In this article, Context: Energy Examined speaks with Channa S. Perera, Vice President, Policy Development, Canadian Electricity Association (CEA)
Q: How does natural gas fit into Canada’s evolving electricity generation mix?
A: Canada’s electricity generation has changed over the last decade and will continue to change in the decade ahead. We currently generate about 11 per cent of our electricity using coal. By 2030, the amended federal regulations will effectively shut down all traditional coal plants that are not using carbon capture and storage. Thus, we will need to be ready to make up for that 11 per cent of generation, plus any additional amount of demand that will have grown by then. Natural gas can certainly fill part of the void, including supporting the integration of intermittent renewable sources to the grid and meeting peak demand. It is an essential part of the Canadian fuel mix in the foreseeable future.
Q: Why use natural gas?
A: Natural gas is an important fuel for several reasons. First, it produces much lower carbon emissions than coal, and can generate the reliable baseload power that coal plants currently produce. Second, natural gas plants can quickly modulate their output to make sure the right amount electricity is being produced to meet fluctuating demand. This is important for enabling renewables like wind and solar, whose output can vary depending on the time of day. Third, it also has one of the shortest lead times for planning and building new generating stations. Thus, natural gas has an important role to play—in some provinces more than others—as Canada transitions to a low carbon future.
Q: So where do you see demand occurring for natural gas generation?
A: Obviously, it’s an attractive option for some provinces, including Alberta, Saskatchewan, Nova Scotia and New Brunswick, that are right in the middle of phasing out coal-fired facilities. These provinces, particularly Alberta, will see some growth in natural gas generation as companies transition from coal-fired generation. There could be additional demand for natural gas generation in remote communities in several other provinces and territories, particularly in areas where other electricity generation options are limited or constrained.
Q: The Alberta government is aiming to have 30 per cent of the province’s electricity come from renewable sources by 2030. It’s also allowing coal units to be converted to natural gas. What makes natural gas a complementary source as that province greens its power system?
A: As I mentioned, one of the strengths of natural gas generation is the ability to enable intermittent renewables like wind and solar. As Alberta adds more renewables onto its grid, it will need to balance those with quick backup generation. Since you can very quickly ramp natural gas up and down to provide just the right amount of power at the right time, it’s an excellent complement to wind and solar. It helps to prevent potential brownouts when demand spikes or when supply dips.
Q: What about natural gas in Ontario?
A: It’s always been an option in Ontario, which has a very diverse generation mix, everything from hydropower, nuclear, natural gas to renewables. Natural gas continues to make an essential contribution to maintaining the flexibility of the grid. Today about 10 per cent of Ontario’s electricity comes from natural gas, and in my view, it remains an important option, especially as Ontario looks to ramp up more renewables onto its grid and reduce diesel-use in remote communities.
Q: Do you see other places in Canada where natural gas generation might be an attractive option?
A: Northern communities are talking more about getting off diesel as a fuel for power generation. In the North, people pay much higher prices for their electricity. There are also environmental concerns with using diesel. So, there are economic and environmental reasons that the North might want to look at natural gas as a better, cleaner alternative to diesel for power generation. Yukon Energy, for instance, has invested in liquefied natural gas (LNG) as an alternative to diesel. We need to continue to work with our northern partners to explore technology and fuel options based on their unique conditions and circumstances.
Q: What kinds of decisions will shape more natural gas generation in Canada?
A: The Canadian government has shown an interest in moving the electricity sector more and more towards clean energy and electrifying the rest of the economy. Given that context, power producers will have to make some strategic business decisions, including whether or not they want to shift from coal-fired facilities directly to renewables, or move from coal to natural gas, with natural gas acting as a “bridging” fuel. Should they decide in Alberta, Saskatchewan or elsewhere to use natural gas as a “bridging” fuel in power generation, then natural gas will become more important in those regions in the next 15 to 20 years. Long-term regulatory certainly and predictability will be key to these investments decisions.
Q: Finally, what’s important to encourage the use of more natural gas generation?
A: Again, providing investment and regulatory certainty for these facilities will be important. Simply knowing that investments made over the next few years in natural gas generation will be able to run for their intended lifetimes will help significantly. At the same time, it’s critical we continue to find efficiencies in natural gas generation technology to further bring down its environmental footprint.