Four of the five Canadian provincial electrical grids we surveyed are much cleaner than their comparable American counterparts. Manufacturers with Environmental Social and Governance (ESG) carbon targets, may prefer these jurisdictions when making investment and operating decisions.
Clean electricity is generated from sources that do not release harmful air pollutants such as carbon dioxide (CO₂). This is an important consideration for the increasing number of manufacturers that track and report carbon emissions in their ESG reports.
The carbon emissions intensity of electricity grids varies widely across North America. Jurisdictions that rely on zero-carbon fuel sources such as hydro, nuclear, wind or solar, fare far better than jurisdictions that rely more heavily on CO₂ producing fuels such as coal and natural gas.
The findings come from reviewing 2019 data contained in National Inventory Reports provided by Environment and Climate Change Canada and from the United States Environmental Protection Agency (EPA) e-Grid tables. We reviewed eight jurisdictions, five in Canada and three in the United States.
Quebec and Manitoba have some of the lowest carbon emissions per kilowatt hour (kWh) anywhere on the continent – less than 2g CO₂e/kWh. British Columbia at 20g, and Ontario at 30g, follow closely behind. California and New York both emit 175g while Ohio emits 565g. Bringing up the rear is Alberta, at a whopping 670g CO₂e/kWh.
Relying on both coal and gas, Ohio and Alberta produce the higher carbon emissions of the jurisdictions we studied. For the New York and California grids, natural gas is the main driver of emissions.
British Columbia, Quebec and Manitoba
All three provinces have made large, long-term investments in hydroelectric generation. Hydro supplies over 90% of their power. Renewable energy provides only 3%. In 2019, BC also generated 3% of its power from natural gas.
In 2005, Ontario mandated the retirement of its coal plants. At the time, coal provided 19% of its power. The action dropped Ontario’s carbon emissions from 250g/kWh to just 30g/kWh. The decline in coal was replaced by more nuclear and renewable generation – both went up by 9%. Ontario is the only grid, out of the eight studied, to get more than 50% of its power from nuclear – nearly double the share in the next closest – New York.
The carbon intensity story in New York comes down to choosing natural gas over nuclear. Both grids get a similar proportion of their power from hydroelectric and renewables. The big difference is New York generated nearly 40% of its power from natural gas in 2019 compared to 6% in Ontario, while Ontario generated 60% of its power from nuclear compared to 34% in New York. That single difference means the carbon intensity of power in New York is five times higher than that of its northern neighbour.
California leads the jurisdictions with renewable generation at 29%. Even in 2005, California was the leader, getting 12% from renewables. California and Ohio have the largest proportion of natural gas generation – 43%.
Ohio has had success taking a transitional approach to reducing grid emissions. Reducing coal generation from 87% in 2005 to 39% in 2019 was the key. Natural gas took up the slack, growing from just 2% of production in 2005 to 43% now. The large majority of Ohio’s non-carbon emitting generation comes from nuclear – 14%.
The carbon intensity of Alberta’s grid dropped significantly between 2005 and 2019. But to de-carbonize, it always had the farthest to go. It still does. Three quarters of Alberta’s power came from coal in 2005. That is now down to slightly less than half. Natural gas provides 40%. Renewables supply the balance – about 7% in 2019.
Manufacturers that operate in higher-carbon emission jurisdictions can expect substantial changes to their local grids. All the higher emitting jurisdictions studied are less carbon-intensive now than they were in 2005. More stringent regulatory emissions requirements are motivating grid operators to phase out coal in favour of renewable, lower- and zero-carbon emitting fuels. Net-zero carbon emissions by 2050 is the goal. When evaluating investment opportunities to meet ESG targets, companies should take these trends into account.
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