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

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6 minute read

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

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Business

Land use will be British Columbia’s biggest issue in 2026

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By Resource Works

Tariffs may fade. The collision between reconciliation, property rights, and investment will not.

British Columbia will talk about Donald Trump’s tariffs in 2026, and it will keep grinding through affordability. But the issue that will decide whether the province can build, invest, and govern is land use.

The warning signs were there in 2024. Land based industries still generate 12 per cent of B.C.’s GDP, and the province controls more than 90 per cent of the land base, and land policy was already being remade through opaque processes, including government to government tables. When rules for access to land feel unsettled, money flows slow into a trickle.

The Cowichan ruling sends shockwaves

In August 2025, the Cowichan ruling turned that unease into a live wire. The court recognized the Cowichan’s Aboriginal title over roughly 800 acres within Richmond, including lands held by governments and unnamed third parties. It found that grants of fee simple and other interests unjustifiably infringed that title, and declared certain Canada and Richmond titles and interests “defective and invalid,” with those invalidity declarations suspended for 18 months to give governments time to make arrangements.

The reaction has been split. Supporters see a reminder that constitutional rights do not evaporate because land changed hands. Critics see a precedent that leaves private owners exposed, especially because unnamed owners in the claim area were not parties to the case and did not receive formal notice. Even the idea of “coexistence” has become contentious, because both Aboriginal title and fee simple convey exclusive rights to decide land use and capture benefits.

Market chill sets in

McLTAikins translated the risk into advice that landowners and lenders can act on: registered ownership is not immune from constitutional scrutiny, and the land title system cannot cure a constitutional defect where Aboriginal title is established. Their explanation of fee simple reads less like theory than a due diligence checklist that now reaches beyond the registry.

By December, the market was answering. National Post columnist Adam Pankratz reported that an industrial landowner within the Cowichan title area lost a lender and a prospective tenant after a $35 million construction loan was pulled. He also described a separate Richmond hotel deal where a buyer withdrew after citing precedent risk, even though the hotel was not within the declared title lands. His case that uncertainty is already changing behaviour is laid out in Montrose.

Caroline Elliott captured how quickly court language moved into daily life after a City Richmond letter warned some owners that their title might be compromised. Whatever one thinks of that wording, it pushed land law out of the courtroom and into the mortgage conversation.

Mining and exploration stall

The same fault line runs through the critical minerals push. A new mineral claims regime now requires consultation before claims are approved, and critics argue it slows early stage exploration and forces prospectors to reveal targets before they can secure rights. Pankratz made that critique earlier, in his argument about mineral staking.

Resource Works, summarising AME feedback on Mineral Tenure Act modernisation, reported that 69.5 per cent of respondents lacked confidence in proposed changes, and that more than three quarters reported increased uncertainty about doing business in B.C. The theme is not anti consultation. It is that process, capacity, and timelines decide whether consultation produces partnership or paralysis.

Layered on top is the widening fight over UNDRIP implementation and DRIPA. Geoffrey Moyse, KC, called for repeal in a Northern Beat essay on DRIPA, arguing that Section 35 already provides the constitutional framework and that trying to operationalise UNDRIP invites litigation and uncertainty.

Tariffs and housing will still dominate headlines. But they are downstream of land. Until B.C. offers a stable bargain over who can do what, where, and on what foundation, every other promise will be hostage to the same uncertainty. For a province still built on land based wealth, Resource Works argues in its institutional history that the resource economy cannot be separated from land rules. In 2026, that is the main stage.

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Dark clouds loom over Canada’s economy in 2026

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From the Fraser Institute

By Jock Finlayson

The dawn of a new year is an opportune time to ponder the recent performance of Canada’s $3.4 trillion economy. And the overall picture is not exactly cheerful.

Since the start of 2025, our principal trading partner has been ruled by a president who seems determined to unravel the post-war global economic and security order that provided a stable and reassuring backdrop for smaller countries such as Canada. Whether the Canada-U.S.-Mexico trade agreement (that President Trump himself pushed for) will even survive is unclear, underscoring the uncertainty that continues to weigh on business investment in Canada.

At the same time, Europe—representing one-fifth of the global economy—remains sluggish, thanks to Russia’s relentless war of choice against Ukraine, high energy costs across much of the region, and the bloc’s waning competitiveness. The huge Chinese economy has also lost a step. None of this is good for Canada.

Yet despite a difficult external environment, Canada’s economy has been surprisingly resilient. Gross domestic product (GDP) is projected to grow by 1.7 per cent (after inflation) this year. The main reason is continued gains in consumer spending, which accounts for more than three-fifths of all economic activity. After stripping out inflation, money spent by Canadians on goods and services is set to climb by 2.2 per cent in 2025, matching last year’s pace. Solid consumer spending has helped offset the impact of dwindling exports, sluggish business investment and—since 2023—lacklustre housing markets.

Another reason why we have avoided a sharper economic downturn is that the Trump administration has, so far, exempted most of Canada’s southbound exports from the president’s tariff barrage. This has partially cushioned the decline in Canada’s exports—particularly outside of the steel, aluminum, lumber and auto sectors, where steep U.S. tariffs are in effect. While exports will be lower in 2025 than the year before, the fall is less dramatic than analysts expected 6 to 8 months ago.

Although Canada’s economy grew in 2025, the job market lost steam. Employment growth has softened and the unemployment rate has ticked higher—it’s on track to average almost 7 per cent this year, up from 5.4 per cent two years ago. Unemployment among young people has skyrocketed. With the economy showing little momentum, employment growth will remain muted next year.

Unfortunately, there’s nothing positive to report on the investment front. Adjusted for inflation, private-sector capital spending has been on a downward trajectory for the last decade—a long-term trend that can’t be explained by Trump’s tariffs. Canada has underperformed both the United States and several other advanced economies in the amount of investment per employee. The investment gap with the U.S. has widened steadily since 2014. This means Canadian workers have fewer and less up-to-date tools, equipment and technology to help them produce goods and services compared to their counterparts in the U.S. (and many other countries). As a result, productivity growth in Canada has been lackluster, narrowing the scope for wage increases.

Preliminary data indicate that both overall non-residential investment and business capital spending on machinery, equipment and advanced technology products will be down again in 2025. Getting clarity on the future of the Canada-U.S. trade relationship will be key to improving the business environment for private-sector investment. Tax and regulatory policy changes that make Canada a more attractive choice for companies looking to invest and grow are also necessary. This is where government policymakers should direct their attention in 2026.

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