Question Period Note: Clean Electricity Standard

Clean Electricity Standard

• Canada is a world leader on clean power with roughly 82% of our power being non-emitting. In 2018, we moved to ban coal-fired electricity by 2030.
• But we can and need to do more in order to get to Net Zero emissions by 2050.
• In particular, we need to transition our electricity sector to net zero well before 2050 in order to enable as much of the rest of the economy as possible to switch to clean electricity from carbon fuels by 2050. This is why we are committed to setting Canada on a path towards a net-zero electricity sector by 2035.
• Electrifying end-uses, such as transportation, is a key pathway to net-zero emissions. This will require up to two- to three-times as much clean power as Canada currently produces.
• A Clean Electricity Standard will play an important role in driving this transition by ensuring that existing electricity generation transitions to non-emitting sources, and that any new power generation, is clean.
• ECCC and NRCan will consult provinces, territories, utilities and other stakeholders on all of the details of this significant transition including on the design of the Clean Electricity Standard to ensure that we maintain an affordable, reliable and clean electricity system for all Canadians.

• In order to meet the increased ambition of Canada’s emission reduction targets of 40-45% below 2005 levels by 2030 and net zero emissions by 2050 (enshrined into law under the Canadian Net-Zero Emissions Accountability Act), the Government of Canada is targeting a net-zero electricity sector by 2035. A clean electricity standard would help the Government to realize this target. ECCC will kick off engagement and frame discussions with stakeholders in the near term.
• A clean electricity standard (CES) could limit emissions from all new and existing sources of electricity. Any new regulation must build on current regulations and work in tandem with existing policies. A 2035 target would provide certainty for investors by clearly delineating the timeline in which the sector must transition to non-emitting sources.
• Current electricity sector policies at the federal level include the 2030 coal phase-out, natural gas generator emission standards, and the carbon price (which is applied to electricity through the Output-Based Pricing System). Although necessary, these are insufficient to ensure that the electricity sector fully transitions to non-emitting sources by 2035.
• Due to the entrenched role of natural gas electricity generation, utilities will require increased regulatory oversight to ensure the move away from new investments in unabated natural gas and towards other non-emitting or low-emitting options. These include energy storage, smart grids, geothermal, small modular reactors and fuel-blending with low carbon fuels such as green hydrogen, all of which could provide the same reliability currently provided by natural gas. Further, transmission lines can allow for the transfer of clean energy to where it’s needed. Accordingly, the Government of Canada is actively engaged in supporting inter-provincial transmission line projects such as the Atlantic Loop.
• The CES will be complemented by other federal actions to achieve net zero including funding and tax incentives announced under the Strengthened Climate Plan and Budget 2021, additional tax credits for renewable energy and batteries, and the establishment of a Pan-Canadian Grid Council.

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