Weekly Energy Charts
June 03, 2022
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Featured Stories
Net-Zero Electricity in Alberta?
Marc Vermette
We hope you all take note of the upcoming release of AESO’s ‘Net-Zero by 2035 Report’, which will give Albertans a much closer look at what aggressive action on climate change means for electricity in the province.
Adding context to this report are pending federal net zero electricity regulations restricting the use of fossil-fueled electricity sources which make up a lot of Alberta’s electricity supply.
Reaching net zero electricity will be challenging and will require coordinated efforts between all levels of government. Constitutionally, provinces and territories have jurisdiction over electricity while the federal government has (notional) jurisdiction over extra-provincial trade including power transmission. And, it will also require a lot of attention to regional markets, in particular in Alberta and Saskatchewan.
Business of Net-Zero
Erica Beattie
Governments and businesses are preparing for a transition to net-zero emissions. While this will have many benefits and create wonderful economic opportunities, it will also come with its own set of consequences. A report from McKinsey this week explains some of the uncertainties around the initiative and the economic transformation that net-zero transitions can bring.
The report highlights six characteristics including a requirement for a large, front-loaded increase in spending.
Spending
Accelerating decarbonization is needed to achieve net-zero, but would require emissions to fall across the entire economy and serious changes to be made towards the energy mix. Achieving this is not an easy, straightforward task. McKinsey suggests that making use of a circular economy is one way to achieve this.
The net-zero transition will not affect everyone in the same way or to the same degree. While all sectors are impacted by the transition, they are impacted unevenly. Lower income and developing countries would also be affected differently compared to developed countries in terms of job rates and government spending. And, of course, jurisdictions more dependent on carbon-intensive production are more vulnerable too.
Serious adjustments are needed in order to achieve net-zero emissions by 2050, and McKinsey argues that coordination between the actions of governments, businesses, and enabling institutions is critical for success. Some of these actions are highlighted in further detail here.
Slow Q1 growth
Keshinee Moonian
According to a StatCan report this week, the Canadian economy grew at an annualized rate of 3.1% in the first quarter, down from 6.6% in the fourth quarter of 2021.
The chief North American economist at Capital Economics, Paul Ashworth, says that this growth was considerably below consensus estimates, but did not differ greatly from the Bank of Canada’s April monetary policy report which predicted an annualized growth rate of 3.0%. This reduction is mainly because of a downward revision of January data, which now shows a 0.2 % month-over-month decline. Omicron-related restrictions appear to have had a more significant impact than expected.
The real economy “remains on a strong footing”, and so the Bank of Canada continued with increases in its key interest rate by half a percentage point this week.
Data from Statistics Canada show that household spending rose 0.8% in the first quarter, while spending on durable goods rose 2.6%. Residential construction grew by 4.3%, business investment in non-residential structures and engineering structures gained 2.9% and 3.5% respectively, while investment in machinery and equipment rose 0.9%. Statistics Canada also said compensation of employees rose 3.8% on a nominal basis for the quarter, which - besides the third quarter of 2020 - was apparently the largest quarterly increase since the second quarter of 1981. The Canadian economy has seen substantial wage growth, including in professional and personal services, trade, manufacturing, health care and social assistance, and construction industries.
Canada’s economy grew 3.1% in the first quarter, slower than expected
Tracking SDG 7
Debosree Mukherjee
Tracking SDG7: The Energy Progress Report 2022, a joint report from IEA, IRENA, UN Statistics Division, The World Bank, and the WHO, tracks progress toward meeting one of 17 Sustainable Development Goals established by the UN General Assembly. SDG7 aims to ensure affordable and clean energy for all by 2030. According to the new report, the world is not on track to achieve this goal
Primary indicators of global progress of the SDG 7 targets are:
Access to Electricity: To meet the 2030 target, the average number of new connections needs to reach 100 million a year, including 80 million in Africa where the rate of new connections needs to triple. At the current rate, only 92% of the population will have access to electricity by 2030.
Clean Cooking Solutions: In 2020, 69% of global population had access to clean cooking fuels and technologies. Without a coordinated effort, 2.1 billion people globally will lack access to clean cooking in 2030 and continue to rely on uses of biomass, kerosene, or coal.
Renewable Energy: Renewable energy accounted for more than 80% of all new generating capacity added in 2020. To achieve net-zero emission by 2050, renewable shares need to exceed 30% of total final energy consumption by 2030. This requires policy support and mobilizing private capital in the least-developed and developing countries.
Energy Efficiency: To reach the target of a 2.6% annual rate of improvement in primary energy intensity in 2010-2030, the average annual rate of improvement in energy intensity must exceed 3.2% between now and the end of the decade.
International Public Financial Flows: International public financial flows to developing countries for clean energy fell to USD 10.9 billion in 2019, a drop of more than 50% from USD 24.7 billion in 2017. This needs to be increased significantly to realize both SDG 7 and SDG 13 (climate action).
Read more of Tracking SDG 7 here.
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