Energy Transition Strategy

September 24th, 2021 in 2017-2021 Term, Open Transition

A note to Edmontonians: this is one of the transition memos that I developed for the next Council. In making them public, I hope that they are of use to candidates and voters alike and contribute to a productive discussion about Edmonton’s future.

We are in a climate emergency. We need to adjust our energy strategy to protect our economy, our biodiversity and our lives. COVID-19 has shown us that we’re able to adapt fairly quickly when there is an emergency — climate change is an emergency and we’ve never needed to adapt more quickly and efficiently.

Cities have an enormous role to play: we have the talent and the capacity to innovate and implement change. The Edmonton Declaration:

Engages all levels of government to recognize the immediate and urgent need for action that will limit global warming to 1.5 degrees celsius;
Recognizes that cities face some of the most significant impacts of rising GHG emissions and bear much of the costs for adaptation and mitigation;
Reinforces the importance and role of cities in achieving the targets in the Paris Agreement;
Calls on the scientific community and other levels of government to provide better data and tools for science-based decision-making; and
Asks cities to look beyond their borders at the impact of consumption on GHG emissions

Taking decisive action on climate change at the municipal level has been a priority for this Council. And as the climate crisis increases in urgency, the next Council must be ready to make tough decisions and ensure this remains a priority in all decisions. This will include a focus on living within the carbon budget and measuring future decisions against that budget.

Why

Climate change is happening, and it affects us. We are already seeing the consequences of climate change after experiencing another smokey summer here in Edmonton due to the wildfires on the west coast and overseas. We don’t have to look much further than the disastrous Calgary floods of the past few years, the wildfires that saw Northern Albertans take refuge at Northlands, the increasingly intense summer storms we face, or the potholes caused by Edmonton’s more frequent freeze and thaw cycles. Like it or not, the problem is at our doorstep today. And if we choose to not act to mitigate the local effects of climate change these problems will only become exacerbated, to say nothing of global food security challenges and climate refugee pressures.

The City asked Edmontonians about their perceptions and attitudes towards climate change and found that 75 per cent agree that we need to take action now. Municipalities have a role to play in all this. For too long, cities didn’t have a seat at the table when it came to addressing climate change. But it has been recognized that in order to meet the targets of the Paris Agreement, cities need to adopt strong adaptation and mitigation strategies and programs. And in 2018, the Global Covenant of Mayors for Climate and Energy created the Edmonton Declaration, which calls on the science community, national and sub-national governments, and global cities to aggressively prioritize the needs of cities to address these impacts and support a just transition to a low carbon future. It was ultimately adhered to by organizations representing thousands of cities like the US Conference of Mayors, as well as direct signatures by mayors across the globe.

In keeping with the declaration, we have updated our modeling and forecasting. The cost of doing nothing is greater than if we take action now. If we don’t invest in reducing emissions and adapting, by 2050 we can expect to see $8 billion in additional societal costs annually, a reduction of $3.2 billion to our GDP annually, and 22,000 additional climate-related health impacts within Edmonton. Between 1983 and 2008 Alberta averaged around $100 million a year in catastrophic losses due to extreme events, and from 2009 to 2012 Alberta has averaged $673 million a year.

Progress

In April 2021, City Council voted 12-1 to approve the revised Community Energy Transition Strategy (CETS), which outlines how Edmonton will reduce greenhouse gas emissions. The previous Energy Transition Strategy was initially approved in 2015, but in August 2019 City Council declared a climate emergency and asked Administration to update the strategy to be more ambitious and to align with the Paris climate agreement. I encourage everyone to read the whole strategy, but I will provide a few key points here.

Filmed in April 2021 after the revised Community Energy Transition Strategy was approved

The strategy presents a 30 year vision with a strategy and action plan for the next ten years. It’s about accelerated and transformational change that will reimagine our energy systems and will transform our community and economy.

There are 105 actions with various impact levels and funding requirements. The targets are our boldest to date. The plan recognizes the urgency of the challenge, as well as the economic opportunity that it creates, and presents actions at a pace and scale that is more accelerated than the last strategy.

There are four pathways that are areas of transformative action. They are interconnected, and all of them are required to meet Edmonton’s energy transition goals.

A Renewable and Resilient Energy Transition will attract the next generation of energy innovators to the region while transitioning Edmonton to 100% decarbonized energy.
Emissions Neutral Buildings will be highly energy efficient, powered by renewable energy, and create a thriving energy efficiency industry.
Low Carbon City and Transportation will build on the transformative city-building efforts outlined in The City Plan and those that are currently underway, such as the Blatchford carbon neutral development. As we strive toward a future with zero emission vehicles, our electric vehicle charging network will need to be significantly expanded over the next decade. The City of Edmonton has a growing fleet of electric buses, currently with 40 in its arsenal, and 20 more on order. In February, the Federal Government announced the Permanent Transit Fund which (if matched by the Government of Alberta) will allow for full buildout of the LRT network, including heading northwest and further south into Heritage Valley.
Carbon Capture and Nature Based Solutions will help catalyze innovative technology and efforts to make a greener and healthier city. This could also be our competitive advantage to attract significant investment.

The City of Edmonton is adopting a Carbon Budgeting Framework to integrate the implications from emissions into city governance and decision making, to track emissions for civic and corporate projects and policies, enable transparent environmental reporting and build carbon literacy in the organization. We need to live within the means of our carbon budget just like we must live within our fiscal constraints; fortunately, adhering to a carbon budget will save money and reduce disaster related costs over the long haul.

Challenges

Challenge: cost

One of the greatest challenges in tackling climate change is the financial costs required to invest in clean energy, retrofit and green development. The transition could require $42 billion dollars of private and public investment over the next 30 years. With $2.4 billion a year in the next 10 years. It’s estimated that a targeted City investment of $100 million annually, with matching funding from the provincial government and the federal government will be required to catalyze private investment.

Multiple levels of government could catalyze this investment by setting investable policies, removing barriers, de-risking private investment and investing in local green infrastructure.

Challenge: regional alignment

Edmonton’s future is closely linked to that of our regional neighbours, and one challenge that future Councils will need to address is the risk of misalignment with the rest of the region. We will need to continue to ensure that we are fighting climate change together, building a strong regional brand around energy transition, and not undercutting each other when it comes to green building standards.

There are two levels of competition to think about here. First, there is how the Edmonton Metro Region will be competing in the energy transition against other city regions, just as we do in other economic sectors. This is about harnessing our collective strengths and establishing a clear and consistent regional brand. Second, there is local competition, which is about permits, taxes, building standards.

Local competition can be good, but in the energy transition context, it is important to avoid a ‘race to the bottom’. To ensure that we are working together to our shared benefit, the Edmonton Metropolitan Region Board passed the following motion in June 2021:

That the Edmonton Metropolitan Region Board direct its Administration to work with regional CAOs on addressing the following Environmental, Social and Governance (ESG) opportunities, with a report back to the Edmonton Metropolitan Region Board following the 2021 Municipal Elections:

Identify the steps needed to coordinate regional standards for climate resilient communities and building energy efficiency, and coordinate approaches to support job creation through energy efficiency and resilient construction and retrofits;
Explore the concept of a region-wide carbon budget and climate risk assessment and how the board could incorporate these into the Growth Plan review and implementation plans, so the region can align to Canada’s commitment to achieve net-zero emissions by 2050.

The other challenge is when the work moves too slowly. We cannot afford to wait.

Opportunities

The Energy Transition Strategy is a jobs plan. Future economic opportunities will reside in low carbon technologies and processes, and low emissions cities will be positioned to take advantage of those opportunities. Some estimates have said the energy transition is a $90 trillion dollar global opportunity by 2030. Edmonton is at a competitive advantage if we pursue deeper, more ambitious emissions reductions targets. This could be our next great opportunity and support economic diversification. Or, we could get left behind.

Here in Alberta, we have long been energy problem solvers. The Edmonton Metropolitan Region has a competitive advantage in hydrogen derived from natural gas, and in 2020 the Edmonton Metro Hydrogen HUB was formed.

To create a viable Canada-wide hydrogen economy, hubs across the country will need to produce hydrogen based on their unique regional strengths and natural resources. For example, provinces with low-carbon electricity (from hydropower, nuclear or renewables) will produce green hydrogen, while provinces with low-cost natural gas and the geology suitable for carbon capture and storage, like Alberta, will produce blue hydrogen. What matters is the carbon intensity of the hydrogen, and with effective carbon capture, and the right technology like Air Products is deploying on its $1.3B plant, ‘blue’ hydrogen can be produced on a net-zero carbon basis here. Canada is one of the lowest cost places to make hydrogen regardless of how it is made, giving us a global competitive advantage. Blue hydrogen can be made in the Edmonton Region for about half the wholesale cost of diesel. Green hydrogen can be made in Canada for about the same price as wholesale diesel. Scaling up both accelerates the availability of hydrogen for our own energy transition, as well as for global exports that could rise to the $100B per year levels.

The region is well-suited to be Canada’s first hydrogen hub because of its access to low-cost natural gas, existing experience in hydrogen production and carbon capture and storage, vast network of pipeline infrastructure, large talent pool of engineers and tradespeople, and engaged economic development, government, Indigenous and academic leaders. It is also home to suitable and existing sites for carbon capture, storage and utilization and the world’s largest CO2 pipeline.

Implementation of the Energy Transition Strategy isn’t just important for the future of the energy industry, but Edmonton’s talent-driven economy more generally. This is an opportunity to build our ESG bonafides to attract and retain city-building talent for the coming decades. Whether directly working in the energy transition or not, folks will be looking for the low-carbon lifestyles that Edmonton will be in a position to provide.

A big idea

Imagine you are looking for a house, and you are trying to figure out how to buy a place that is energy efficient and won’t cost you a fortune in heating bills, particularly as the carbon price increases in the coming years. Folks in that situation today are working from an information deficit. This is why I believe it is time for mandatory energy labelling for all homes.

This would be in the best interest of consumers, but also in the best interest of our shift to highly energy efficient buildings. Transformation will happen faster when consumers have the information they need to align their purchase decisions with their values and their long-term interests.

Key Partners

Further considerations

Do you think we need to balance our carbon budget? Do you think the revised Energy Transition Strategy goes far enough? Where do you think a municipality’s greatest responsibility is in tackling climate change?

Read other transition memos

Why