Fast Forward Beyond Net Zero

Electricity Canada: The Grid 2022

President and CEO, Electricity Canada

Everyone is talking about the aspiration for Canada to achieve Net Zero greenhouse gases economy-wide by 2050 and recently, a Net Zero electricity grid by 2035. But what comes next? What lessons can we draw from the past and project into the future? What could the Canadian electricity picture look like beyond 2050, out to 2075?

History is rife with examples of social change and technology adoption that initially seemed far off but reached a tipping point more quickly than anticipated. Before more modern methods of transportation, the greatest environmental problem facing the city of New York at the turn of the last century was horse manure. At the time, given the continued growth of the city and population, experts were predicting that New York would be buried 30 stories deep in manure as a direct outcome of the millions of horsecar trips taken through the city each year. And yet, this didn’t come to pass. The rapid adoption of the automobile more than a century ago turned this conventional wisdom on its head.

Today, in the electricity sector, we have seen the cost of intermittent renewable electricity sources drop dramatically. What started out as the most expensive option has now become, in many cases, the least expensive incremental source of electricity generation.

What these two examples have in common is Wright’s Law, which postulates that the cost of a unit decreases as a function of cumulative production. In other words, as the production of cars (or wind turbines) increases, the cost per unit decreases.

If we apply Wright’s Law to the emerging—or even existing but expensive—technologies that may transform the future of energy, like small modular reactors, direct air capture or hydrogen electrolysers, what could happen to electricity beyond 2050 could be revolutionary.

Electricity Canada: The Grid 2022

Picture a world in 2075 where international cooperation on climate change has continued to build, to a point where there are binding agreements for greenhouse gas emissions. There are also agreements where Net Zero ambitions have been met, and are now replaced by net-negative commitments. These targets seek to reduce carbon concentrations in the atmosphere to begin to reverse the impacts of historical GHG emissions from a century-and-a-half of industrialization. There is a functioning global emissions trading system in place, to address both atmospheric carbon reduction targets and continued emissions in “hard-to-abate” sectors, like air transportation and agriculture.

The global energy picture in 2075 might include the emergence of new global energy superpowers, thanks to the continued decrease in costs for solar and wind, both onshore and off. Canada, Australia, Russia, the U.S., India, as well as Saharan and African countries, have become not only dominant players in wind and solar, but also in the production of green hydrogen.

Due to our geography, Canada would now be a leader in the generation of emissions-free electricity, the production of green hydrogen, blue hydrogen with carbon capture, and a major direct air capture hub. The grids would have evolved so that the large central (fossil fuel-free or carbon-captured) generation plants are complemented by community-level resources as well as distributed resources at the customer level. The natural gas distribution network would have been transformed by 2075 as a distribution system for hydrogen, which would now support a variety of technologies, including fuel-cell transportation and critical emergency power back-up, supplanting the need for storage in many applications. Indeed, for some applications, hydrogen would become the long-duration storage solution.

The major clean energy companies in 2022 would continue to expand their hydro and nuclear generation over five decades, and would now be joined by major players on both coasts, and in the prairies, due to very favourable solar and wind regimes. Domestic, continental, and global markets for both hydrogen production and for direct air capture contracts will have created new opportunities. Nimble and flexible players- those able to toggle between electricity production, hydrogen production, or direct air capture, are able to maximize opportunities depending on market conditions, and new energy hubs emerge. The centre of gravity for energy shifts to these new hubs, that become more geographically diverse such as in Vancouver, Saskatoon and St. John’s. Energy pricing is no longer expressed as Brent or the WTI, but what the price may be on the Tsawwassen Index, the Moose Jaw Market or the Heart’s Delight Exchange.

The customer’s world in 2075 would have changed as well. The era of the prosumer would now be evolved to the full automation of customer decisions about energy. Thanks to the speed of quantum computing and complexity of evolved Artificial Intelligence, customer energy systems would know customer preferences, and algorithms are able to make energy decisions for customers, based upon their preferences as well as market conditions. Energy utilization will have changed thanks to the emergence of new technologies, such as advanced hydrogen fuel cell combined heat and power, and the emergence of new transportation options. By 2075, a “hybrid vehicle” would be a vehicle which has both battery and hydrogen fuel cell technology.

For customers with significant distributed energy opportunities, energy use would dynamically adapt to changing market opportunities. The connected customer can draw electricity from the electricity grid if the price is right, or from a community micro-grid. If weather conditions are favourable, self-generation may meet the customer’s needs. And in the case of surplus self-generated electricity, the customer energy system will seek to maximize value by selling back to the grid, the community, to direct air capture aggregators, or perhaps to a community hydrogen producer.

This is neither far-fetched nor science fiction. These are all technologies that exist today but are currently not economic, or not to scale. However, Wright’s Law will bring these solutions into our future. All that is missing is political will, international cooperation, and the policies and frameworks to move us to Net Zero… and beyond.

Electricity Canada: The Grid 2022