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Canada Standard
13-05-2025
- Business
- Canada Standard
How Ontario and Alberta Phased Out Coal-and What Comes Next
Alberta and Ontario delivered Canada's biggest climate success to date by phasing out coal power-but as electricity demand rises, a new analysis warns that the gains could slip away unless both provinces act fast to expand clean generation and cut reliance on gas. In a new analysis, 440 Megatonnes uses the latest data from Canada's National Inventory Report (NIR) to assess how Ontario and Alberta are progressing on efforts to decarbonize their electricity grids. Electricity generation has progressed faster than any other sector in reducing emissions and these two provinces are standouts, largely thanks to the phase out of coal-fired generation. Taken together, these actions have led to one of the biggest reductions in greenhouse gas emissions Canada has seen to date. What does this success mean for future progress? 440 Megatonnes unpacked some of the numbers and provided potential next steps on grid decarbonization as provinces and territories face increased power demand in the near future. Both Alberta and Ontario have stopped using coal for electricity generation. Ontario's last coal plant shut down in 2015 and Alberta zeroed out coal-fired power almost a decade later in 2024. Both provinces used policy to achieve this, with the provincial policies tailored to the regional situations. In 2003, Ontario officially committed to a provincial phase out of coal-fired electricity. Initially, the provincial government planned to phase out all coal plants by 2007, but later revised this date to the end of 2014. Between 2005 and 2015, coal dropped from 19% of Ontario's generation to zero, a remarkable transformation over the span of a decade. A mix of nuclear and wind generation grew to meet the province's power demand, with some additional generation from gas. Since 2015, nuclear generation has declined due to refurbishments, which have temporarily taken some reactors offline. That power has been replaced by gas and hydro generation, in a roughly even mix, alongside solar and wind to a lesser extent. Alberta committed to eliminating coal-fired electricity in 2015, with an initial phase- out date of 2030. However, in practice coal was phased out much quicker due to Alberta's Technology Innovation and Emissions Reduction (TIER) regulation-also known as the province's industrial carbon pricing system-plus the financial contracts with Alberta power companies to move off coal. Coal accounted for 65% of generation in Alberta in 2015, but declined to 15% by 2023, the most recent year reported by the NIR. 440 Megatonnes expects that coal-fired generation in 2024 will be less than 10%, since the last dedicated coal plant went offline on June 16, 2024. Gas accounted for about 70% of the fuel switch from coal, while wind and solar power grew substantially and accounted for the remainder. Ontario and Alberta used different policies and technologies in their phase outs. Ontario's coal plants were old and owned by a public company accountable to the Ministry of Energy. Thus it was feasible to rely on government instruction and regulation to ban the use of coal, without complementary policies. The replacement power took advantage of the province's extensive investments in nuclear power since the 1970s. Alberta's coal plants accounted for a much larger share of total generation and were generally newer and privately owned. The government implemented a regulation but ultimately the carrots and sticks of TIER and other supportive policies proved stronger than regulations in moving the province off-coal. While a few coal plants completely shut down, many plants were modified to use gas, taking advantage of the coal to gas conversion experience gained in the United States. The emissions reductions in Alberta and Ontario are unambiguously good for the climate, and eliminating coal brought additional health savings due to improved air quality. To put it in perspective, Canada's total emissions dropped by 65 million tonnes (Mt) from 2005 to 2023. Taken together, the two provincial coal phase outs represent more than 80% of that emissions cut. Ontario's electricity sector emissions decreased by 26 Mt and Alberta's by 27 Mt during that time. In 2013, the Ontario Power Authority referred to the province's coal phase out as "the single largest greenhouse gas reduction measure in North America." Alberta's emission reductions have been similarly celebrated as a policy success by regulators and academics. But the emissions intensity of the respective provincial grids tells a cautionary tale for each province. While the coal phase out significantly reduced the emissions intensity of Ontario's grid, the growth of gas is now offsetting some of those gains. Zero-emitting nuclear generation has accounted for the majority of electricity generation since 2015, but its contribution has declined from 59% to 52% during this time. It has been replaced by a mix of non-emitting and gas generation, which has increased overall emissions intensity since 2017. Alberta's emission intensity is much higher than Ontario's due to limited non-emitting generation like nuclear and hydro, both historically and currently. Emissions intensity in the province decreased by more than half from 2005 to 2023 due to gas and renewables replacing coal generation. Gas increased from 20% of the electricity mix in 2005 to 59% in 2023, while solar and wind generation remarkably grew from 1% to 22% in those 18 years. But the future trajectory of Alberta's emissions intensity is uncertain. In 2023, the intensity of the grid (424 grams of CO 2 eq / kWh) was only slightly higher than the intensity of the most energy-efficient gas plant. This intensity could continue to fall in the short term if more generation from older plants are replaced by newer gas plants-but only if electricity demand does not increase. But most provincial forecasts see electricity demand growing, possibly significantly-and both policy and economic uncertainty are applying headwinds to growth in non-emitting generation, whether from renewables or gas with sequestration. Both Alberta and Ontario are facing increased demand for electricity due to consumer choice-like more electric vehicles and heat pumps-policy-driven decarbonization through electrification, and new economic activity. This potential growth is a stark contrast to the last decade of stable electricity demand, but it's not unprecedented. In Canada, electricity generation almost tripled from 1965 to 1985 due to strong economic growth. Strategic planning and rapid action are needed now to develop a strong low-emitting electricity system that is reliable, affordable, and flexible, in the timeframe required for provinces and territories to leverage this clean electricity competitive advantage. Provinces and territories are already charging ahead with planning and procuring emissions-free electricity. The federal government's Clean Electricity Regulations, which were finalized last December, provide direction for decarbonizing the sector, with flexibility for provinces to apply innovative solutions for their electricity systems. Next steps for provincial governments should include energy road maps, which support clear mandates and integrated planning. Ontario has been advised to prioritize conservation, consistent and long term procurement planning, transmission planning for the net-zero grid, and exploring multiple technology solutions in parallel. Previous research shows that Alberta can match its growing clean electricity needs by investing in transmission and ensuring non-emitting generation dominates future power plant decisions while developing strategies that account for the significant uncertainty of industrial demand. The net zero economy goals require that both provinces start investing now. Even with their different generation mixes and policy choices, Ontario and Alberta have each radically reduced emissions from their electricity sectors. Looking forward, each province is working toward clean energy or net-zero emissions economies and non-emitting electricity is the linchpin to that goal. The historical data demonstrates that each province is up to the challenge, but they need to quickly build on those previous successes. Source: The Energy Mix
Calgary Herald
12-05-2025
- Business
- Calgary Herald
Alberta places 'indefinite freeze' on industrial carbon tax
Alberta is indefinitely freezing the industrial carbon tax at $95 per tonne for heavy emitters. Article content Premier Danielle Smith said the decision comes in the wake of the ongoing tariff threats by U.S. President Donald Trump and after industry feedback indicating that further increases would be 'detrimental' to businesses and market competitiveness. Article content 'Alberta remains committed to reducing emissions through the development and implementation of new technologies, not unrealistically high taxes, while responsibly powering the world for decades to come,' Smith said at a Monday press conference. Article content Article content The carbon price was set to increase to $110 per tonne in 2026 under the Alberta Technology Innovation and Emissions Reduction (TIER) program and continue to increase to $170 per tonne by 2030 — which the province had agreed to with Ottawa in late 2022 to comply with federal standards. Article content Article content According to Smith, any additional increases above $100 per tonne will 'wipe out any benefits' the province has seen so far. She said Ottawa's decision to increase the carbon tax to $170 per tonne by 2030 would be 'devastating' to the Alberta economy. Article content 'This is yet another example of Ottawa overstepping,' Smith said. Article content Parliament is set to resume at the end of May after being prorogued in January. Prime Minister Mark Carney and his cabinet are set to be sworn in on Tuesday. Article content Alberta's industrial carbon tax system has been in place since 2007. Under the program, industry pays into a central TIER fund when emissions exceed specified limits. The fund is used to support various technologies and initiatives aimed at reducing greenhouse gas emissions. Article content Article content Environment and Protected Areas Minister Rebecca Schulz said revenue in the TIER fund has fluctuated and did not voice concerns on how various initiatives will be funded if the annual $15 increase on industrial carbon price is stagnant. Article content Article content 'This year we've been able to even increase some of our investments. I think some of that fluctuation is normal. Again, the most important piece has to be economic competitiveness for our industry,' Schulz said. Article content Article content Article content Article content
Calgary Herald
12-05-2025
- Business
- Calgary Herald
Varcoe: Alberta to freeze industrial carbon price at $95 a tonne
The federal consumer carbon tax is dead and buried, but the Alberta government is now setting its sights on freezing the price on the industrial carbon price in the province. Article content The UCP government will announce Monday that it won't increase the carbon price on heavy emitters to $110 a tonne next year under its Alberta Technology Innovation and Emissions Reduction (TIER) program — as it had agreed to in a deal with Ottawa in late 2022 to meet federal equivalency requirements. Article content Article content Article content Alberta Environment Minister Rebecca Schulz said with global trade instability, an industrial carbon price above $100 a tonne for emissions would make the province 'exceptionally uncompetitive,' while a levy at $170 'would completely decimate our industry.' Article content 'With what we're seeing in terms of uncertainty with our trade relationships south of the border and, of course, proposed tariffs, this is not the time to go and increase the carbon tax,' she said in an interview. Article content 'We will be freezing that at $95, and so right now, that keeps us in compliance with the federal backstop but does send a message to the federal government that we are not interested in making our industries uncompetitive at a time like this.' Article content Article content Alberta has had a carbon price placed on heavy emitters since 2007. Article content The TIER program is applied to any large facility that emits more than 100,000 tonnes of carbon dioxide equivalent greenhouse gases. Article content Facilities that exceed their requirements can generate performance credits, while those that don't meet the limit can either buy Alberta-based offsets or pay into the TIER fund at a level of $95 per tonne this year.
