Jul 4, 2022
2050: The Future of Energy with the Ontario Energy Association
In order to achieve Canada’s goal of being net zero by 2050, the future of energy will need to look a lot different than it does today. Vince Brescia, President and CEO of the Ontario Energy Association shared how controlling our emissions is a large part of the process, taking into account affordability and reliability of the energy supply, and six recommendations outlined by the Ontario Energy Association in a recent report. Relive this episode as part of thinkenergy’s Summer Recharge!
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Dan Seguin 00:06
This is thinkenergy. The podcast that helps you better understand the fast changing world of energy through conversations with game changers, industry leaders, and influencers. So join me, Dan Seguin, and my co host Rebecca Schwartz, as we explore both traditional and unconventional facets of the energy industry. Hey everyone, welcome to the summer rewind edition of the thinkenergy podcast. While we recharge our batteries during these lazy hazy days of summer, we're bringing back some blasts from our podcast past. We'll be reintroducing some of our most popular interviews that garnered a lot of attention and interest. There's been a lot of talk about the future electrification of energy on the path to net zero. The episodes we've selected are very future focused with themes around Green Innovation, renewable energy, and our impact on the environment. So I hope you enjoy the summer rewind edition of today's episode. In the meantime, have a happy summer. And we'll be back on August 15. To kick off another exciting season. Cheers.
Dan Seguin 00:02
Hey, everyone, I'm Dan Seguin.
Rebecca Schwartz 00:04
And I'm Rebecca Schwartz, both from Hydro Ottawa.
Dan Seguin 00:07
And we'll be hosting the ThinkEnergy podcast. So are you looking to better understand the fast changing world of energy? Every two weeks, Rebecca and I will be taking you on a tour and discuss some of the coolest trends, emerging technologies, and latest innovations within the energy sector
Rebecca Schwartz 00:26
We'll be engaging in great conversations with game changers, thought leaders and industry leaders who welcome the opportunity to share their expertise and views with you, our listeners.
Dan Seguin 00:37
So stay tuned as we explore some traditional and some quirky facets of this industry.
Rebecca Schwartz 00:43
This is the ThinkEnergy podcast.
Dan Seguin 00:50
Hey, everyone, welcome back. This is the ThinkEnergy podcast and I'm Dan Seguin.
Rebecca Schwartz 00:55
And I'm Rebecca Schwartz. In November 2020, the Government of Canada introduced a bill setting the stage to achieve net zero greenhouse gas emissions by 2050. Dan, how old will you be in 2050?
Dan Seguin 01:08
I don't know, Rebecca, you have to ask me then, when I wake up from my cryogenically frozen state along with Walt Disney, that's the plan.
Rebecca Schwartz 01:17
Okay, good to know
Dan Seguin 01:19
When you try and wrap your head around what it will take to get Canada to net zero by 2050, do you wonder what kind of energy transformation that will entail?
Rebecca Schwartz 01:30
I'm still thinking about what you said about being cryogenically frozen. But yes, I think it's going to be a massive undertaking and necessary one. Ontario currently produces 163 megatons of greenhouse gas emissions. And 76% of that is from emissions stemming from energy use.
Dan Seguin 01:51
Right. But when we talk about energy, we're not talking about electricity. We're talking about refined petroleum, primarily used for transportation and natural gas to heat our homes and buildings.
Rebecca Schwartz 02:05
That's right. Those two sectors, transportation and buildings make up 76% of the provinces greenhouse gas emissions, however, the electricity sector makes up only 16%. So here's today's big question. What are the keys to net zero success?
Dan Seguin 02:23
It's interesting, because, as you know, despite what the electricity sector in Ontario has achieved in terms of renewable energy, and curbing its greenhouse gas emissions, the conversation almost always still revolves around the electricity sector when it comes to climate change. Which brings us to today's show.
Rebecca Schwartz 02:45
Recently, the Ontario Energy Association released a white paper that reviewed various elements of the provinces energy system and the options available to achieve zero emissions by 2050.
Dan Seguin 02:57
Our guest today is Vince Brescia, President and CEO of the Ontario Energy Association.
Rebecca Schwartz 03:07
Vince, welcome to the show. Perhaps you can start us off by telling us a little bit about yourself and what the Ontario Energy Association does.
Vince Brescia 03:15
Thanks, Rebecca, and thanks for having me on the show. I'm the president and CEO of the Ontario Energy Association. I've been active in public policy work and research since the late 1980s, I guess, inside the government and in various capacities outside of the government, then I've been here at the OEA for the last five years and really enjoying it. Here's of who the OEA is we represent the the breadth of Ontario's energy industry. We have power producers of all the different fuel types, you know, whether that's nuclear, hydro, wind, solar, etc. We have demand response and storage. We have the large electricity distributors representing 75% of Ontario's customer base. We also have the natural gas distributors representing over 99% of Ontario's customers in terms of what we do the OEA conducts Public Policy Research and advocates on behalf of its members. And we also provide forums for education on Energy and Environment issues. So that's a quick snapshot of me and the OEA
Dan Seguin 04:27
Now Vince with respect to the government of Canada's goal to reach net zero emissions by 2050. What is the role of the Ontario Energy Association in this initiative?
Vince Brescia 04:40
Thanks. Yeah, reaching net zero by 2050 will be a massive undertaking, perhaps the largest infrastructure projects in our country's history. So our role at the OEA is going to be to leverage the expertise of our members and advise governments at all levels about how we can make this transition happen. while still maintaining the affordability and reliability of our energy supply, it's going to be a big challenge. And we're all going to need to work together to achieve this goal.
Rebecca Schwartz 05:08
So what kinds of major transformation will it take to achieve the government's goals?
Vince Brescia 05:14
I'll break it down in a couple of different ways. In Ontario, 76% of our emissions come from the energy we use. So reaching our goals will require a major transformation of our energy system. 23% of those emissions come from industrial processes and product use 10% of agriculture, percent based so that gives you the full spectrum of the emissions in Ontario. But because we're an Energy Association, we've focused on the energy component and the transformation required in the energy system. Or there are some overlaps. For example, we're hopeful some of those waste emissions can be turned into energy just as an example. But then turning to energy. Currently in Ontario 80% of the energy we use comes from fossil fuel sources. 48% is from petroleum primarily for transportation uses. Another 28% is from natural gas primarily to heat our homes and buildings. 16% comes from electricity, which is now a clean energy source. So altogether, achieving our goal is going to require us to transform 80% of our energy system. That's a big project. And the three big sources of emissions in Ontario are transportation, buildings and industry. Altogether, those account for almost 80% of our emissions. So we're going to have to swap up the fuels that we use in transportation, we're going to need to decarbonize our building heating systems. And many of our industries and businesses are going to have to adapt to new fuel sources. This gives you a sense of the scale of the challenge. But also with comes that comes with that is a large opportunity of the to go to go hand in hand.
Dan Seguin 06:56
2015 is 30 years away. But it's fair to say that Ontario's emissions have changed a lot in the past 30 years. Vince, can you give us a snapshot of how our energy use has changed since 1990. What sectors and provinces have improved the most?
Vince Brescia 07:16
In 2019. Just to give you a sense of where we're at Canada emitted 730 mega tons of ghgs of that Ontario represented 163 mega tons or 22% of the national total. Over time since 1990, Ontario's emissions have declined from 180 megatons to 163, which is a reduction of about 17 megatons or 9%. We still have another 19 megatons to go to meet our 2030 target of 30% below 2005 levels. That's not factoring in the recent national commitment by our Prime Minister to reduce emissions by 40 to 45%. By 2030. In terms of you asked about how you know how the provinces have, have compared and fared nationally, Ontario has made the largest largest progress nationally. That came primarily from the elimination of coal fired generation in the province. That one policy change resulted in a 31 mega ton reduction reduction in emissions from its peak in 2005. However, a lot of those emissions reductions in Ontario have been offset by increases in emissions from our transportation sector since 1990. Nationally, to give you a sense of how other provinces have done, you know, to the east of Ontario, Nova Scotia, New Brunswick and Quebec together, have reduced emissions by 19 megatons in total since 2005. However, west of Ontario, the emissions profile has been rising. So altogether, nationally, our emissions have been flat since 2005. And if you look back to 1991, they're up from the 600 megatons to the 730 we're at now.
Rebecca Schwartz 08:57
Vince, the Ontario Energy Association outlines six recommendations in the report, can you walk us through what those are at a high level and why you believe they're the keys to netzero success,
Vince Brescia 09:09
I'll do a quick walk through. Our first recommendation is that we need to move as quickly as we can on transportation fuel switching. And that's because we have almost all of the technologies we need to affordably transform the sector and because transportation is our largest source of emissions. So that's what we need to tackle first, and we can do it affordably. Second is we need to start reducing emissions in our natural gas system is our second largest source of emissions. And if we get time later, we can talk a bit about some of the things we can do in that area. The third thing we're going to need to do is to plan to expand our electricity system, all this fuel switching. I've been talking about like for example in transportation, and we're going to need it in industry as well. We're going to need a lot more electricity and we're going to need every type of resource. We're going to need nuclear, hydro, wind, solar storage demand response transmission, you name it, we're going to need the whole package to meet the amount of electricity that's needed. Some people talk about a doubling or tripling of our electricity. Some, we're gonna need a lot more electricity as we transform our economy. The fourth thing that we recommended is that we start to accelerate accelerate hydrogen programs and pilots, we're gonna need a lot of hydrogen in our future, because there's certain types of industrial processes and activities, where it's not so easy to swap out the fossil fuels that we use. And hydrogen seems like a highly likely candidate, or hydrogen based fuels. But we have a bit of work to do to develop those and make them affordable for customers. So we need governments to lean in and help with pilot projects, and put their thumb on the scale, so to speak, to accelerate this economy and help build the infrastructure that we need to service the economy. Fifth recommendation we made is that there be comprehensive energy planning, not just electricity policy. In Ontario, we have tended to have a history of focusing just on the electricity system. And you've heard me mentioned earlier, it currently only accounts for 16% of our total energy use. We now now need to think about our whole energy system holistically. And make a detailed plan about what it's going to cost, what the most likely pathways are. The final recommendation is that we're going to need federal, provincial and municipal coordination. All three levels of governments are active in the space, all are having an impact and can have an impact. But we're not going to be successful if they're not coordinating their efforts, or if they're working at cross purposes, or fighting each other's or turning issues into political wedges, you know, against each other. We need to all work together because you know, as I mentioned earlier, this is a massive undertaking. And if we're going to be successful, we all need to work together in coordination. So that's a quick summary of our recommendations.
Dan Seguin 12:11
You note that in order for the transition to be successful in Ontario, careful attention needs to be paid to three core pillars that are the underpinning of the energy system. What are those?
Vince Brescia 12:24
Yeah, thanks for asking. Now we know from from experience that are three critical pillars that underpin public support for our energy system. The first is sustainability, which encompasses the net zero discussion we are having today. our energy system must be sustainable over the long term, and that includes ensuring that we utilize energy in a way that ensures the environmental sustainability of our communities, and of our planet. Of course, the two other pillars, though, are affordability, and reliability. We have recent experience in Ontario that significant increases in energy costs lead to very negative customer and voter reactions. We must keep our customers informed and supportive of the transition, or they will rebel against the effort. Finally, our modern economy is also very dependent upon reliable energy. customers expect and depend on energy being available when they need it. If we go too long, without energy to heat our homes or power to run our economy, or God forbid, keep our cell phones charged. It causes major disruption for all of us. So our transition must ensure we continue to provide an energy in the reliable fashion that our consumers have grown accustomed to,
Rebecca Schwartz 13:36
In your opinion, Vince, what are some of the biggest barriers and challenges to achieve the 2015 zero emission targets? For instance, are there any activities that we can't fully eliminate?
Vince Brescia 13:47
Yes, some of the biggest barriers and challenges to achieving our goals will come from what some call the hard to abate sectors. These sectors are characterized by high material volumes, and finding alternative processes that are affordable, it's going to be a challenge for us. These are also some of our largest sources of emissions globally. And the big three are cement, steel and chemicals. Cement is one of the largest sources of global emission each tonne of cement produces about a half a tonne of carbon dioxide. And this has two main components. One is from the chemical reaction of turning limestone, which is calcium carbonate, and to lime, which releases co2. The other is from the energy component that we use to cook the limestone to over 1000 degrees Celsius, which is typically fossil fuels. So you have two elements, you have both an energy element and a chemical element that leads to large emissions from that sector. And that's going to be a challenge to decarbonize that sector. Steel is another one steel is the highest emitting industry in the world. It produces 3.5 Giga tons of co2 globally. Like cement, they're both energy In process admissions, we make primary steel out of iron ore, which is iron oxide, we add coal to the iron ore for its heat energy to essentially boil the you're kind of like we did we do for the cement, and for its chemical properties that allow us to strip off the oxygen atoms. This results in a chemical process where you end up with pure iron and co2 emissions. We produce steel in Ontario. And we also produce a lot of cars, which use a lot of steel and steel and a lot of other processes. So we're Ontario is going to have to tackle this one head on and it's going to be a challenge. The third big challenging areas, chemicals, petrochemicals and plastic production are the other large area of emissions globally and Ontario. There's a more diverse range of products here, but the largest one is ammonia, which we use for fertilizer in agriculture. And the next are ethylene and propylene, which are the most important ingredients and plastics. Again, there's going to be some difficulties and challenges and a lot of technology required to decarbonize those sectors.
Rebecca Schwartz 16:07
Let's talk about opportunities and leveraging technology and innovation. What's exciting you or giving you hope for the future?
Vince Brescia 16:14
There are some activities, we're going to need a lot of Innovation and Learning before we'll be able to eliminate emissions. According to the International Energy Agency, almost half the emissions cuts necessary for us to achieve net zero will come from technologies that are not in the marketplace yet. Some of the more exciting areas that are important and looked like they have significant potential, I would say are the following three hydrogen and hydrogen based fuels. governments around the world are developing hydrogen strategies. It looks to be very competitive globally, every major western country is working on a hydrogen strategy. And Ontario in Canada have some leading companies in this area like we have Enbridge Cummins hydrogenics, new flyer Ballard loop energy, planetary hydrogen, hydro energy, it's going to be a very exciting area is watching the hydrogen economy develop. That's what I'm excited about. The other one is energy storage, particularly long duration energy storage. We store lots of energy, now we have the technology. The costs are coming down fast. But what's really going to help us transform our economy is the ability to store energy for a long period of times and learn to do that affordably. There's lots of people looking at that and working on it, it's going to be a significant growth area. And I'm very excited about it. The third big one is is carbon capture utilization and storage, we are absolutely going to need carbon capture and storage if we're going to meet our netzero goals. One of the examples is cement, which I talked about earlier, I talked about this process where we boil the limestone and the chemical reaction leads to a bunch of emissions. The only thing I'm really hearing about from experts who know a lot more about this stuff than I do is that we're gonna need carbon capture to capture the carbon dioxide that comes from that cement. And cement. You know, as I mentioned, it's a very large global emissions producers. And that's just one example. There are lots of places where we're going to need carbon capture in our future to meet our goals. So there's a there's there's three areas that I'm excited about where I think we're going to see a lot of growth.
Dan Seguin 18:21
How important is energy affordability for Ontarians?
Vince Brescia 18:26
It's critically important. History has shown us that Ontarians react negatively to energy cost increase. If the government's Transition Plans a significant negative impact on energy and affordability. Families and businesses will rebel against the plan and the plan will get derailed. Oh, it is critically important. We have to keep it in mind.
Dan Seguin 18:45
What lessons can be learned from when Ontario's electricity rates increase to pay for renewable investments? And how can these lessons be applied to Canada's goal for 2050?
Vince Brescia 18:59
It's a great question. I'll give you my perspective. I think one important lesson we can learn from that experience is that sudden large spikes in energy costs are very upsetting to people and they draw lots of attention. They draw lots of political attention, lots of media attention. I think you can socialize the idea that costs may have to arise incrementally over time and get people used to the idea. However, most households don't pay much attention to public policy discussions and debates. They just look at their bill. They compare their last bill to this one, or this month's bill compared to this month last year to see how it's doing. So whatever plan we develop, if we can avoid sudden spikes, I think you can invoke you can avoid the negative public reactions, like the one we saw. That's what we can learn from that previous experience.
Rebecca Schwartz 19:47
Ontario's electricity system is one of the cleanest in the world. What does removing natural gas from the provinces supply mean for the reliability of the grid?
Vince Brescia 19:58
It's a great question. It's one that's getting discussed more. In the current climate, Ontario's Nash natural gas plants were built only recently to replace the reliability service offered by the coal plants we were shutting down. Once we had the capabilities of these natural gas plants in place, we were able to add a large volume of renewables to our system, resulting Ontario having one of the cleanest electricity systems in the world. These gas plants are like a backup to our electricity system. Most of the time the plants are not utilized much while we power the system with you know, nuclear, hydro, wind and solar and other other sources. That's why our system is so clean currently, because the plants are set seldom run at full capacity, so we get fewer emissions from them. However, when we have a large spike in demand on a really cool day, or a really hot day, these plants kick in to help maintain system reliability. They can be deployed on relatively short notice to meet urgent needs. Like the coal plants that they replace, these plants have access to something that is critically important for grid reliability, vast amounts of energy storage, this capability is not easy or affordable to replace. So we're going to need the services of these plants for some time before we're going to be able to replace them,
Rebecca Schwartz 21:12
can we replace natural gas to heat our homes and buildings and what will it take to make it happen? Vince,
Vince Brescia 21:19
we are going to need to maintain our gases to heat our homes and buildings for some time, we can change what goes into the system to make it cleaner and we can reduce the amount of energy we need from the system. I'll try and put it into perspective for you. The natural gas system currently provides about three times the peak energy of our electricity system. In other words, we would need to quadruple our current electricity system to meet the current peak heat demand if we wanted to transition to electric heat across Ontario. To give you a sense of the scale of that, if we were going to replace all of the gas system with electricity that would require about 24 nuclear generating stations. Or it would take 30 to 50,000 wind turbines paired with long duration energy storage, acquiring about 1.3 million acres for siting, you get a sense that this would be a pretty massive undertaking, and would probably be very expensive for customers. At the same time, we are going to have to expand our electricity system to deal with significant electrification and transportation, which we've talked about, and an industry which we've also talked about. So if we were to add the electrification of the natural gas system on top of that, that would likely not be achievable. So this informs the view that we should be looking at ways to decarbonize the natural gas system. And we're doing that now. Firstly, we've begun to blend renewable natural gas into our system, which takes methane from waste that was otherwise go into the atmosphere. Methane is a very potent greenhouse gas, making this a carbon negative activity. We're also blending green emissions free hydrogen into our gas system. Going forward, we'll be continuously exploring technological advances that allow us to increase the amount of that blend of hydrogen and renewable natural gas into our system. In addition, if we were to pair our current heating system with heat pumps, we can make a significant reduction in the amount of natural gas needed to heat our homes and buildings. On top of all of that, you know, research has shown us that we can affordably achieve significant reductions in the amount of natural gas use through building energy efficiency measures. So when you put all of those things together, you know, our view is that we can deeply decarbonize the natural gas system, and do that relatively affordability which reduces the scale relatively affordably as well and it reduces the scale of the electricity expansion that is going to be required. In Ontario for all these other activities we've talked about.
Dan Seguin 23:52
As we know from your report, refined petroleum makes up 48% of Ontario's energy use mostly for transportation. Are electric vehicles the answer to the transportation sectors greenhouse gas emissions problem here in Ontario.
Vince Brescia 24:10
Yes, they are a large part of the answer. Transportation as you mentioned, it's Ontario's largest source of emissions. passenger vehicles currently make up 57% of our transportation emissions, electric electrification of these passenger vehicles and a smaller short haul trucks and transit uses this can be done affordably with current technology, very exciting. I expect this transition to really accelerate and the next while for heavier and long haul transportation, we may need other solutions to be part of the mix. Long Haul and heavy transportation is less amenable to electrification because the batteries get too big and heavy and refueling time, you know adds significantly to cost for these uses. You know, we could be looking at learning compressed natural gas and renewable natural gas to to get to net zero most analysts seem to think that hydrogen fuel cells will be an important part of the long term substitution for heavy transportation. exciting part, as I've mentioned, we have a number of leading hydrogen companies in Canada and Ontario that are, that are making these these fuel cells. So it's also an economic opportunity for our province. And also, you know, you think of the materials for batteries and some of the the steel and inputs to the these vehicles that we're talking about, there's another economic opportunity there for Ontario. For some other transportations like ships and planes, we're just going to need alternative fuels. And again, the batteries be too heavy, you need a high energy density of the fuel. And we have, we may be looking at variants on hydrogen fuels like ammonia, that are very, very dense in energy in order to the fuel all those activities. And what we're going to do to try and figure out as a way to develop those supply chains affordably to set out those users.
Rebecca Schwartz 26:04
Alright, then, how about we close off with some rapid fire questions?
Vince Brescia 26:08
Rebecca Schwartz 26:09
what is your favorite word?
Vince Brescia 26:11
Rebecca Schwartz 26:12
What is one thing you can't live without?
Vince Brescia 26:14
Air And Starbucks coffee.
Rebecca Schwartz 26:17
What is something that challenges you?
Vince Brescia 26:19
golf. I keep trying, but it keeps challenging me.
Rebecca Schwartz 26:22
If you could have one superpower events, what would it be?
Vince Brescia 26:26
Rebecca Schwartz 26:27
If you could turn back time and talk to your 18 year old self? What would you tell him?
Vince Brescia 26:32
Oh, with my new superpower, I'd say invest all your savings and Berkshire Hathaway and leave it there.
Rebecca Schwartz 26:38
And lastly, what do you currently find most interesting in your sector?
Vince Brescia 26:42
You know what I love the technological innovation that is taking place in our sector. I mean, we've been talking about it today. It's exciting. It's a very exciting time to be part of the sector. I'm learning every day about new technologies and processes. And I love it.
Dan Seguin 26:59
Well, Vince, we've reached the end of another episode of The think energy podcast. Thank you so much for joining us today. I hope you had a lot of fun.
Vince Brescia 27:08
I did have a lot of fun. Thank you so much for having me. This was great.
Dan Seguin 27:13
Thanks for tuning in to another episode of the thinkenergy podcast. And don't forget to subscribe and leave us a review wherever you're listening. And to find out more about today's guests, or previous episodes, visit thinkenergypodcast.com. I hope you'll join us again next time as we spark even more conversations about the energy of tomorrow.