Pathways to Net-Zero Electricity in Alberta Under Alternative Policy Scenarios

Abstract

Canada has set a goal to reach net-zero electricity. For Alberta, this remains a significant challenge. Although Alberta has achieved considerable greenhouse gas (GHG) reductions by eliminating coal and expanding its renewable fleet, a unique electricity market and the dominance of natural gas-fired generation, which accounted for over 80% of generation in 2023, has created uncertainty surrounding transition timelines and feasibility. Policies including provincial carbon pricing and carbon credit generation, federal investment tax credits to reduce the cost of low GHG projects, and a draft federal standard to limit annual GHG emissions from fossil fuel plants, will impact future electricity supply. This work uses a long-term capacity expansion and dispatch model to assess how alternative policies could shape Alberta's pathway to net-zero electricity between 2023 and 2045 within its competitive market. Results show a 75% GHG reduction by 2030 as a result of existing GHG policies. Scenarios project that tripling Alberta's 2024 wind capacity, retrofitting 75% of existing combined-cycle gas units with carbon capture, and low-use dispatchable thermal generation could enable annual GHG emissions of less than 3 MtCO2e by 2035. Draft federal standards could enable further reductions to 1 MtCO2e of annual GHG emissions by 2045. With electricity GHG emissions down from 29 MtCO2e in 2020, the goal of net-zero could be within reach. The timing and capacity of new wind and carbon capture retrofits was dependent on the value of carbon credits, removing carbon credits entirely may increase cumulative GHG emissions by 142 MtCO2e. Overall, modelling suggests existing technology can be deployed at rates already seen in Alberta to approach net-zero, but GHG reductions depend on the policy framework over the coming decades.