By Dave Wilkin
Energy has been in the news a lot recently. Here are four important messages that Canadians can take away from some recent events.
#1. Energy security and resiliency matter most
European governments ignored fossil-fuel supply diversification while prioritizing climate change over energy security. Now skyrocketing energy prices have left them scrambling to secure fossil fuels (including coal), pushing to slash energy usage, capping prices, and providing emergency relief spending approaching a trillion dollars. They hope for a warm winter but it’s going to get uglier as the costs mount and damages to their industrial core grow, all with no end in sight.
This was not all due to the Ukraine war, as politicians like to claim. The seeds were sown by years of Western government hostility towards fossil fuels leading to producers scaling back investments and production, reducing global supply and reserves. Then Europe’s energy shortages worsened as a cold winter followed by a hot, dry, less windy summer undermined renewables-heavy power systems.
Last year Texas experienced a severe winter storm, triggering widespread power outages while coming close to a total power grid collapse. In California, grid emergencies and power outages, (again) brought on by a hot dry summer, resulted as their power system struggled. In both cases, resiliency-deficient systems combined with large-scale wind and solar power share were the root cause.
In Atlantic Canada, hurricane Fiona underscored the urgent need for improved power system resiliency.
In a future where more energy will be grid-delivered, resiliency will matter much more. Yet aging power systems and gross underfunding is widespread. It turns out that shunning fossil fuels before reliable/affordable alternatives are widely available is bad energy policy.
#2 Wind/Solar – not cheaper
Ontario’s electrical system operator recently estimated the cost to replace natural gas power with wind/solar at over $27 billion, which would push residential energy bills up an estimated 60 percent. This was considered an “optimistic scenario”, leading to blackouts, while removing less than one percent of Canada’s GHG emissions. Yet opposition parties oppose gas plants, including replacing base-load power lost as our nuclear power plants go through refurbishments, and instead push for more wind, solar, and battery power.
Large grid-scale wind and solar power deployment is costly and much more so if government subsidies are removed. The reason behind this is their intermittency. Power output shortfalls can persist for months, as Europe and California have experienced, so duplicate on-demand power sources are needed. Their distributed nature also means additional costly grid upgrades are needed. These costs are seldom included. As the grid share of wind & solar power rises, so too do utility rates. In California, they are double Canada’s and in most of Europe it’s more than triple, as wind/solar grid shares range between 20 to 40 percent.
Despite claims of continuing cost declines, the reality is they are headed higher. Solar panels, wind turbines, batteries and the rare-earth materials required have been largely off-shored to low-cost developing countries, especially China. As deglobalization continues, costs will rise. Then consider that their manufacturing and construction uses far more commodities per unit of energy generated, meaning shortages will only grow over time, pushing costs higher. Example – solar panel costs are up by half since 2020. Expect this trend to continue.
#3. A Nuclear renaissance?
As renewables struggle, nuclear power’s star may be rising again, notably in Europe and the US. This, after a 20 percent decline over two decades in OECD countries, resulting in ceding of global leadership to Russia and China, who led the 50 percent expansion of nuclear power in non-OECD countries.
Canada has a successful nuclear power track record, but it has not grown for a decade, and it’s set to decline this decade. Canada’s Federal government commitment to it remains mixed, investing $27 million in Westinghouse’s eVinci™ Micro Reactor development while explicitly excluding nuclear from their recent $5 billion Green Bond announcement. Not good enough.
#4. Non-OECD countries matter more
Over two decades, non-OECD (Organisation for Economic Co-operation and Development) countries added 1.7 billion people and tripled their GDP, doubling their fossil fuel consumption. Their producers, mostly in OPEC+ countries dominated by National Oil Companies, own 87 percent of global oil & gas reserves. My graph shows their fossil fuel production grew by 80 percent, but exceeded domestic consumption by a narrowing margin, meaning they are exporting a shrinking share to OECD countries. The West’s sanctions on Russia have accelerated this trend, as Putin squeezes European energy flows in retaliation, and pivots to Asian countries. Then recently Saudi Arabia ignored US President Biden’s pleas for increased production by leading an OPEC+ 2 million barrels crude oil cut, placing more upward pressure on oil prices, and supporting export revenues.
My graph also shows the WEF’s Great Reset is nowhere in sight, as fossil fuel consumption strongly rebounded last year. That Reset called for a “new social justice contract” anchored on green renewable energy. It’s ambitious, but coming from jet-setting elites, it’s also hypocritical. In developing countries affordable energy remains a top priority, critical to their economic development and poverty reduction goals. Fossil fuels remain core to that, supplying 86 percent of their primary energy today. Their Energy/Capita is just a third that of OECD countries, while in Africa it’s a paltry 9 percent, so they see the disparity and hypocrisy. That said, a very different Reset may be forming as the energy crisis persists.
My chart also shows non-OECD countries’ world share trends, including my 2050 projection where their recent trends continue Business-As-Usual (while OECD countries transition) leading to a doubling of GDP and energy consumption, with 60 percent fossil fuels. The cost to shift to a 15 percent fossil fuels future tops $120 trillion in energy-system capital spending alone, roughly 7 percent of their GDP yearly. A very hard message indeed.
All of the above, especially the impacts from botched European and US energy policy, send clear messages. Despite this, our Federal Government continues to repeat many of the same failing policies. A change is now needed to better manage Canada’s energy transition.
Dave Wilkin is a Professional Engineer, with a master’s degree in Electrical Engineering from the University of Toronto. His career spans over 40 years in Information Technology, banking, and energy. He is currently a co-owner in a small energy consulting company and lives in Huntsville, Ontario.
Don’t miss out on Doppler!
Sign up here to receive our email digest with links to our most recent stories.
Local news in your inbox so you don’t miss anything!
Click here to support local news
Bob Braan says
Ontario has so much excess power at night there is a proposed new ultra-low 2.5 cents per kWh overnight rate coming up.
Power is worth less than nothing sometimes at night here.
Ontario sometimes has to PAY neighbouring states to take it.
2.5 cents per kWh is a much better deal.
https://news.ontario.ca/en/release/1002018/ontario-advances-work-on-new-ultra-low-overnight-electricity-rate
Put a timer (EH40 at HD) on your electric hot water heater so it only heats at the lowest cost time of day.
Mine has been on a timer for years. The water stays hot for hours after 7 am when rates jump.
2.5 cents per kWh is cheaper than natural gas heat.
Electric water heaters are also much cheaper to buy than gas so GHG spewing gas water heaters would be obsolete.
For an EV 2.5 cents per kWh means only $75 per YEAR for “fuel” instead of per tank of gas every week or two.
Jim Logagianes says
Thank You Mr Wilkin for another accurate and thorough assessment of the present situation. Very impressive I must say. If Ottawa hired knowledgeable and unbiased consultants as competent as Mr David Wilkin this green movement would have been approached in a more realistic fashion than we are witnessing.
Watching the leader of our nation and his minions flying around the country all week for photo ops really does not give a lot of credence to the green movement. If anything it wreaks of entitlement.
Someone please inform the Federal Liberals that they need to hire someone to help them photo share pictures on the internet, It really is quite easy. It’s a cost effective option that could be implemented immediately at no cost and would go along way to decreasing our carbon footprint which I believe is the objective. Passing up this cost effective option will show your sincerity towards the green movement.
Sue McKenzie says
I am every suspicious of the extreme energy views Dave Wilkins is promoting here. I would want to see exactly what his connections to the Nuclear Industry and the Fossil Fuel Industry are as well as his connections to the Big-Oil-financed right wing ‘think tanks’ which he has used as sources in previous writings on this topic.
Joanne Tanaka says
I am wondering why Dave Wilkins has not used the words ” global climate change crisis” which is the ongoing “event” that has led to the need to decarbonize our ways of living and economy.The intense droughts, and storms will be experienced more often unless we find ways to cut fossil fuel dependence. We have to stay within an emissions budget, so that we can stay under 1.5 degrees global warming.
For decades, all governments, banks, and the fossil fuel industry have known about the need for new technology and strategies to avoid this precipice we are approaching. They did nothing to plan for an effective transition. Dave Wilkins may have been an expert and watched it happening. Armed conflict, like in Europe and elsewhere is a symptom of
the overwhelming greed and control that drives the taking of more, more, more for some, than the earth can provide and still stay healthy enough to support humans. Industry needs a healthy planet like people do.
There is a search for solutions that will resolve climate change problems. Each of us will find our own path, but there are many large changes only governments, banks and industry can make happen. We cannot get stuck in denial, eco-anxiety or get so caught up in self- destructive anger and blaming that creative, effective human energy is wasted. So, Dave Wilkins, you are an expert, what are your specific energy strategies to keep the planet healthy?
Hugh Holland says
Good article Dave. I would offer these supportive points.
1. Energy security matters most in the short and perhaps medium term, but climate security will matter most in the long term. According to the Insurance Bureau of Canada, investments in resilient infrastructure have a return on investment of $6 in future averted losses for every $1 spent proactively. The return is likely higher for investments in zero-emission energy.
2. Intermittent wind and solar will play an important role for some countries but indeed they are not cheaper. Their total cost essentially doubles when the cost of necessary backup, storage and grid management controls are included. Also, large amounts of battery storage require large amounts of scarce minerals which must be preserved for batteries for mobile transportation, and construction and farm equipment for which there is currently no known alternative.
3. A great deal of the preparation work has been done on devices that both make and use zero-emission energy. Essentially all significant companies in the world are now actively engaged in the effort. Like the engineering, testing, and foundation work for a new skyscraper, much of this work only becomes visible as the building itself starts to emerge from the ground. Energy efficient electric vehicles and equipment, cold-climate heat pumps, hydrogen-electric vehicles and mobile equipment, and small-modular nuclear reactors with their unique ability to co-generate clean electricity and virtually free clean industrial heat, are on the cusp of accelerating rapidly up the implementation curve. The foolish actions of Russia and OPEC will accelerate that implementation. Canada has all the expertise and resources needed to thrive in the new-energy world.
4. Thankfully, these new technologies offer the possibility of all countries becoming self-sufficient in zero-emission energy. The world will no longer be kept in turmoil by the 15 countries that have 85% of the world’s proven reserves of oil and gas. But yes, running out of finite fossil fuels before we have replaced them would be the worst of all possible outcomes.
Dave Wilkin says
Sue KcKenzie, I have no connection to either the nuclear nor the fossil fuel industries. What specifically is extreme in my views here? I am sharing some important energy information and facts which don’t get much air time these days. If we’re going to have any hope of reducing fossil-fuel consumption to lower emissions and avoid running so low on it that it becomes prohibitively expensive, we cannot tank economies in the process, which would hault progress.
Joanne Tanaka, yes there is indeed a crisis. I do care, that is why I write about this topic. Current strategies in many Western countries choose to ignore some hard truths about energy. Even green Europe has shown that they are starting to realize some of their past mistakes. Energy security is a top priority for them, after all. You asked about what my strategies would be. A very fair question. I will write another article and layout what I think should be done, globally. Time is running out.
.
Jim Logagianes says
Dear Mr Holland your affection for this administration is not shared by all. Your older than I am so that leaves me perplexed as to why you have so much faith in this government. The Trudeau Liberals are spending more money than any previous administration with little or nothing to show for it. The Arrivecan app’s minuscule 58 million price tag is a perfect example of money well spent. A recent tech competition created a replica for under a million. What could you do to address hunger and homelessness with 57 million dollars. I wish none of this was true but sadly it is.
Complete mismanagement and deep seated division have sent this country on it’s current trajectory. The private sector is suffering under this current administration while the public sector has seen a massive expansion(180,000 new positions) at the federal level. They all receive indexed pensions paid for by people without pensions. I have a cost effective solution to all our problems. Send the current administration on a one way trip to Mars .Elon Musk needs people to achieve his goal. And we can all watch the red planet prosper with all these talented individuals just like our economy is currently.
Dave Wilkin says
Joanne, I forgot to add that my small consulting company’s focus has pivoted more towards navigating the energy transition.
Joanne Tanaka says
I hope in your planning, you are thinking about the global climate change crisis. I hope you care enough to put real people before profit.( not just conceptually, which tends to lack equity and smells of unconscious bias) And be inspired by communities that are using solar to make their lives better, and less costly by freeing themselves from dependence on fossil fuels. Challenge your barriers Dave Wilkin.
Hugh Holland says
Sue Mackenzie, after 20 years of the world’s most aggressive application of renewable wind and solar power, Germany succeeded only in shutting down half of their nuclear plants and made no impact whatsoever on their use of fossil fuels which still provide 75% of their primary energy. Now Russia has them really in a pickle. Diversity is the key to both energy security and climate security. There are dozens of zero-emission tools in the toolbox that will work somewhere, but none will work everywhere. Tidal power doesn’t work in Ontario. Hydro works well in the terrain of BC and northern Quebec but doesn’t work so well in the prairies. After 2 decades of legal battles about flooded land etc. the 2 biggest hydro projects in Canada (BC Site C and Muskrat Falls Labrador) together will add only 1% to Canada’s primary energy supply.
Some environmental groups are inhibiting progress with a closed mind. Those who have irrational faith in wind and solar power (that is never going to fill all our needs) and irrational fear in nuclear (which has enormous and growing potential) are inhibiting progress as much as those still clinging to fossil fuels. If we all keep an open mind and support sensible diversity in each region, the large number of zero-emission energy tools in the toolbox offers the possibility for every country and region to become self-sufficient in zero-emission energy.
Erin Jones says
A well-written and concise piece, Dave. Engineers are the ones who have to make the science work in a practical way. Not all proposed “energy solutions” are solutions at all because they can take more energy to produce the energy than what is yielded by the operation of the technology. As an example, wind and solar will likely always be a small part of the energy basket (barring some new technological miracle).
For the foreseeable future, energy production will likely take a combined approach, based on the local conditions where energy is needed. Many efficiencies have already been produced in energy technology and will no doubt improve in the future. Geothermal heat pump use has never been adequately explored. It is wonderfully efficient for home heating but it is unlikely to be used in the concrete canyons of Mississauga.