A National Grid Should Accelerate-Not Stifle-the Energy Transition

Canada Standard

a day ago

In response to Donald Trump's trade war and annexation threats, Canadians are thirsty for new nation-building projects that can make us less economically reliant on the U.S.
One proposal that has been receiving attention is expanding interprovincial electricity transmission, writes Brendan Haley, Efficiency Canada's director of policy research, in a post for Policy Options.
Proponents emphasize economic efficiencies from energy trade, and the technical benefits of coupling wind and solar production with "natural batteries" in large hydro reservoirs.
Taking lessons from history, past nation-building infrastructure projects of a similar sort came up short in many ways, notably by failing to develop diversified technology systems. To better ensure success this time, complementary, regional renewable energy and energy demand innovations must be made a priority.
The transcontinental railway that linked east and west after Confederation protected Canada's territorial integrity in reaction to American threats.
Yet, the project's costs and the related national policy locked Canada into economic dependencies and failed to spur diversified industrial development.
Policymakers were more focused on building infrastructure than developing industrial research programs or education systems in new technologies and management techniques, as seen in Germany. Banks were more focused on financing resource extraction and large infrastructure than industrial development ventures.
Thus, Canada industrialized in a way that failed to foster domestic entrepreneurship and was dependent on American branch plants.
The pattern of big infrastructure pushes, in reaction to crises, failing to spur complementary development is recurrent in Canadian history.
Fast-forward more than a century and similar patterns continue to unfold.
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In 2010, the provincial utilities in Nova Scotia and Newfoundland and Labrador announced a plan to build an undersea transmission link connected to the Muskrat Falls hydroelectric project.
In Newfoundland and Labrador, the political drive to build the dam and transmission project prevented an independent assessment of alternatives, such as energy efficiency. The dam project ran significant cost overruns. Customers faced potentially large rate increases.
Today, policymakers are so focused on managing rate increases that they are neglecting new development opportunities such as allowing utilities to reduce customer bills by switching from oil to electricity for heating and transportation.
For a decade, Nova Scotia policymakers were over-dependent on the single megaproject to the detriment of domestic clean-energy solutions like energy efficiency and community-based renewables.
The Atlantic Loop, a proposed plan to bring hydroelectric power from Quebec to Nova Scotia and New Brunswick, was eventually shelved. Only then was a greater focus placed on domestic energy demand management, storage, and renewables.
If the same policy dynamic is repeated, with cross-border megaprojects crowding out domestic clean-energy solutions for a decade, Canada will repeat its pattern of stifled technological development and fail to meet net-zero emission goals in time.
Transmission is only one component of a large technology system. To achieve a self-reliant and sustainable future it needs to be coupled with renewable energy and methods to shape demand and supply in real time.
Transition to sustainable energy introduces new technical challenges: electrifying home heating and vehicles could lead to spikes in demand during cold days or if everyone charges up their car at the same time.
Wind and solar energy generation rises and falls with the weather. A flexible system that can ramp up and down would match renewable generation with demand and manage peaks. Transmission increases flexibility by connecting a wider diversity of energy resources across larger geographies.
But transmission needn't work alone. Adding solar generation can reduce the need to transmit electricity. Insulating buildings reduces electricity peaks.
In the same way, ratepayers and utilities can work together to pre-charge hot water tanks and pre-heat and pre-cool homes in advance of electricity peaks. Electric vehicles could charge when it makes the most sense for the grid.
Industrial operations can time large-scale energy demands to periods when renewables are plentiful and cheap.
Making energy demand more flexible and efficient means people and businesses that want to reduce their energy bills can even get compensated, improving both affordability and equity. In addition, homes and local communities can be protected from power outages.
One example: Vermont is putting batteries in people's homes instead of building transmission-the batteries balance supply and demand for the grid and can also be used by people if the power cuts out.
Local renewable energy and demand-side flexibility resources can still face periods when they will generate more energy than they can use locally, or periods when local generators, energy efficiencies and storage can't keep up with demand.
Concern about these demand-supply imbalances have led policymakers and utility managers to put the brakes on renewable-energy development or rely on non-renewable generators that use combustibles as back-up resources.
Interprovincial transmission and more local energy systems can complement one another. For instance, local grids could mostly balance hourly and daily ebbs and flows in demand and supply. Interprovincial transmission could manage seasonal differences by using wind and solar generation across the country to give time for hydroelectric reservoirs to fill up so they are ready for the winter heating season in a highly electrified future.
Policy choices will determine whether east-west-north electricity interconnections spur-or stifle-the development of multiple complementing clean technologies.
If transmission is given primacy as the favoured approach, it is more likely to crowd out other technologies and distract from solutions that are readily available. Conversely, policies that increase local renewable-energy development and electrification will show where transmission can be most effectively used to alleviate constraints that hold back local energy visions.
While building transmission takes years or decades, demand-side energy solutions can be deployed in months.
The creation of local, energy efficient "microgrids" across the country, capable of meeting their own energy needs most of the time is a national project to increase self-reliance that can start right now. Improving energy efficiency would better prepare for transmission by hedging against megaproject delays, easing peak demands that require electricity imports, and/or free up electricity for cross-border trading.
A national grid will be a successful accelerant for clean energy if it plugs into these microgrids with at-the-ready plans to use energy trade as a way to further accelerate local renewables and electrification.
If policymakers react to the current crisis by focusing solely on transmission megaprojects, they are likely to repeat a familiar Canadian pattern that will ultimately stifle technological development.
We don't have to wait for transmission to improve energy self-reliance. A clean-energy superpower agenda should start by creating diverse local systems that will be complemented by a national grid.
This post originally appeared on Policy Options under a Creative Commons licence.
Source: The Energy Mix