Energy Projects and Net Zero by 2050: Can We Build Enough Fast Enough?

There are many challenges to realizing the goal of net zero by 2050. Increasingly, it is becoming apparent that one of the most important lies in the investment environment, specifically, the need for policy and regulation that support investment in and timely decision-making for all the new energy infrastructure Canada needs to transform its energy system and the broader economy.

Reforming policy and regulation begins with an understanding of the various steps that any infrastructure project must go through in Canada. This helps to uncover challenges and obstacles that hinder progress and, importantly, helps to develop solutions to investment environment challenges.

This study examines all types of energy projects, including renewable, oil and gas (including CCUS), and nuclear energy, and encompassing production, transportation, and storage to expand understanding of the various steps of formal public sector decision-making processes for energy infrastructure projects, set in the context of the full project cycle.

The first component involved a look back through a literature review and analysis of 18 projects located across the country over the last twenty years. Each profile, based on information in the public domain, considered the project's timeline from inception to in-service (or cancellation/rejection where this was the outcome). A key finding is that the entire policy and regulatory system shapes project timelines.

The second component involved a look forward through confidential interviews with close to three dozen senior leaders, principally from companies, trade associations, Indigenous organizations, and the finance and investment community, to identify impediments to future projects and ideas for reforming various public approval systems.

The most important finding is that the challenge of rebuilding the energy system over the next two and a half decades is much bigger than a question of regulatory reform. It is also about more than just timeliness of decision-making: it involves clarity and predictability of current and future policy and regulatory frameworks and processes. There was broad consensus among interviewees that Canada currently lacks the investment environment needed to build enough fast enough.

The recommendations for reform fall into two sets of packages: both within and beyond the regulatory system. Indeed, regulatory reform, although essential, is only part of the solution to the challenge of building projects to meet the goal of net zero by 2050. Of note, the diverse roles of Indigenous communities and the variety of issues to be addressed are woven throughout all of the packages. 

Action within the regulatory system is complex but tractable and should focus on governments providing policy direction for projects while regulators focus on assessments; improving intergovernmental relations and better delineating federal and provincial roles; changing organizational culture where needed to support the need for new projects; and strengthening intra-governmental coordination.

Efforts beyond the regulatory system concern the critical need for predictability and clarity of policy, strategy and vision across jurisdictions; establishing planning processes for the energy future; and building the capacity of public, private and civil society organizations to contribute to achieving net zero.

• Michael Cleland, Positive Energy Executive-in-Residence
• Monica Gattinger, Positive Energy Chair

With:

• Rafael Aguirre, Postdoctoral Fellow
• Patricia Larkin, Project Coordinator
• Julien Tohme, Doctoral Candidate