A capacity expansion model to explore Canada’s electricity system decarbonization pathways
Date
2022-12-22
Authors
Arjmand, Reza
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Abstract
Canada has announced carbon reduction targets of 40-45 percent below 2005 levels by 2030 and net-zero emissions by 2050. To achieve these targets, climate plans are designed and introduced in which a significant transition in the energy system is proposed. Canada’s electricity system is one of the main sectors of the energy system expected to be affected by climate actions and experience a transformation from fossil fuel fired generation to renewable energies. To inform policy decisions and facilitate the transition of the electricity system, modelling and analysis of potential pathways are required. This thesis proposes an electricity system planning model entitled COPPER, Canadian Opportunities for Planning and Production of Electricity Resources, designed based on Canada’s electricity system characteristics to explore challenges and opportunities associated with the transition. COPPER is developed and deployed in three iterations to assess the impacts of (1) climate plans, (2) carbon pricing mechanisms, and (3) technological development on the electricity system transition. In the first iteration, the base COPPER is employed to analyze whether the policies announced in Canada’s latest climate plan are enough to achieve the set carbon reduction goals. The results highlight that although in-place policies are enough to reach the 2030 carbon reduction goal, they need to be strengthened to achieve net-zero emissions by 2050. This study models carbon pricing as a universal carbon tax for all provinces while Canada’s federal carbon pricing system is a flexible program allowing provinces to design their pricing systems. Therefore, in the second iteration, COPPER is enhanced to incorporate in place carbon pricing mechanisms across Canada. Through enhanced COPPER, we explore whether provincially designed carbon pricing systems improve carbon reduction and economic outcomes for provinces compared to the federal pricing system. Analysis shows that provincially designed carbon pricing mechanisms result in lower carbon emissions while their associated costs are less than the federal pricing system. Also, we flag that in order to achieve carbon reduction goals, the emissions benchmark for provinces with the output-based pricing system needs to be tightened. The version of COPPER used for the first and second iterations includes conventional generation types alongside wind, solar and battery storage. However, emerging technologies have the potential to facilitate the transition of the electricity system toward a cleaner system. Therefore, in the third iteration, to explore the extent to which emerging technologies contribute toward Canada’s electricity system decarbonization, COPPER is improved to incorporate combustion hydrogen, natural gas fire with carbon capture and storage, small modular reactors, offshore wind, and geothermal. Through exploring scenarios, we find that although the penetration of these technologies in the future mix of Canada’s electricity system is uncertain, their contribution can be significant under some scenarios. Low- or non-emitting thermal technology types such as natural gas with carbon capture and storage and hydrogen combustion have the highest share of capacity among modelled emerging technologies.
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Keywords
Capacity expansion, Canada’s electricity system, Renewable energy, Carbon reduction policies, Carbon pricing mechanisms, COPPER, Hydrogen, offshore wind, emerging technologies