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Updated: UCP and NDP duel over the impact of a 2035 net-zero power grid, UCP gets report numbers wrong

UCP candidates said NDP plans for a net-zero power grid in 12 years are unrealistic and dangerous to the long-term health of the Alberta economy. But, they got the initial numbers wrong – by $35 billion.

UCP candidates Brian Jean of Fort McMurray-Lac La Biche and Rebecca Schulz, who’s running in Calgary-Shaw, held a press conference Wednesday morning in the southwest Calgary community of Glamorgan and were highly critical of the potential costs under a potential NDP government.

The UCP candidates used reports from Navius Research and the Alberta Electric System Operator (AESO) to explain why the NDP’s plan for net-zero would significantly hurt Alberta.

Navius Research, based out of Vancouver, recently released a study showing a move to a net-zero electricity grid would have significant ramifications for people in Alberta.

According to their report, the Alberta GDP would decline by 0.03% resulting in the GDP being $1.9 billion lower in 2030 and $3.2 billion lower in 2035. This would translate to a cumulative GDP impact of about $35 billion between 2020 and 2040, according to Navius research.

The UCP had initially totaled Navius’ report as being an $87 billion cost to taxpayers, a number that Navius disputed on social media.

“AESO has costed out meeting the pure power generation part of this unreasonable Notley-Trudeau promise at $52 billion. And that opportunity cost to our economy according to the Navius Research report, would add a further $35 billion between now and 2035,” wrote the UCP in a news release on the topic.

“That’s a total cost of $87 billion to Albertans.”

In that response on social media on Wednesday afternoon, Navius said that the estimated $35 billion in opportunity costs were already factored into the AESO report.

“This $35 billion already accounts for, and is not additive to, the investment estimated in the AESO report. The cost to Alberta’s economy reported in the media today is more than double what our model suggests it will be.”

The UCP campaign, also known as the UCP War Room, walked back their numbers nine hours after the Jean-Schulz media event, stating that the $52 billion in costs would be a reduction in $35 billion in estimated GDP, and not a cumulative $87 billion dollars.

Report resulted disputed by economists

AESO had previously been critical of the move to net-zero by 2035, citing a total $52 billion cost.

According to AESO, which manages the province’s power grid, the cost of this move would be considerable.

There would be approximately $3 billion of incremental transmission costs by 2041, normalized across system load costs would increase 40 per cent by 2035 and there would be $44 billion to $52 billion required in additional capital investments to reach a net zero future.

Both reports combined suggest that a move to a net-zero power grid by 2035 would cost Alberta’s economy and ratepayers at least $87 billion.

University of Calgary economist and former energy trader Blake Shaffer, who studies the electricity market in Alberta, reiterated his issues with the AESO report in response to commentary on Twitter over the UCP’s Wednesday announcement.

“For starters, the AESO numbers ($52B) is a very large overestimate. Perhaps up to 3x based on the assumed technology costs used vs what we are already seeing deployed,” he said.

Similarily, the assumptions made by Navius about the cost of renewable energy in their report cited by the UCP were disputed by University of Alberta professor of law and economics, Andrew Leach.

“If your analysis is based on an assumption that there are no additional renewable GWhs available in Alberta below $110/MWh, I don’t even know where to begin. This is taking Alberta Back to the early 2000s!”

National grid commitment

Canadian Prime Minister Justin Trudeau confirmed his government’s commitment to a net-zero electricity grid in November 2021 at the COP26 climate conference.

Schulz said that in that same year, Rachel Notley fully committed to this goal.

“In 2021 in a members-only speech at the NDP AGM, Notley first committed that an NDP government will force Alberta into a net-zero electricity grid by 2035,” Schulz said.

Jean compared Notley’s aggressive plan to go net zero by 2035 to the quick phaseout of coal during her time as Premier.

“The majority of Canada’s fossil fuel generated electricity is produced here in Alberta, now Alberta use to make electricity from coal but we got off coal, Rachel Notley phased out coal on such an aggressive timeline that it cost Albertan families billions of dollars,” Jean said.

The UCP candidates both said they are committed to net-zero electricity grid, but that 2050 is a far more realistic and safe goal for Alberta.

Kathleen Ganley, NDP candidate in Calgary-Mountain View said the UCP statements on net-zero don’t align with other G7 countries, leaving Canada potentially on the outs for investment opportunities.

“Every major G7 country has committed to net-zero electricity grids by 2035, Alberta is looking to attract investment are looking to attract investment in clean tech in our oil sands and oil and gas throughout the province, and we’re not going to be able to do that without taking ESG seriously,” Ganley said.

Ganley also disputed the numbers cited by the UCP during the Wednesday morning press event.

“Now they’re coming out here with this report, which overstates the case to begin with, and then they’re sort of adding an imaginary number,” she said.

The City of Calgary’s wholly-owned electricity subsidiary, Enmax, said they’re working towards achieving net zero 2050.