Canada's electricity system transition under alternative policy scenarios

Abstract

To meet Canada's emissions reduction targets, governments at the federal and provincial levels have developed climate plans and implemented a series of policies and regulations. Canada's latest climate plan, entitled “A Healthy Environment and a Healthy Economy” aims to decarbonize various sectors of the economy including the electricity sector. In this paper, we explore the extent to which implementing announced policies and regulations could drive investment in the electricity sector needed to achieve Canada's climate objectives. To do so, we propose a multi-period, optimization-based capacity expansion model specifically designed for the Canadian context entitled COPPER for the “Canadian Opportunities for Planning and Production of Electricity Resources.” We employ COPPER to analyze Canada's electricity system transition under various carbon management policies. Results show that current and announced policies significantly increase renewable energy capacity, which in turn decrease the electricity system emissions by 40 percent in the mid-term. However, in the long-term, more ambitious actions will be required to achieve the emissions reduction targets. Natural gas-powered generation facilities persist at the proposed carbon tax levels, and thus supplementary regulations or policies will be needed to achieve deep decarbonization.