Most Canadians now know that by 2035, Ottawa will ban the sale of new gasoline-powered cars and light duty trucks. For now, zero emission vehicles (ZEV) must make up 20% of new sales by 2026, growing to 60% by 2030 and finally to 100% by 2035. Heavy-duty vehicles have until 2040 to reach 100% of new sales..According to Transport Canada, ZEV are defined as “a vehicle that has the potential to produce no tailpipe emissions. They can still have a conventional internal combustion engine, but must also be able to operate without using it.” So in other words, even a plug-in hybrid electric vehicle with a battery range of 10 to 15 km would qualify as a zero-emission vehicle..How are we doing so far?.Statistics Canada shows new ZEV registrations in 2017 were two percent of all new vehicle registrations: By the first six months of 2022 sales were at 13%. Examining the national trend shows a doubling of adoption rates of new ZEV registrations every two years..Clearly there is a rapidly growing demand for ZEV and if this rate continues, Canadians may very well achieve compliance before 2035..But, what if electrical demand from our transportation sector grows faster than new low to zero emission power generation is commissioned?.In my October 30th article titled The Insanity of Not Building More Power, I highlighted data showing electrical power generation across Canada has stagnated over the past 15 years. We have seen coal powered generators removed from the grid as fast as new wind, solar and their natural gas back-up power generation have been added..Now, the Royal Bank of Canada (RBC) has come forward with a clear warning that blackouts, starting first in Ontario, could begin as early as 2026. Furthermore, RBC predicts that power generation in Canada will likely need to increase by 50% over the next decade, just to keep the lights on. And SNC Lavalin estimates show Canada will have to double its power generation and transmission infrastructure over the next 30 years. Considering that Canada’s population is growing and has one of the highest per-capita electric power consumption rates in the world, this will be no small feat..To put this 30-year power generation build-out into perspective, Canada would require:.• 115 x 1100 MW-sized large hydro reservoirs similar in capacity to BC Hydro’s Site C project or....• 114 x 1000 MW-sized large nuclear reactors (i.e. 19 sites the size of Bruce Power in Ontario, or....• 380 x 300 MW small modular nuclear reactors, or• 20,000 x 10 MW-sized wind turbines..The SNC Lavalin time series for power generation commissioning in Canada shows that 1981 saw 7GW (7 billion watts) of hydro and coal power plants commissioned. Canada would have to achieve that on a yearly basis from now until 2050 in order to have enough electric power capacity to replace hydrocarbons..Large-scale utility projects in Canada, like BC Hydro’s Site C dam, take 8 to 12 years from initial environmental assessment to first power. Most professionals in the power generation industry would admit that the regulatory assessment and approval process is too burdensome, inefficient and a major reason for the time scales required to commission new large utility assets..In RBC’s Financing Greener Growth report released November 1st, 2022, it is stated that investment in this space needs to on average hit $80 billion per year versus the short fall of late in the range of $10 to $20 billion. Likewise, RBC acknowledges that many of the start-up companies in the clean-tech space have insufficient equity or cash flow to access traditional debt markets at this scale of construction necessary..That's why the federal government has implemented a variety of measures in 2022 to entice more investment capital. In 2022 to date, Ottawa has granted a 30% green investment tax credit, a $15 billion Canada Growth Fund, and issued $1 billion to the Investment and Innovation Agency. The 2022 budget also gave the Canada Infrastructure Bank a mandate adjustment to focus some of its $35 billion in capital on private-led green projects. Ottawa hopes to attract $4 to $5 in private investment capital, for every dollar of taxpayer investment..Having spent half of my career in the new energy start-up space, I will highlight that the need for taxpayer shielding against investment risk is clear evidence of the commercial immaturity of the technologies being mandated. Demand for ZEV is rising fast and while incentives for investments in low emission power generation may entice greater interest from private sector investment agencies, without major reform on the side of regulatory bodies, Canada faces significant uncertainty in terms of both energy inflation and blackouts..Joseph Fournier is a research scientist with 15 years experience in technology innovation specific to industrial environmental performance. He is currently a rancher near Rockyford Alberta.
