Canadian Climate Institute released a new report indicating that the country should switch from gas to electric heating in order to achieve net zero emissions.
Achieving this requires not only changes in individual building systems but also broader shifts in energy systems and regulatory frameworks. As Canada aims for a net zero economy by 2050, the urgency to address these issues is mounting. Energy utilities and regulators are beginning to understand the implications of the clean energy transition for their systems and customers, but inertia persists. Without significant policy shifts, Canada risks higher costs and missed climate targets.
Key Insights from the Report
- Current State and Challenges:
- Despite some progress, Canada’s buildings sector and its energy systems are not yet on a cost-optimal path to net zero. Continued inertia in policy and regulation could jeopardize climate goals and affordability.
- A cost-optimal pathway to net zero will require a significant increase in electricity use for heating, reducing reliance on gas. This transition must start immediately to mitigate risks and ensure a smooth transition.
- Electricity as the Primary Heating Source:
- Across all provinces, the trend is clear: electricity will increasingly power space heating. Heat pumps with electric resistance backup emerge as the most cost-effective solution, despite the need for substantial electricity system upgrades.
- Reducing peak electricity demand is crucial for maintaining affordability and reliability. Strategies include building retrofits, energy-efficient new buildings, and switching from electric baseboards to efficient heat pumps. Hybrid systems, energy storage, and demand-side management will also play significant roles.
- Risks of Expanding Gas Networks:
- Expanding gas distribution networks is inconsistent with achieving net zero cost-effectively. Such expansions can lock in higher costs and create stranded assets, ultimately burdening ratepayers.
- Hybrid systems and low-carbon gases like hydrogen and biomethane will not sufficiently replace natural gas in heating buildings. Electrification remains the dominant pathway, even under optimistic scenarios for alternative fuels.
- Regulatory Reforms Needed:
- Current utility regulations often incentivize gas infrastructure expansion, which conflicts with long-term affordability and climate goals. Regulators need to protect ratepayers from overbuilt gas systems and overburdened electrical grids.
- Provincial and territorial governments must update regulatory mandates to align with net zero targets, providing the necessary resources for effective oversight during the energy transition.
Policy Recommendations
- Equip Regulators and Utilities:
- Provincial governments should legislate net zero targets and equip regulators with the necessary tools and resources. Regularly updated independent pathway assessments and comprehensive energy roadmaps are essential.
- Halt Gas Network Expansion:
- Provinces should direct regulators to consider the risks of stranded gas assets and prioritize electrification. Mandating new buildings to be fully electric, except where viable alternatives exist, is crucial.
- Map Gas Networks for Managed Transition:
- Governments should facilitate the gradual contraction of gas networks by mapping existing infrastructure. Learning from other jurisdictions can help manage this transition effectively.
- Strengthen Support for Building Electrification:
- Policies should support energy efficiency, retrofits, and peak management. This includes regulatory certainty, financial incentives, and comprehensive climate policies.
- Ensure Equity in the Transition:
- Governments must design policies that address the equity impacts of the energy transition, ensuring support for low-income households and those most affected by infrastructure changes.
By implementing these strategies, Canada can navigate its path to net zero while ensuring energy affordability and reliability for all its citizens, stated Canadian Climate Institute.