It will cost as much as $1 trillion to repair Canada’s energy infrastructure to handle intense weather

July 14, 2021

  1. Renewables
  2. Oil & Gas
  3. FP Energy

New paradigm means grid operators will need to draw energy from a constantly changing array of sources to meet demand

Author of the article:

Gabriel Friedman It will cost as much as trillion to repair Canada’s energy infrastructure to handle intense weather A welcoming sign is seen on the door of the Hillcrest Community Centre where they can cool off during the extreme hot weather in Vancouver, British Columbia. Photo by Don MacKinnon/AFP via Getty Images

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The record heat wave that swept across Western Canada in late June caused hundreds of fatalities and left houses and infrastructure smouldering in ashes.

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Though less easily observed, it is also causing a stir on the electrical grid, as regions that could reliably expect electrical demand to peak during the coldest days of winter suddenly find that blazing summer temperatures are surpassing previous peak demand levels.

In Alberta, on June 29, electrical demand reached a new summer peak of 11,721 megawatts — eight megawatts shy of the all-time record set this past January. Meanwhile, Fortis B.C., which services 180,000 customers in that province’s southern interior, reported electrical demand hit an all-time record of 764 MW on June 30, shattering the previous record set more than a decade earlier in December 2008.

Indeed, across Western Canada, the electrical grid faces new challenges as oppressive summer heat waves invert historical electricity consumption patterns. At stake is not just added costs of generating additional electricity, but also potential power outages, which can lead to the loss of human life.

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“What happened in Alberta and B.C. last week was completely consistent with what we found would happen,” said Nicholas Rivers, a professor of University of Ottawa’s School of Public and International Affairs and Institute of the Environment.

In 2019, Rivers and Blake Shaffer, an economics professor at the University of Calgary, reviewed 20 years of Canada’s hourly electricity data to predict how climate change will affect electricity consumption patterns.

A BC Hydro sub station in Vancouver. A BC Hydro sub station in Vancouver. Photo by Arlen Redekop/Postmedia News files

Their paper, “Stretching the Duck: How rising temperatures will change the level and shape of future electricity consumption,” concludes that colder places will increasingly see greater demand in the summers as heat waves intensify. Meanwhile, climate change is likely to also lead to more mild winters, lessening demand during that season.

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“We can expect strains on infrastructure including electricity markets,” Rivers said, adding that failures of energy pipelines and transmission pipelines are all more prone to fail during extreme temperatures, such as heat waves.

In the study of Canadian hourly electricity data and how consumption patterns will change as climate change takes place, Rivers and Shaffer predict that overall electricity consumption will only increase four per cent — with rising summer demand offset by declining winter demand.

The shift is significant, however, because as heat waves become more common, the grid must be able to accommodate the increased strain or else power outages could take air-conditioning offline, putting lives at risk.

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Air-conditioning penetration is expected to skyrocket across the country from around 60 per cent today, to more than 90 per cent by the end of the century.

That surge is already happening in B.C., where air conditioning use has grown from 26 per cent of households in 2010 to 40 per cent in 2021, according to B.C. Hydro, the main electricity supplier for the region.

A resident transports an air conditioner during a heat wave in Vancouver. A resident transports an air conditioner during a heat wave in Vancouver. Photo by Trevor Hagan/Bloomberg

During the heat wave, it shattered peak electricity demand records on three consecutive nights in a row, reaching 8,651 MW — about 30 per cent higher than a typical June day, according to BC Hydro spokeswoman Mora Scott.

“The primary drivers were people turning to AC and fans to keep cool, plus refrigeration units have to work harder in hot temperatures to keep their contents cool,” Scott wrote via email.

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Of course, the impact of air-conditioning is highly dependent on the nature of the grid: For example, in Alberta, residential demand accounts for only 13 per cent, compared to 81 per cent for industrial and commercial. Thus, the health of the economy may be more dispositive of overall demand in that province.

Still, the recent heat wave shows how extreme weather has a large effect on the grid.

Normally, it is difficult if not impossible to attribute any one event to climate change, but World Weather Attribution, an international group of 27 scientists from prestigious universities including Princeton, Oxford and University of California, Los Angeles (UCLA), aims to change that by releasing studies on weather events shortly after they happen.

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The group released a report that found the heat wave in the Pacific Northwest in late June was so far outside the range of historically observed temperatures, that it “was virtually impossible without human-caused climate change.”

The study is yet not peer-reviewed but utilizes peer-reviewed methodology.

“In the most realistic statistical analysis the event is estimated to be about a 1 in 1,000 year event in today’s climate,” the report found.

It added that if the globe warms by two degrees Celsius, such weather events can instead be expected to occur every five to ten years.

The damage from such events is often obvious: In British Columbia and Alberta, hundreds of fatalities were reported as a result of the heat.

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The fire in Lytton also left rail lines used by Canadian Pacific Railway Ltd. and Canadian National Railway Ltd. damaged, which disrupted the transport of grains, commodities and various parts of the industrial supply chain.

Vancouver’s Teck Resources, for example, has reduced its estimated metallurgical coal production for the quarter by 300,000 to 500,000 tonnes because damage to the rail lines in Lytton meant it couldn’t export out of lower B.C. port terminals.

A wildfire burns above the Fraser River Valley near Lytton, British Columbia, on Friday, July 2, 2021. A wildfire burns above the Fraser River Valley near Lytton, British Columbia, on Friday, July 2, 2021. Photo by James MacDonald/Bloomberg files

On Monday, the Winnipeg-based International Institute for Sustainable Development released a report that found one-third of Canada’s core infrastructure is in poor condition and not resilient to the impacts of climate change.

The estimated cost to repair the “infrastructure gap” ranges from $150 billion to $1 trillion, depending on what changes are made, according to the IISD.

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“The numbers are quite crazy,” said Darren Swanson, an associate at IISD in Winnipeg. “It just highlights the fact that there will be investment needed and that climate change is wreaking havoc on infrastructure itself, so the timing is quite urgent in terms of building resiliency.”

Climate change is wreaking havoc on infrastructure itself, so the timing is quite urgent in terms of building resiliency

Darren Swanson

The report lays out in detail some of the ways that climate change is already damaging infrastructure, such as when forest fires destroy transmission lines, or cause overheating in data centres, or when extreme precipitation causes flooding that buries substations and transmission lines.

The effect of such heat on the electrical grid draws less attention than coal exports or forest fires, but may be more consequential especially as Canada revamps its power generation in an effort to decarbonize the economy.

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Operating an electrical grid requires constantly matching supply with demand.

For decades, grid operators have used a baseload framework, in which fossil fuel generated electricity, such as natural gas and coal, produced a steady amount of electricity.

In contrast, renewable sources such as solar or wind are considered variable because their power generation depends on the weather and is not steady.

Renewables such as wind turbines have a high upfront capital cost, but are inexpensive to operate. Renewables such as wind turbines have a high upfront capital cost, but are inexpensive to operate. Photo by Mike Hutchings/Reuters files

Sara Hastings-Simon, a professor at the University of Calgary’s Schools of Physics and Astronomy and Public Policy, said grid operation is changing. She noted extreme weather events, like heat waves and cold snaps, actually limit the power generation capacity of traditional baseload sources.

“It’s sort of like this paradigm shift happening in ways of operating a grid as we have different resources on it,” she said.

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As more renewables comes online and more fossil fuels are phased out of the grid, it will have an impact on costs: Renewables have a high upfront capital cost, but are inexpensive to operate, Hastings-Simon said, whereas fossil fuel plants have higher operation costs because they require fuel purchases.

As the upfront costs of wind and solar power decline, it becomes cost effective to integrate more and more of them, even if you’re not using them all the time, she said.

The changing cost patterns could upend traditional grid operation patterns. A more connected grid that covers a greater geographic region would allow operators to more reliably source power from renewables: as the sun or wind declines in one area, it may increase in another.

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The new paradigm may shift to more of an orchestra, in which grid operators, draw energy from a constantly changing array of sources to meet demand.

At the same, consumption patterns are shifting and many historical winter peaking regions are seeing ever-greater demand in the summer.

“The gap has been narrowing, and actually, it’s been narrowing faster than the grid operator has expected,” said Hastings-Simon.

Financial Post

• Email: gfriedman@postmedia.com | Twitter: GabeFriedz

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