In the ongoing race to replace fossil fuels with clean energy on the electrical grid, a myriad of competing demands has emerged. These include electric vehicles (EVs), home heating, data centres, artificial intelligence (AI), cryptocurrency mining, liquefied natural gas (LNG), and hydrogen production. The challenges of planning and expanding power grids have never been straightforward or inexpensive. Today, they are becoming increasingly urgent as the world strives to reduce greenhouse gas emissions and electrify large sectors of the economy, particularly transportation.
The primary goal for clean power is to eliminate fossil fuels from the grid, creating electricity with minimal emissions. This strategy is crucial for achieving net zero emissions across the economy by 2050.
This aim is closely linked with reducing fossil fuels in other areas, such as transportation and home heating. It’s important to note that emissions from the oil sands, passenger transportation, and buildings each represent about one-eighth of Canada’s total emissions.
As the demand for power grows, governments face difficult choices. One area of contention is electric vehicles. Skeptics often blame EVs for straining the power grid during periods of heavy demand. However, a recent analysis by University of Calgary professor Blake Shaffer found that adding one million EVs to Alberta’s grid would only increase total demand by 3.5%. Another study showed that lower rates for charging EVs during off-peak hours could be highly effective. Moreover, as technology advances, some EVs could supply power to the grid during peak demand, suggesting that a fleet of a million EVs in Alberta could help stabilize the grid.
On the other hand, cryptocurrency mining has been criticized for its high energy consumption with little societal benefit. Provinces such as Quebec, Manitoba, New Brunswick, and British Columbia have restricted or banned new grid connections for crypto mining. In late 2022, B.C. paused new connections, facing power requests exceeding the output of two Site C dams. This spring, B.C. passed legislation allowing the government to prohibit such connections.
Data centres, which support services like Netflix and cloud storage, and AI also have significant power demands. In 2022, data centres in Ireland consumed almost one-fifth of the country’s power, partly due to companies like Google. AI will likely increase these demands. Goldman Sachs predicts that data centres and AI could account for 3.5% of global power usage by 2030, up from 1.5% today. There is potential for improved efficiency, as better-designed data centres and AI systems can do more with less power.
Green hydrogen, a clean fuel, poses another challenge with its extreme power needs. A proposed $2-billion project in B.C. would require almost all the output of the Site C dam, highlighting the tough decisions governments must make regarding power allocation. Similarly, the LNG industry faces significant power demands. B.C. aims to reduce emissions from LNG, with projects like the Cedar LNG planning to use power equivalent to one-sixth of Site C’s output. The potential expansion of Royal Dutch Shell’s LNG Canada project would require even more power, raising concerns about the upfront costs to publicly owned BC Hydro.
Expanding the power grid has always been a complex task, and it is more challenging than ever. The effort is complicated by the need to balance various competing demands for electrical resources, making strategic planning and prioritization essential for a sustainable energy future.
“Amid growing demands for clean power, governments face tough choices in balancing the needs of EVs, data centres, AI, and more. Explore the future of energy in this comprehensive analysis.”
