Regulatory pathways to a net-zero electricity system in Alberta

Decarbonizing electricity generation is an important step towards overall reductions in greenhouse gas emissions. Canada generates over 80% of its electricity from non-emitting sources and has a stated goal of net-zero electricity to support ambitions of net-zero emissions by 2050. Some provinces pose significant challenges to this goal, notably Alberta, which is the third-largest grid in the country and relies on fossil fuels for 80% of its electricity generation. This work uses an optimization capacity expansion and dispatch model to generate net-zero transition pathways for Alberta’s electricity system, which are novel for their consideration of Alberta’s energy-only market and for their inclusion of significant federal and provincial regulatory policies that affect supply options. Results indicate that, between 2023 and 2045, current policies could reduce electricity-related greenhouse gas emissions (excluding industrial cogeneration) by 83% and by 93% with the inclusion of draft federal electricity regulations. Results present a cost-optimal path distinct from existing literature that pairs tripling wind capacity with 2.7 GW of carbon capture and storage retrofits to existing units and 3.2-4.4 GW of low-use dispatchable gas and/or hydrogen capacity. Existing regulations that allow carbon credit trading, as the carbon price is scheduled to increase to 170 CAD/t CO2e by 2030, drive significant early reductions, which are enhanced by federal investment tax credits. • Optimal modeling shows major electricity GHG cuts under Alberta’s current regulations. • Expansion of wind and low-use peaking generation can decarbonize Alberta’s electricity. • Strengthened industrial carbon pricing enables cost-effective GHG reductions. • Carbon capture and storage may help decarbonize fossil-fuel-based electricity systems.