Fraser Institute: ‘Extremely Costly’ to Coal-Fired Power Plants with Wind, Solar


Replacing coal-fired power in Canada with renewable energy will impose significant costs on Canada’s economy while only making modest reductions in greenhouse gas emissions, finds a new study released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Despite what advocates claim, renewable power – including wind and solar – isn’t free and comes with only modest benefits to the environment,” says G. Cornelis van Kooten, economics professor at the University of Victoria, senior fellow at the Fraser Institute, and author of Canadian Climate Policy and its Implications for Electricity Grids.

The study finds that shutting down coal-fired power plants – which accounted for 9.2% of electricity generation in Canada in 2017 – and replacing them with wind and solar would reduce Canada’s greenhouse gas emissions by 7.4% but increase the costs of operating the electricity grid by between $16.8 billion and $33.7 billion a year – or 1 to 2% of Canada’s annual GDP – depending on the weather impacting wind and solar power.

The study explains that part of the increased cost is a result of having to build and maintain backup power from natural gas to supply electricity when wind and solar are not available.

Crucially, the 7.4% emissions reduction would fall short of the federal government’s target – to be 40% to 45% below 2005 emissions levels by 2030.

“Reducing Canada’s greenhouse gas emissions by replacing coal-fired power with wind and solar would prove extremely costly, and still wouldn’t meet the federal government’s climate targets,” van Kooten adds.

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto and Montreal with ties to a global network of think-tanks in 87 countries.

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Peter Besenovsky
Peter Besenovsky
2 years ago

Disclaimer that I have not read the report, only this article, but does the Fraser Institute think-tank therefore recommend maintaining the status quo of coal-fired generation? According to the SEIA the average annual growth of solar has been 42% over the past decade and the addition of energy storage systems is facilitating the time shifting of solar and wind energy. Granted there may be a cost to adding renewable variable energy resources to the electrical grid, but given the dramatic and unpredictable cost of dealing with the material negative impacts of climate change, it is far less than the cost… Read more »