Clear Vitality Canada is a clear power suppose tank on the Morris J. Wosk Centre for Dialogue at Simon Fraser College. By way of media briefs, we intention to offer helpful factual and contextual info associated to Canada’s clear power transition. Please use this as a useful resource, and tell us if there are any subjects that you simply want to see for future media briefs.
The struggle in Ukraine and the related power disaster have squeezed family power payments around the globe. In response, many jurisdictions—notably within the EU—are working to diversify power provide away from fossil fuels towards cleaner alternate options corresponding to wind, photo voltaic and hydrogen.
Proof means that the power transition just isn’t solely essential to keep away from the worst impacts of local weather change, but additionally to deal with the power insecurity and worth volatility being felt by shoppers around the globe. Certainly, quite a few research recommend that Canadians might be spending much less on power in a net-zero world.
This media transient summarizes obtainable analysis on the potential impacts of the power transition on family power spending in Canada.
1. The Worldwide Vitality Company’s World Vitality Outlook 2021 discovered that, underneath present world insurance policies, common family power payments in superior economies would decline between 2020 and 2050. Below a situation the place governments introduce insurance policies to succeed in internet zero by 2050, payments would decline even additional. Whereas electrical energy payments are set to be increased in a net-zero world on account of elevated use of electrical energy, price financial savings from power effectivity and the dearth of fossil-fuel-related expenditure (like gasoline for automobiles and pure gasoline for heating) imply that total family power payments are projected to be decrease. Extra bold local weather insurance policies would scale back the monetary influence of fossil gas worth shocks on households, such because the latest one in Europe.
2. Equally, 2022’s World Vitality Outlook signifies {that a} net-zero situation would require much less client spending on power in 2030 than in a situation the place solely present insurance policies are retained, and fewer total than was spent in 2021. The typical price per unit of electrical energy in a internet zero 2050 is ready to be 10% under 2021 ranges.
3. The Canadian Local weather Institute’s report on Canada’s Web-Zero Future, utilizing modelling by Navius analysis, examined the proportion of family earnings spent on power providers (together with residence heating, electrical energy, and transportation). The report discovered that households throughout all earnings teams are prone to spend much less in 2050 in comparison with 2020. This is because of three causes:
- Vitality effectivity is ready to enhance, considerably lowering whole power use.
- The extra prices of unpolluted applied sciences could be greater than offset by the financial savings derived from their diminished power consumption. Whereas the flexibility to pay increased upfront prices varies by earnings group, public coverage and program options corresponding to rebates or incentives may also help tackle this concern.
- Financial development nationwide from 2020 to 2050 would trigger common incomes to rise, which means even when power spending holds regular in absolute phrases for some households, the share of earnings spent on power would decline.
4. When the impacts of local weather change are thought-about, affordability is negatively impacted, emphasizing the significance of local weather motion and clear power to convey down economy-wide prices over the approaching a long time. One other examine from the Canadian Local weather Institute discovered that inaction on local weather may have important impacts on affordability. In line with the report, Canada’s GDP might fall by 12% by the tip of the century whereas family incomes might fall as a lot as 18% in comparison with a “stable-climate” situation. The examine initiatives that decrease earnings households could be essentially the most adversely affected.
5. A examine from researchers at Oxford College discovered that switching from fossil fuels to renewables might save the world between US$5 trillion and US$12 trillion by 2050, emphasizing that “a speedy inexperienced power transition is prone to be helpful, even when local weather change weren’t an issue.” The examine argues, particularly, that there are minimal trade-offs related to the power transition and that “a greener, more healthy, and safer world power system can be prone to be cheaper.” When the social price of carbon is included within the evaluation (i.e. the prices to our financial system when it comes to harm from local weather change per unit of carbon emitted), the financial savings are even increased, within the vary of US$31 trillion to US$775 trillion relying on the assumed social price of carbon and low cost price.
6. In lots of circumstances, clear electrical energy already prices shoppers lower than fossil-fuel-powered electrical energy.
- South Australia will get 62% of its electrical energy from wind and photo voltaic mixed with grid-scale battery storage. Since 2018, family power payments have declined some A$300, whereas the state’s grid is the one one within the nation to not have misplaced a single hour of electrical energy.
7. Many local weather options contain applied sciences that may save Canadians cash total, even when they price extra upfront. That is notably related for transportation and buildings.
- Earlier this yr, Clear Vitality Canada analyzed quite a few well-liked electrical automobile fashions, evaluating their whole possession prices with that of gasoline equivalents. With only one exception, the electrical model of each automobile analyzed was cheaper, often considerably so. Particularly, the evaluation discovered that the electrical Hyundai Kona, Canada’s second best-selling EV in 2021 (after the Tesla Mannequin 3), is $17,800 cheaper to personal than the gas-powered Kona with a median gasoline worth of $2. Even at a gasoline worth of $1.45, the Kona remains to be $10,500 cheaper. The electrical Chevrolet Bolt supplied much more price financial savings, with the comparable gas-powered Toyota Corolla costing $22,000 extra over its lifetime at a $2 gasoline worth.
- Canadian households would save $151 yearly per family on common with best-in-class power effectivity insurance policies in place, in response to 2018 modelling performed by Dunsky Vitality Consulting on behalf of Clear Vitality Canada and Effectivity Canada. For households that retrofit their properties, financial savings could be far increased. Throughout the Canadian financial system, such measures would result in $1.8 billion in internet residential financial savings and $4.9 billion in internet industrial and industrial financial savings.
