concrete policies are being implemented like carbon pricing, a clean electricity regulation to eliminate greenhouse gas emissions from the electricity system, and a clean fuel standard, among others.
What are the highest priority areas that Canada needs to invest in in order to reach its ambitious target?
We have the foundational policies in place, but we need electricity market and regulatory reform to enable us to take advantage of new disruptive technologies and deploy them at the pace that is required. We need greater inter-jurisdictional cooperation given that responsibility for the electricity sector rests primarily with the provinces, who do not have a history of collaborating on electricity policy. We need clarity in terms of pathways for industry so that they can develop a long-term investment plan going forward. We need investment in new infrastructure and transmission. There is currently a lot of new activity and commitments being made. They are not enough, but we are certainly in a better place than we were two years ago.
How do you see international collaboration evolving and the role that Canada will be playing in the energy transition ecosystem?
Given the speed and the scale of the transformation, every country is still going to have to rely on others. Nobody is going to become totally self-sufficient. Canada has a lot of raw materials that can contribute to this transition. And there certainly is a growing effort, for example, to get new mines off the ground. But will Canada end up being the place where a lot of these raw materials are processed? Not necessarily.
It is all going to depend on Canada's ability to compete for capital, which is going to rely on the investment climate and overall landscape.
What is your opinion on nuclear energy as a complement to solar and wind energy?
There is certainly a growing amount of discussion about the potential role that nuclear can play in the energy transition. Ultimately, it is going to come down to economics. The energy transition will require massive amounts of investment. There is a lot of interest right now, for example, in small modular reactors (SMRs), and a great deal of uncertainty as to what the cost of electricity produced from small modular reactors is actually going to be. Once we see that, I think we will have a much better sense of what the role of nuclear power will be going forward.
What is your vision for CanREA moving forward?
We want to be leaders not just in terms of putting new projects on the ground, but in actually designing the solutions that enable us to meet climate targets. At the moment, our challenge is less a technology issue and more of a policy, regulatory, and market issue. We would like to see ourselves collaborating with other stakeholders to define those solutions that allow us to capture and capitalize on Canada's enormous wind, solar and energy storage potential. There is a need to ensure that we are holding governments to account in terms of the pace of change that is required to go forward.
Do you have a final message for Newsweek’s international readership?
The energy transition is coming, and nothing is going to stop it at this point. People can sometimes wonder “how can I make a difference because I am this tiny percentage of the issue?” Consumers, whether they are individuals or corporations, can play a critical role in enabling the deployment of these technologies, through their choices. By signaling their preferences through their buying power, they send a signal to both policymakers and industry.
Bottom line considerations are always going to be paramount for any corporate entity. What is changing is the definition of the bottom line. It is not just about the final cost, but about license to operate, social acceptance and other ESG elements. There is a lot of gloom and doom right now, in terms of turning on the news every day, and you see more extreme weather events, more challenges coming forward. But things are starting to move in a positive direction. I would say, recognize that your choices do make a difference and do help out.
