Yahoo Finance Power grids 'miles away' from ready, as clock ticks on Canada's net-zero goals
A looming global copper shortage and labour woes are some of the major challenges
Canada’s power grids are “miles away” from being ready for enough electric vehicles (EVs) to meet the federal government's net-zero goals.
It's a challenge compounded by labour and copper shortages, as well as uncertainty about where to invest.
That warning is courtesy of Jerome Leroy, vice-president of the Canadian business unit of global cable supplier Nexans. At its Montreal plant, the Paris-based company is stripping metal out of scrap cable to help ensure enough supply is available for its utility customers. It’s an attempt to solve one problem on a spectrum of challenges Leroy predicts over the coming years as Canada’s energy needs undergo massive change.
“If you take an average household, buying an EV doubles daily [electricity] consumption,” Leroy told Yahoo Finance Canada. "It's such a challenge."
Canada climbed four spots this year on an index ranking countries' "readiness" for a smooth transition to EVs, placing ninth as the federal government intensifies efforts to promote the sector. Data from S&P Global Mobility show zero-emission vehicle registrations, which include plug-in hybrids, rising to an all-time high of 10.5 per cent in the second quarter of this year.
Ottawa’s plan to achieve net-zero by 2050 includes targets for a net-zero electricity grid by 2035, plus a ban on the sale of internal combustion light vehicles that same year. Asked if these timelines are achievable, Leroy says he’s cautiously optimistic.
“To me, I like to say yes. [But] I’m still not convinced on how it can happen so quickly,” he said. “I know the attention is there. I know the plans are there. I think the money is understood. But the key challenge is to make it happen.”
In a report on Wednesday, Toronto-based DBRS Morningstar analyst Jaideep Nagpal says more renewable energy sources, extreme weather events, ageing infrastructure, and policy uncertainty are all making grids more complicated to operate and expand.
“Power systems (electricity generation, transmission, and distribution systems) will be forced to adapt to these challenges,” Nagpal wrote.
On top of that, Leroy adds the skilled contract labourers needed to expand the grid to meet rising demand are in short supply. Making matters worse, he predicts a global shortage of copper within the next two years.
“When I interact with some of the power grid managers, especially here in Ontario, what they are telling me is that between now and the next five years, they will need five new high-voltage lines installed. That’s just the beginning,” he said.
“They’ve got to connect new renewable sources like solar farms or wind farms to the grid. Then they need to carry the electricity from the high-voltage line down to lower voltage, and then the users. Today, I would say we are really miles away from that.”
Last year, Bruce Lourie, president of the net-zero-focused Ivey Foundation, told Yahoo Finance Canada that utilities were “afraid to own the risk of making wrong decisions." Leroy sees things moving more quickly now. However, given the time constraints, he expects utilities will need to “choose their battles.”
“Do we go for sourcing more renewable energy? Do we focus on the power grid itself? Do we focus on the charging stations that hundreds of thousands of EVs will need?” he asked. “At the end of the day, we cannot deal with everything, even though each of them are priorities.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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