COLUMN: From the Hill -- G20 Energy
By Dick Cannings MP
Last week I travelled with Jim Carr, Canada’s Minister of Natural Resources, to the G20 energy meetings in Argentina. The meetings are a mix of reports from the G20 countries and of presentations by world experts about the state of energy markets and future energy demand.
The main theme of the talks was the “grand transition” to a low carbon future. While there are political pressures to make this transition, pressures driven in part by the Paris agreement, most of the action on this front is being driven by pure economics.
Renewable energy systems have very quickly become cheaper than fossil fuels. A Brazilian expert pointed out that in his country natural gas power plants cost three times more than wind farms and two times more than solar panels. He predicted that much of the world’s energy will shift out of fossil fuels to renewables in the next 10 years. The Mexican energy minister presented similar data on cheap renewables, the 20-year contracts for power generation dropping from $70/MWh to $20 over the last two years alone.
The United Kingdom representative used three sayings to illustrate his country’s achievements in reducing emissions. The first was “walk the walk”, pointing out that the UK had created legally binding reduction plans that had already resulted in a 40 percent reduction in carbon emissions. The second was “have your cake and eat it,” referring to the fact that emission reductions are not economically painful—they have created more than 450,000 good jobs in the clean energy sector in the UK. And the third was “put your money where your mouth is;” the UK has spent almost $4.5 billion CDN on clean tech innovation, and almost $2 billion CDN on electric vehicle infrastructure alone.
The Chinese minister stated that his country is moving as fast as possible from coal directly to renewables, and stated that “there is no such thing as clean fossil fuels.” He brought up a theme repeated by others in the meeting that of increasing trade in clean energy, and predicted that by 2025, China will have an ultra-high voltage electrical distribution system for transporting clean energy throughout the country, and that will spread across Asia by 2035 and around the world by 2050.
The German energy director echoed that idea of international clean energy trade, and as an example suggested that Chile could create solar energy in the Atacama Desert and sell it to intercontinental markets in the form of liquid hydrogen.
There are obviously still challenges out there. Rick Perry, the US Secretary of Energy, claimed that his country will be battling climate change through clean coal, nuclear energy and reductions in regulations. On the other hand, the California electrical system operator noted that energy policy in the United States is led by the individual states—even conservative Texas is producing huge amounts of wind power. But when the moderator asked him the question asked of each participant—“What keeps you awake at night”, he simply said “the federal government.”
Canada needs to take these messages to heart. Like the UK, we need to walk the walk and make serious investments in the transition to renewables and the electrification of our transport systems. Like China, we need to find ways to move our clean energy across the country instead of simply selling it to willing markets in the United States. The transition to clean, renewable energy is coming fast, and Canada is particularly vulnerable because of its reliance on the oil and gas sector for good jobs. We have to plan quickly for a transition that will create well-paying jobs in the clean energy sector across the country, and we have to be prepared to invest money to do that.
