Regulatory changes needed to advance grid decarbonization

Pembina's report shows outdated approaches to regulation remain a major barrier to grid modernization and decarbonization.

Provinces and territories manage their own systems, offering challenges and opportunities to meet decarbonization targets. Clive Schaupmeyer photo.

This article was published by the Pembina Institute on March 20, 2024.

CALGARY — A new report from Pembina Institute shows governments and regulators can enable decarbonization in today’s changing grid.

Directing Decarbonization: Examining regulatory barriers to a cleaner electricity grid identifies key barriers for advancing grid decarbonization and provides solutions for governments and regulators to adapt their regulatory structures to the modern-day grid.

The report shows outdated approaches to regulation remain a major barrier to grid modernization and decarbonization. To accelerate national achievement of net-zero electricity, each province and territory will need to pursue specific regulatory reform opportunities that are most effective for their own system.

Canada’s unique electricity system means there is no overarching federal body that oversees utility regulation. Provinces and territories manage their own systems, offering challenges and opportunities to meet decarbonization targets.

“Each province and territory manages and regulates their own electricity system, which makes mobilizing cohesive regulator action challenging,” said Grace Brown, Senior Analyst at Pembina. “With a cohesive approach to system planning, including clear strategic direction on grid-level emissions reduction objectives and mandates, system operators and regulators can adapt their systems to support achieving a net-zero grid.”

Transitioning to a net-zero grid will require significant changes to system infrastructure and operations. Including emissions reduction outcomes in regulators’ mandates would support enabling the necessary changes and provide clear direction for utilities to remain sustainable as the grid changes.

This report is the first in a series that aims to provide a roadmap of available regulatory reform opportunities and potential solutions, including case studies from other jurisdictions. The Rethinking Regulation to Decarbonize Canada series will examine Ontario, Alberta, and remote and Indigenous communities in British Columbia and the territories. These focus areas were selected due to their high decarbonization potential and unique circumstances that make them important case studies for understanding pathways to electricity system decarbonization across the country.

Visit the Pembina Institute’s website to download a copy of Directing Decarbonization: Examining regulatory barriers to a cleaner electricity grid.

 

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