Federal Government Releases Finalized Clean Electricity Regulations
December 17, 2024
The federal government has released Powering Canada’s Future, which lays out their roadmap to build more affordable, reliable, and clean power to help meet growing demand. As part of this plan, the Ministers also released the finalized Clean Electricity Regulations.
Today, 85% of Canada’s electricity is generated from clean sources like hydropower, wind, solar, and nuclear—and it’s a big part of the reason why companies around the world are choosing to invest in Canadian workers and business. Canada has recently attracted investments from Volkswagen, Honda, General Motors, Stellantis, and Michelin due to that energy mix.
“The federal government’s final Clean Electricity Regulations are pragmatic, flexible, and achievable, and part of a larger package of measures designed to help keep electricity affordable and reliable,” commented Jason Dion, Senior Research Director at the Canadian Climate Institute in a statement on the final regulations.
However, Electricity Canada did not respond positively to the announcement, “A “Canadian” electricity regulation must be achievable in all provinces; the final Clean Electricity Regulations (CERs) announced today do not meet this test. The CERs will set strict limits on how and where electricity can be generated, limiting certain types of generation and will determine how trillions of dollars’ worth of investment will be spent,” Electricity Canada commented via press release.
“Our industry is committed to achieving a net zero economy by 2050 and our track record of reducing emissions by 62% since 2005 shows just how serious we are. When it comes to how emissions are reduced in each province while maintaining a safe supply of electricity, system operators know best – and many of them continue to be ignored, which puts parts of the Canadian grid at risk. We’re disappointed to see that the final Clean Electricity Regulations have been unable to meet a threshold that protects reliability in all parts of Canada.”
The federal government has moved off its goal of achieving a net-zero grid by 2035. Alberta, Saskatchewan, and Ontario strongly challenged the regulations since the draft form was released. The final Clean Electricity Regulations set a net-zero grid target of 2050, while easing regulations on natural gas. The changes will substract approximately 149 million tonnes of carbon dioxide equivalent from the goverment’s emissions reduction goal.
“Some of things that we put on the table were too stringent and from a technical point of view would be very hard to achieve without Canadians incurring a very high cost,” Environment and Climate Change Minister Steven Guilbeault told the CBC.
“Producing and using more clean electricity is foundational to meeting Canada’s climate goals, attracting investment and remaining competitive. The final regulations will help provinces and territories make the necessary investments in bigger, cleaner, and smarter electricity systems, while allowing some flexibility when it comes to limited use of gas generation in the interim. This added flexibility in design—combined with the billions of dollars in support for provinces and territories through the Investment Tax Credit for clean electricity—will make the regulations more achievable,” said Dion as part of their statement.
The Government of Canada aims to send a strong market signal to investors and the electricity industry that now is the time to build more clean Canadian power for communities and industries and in the process continue to generate good jobs for Canadian workers. Canada is also accelerating work already underway, sparked by historic billions in support that the federal government is bringing to the table, including through the clean electricity investment tax credit.
The criteria for the clean electricity investment tax credit have been finalized in the Fall Economic Statement. They are part of the more than $60 billion in federal support scheduled over the next decade to help get more projects built.
“The final ITC for clean electricity includes a newly-announced requirement for province-led energy roadmaps that detail how a jurisdiction intends to develop its energy system in line with Canada’s 2050 climate goals. This kind of simple condition, as recommended by the Canada Electricity Advisory Council and other experts, helps provide needed policy clarity for provincial utilities and regulators—while respecting provinces’ jurisdiction over electricity,” said Dion.
The push towards electrification is pushing up demand, the IESO, for example, has recently forecasted a 75% increase in demand by 2050. Their report cited the industrial sector, ev supply chain investments, data centres, as well as other electrification initiatives as the drivers of the demand.
Alberta expressed some gratification on the new regulations in their statement, however remains comitted to a court challenge.
“The federal government’s finalized electricity regulations remain entirely unconstitutional as they seek to regulate in an area of exclusive provincial jurisdiction. They also require generators to meet unreasonable and unattainable federally mandated interim targets beginning in 2035 that will still make electricity unaffordable for Canadian families,” says the Alberta statement.
“Alberta will therefore be preparing an immediate court challenge of these electricity regulations that we fully expect to win.”
The federal government noted that the Clean Electricity Regulations were shaped by rounds of extensive input over nearly three years from provincial and territorial governments, electricity providers, Indigenous peoples, labour unions, experts, and everyday Canadians. This extensive engagement allowed us to make changes that respond to evidence-based concerns, leading to final regulations that better balance affordability, reliability, and emission reductions.
“As Canada’s demand for electricity grows, so must supply. The opportunity to power our communities with clean, affordable, and reliable power is a win-win-win—for our energy workers, for affordability, and for the environment,” conlcudes the government’s press release on the announcement.
