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Economy

Not energy ‘transition’ but energy ‘addition’. Intermittent wind and sun requires backup power generation

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From Resource Works

Until battery technology is an option, there is no real energy transition

Climate campaigners steadily push for clean, renewable energy sources to replace hydrocarbons. However, international consultants Wood Mackenzie view this push as overly simplistic, arguing it does not consider the complexities of energy supply and the uses of oil and gas that extend far beyond power generation.

“Perhaps most striking is the extraordinary contribution that oil and gas have made to energy supply and what a gargantuan task it will be to build a new low-carbon system in its place.”

The latest report from “WoodMac” lists several challenges for a future of low-carbon power.

For one, U.S. demand for electrical power is set to grow at least through the rest of this decade.

“What is exciting about this new growth is that it is a manifestation of the Fourth Industrial Revolution. Central to this is the explosive growth of data centres, the beating heart of the infrastructure supporting artificial intelligence (AI), cloud computing, digitalization, and big data. Second is a new wave of cleantech, including the manufacturing of semiconductors, batteries, and renewable energy equipment. Third is the increasing electrification of the economy.”

Offshore wind’s power output has an energy efficiency of 92% compared with oil and gas, which, in use, deliver only 25% of their original energy content. But “what may impress is how long it will take for the cumulative output of wind to exceed that of oil and gas, despite this disparity in energy efficiency.”

Closer to home, questions have been raised in Canada about climate campaigners’ arguments that the costs of solar and wind power operations have steadily decreased and are now comparatively affordable.

The small-c conservative Fraser Institute notes that the G7 countries (including Canada) have pledged to triple renewable energy sources to ensure an “affordable” energy future.

“But while direct costs for wind and solar are dropping, they remain expensive due in part to the backup energy sources required when renewables are not available.

“Wind and solar energy are intermittent, meaning they aren’t consistently available, so we need an alternative power source when there’s no sunlight or wind, given the current limited ability to store energy from solar and wind.

“So we must maintain enough energy capacity in a parallel system, typically powered by natural gas. Constructing and maintaining a secondary energy source results in higher overall energy costs because two energy systems cost more than one. Therefore, when evaluating the costs of renewables, we must consider the costs of backup energy.

“Often, when proponents claim that wind and solar sources are cheaper than fossil fuels, they ignore these costs.”

The TD Bank adds: “Despite the improvement in the cost-competitiveness of renewable and storage technologies, the growth of low-carbon electricity supply is likely to increase electricity costs.

“According to estimates by the Alberta Electric System Operator, the load-adjusted generation costs in 2035 could be 56–66% higher in net-zero-by-2035 scenarios compared to a technology trajectory based on current policies.

“For Ontario, we estimate that replacing expiring gas-generator contracts with a combination of solar, wind, storage, and small modular reactors could increase the average generation cost by around 20% in 2035 compared to what it would be if the gas contracts were renewed and the current procurement plan for new resources proceeds as planned.”

The Fraser Institute also cites a 2021 study by University of Chicago economists showing that between 1990 and 2015, U.S. states that mandated minimum renewable power sources experienced significant electricity price increases after accounting for backup infrastructure and other costs.

“Specifically, in those states, electricity prices increased by an average of 11 per cent, costing consumers an additional $30 billion annually. The study also found that electricity prices grew more expensive over time, and by the twelfth year, electricity prices were 17 per cent higher (on average).”

“Europe is another case in point. Between 2006 and 2019, solar and wind sources went from representing around 5 per cent of Germany’s electricity generation to almost 30 per cent in 2019. During that same period, German households experienced an increase in electricity prices from 19.46 cents to 30.46 cents per kilowatt hour — a rise of more than 56 per cent. This surge in prices occurred before the war in Ukraine, which led to an unprecedented price spike in 2022.”

Meanwhile, in the U.S., a study published in Energy, a peer-reviewed energy and engineering journal, found that — after accounting for backup, energy storage, and associated indirect costs — solar power costs skyrocket from US$36 per megawatt hour (MWh) to as high as US$1,548, and wind generation costs increase from US$40 to up to US$504 per MWh.

We’re firmly in favour of advancing renewable energy sources, and the sooner, the better. But the cost estimates need to be true

Alberta

COWBOY UP! Pierre Poilievre Promises to Fight for Oil and Gas, a Stronger Military and the Interests of Western Canada

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Fr0m Energy Now

By Maureen McCall

As Calgarians take a break from the incessant news of tariff threat deadlines and global economic challenges to celebrate the annual Stampede, Conservative party leader Pierre Poilievre gave them even more to celebrate.

Poilievre returned to Calgary, his hometown, to outline his plan to amplify the legitimate demands of Western Canada and not only fight for oil and gas, but also fight for the interests of farmers, for low taxes, for decentralization, a stronger military and a smaller federal government.

Speaking at the annual Conservative party BBQ at Heritage Park in Calgary (a place Poilievre often visited on school trips growing up), he was reminded of the challenges his family experienced during the years when Trudeau senior was Prime Minister and the disastrous effect of his economic policies.

“I was born in ’79,” Poilievre said. “and only a few years later, Pierre Elliott Trudeau would attack our province with the National Energy Program. There are still a few that remember it. At the same time, he hammered the entire country with money printing deficits that gave us the worst inflation and interest rates in our history. Our family actually lost our home, and we had to scrimp and save and get help from extended family in order to get our little place in Shaughnessy, which my mother still lives in.”

This very personal story resonated with many in the crowd who are now experiencing an affordability crisis that leaves families struggling and young adults unable to afford their first house or condo. Poilievre said that the experience was a powerful motivator for his entry into politics. He wasted no time in proposing a solution – build alliances with other provinces with mutual interests, and he emphasized the importance of advocating for provincial needs.

“Let’s build an alliance with British Columbians who want to ship liquefied natural gas out of the Pacific Coast to Asia, and with Saskatchewanians, Newfoundlanders and Labradorians who want to develop their oil and gas and aren’t interested in having anyone in Ottawa cap how much they can produce. Let’s build alliances with Manitobans who want to ship oil in the port of Churchill… with Quebec and other provinces that want to decentralize our country and get Ottawa out of our business so that provinces and people can make their own decisions.”

Poilievre heavily criticized the federal government’s spending and policies of the last decade, including the increase in government costs, and he highlighted the negative impact of those policies on economic stability and warned of the dangers of high inflation and debt. He advocated strongly for a free-market economy, advocating for less government intervention, where businesses compete to impress customers rather than impress politicians. He also addressed the decade-long practice of blocking and then subsidizing certain industries. Poilievre referred to a famous quote from Ronald Reagan as the modus operandi of the current federal regime.

“The Government’s view of the economy could be summed up in a few short phrases. If anything moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

The practice of blocking and then subsidizing is merely a ploy to grab power, according to Poilievre, making industry far too reliant on government control.

“By blocking you from doing something and then making you ask the government to help you do it, it makes you reliant. It puts them at the center of all power, and that is their mission…a full government takeover of our economy. There’s a core difference between an economy controlled by the government and one controlled by the free market. Businesses have to clamour to please politicians and bureaucrats. In a free market (which we favour), businesses clamour to impress customers. The idea is to put people in charge of their economic lives by letting them have free exchange of work for wages, product for payment and investment for interest.”

Poilievre also said he plans to oppose any ban on gas-powered vehicles, saying, “You should be in the driver’s seat and have the freedom to decide.” This is in reference to the Trudeau-era plan to ban the sale of gas-powered cars by 2035, which the Carney government has said they have no intention to change, even though automakers are indicating that the targets cannot be met. He also intends to oppose the Industrial Carbon tax, Bill C-69 the Impact Assessment Act, Bill C-48 the Oil tanker ban, the proposed emissions cap which will cap energy production, as well as the single-use plastics ban and Bill C-11, also known as the Online Streaming Act and the proposed “Online Harms Act,” also known as Bill C-63. Poilievre closed with rallying thoughts that had a distinctive Western flavour.

“Fighting for these values is never easy. Change, as we’ve seen, is not easy. Nothing worth doing is easy… Making Alberta was hard. Making Canada, the country we love, was even harder. But we don’t back down, and we don’t run away. When things get hard, we dust ourselves off, we get back in the saddle, and we gallop forward to the fight.”

Cowboy up, Mr. Poilievre.

Maureen McCall is an energy professional who writes on issues affecting the energy industry.

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Alberta

Alberta and Ontario sign agreements to drive oil and gas pipelines, energy corridors, and repeal investment blocking federal policies

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Alberta-Ontario MOUs fuel more pipelines and trade

Alberta Premier Danielle Smith and Ontario Premier Doug Ford have signed two memorandums of understanding (MOUs) during Premier Ford’s visit to the Calgary Stampede, outlining their commitment to strengthen interprovincial trade, drive major infrastructure development, and grow Canada’s global competitiveness by building new pipelines, rail lines and other energy and trade infrastructure.

The two provinces agree on the need for the federal government to address the underlying conditions that have harmed the energy industry in Canada. This includes significantly amending or repealing the Impact Assessment Act, as well as repealing the Oil Tanker Moratorium Act, Clean Electricity Regulations, the Oil and Gas Sector Greenhouse Gas Emissions Cap, and all other federal initiatives that discriminately impact the energy sector, as well as sectors such as mining and manufacturing. Taking action will ensure Alberta and Ontario can attract the investment and project partners needed to get shovels in the ground, grow industries and create jobs.

The first MOU focuses on developing strategic trade corridors and energy infrastructure to connect Alberta and Ontario’s oil, gas and critical minerals to global markets. This includes support for new oil and gas pipeline projects, enhanced rail and port infrastructure at sites in James Bay and southern Ontario, as well as end-to-end supply chain development for refining and processing of Alberta’s energy exports. The two provinces will also collaborate on nuclear energy development to help meet growing electricity demands while ensuring reliable and affordable power.

The second MOU outlines Alberta’s commitment to explore prioritizing made-in-Canada vehicle purchases for its government fleet. It also includes a joint commitment to reduce barriers and improve the interprovincial trade of liquor products.

“Alberta and Ontario are joining forces to get shovels in the ground and resources to market. These MOUs are about building pipelines and boosting trade that connects Canadian energy and products to the world, while advocating for the right conditions to get it done. Government must get out of the way, partner with industry and support the projects this country needs to grow. I look forward to working with Premier Doug Ford to unleash the full potential of our economy and build the future that people across Alberta and across the country have been waiting far too long for.”

Danielle Smith, Premier of Alberta

“In the face of President Trump’s tariffs and ongoing economic uncertainty, Canadians need to work together to build the infrastructure that will diversify our trading partners and end our dependence on the United States. By building pipelines, rail lines and the energy and trade infrastructure that connects our country, we will build a more competitive, more resilient and more self-reliant economy and country. Together, we are building the infrastructure we need to protect Canada, our workers, businesses and communities. Let’s build Canada.”

Doug Ford, Premier of Ontario

These agreements build on Alberta and Ontario’s shared commitment to free enterprise, economic growth and nation-building. The provinces will continue engaging with Indigenous partners, industry and other governments to move key projects forward.

“Never before has it been more important for Canada to unite on developing energy infrastructure. Alberta’s oil, natural gas, and know-how will allow Canada to be an energy superpower and that will make all Canadians more prosperous. To do so, we need to continue these important energy infrastructure discussions and have more agreements like this one with Ontario.”

Brian Jean, Minister of Energy and Minerals

“These MOUs with Ontario build on the work Alberta has already done with Saskatchewan, Manitoba, Northwest Territories and the Port of Prince Rupert. We’re proving that by working together, we can get pipelines built, open new rail and port routes, and break down the barriers that hold back opportunities in Canada.”

Devin Dreeshen, Minister of Transportation and Economic Corridors

“Canada’s economy has an opportunity to become stronger thanks to leadership and steps taken by provincial governments like Alberta and Ontario. Removing interprovincial trade barriers, increasing labour mobility and attracting investment are absolutely crucial to Canada’s future economic prosperity.”

Joseph Schow, Minister of Jobs, Economy, Trade and Immigration

Together, Alberta and Ontario are demonstrating the shared benefits and opportunities that result from collaborative partnerships, and what it takes to keep Canada competitive in a changing world.

Quick facts

  • Steering committees with Alberta and Ontario government officials will be struck to facilitate work and cooperation under the agreements.
  • Alberta and Ontario will work collaboratively to launch a preliminary joint feasibility study in 2025 to help move private sector led investments in rail, pipeline(s) and port(s) projects forward.
  • These latest agreements follow an earlier MOU Premiers Danielle Smith and Doug Ford signed on June 1, 2025, to open up trade between the provinces and advance shared priorities within the Canadian federation.

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