Fraser Institute: ‘Extremely Costly’ to Replace Coal-Fired Power with Wind, Solar

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Replacing coal-fired power in Canada with renewable energy will impose significant costs on Canada’s economy while only making modest reductions in greenhouse gas emissions, finds a new study released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Despite what advocates claim, renewable power – including wind and solar – isn’t free and comes with only modest benefits to the environment,” says G. Cornelis van Kooten, economics professor at the University of Victoria, senior fellow at the Fraser Institute, and author of Canadian Climate Policy and its Implications for Electricity Grids.

The study finds that shutting down coal-fired power plants – which accounted for 9.2% of electricity generation in Canada in 2017 – and replacing them with wind and solar would reduce Canada’s greenhouse gas emissions by 7.4% but increase the costs of operating the electricity grid by between $16.8 billion and $33.7 billion a year – or 1 to 2% of Canada’s annual GDP – depending on the weather impacting wind and solar power.

The study explains that part of the increased cost is a result of having to build and maintain backup power from natural gas to supply electricity when wind and solar are not available.

Crucially, the 7.4% emissions reduction would fall short of the federal government’s target – to be 40% to 45% below 2005 emissions levels by 2030.

“Reducing Canada’s greenhouse gas emissions by replacing coal-fired power with wind and solar would prove extremely costly, and still wouldn’t meet the federal government’s climate targets,” van Kooten adds.

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto and Montreal with ties to a global network of think-tanks in 87 countries.

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Andy Black
Andy Black
1 month ago

This “study” should not have been given any additional airtime. It was poorly done and grossly overstates the cost of solar, basing future solar costs on Ontario’s FIT and microFIT legacy costs. Readers may recall that Ontario’s microFIT incentivized <10kW solar at about CA$0.80/kWh for 20 years. This was a massive-oversubsidy. It didn’t just launch Ontario’s solar industry – it exploded it with unsustainable growth and has left numerous legacy problems due to the over-spend. It is not a good proxy for well-done solar incentives of its era, and is not even close to an appropriate level of incentive going… Read more »

David Navari
David Navari
1 month ago

What garbage. How did this fossil fuel industry propaganda make it into the Solar Industry Publication. The analysis should have been done with Battery backup NOT natural gas.

Burghermeister
Burghermeister
1 month ago

Your independent group is not.
Wiki : “In 2012, the Vancouver Observer reported that the Fraser Institute had “received over $4.3 million in the last decade from eight major American foundations including the most powerful players in oil and pharmaceuticals”. According to the article, “The Fraser Institute received $1.7 million from ‘sources outside Canada’ in one year alone, according to the group’s 2010 Canada Revenue Agency (CRA) return. Fraser Institute President Niels Veldhuis told The Vancouver Observer that the Fraser Institute does accept foreign funding, but he declined to comment on any specific donors or details about the donations.”

Barrett Silver
1 month ago

If the backup power were batteries instead of natural gas the answer would be completely different.

Aaron Pine
Aaron Pine
1 month ago

Canada has abundant untapped hydroelectric resources.  Hydroelectricity has been the lowest-cost source for baseload electricity since its invention in 1882.  Canada should be building out its hydroelectric capacity as much as needed to supply its power requirements.
 
Solar + wind + batteries will make huge strides in technology, cost and efficiency in the next 10 years and will likely be the least cost triad for worldwide energy supplies in the years to come.  Once that is achieved, the dams can be removed, and the fish habitat and Ancient Indian burial grounds can be restored.

Glen C Hillier
Glen C Hillier
1 month ago

So, because switching to renewable energy would only reduce emissions by 7.4% instead of 40% to 45% Canada shouldn’t do it? This is strange logic. Also, what is needed is low cost sustainable energy storage technology. Add that to the equation and I’d expect the need for expensive natural gas back-up power would be significantly reduced. There is only a “cost problem” when viewed the way the Fraser Institute framed it.

Aaron Burkhart
Aaron Burkhart
1 month ago

So they didn’t even evaluate with battery storage. You don’t need natural gas anymore, that’s an antiquated idea. What a garbage report.

R Johnson
R Johnson
1 month ago
Reply to  Aaron Burkhart

So, what are the real numbers?