But in the small Bavarian town of Geretsried, near Munich, a new geothermal plant is quietly signalling a paradigm shift for the industry, as recent technological advances have opened up new territories, enabling the production of clean, baseload power.

Calgary-based Eavor Technologies, a pioneer in what’s being called “next-generation” or “advanced” geothermal, is part of a small pool of start-ups that is borrowing technical expertise gleaned from the oil and gas industry to drill for heat far below the earth’s surface and send it back up as a source of low-carbon energy.

“It has one of the smallest footprints for power generation of any technology,” says Steve Grasby, president of Geothermal Canada, a non-profit that supports research and development of geothermal projects. “It’s also highly reliable; the power is always there. And it’s easy to ramp up and down as needed, unlike nuclear, which needs to run all the time.”

Eavor’s latest milestone was achieved on December 4, 2025, when it became the first geothermal company to deliver electricity to a commercial power grid at its Geretsried facility, demonstrating that its “closed loop” system is capable of supplying emission-free power at scale. For this project representing the culmination of a decade’s worth of research and development, Eavor bored sealed pipes nearly 4.5 kilometres into the earth, connecting more than 300 kilometres of boreholes underground. Now completed, the eight-megawatt electric and 64-megawatt thermal project produces enough electricity for 8,000 homes and enough heat for 120,000 homes. Another Eavor project is in the works in the Netherlands.

If geothermal is ever going to scale, it has to be a repeatable process you can do over and over. We think we’ve got the best way to do that.

– John Redfern, CEO, Eavor Technologies

The U.S. Air Force has also shown interest in advanced geothermal energy supply. In 2023, the Air Force began planning for two prototype-level geothermal projects at Mountain Home Air Force Base in Idaho and Joint Base San Antonio in Texas, awarding the Texas base project to Eavor.

Eavor believes its technology has the potential to generate power almost anywhere, and the firm has attracted hundreds of millions of dollars in venture capital with the promise of truly ubiquitous, dispatchable renewable energy. The venture capital arms of BP and Chevron have invested some US$40 million in Eavor, and, through the Canada Growth Fund, the federal government has funnelled $90 million to the company. Eavor has used investors’ capital on research and development to continue to scale up the number and size of its projects and trim costs.

Eavor is not the only player in the hydrothermal sector that is exploring new ways to dig for heat. Texas is a hub of innovation in next-generation geothermal power. Prominent start-ups, such as Sage and Fervo Energy, are based in Houston, which shouldn’t be surprising given that energy demand is surging in Texas, where Meta, OpenAI and Microsoft are building huge data centres.

In general, geothermal is becoming a growth sector as new drilling capabilities and other advances now enable projects to be developed across a much wider range of geologic settings than ever before.

What is geothermal energy and how does it work?

For more than a century, people have been using steam generated by deep underground water reservoirs that are heated by the earth’s mantle to power generators. Iceland and New Zealand get about 20% of their electricity from geothermal thanks to their volcanic landscapes, which host shallow, highly permeable underground heat reservoirs. Only a few sites on the planet, however, contain the geological conditions to support a geothermal system at scale, and geothermal contributes only a very small share of the world’s overall supply – approximately 16 gigawatts, representing less than 1% of total capacity installed worldwide. (The only commercial geothermal power plant in Canada is in Alberta, the Swan Hills Geothermal Power Project.) By comparison, wind and solar together supplied 17.6% of global electricity in the first three quarters of 2025, pushing the total share of low-carbon energy sources to 43%.

With the rise of next-generation technologies, geothermal could significantly raise its contribution to the world’s supply of renewable power. Key to both “enhanced” geothermal and “advanced” geothermal systems is that neither requires natural underground reservoirs. All that is required is the heat of the earth, which is available nearly everywhere.

Enhanced geothermal uses the fracking techniques of the oil and gas sector to drill into hot rock and create permeability.

Eavor’s advanced geothermal system forgoes fracking in favour of a closed-loop system. Started by veterans of the oil sector, Eavor has designed a kind of underground radiator where fluid is circulated through a closed loop of vertical pipes that connect a network of horizontal pipes deep within the earth. Absorbing heat from the rock, the temperature of the working fluid rises and is then pumped up to ground level to generate heat and power.

“If geothermal is ever going to scale,” Eavor’s chief executive, John Redfern, told The New York Times in 2023, “it has to be a repeatable process you can do over and over. We think we’ve got the best way to do that.”

Low risk, high rewards

Besides the scarcity of suitable locations, geothermal has long been hampered by its high capital costs, the bulk of which are spent on drilling, which can eat as much as half the cost of a project.

Still, as greater efficiencies are realized, costs are coming down – by an impressive 22% from 2021 to 2022 alone. Some systems are even cost-competitive with gas plants and cheaper than coal. Moreover, once built, geothermal is much cheaper to operate than other dispatchable sources like coal, gas and nuclear.

While some experts believe it possible to create geothermal energy almost anywhere, Grasby does offer a caveat. “You can’t really do this just anywhere. In some places, you may have to drill much deeper to get to the heat you need. Rocks vary in thermal connectivity; some rocks have high connectivity and others are low in connectivity. You need a certain temperature to make the system work.”

In Canada, as well, permitting and regulatory regimes have yet to catch up to the latest developments in the geothermal world. According to Grasby, only three provinces currently regulate geothermal energy production: Alberta, British Columbia and Nova Scotia.

Updates to regulatory frameworks may yet emerge should the momentum behind geothermal continue, especially given that hydrothermal offers round-the-clock, on-demand power, unlike wind and solar.

New analysis from the International Energy Agency forecasts next-generation geothermal as representing up to 800 gigawatts of clean electricity capacity by 2050 – roughly 50 times the world’s current geothermal capacity of around 16 gigawatts.

Analysts at Ember, a U.K.-based energy think tank, anticipate that geothermal will quickly accelerate, reporting that by 2030, nearly 1.5 gigawatts of new capacity is expected to come online each year globally, three times the level added in 2024. By 2050, geothermal could meet up to 15% of the growth in the world’s demand for clean power.

As a net-zero economy looks increasingly precarious, the latest geothermal breakthroughs offer a solution to the supply of firm, low-emission energy thanks in large part to the tools and expertise that originated in the oil field.

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post A breakthrough geothermal project in Bavaria  appeared first on Corporate Knights.

But in 2022, a controlled fusion reaction conducted in a California laboratory produced – for a fraction of a second – net-positive energy, thus turning the dream of endless, carbon-free energy into a possibility. A handful of start-ups intend to capitalize on that possibility, including B.C.-based General Fusion. After more than two decades of research, General Fusion says its “first of a kind” fusion power plant will be generating electricity by 2035.

Venture capital has responded enthusiastically to the new arrivals, with money surging into the space. In 2025, fusion start-ups raised $2.6 billion (all values in U.S. dollars unless otherwise noted) according to the Fusion Industry Association.

Earlier this year, General Fusion announced that it will go public as part of an intended merger with Spring Valley Acquisition Corp. III, headquartered in Dallas, Texas. The B.C. company has raised more than $400 million to date, including support from governments in Canada, the United States and Britain. General Fusion was valued at $600 million prior to the transaction; the deal with Spring Valley would provide it with up to $335 million in additional funding.

Fusion is the most exciting form of energy because it is abundant and would mean that everyone would have access to affordable electricity. However, fusion is monumentally difficult to do at a commercial scale.

– Jason Donev, physics professor, University of Calgary

Founded in 2002 by physicist Michel Laberge, the 117-person firm is in the process of developing a commercially viable fusion energy system. Currently, there are no operating commercial-scale nuclear fusion reactors. General Fusion’s chief strategy officer, Megan Wilson, is pumped. “Right now, the market is seeing interest in clean energy, and this has dovetailed with major advancements in fusion,” she says. “This is an exciting time for us.”

Donev echoes Wilson’s observation that there is a heightened sense of urgency in the energy market. Electricity consumption, he notes, had been levelling off worldwide until the introduction of AI and data centres, which have driven a surge in energy demand. The International Energy Agency’s World Energy Outlook for 2025 confirms that anticipated spike, estimating that demand for electricity will grow between 40% and 50% in less than 10 years. The U.S. Department of Energy has predicted that the total energy use from data centres alone will double or even triple by 2028.

The market heats up

Even Trump Media & Technology Group, whose core business until now has been the president’s social media platform Truth Social, is embracing fusion. Last December, the firm revealed it was merging with TAE Technologies, an energy company with plans to begin construction on the first utility-scale fusion power plant this year. The transaction values TAE at approximately $3 billion.

Likewise, Microsoft and Google, billionaires Bill Gates and Jeff Bezos, and the oil company Chevron have all started investing heavily in fusion energy companies, including TAE.

In France, a multinational coalition is building an enormous fusion reactor called ITER (the International Thermonuclear Experimental Reactor) at an estimated cost of €13 billion ($21 billion Canadian). ITER will use 50 megawatts of heating power to generate 500 megawatts of electricity – theoretically enough to power some 250,000 homes. ITER is tracking to be operational in the late 2030s, although for demonstration purposes only.

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The biggest player in the United States is Commonwealth Fusion Systems, which has raised more than $2 billion since its founding in 2018, more than any other fusion start-up. Upon completion of its demonstration machine, SPARC, Commonwealth says its next machine will generate electricity for paying customers as soon as the early 2030s.

The provincial government of Ontario is getting in on the action as well with a new Centre for Fusion Energy, announced late last year. The federal government and Crown corporation Atomic Energy of Canada Ltd. have committed CAD$33 million to the centre, with an additional $19.5 million from the Ontario government and $39 million from fusion start-up Stellarex Group Ltd.

What is nuclear fusion?

For all the buzz, there are more than a few skeptics. And it’s not hard to understand why when you consider the cost and complexity of trying to create a star here on Earth.

Fusion energy is different from the nuclear energy that was developed in the 1940s in which energy is generated by splitting atoms. Fusion energy creates energy by forcing atoms together, specifically very light hydrogen atoms. When hydrogen atoms fuse, they form helium and, in the process, release an immense amount of energy. The sun and stars are essentially giant balls of hydrogen and helium gases. As the atoms merge, they enter a different state of matter: plasma. The high-energy particles that blast out of the plasma are turbulent and highly unstable. “Holding plasma in place is kind of like juggling jello with elastic bands,” Donev says.

Inside the sun, gravity holds the plasma together. In most reactors, immensely powerful magnets or lasers do the work. Lately, fusion power start-ups have been experimenting with cheaper, easier approaches. General Fusion, for instance, uses pistons to hold plasma together, not unlike the pistons in a car engine.

Speaking to The New York Times in 2024, Earl Marmar, a physicist at the Massachusetts Institute of Technology, said that the latest reactors have yet to generate more energy (in a commercially relevant way) than they consume. “But, you know, good luck. I hope something works soon, for sure.”

Even a giant reactor like ITER has encountered setbacks. Construction on ITER began in 2007 amid lofty declarations that net-positive energy would be produced by about 2020. Since then, ITER has suffered repeated delays, while the estimated cost of $5.45 billion has quadrupled.

“Fusion is the most exciting form of energy because it is abundant and would mean that everyone would have access to affordable electricity,” Donev says. “However, fusion is monumentally difficult to do at a commercial scale. The problem is [that] it takes so much energy to produce, you can’t get energy back – yet.”

So, is fusion the future?

Wilson with General Fusion predicts that fusion energy will be a trillion-dollar market by 2050, and her optimism is shared. Future Markets reports that the fusion energy sector could reach $40 to $80 billion by 2036 and possibly exceed $350 billion by 2050 “if technological milestones are achieved.”

General Fusion is bullish on its practical and cost-effective methods and confident in its timelines.

While Donev doubts that a fusion energy plant will be dispatching energy to consumers within the next 10 years, he espouses the critical role this power source will likely play in the transition to a clean-energy economy. “It’s such a careful balance with fusion, because it is a good-news story,” he says. “But it’s a very long story. Investors who want to do this need to recognize they’re in for a very long game, albeit a potentially very lucrative one.”

Victoria Foote is a writer and editorwho specializes in clean energy and climate.

The post With investment flowing, fusion energy’s long shot has become a gold rush appeared first on Corporate Knights.

The blackout would become the longest in U.S. history. Prior to Maria’s battering, Puerto Rico’s solar industry did a modest business.

That quickly changed. In the immediate aftermath of the storm, solar panel purchases soared. They became so ubiquitous that when Hurricane Fiona landed in 2022, the national grid operator launched a pilot program connecting batteries to residential panels for backup power in the event of future blackouts and as an alternative to using gas peaker plants.

Today, solar panels are installed on the rooftops of some 175,000 households; of those, approximately 160,000 also have storage. The pilot program has since become a pillar of the island’s energy system and is the first operational virtual power plant (VPP) in Latin America and the Caribbean, helping to deliver electricity to three million residents.

Now Canada is getting in the VPP game. Utilities and regulators are initiating programs that reward energy-efficiency measures while testing projects that pull energy from unconventional sources such as electric school buses that are hooked up to the grid.

But there’s still plenty of room to grow. Canada boasts only a handful of fully functioning distributed power plants.

Some argue that this slow deployment is due, at least in part, to regulatory policies that fail to prioritize energy efficiency over additional, capital-intensive, supply. Expanding VPPs may also require a mind shift. Speaking with Corporate Knights, experts agree that it’s past time to move from pilots to programs at scale.

What is a virtual power plant?

A virtual power plant is a collection of devices – home batteries, electric water heaters and vehicles, solar panels – connected to each other and to the grid. Combined, these multiple small energy sources form a network that acts as a power plant, supplying electricity to the grid when demand surges. In addition to supply, efficiencies in energy use can also contribute to a VPP.

For example, smart thermostats alleviate stress on the grid during periods of high consumption by automatically adjusting the temperature up or down depending on whether demand is for heating or cooling.

“Using energy sources that are responsive to demand fluctuations isn’t new, but it was always done with big industrial partners,”says Brendan Haley, senior director of policy strategy at Efficiency Canada. “What is new is the electrification of end uses, especially on the residential and commercial side, combined with digital technologies that allow communications to happen in real time. This enables rapid demand response.”

Many regions around the world are catching on. Vermont-based Green MountainPower sources power from solar-charged batteries, EV chargers and remote-controllable water heaters while incentivizing the use of smart thermostats. The company’s clean-energy network provides 72 megawatts of extra capacity that can be deployed in emergencies. In Germany, more than 144,000 home batteries automatically dispatch daily to help stabilize and bolster the grid in real time. Sunrun, the largest rooftop solar and home battery company in the United States, has enrolled more than130,000 systems in its VPP program. The distributed power plant supplies 480,000 homes with electricity.

Cost savings and reduced emissions

Utilities and consumers alike can realize significant cost savings by drawing on power from distributed energy sources. B.C. Hydro in British Columbia estimates that by coupling its energy-efficiencies program (Peak Saver) with a new VPP project using residential batteries for energy storage and supply, the utility will save customers as much as $80 million annually by 2030. The savings in energy will amount to more than 2,000 gigawatt-hours – enough to power more than 200,000 homes. B.C. Hydro’s director of energy management and innovation, Brandon Young, says that demand-side management and optimizing energy usage is cost effective “because the benefit to us is greater than the cost of all aspects of the generation and distribution that would be required to deliver that additional energy.”

Power plants only supply power. VPPs do that but can also store electricity and use energy more efficiently.

—Brendan Haley, senior director of policy strategy, Efficiency Canada

By shifting demand away from periods of peak usage, when the grid relies most heavily on fossil fuels, and redirecting energy consumption to times when carbon-free resources are available, distributed power plants directly contribute to lowering emissions.Again, the return on investment is compelling: a U.S. Department of Energy study found that VPPs are 40% to 60% cheaper than alternatives when it comes to managing peak demand.

Policies can obstruct growth

“VPPs provide more benefits than a conventional power plant,” Haley points out. “Power plants only supply power. VPPs do that but can also store electricity and use energy more efficiently.”

Ontario’s Independent Electricity System Operator (IESO) now runs a program called Save on Energy Peak Perks. Participants permit their utility to adjust their home thermostat up to 2°C during periods of peak electricity demand from June1 to the end of September. IESO reports that up to 90 megawatts are saved each time thermostats are activated – roughly equivalent to taking a mid-sized city off the grid.

Despite the benefits, regulatory regimes are a roadblock to expansion. In Canada, there is no requirement that customer-side sources be optimized.

“In states like Massachusetts, they’re required to invest in all energy efficiency that’s cost effective before paying for a supply-side measure or power plant,” Haley notes. “There’s no utility in Canada that has a similar rule, which, essentially, requires the demand-side option be considered first before a supply-side option.”

Indeed, capitalizing on small pools of existing power sources – before building out more infrastructure or firing up natural gas plants – may turn out to be key to helping the grid address its biggest challenges.

Victoria Foote is a writer and editorwho specializes in clean energy and climate.

The post Puerto Rico’s virtual power plant is a model for cost savings and energy security appeared first on Corporate Knights.

Fires have traditionally burned an average of 2.5 million hectares of land in Canada yearly. But the 2023 fires were unusually large and widespread: by mid-July, 29 megafires, each exceeding 100,000 hectares, left a trail of destruction across the country. Canada released 647 megatons of carbon that year, generating approximately 31% of the global emissions from wildfires.

This year, wildfires swept across northern Manitoba and Saskatchewan. Smoke permeated the atmosphere in central Canada, the Great Lakes region and the northeastern United States, compromising air quality and reducing visibility in major cities.

Looking not too far into the future, the amount of forest burned by wildfire is projected to double as a result of a changing climate.

“A warming planet is contributing to longer fire seasons,” says Mike Flannigan, professor of wildland fire at Thompson Rivers University. “Alberta’s fire season used to start in April. Now we’re seeing fires in March and February. The warmer the planet gets, the more lightning we expect. And the atmosphere gets more efficient at sucking moisture out of vegetation, the fuel for fire. The drier that fuel on the forest floor is, the higher the intensity of the fire, which is difficult to impossible to extinguish.”

Given the new reality, the burning question is how can Canada be better equipped to battle blazes that have increased in intensity and size, especially in the boreal forests? 

Fight smarter with precision tech

Earlier this year, the federal government announced a new wildfire-fighting initiative called WildFireSat, which will be the first government-owned satellite mission specifically designed to monitor all active wildland fires across Canada on a daily basis.

Spending money on more resources to extinguish larger fires is a waste. You want to get the fire at the start. That’s where the investment needs to be.

 – Mike Flannigan, wildland fire expert, Thompson Rivers University

Set to launch in 2029, seven microsatellites will feed the tracking information back to fire-management authorities. The data is intended to help those on the front lines identify high-risk wildfires and deploy resources and crews more strategically.

In recent years, start-ups have been testing a variety of tools to aid in battling forest fires. One company, Pano, makes AI-enabled cameras to spot wildfires; another called Rain has been piloting autonomous helicopters to douse them. Others have developed satellites and drones to monitor forests and weather.

Flannigan explains: “Say we’ve got 100 new fires. Which ones do we fight? What if we’ve only got enough resources to fight 20? Which are the important ones to fight, and which are the ones we can deal with later or just let Mother Nature run her course? Using machine learning helps make an informed decision when faced with that kind of situation.”

In a related effort, researchers at the University of British Columbia’s Okanagan campus and B.C. Wildfire Service, the province’s wildfire-suppression service, have formed a partnership to develop a provincial wildfire camera network. Using 5G technology, the cameras detect smoke from wildfires and share real-time data to support evacuation planning, resource deployment and wildfire behaviour predictions.

The Washington Post reports that, since 2023, more than 100 new wildfire-related technologies have launched in the United States and around the world. Many employ artificial intelligence in wildfire detection, such as FireSat, an initiative undertaken by the non-profit Earth Fire Alliance, with funding from Google and the Moore Foundation. Drawing on “high-res multispectral satellite imagery,” FireSat is designed to feed updates in 20-minute intervals to first responders, citing the location of active fires. The data will be accessible through phones, tablets and laptops. A prototype was deployed in March this year.

For now, though, firefighters mainly rely on people to alert them of a wildland blaze. To facilitate reporting, some provinces have created apps specifically to call in a fire. B.C. Wildfire Service’s mobile app features a “Report a Fire” function that automatically generates the coordinates of a fire’s location and sends them directly to the closest fire-management agency.

The high cost of forest fires

Economic losses due to forest fires are significant and likely to rise if current fire trends continue. Assistance funds now average about $340 million per year; in 2016/2017 and again in 2020/2021, the Disaster Financial Assistance Arrangements program paid $1.7 billion in assistance. (According to a government media release, WildFireSat is expected to save the Canadian economy between $1 billion and $5 billion over its first five years of operations.)

The 2016 wildfire in Fort McMurray, Alberta, is considered the costliest natural disaster in Canadian history at an estimated $9 billion in direct and indirect physical, financial, health and environmental impacts.

Equally alarming are the health impacts of smoke inhalation. Research suggests that as many as 1.5 million people die globally every year as a result of wildland fire smoke. Even short-term exposure is detrimental as it can lead to bronchitis, worsen asthma and create other health problems, as reported by the U.S. Environmental Protection Agency.

And there is the environmental cost, which itself contributes to worsening the main cause behind bigger, more frequent wildfires: a warming planet. Boreal forests have historically helped to slow climate change by storing carbon as trees grow rather than adding carbon dioxide to the atmosphere. Forests absorb approximately a quarter of global carbon emissions.

With forest fires burning more than twice as much tree cover as they did 20 years ago, this vital carbon sink is shrinking.

The window of opportunity

Canada has been warming at about twice the global rate. Average temperatures in 2023 between May and October were 2.2°C above the norm over the previous 30 years and were largely responsible for the unusual weather patterns that fuelled the fires. Which is all to say that wildfire season will continue to last longer and burn more fiercely than before.

Flannigan believes fire-management plans should prioritize quick and early containment of wildfires to realize the highest return on investment. “Every fire starts small, whether it’s a campfire or lightning strike. That’s our window of opportunity,” he says. “Spending money on more resources to extinguish larger fires is a waste. You want to get the fire at the start. That’s where the investment needs to be.”

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Flannigan also highlights the importance of establishing a centralized agency solely dedicated to addressing natural disasters. “[Canada needs] an agency like the U.S. Federal Emergency Management Agency to deal at the national scale with floods, earthquakes, hurricanes and fire,” he says, noting that each province and territory devises its own fire-management plan and may not be in a position to share resources when a neighbouring region requires extra support.

Most Canadians agree that such an agency should be created. Recent polling conducted by Abacus Data shows there is overwhelming support for a national forest-firefighting unit. As Flannigan succinctly observes, “We live in a flammable environment.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post The fight against wildfires is getting increasingly high-tech appeared first on Corporate Knights.

The transition from gas to zero-emission vehicles has hit some speed bumps lately. Only three years ago, automakers and governments alike pledged significant capital investment into retooling manufacturing sites, upskilling auto workers and securing supply chains, to support the gradual replacement of conventional cars with battery-run vehicles.

To safeguard Canada’s nascent electric vehicle industry, the federal government imposed a 100% tariff on Chinese EVs in October 2024, matching the 100% tariffs under U.S. president Joe Biden that took effect a month earlier.

President Trump’s arrival at the White House has since upended the economic landscape. The Trump administration has launched a trade war on Canada that includes a 25% tariff on automobiles, light trucks and auto parts that fail to meet the regulatory requirements under the trade agreement between Canada, the United States and Mexico (CUSMA).

The U.S. import taxes coincide with Canadian federal requirements to produce more electric vehicles. Former prime minister Justin Trudeau oversaw the adoption of new rules that required that 20% of total passenger car sales be electric by 2026. Between the import tariffs and the looming deadline to supply more EVs, legacy automakers such as General Motors, Ford and Stellantis pushed back, arguing that the federal mandate is simply not feasible.

“With EV sales falling for five months in a row . . . there is no pathway to meeting the government mandated target,” Brian Kingston, president and chief executive of the Canadian Vehicle Manufacturers’ Association, argued in The Globe and Mail, adding that “Canadians are clearly not ready for widespread EV adoption.”

Responding to industry pressure, Prime Minister Mark Carney suspended the 2026 EV sales target, saying that automakers have “got enough on their plate.”

The carmakers want the free market when it suits them, but they don’t want the free market when it doesn’t suit them.

– Daniel Breton, CEO, Electric Mobility Canada,

Indeed, new registrations for battery-electric vehicles dropped by 39.2% in the second quarter of 2025, according to Statistics Canada. But Joanna Kyriazis with Clean Energy Canada takes issue with the cause of plummeting sales – which, she notes, is occurring only in Canada as EV purchases continue to climb upward in much of the rest of the world.

“Our polling from this year shows that 45% of Canadians still lean towards an electric vehicle for their next purchase,” Kyriazis counters, adding that the percentage rises to 69% in metro Vancouver. “The interest is there, but upfront cost remains a top barrier. The pause in provincial and federal buyer incentives means buyers are waiting on the sidelines to see if those programs are coming back.”

Despite the recent spate of automakers announcing delays and cancellations of EV rollouts, the tariff on Chinese-made EVs remains in place. The situation has turned into a political tug-of-war: OEMs (original equipment manufacturers) as well as Ontario Premier Doug Ford say that the tariff barrier is still needed. Others, such as Daniel Breton, president and CEO of Electric Mobility Canada, disagree. “We’ve been against the 100% tariff from the get-go. [Canada] imposed the tariff to play nice with the U.S. But here we are a year later and playing nice hasn’t given us any advantages.”

The TD report makes the case that blocking electric cars made outside of North America from the Canadian market may not, in fact, be in anyone’s interests.

The tariff wars

Globally, sales of battery-electric cars are surging. Brazil, which has been open to Chinese imports, has seen EV sales soar more than 500% between 2022 and 2024, and Chinese automaker BYD has established a significant presence in the Brazilian market.

Bloomberg reports that Brazil plans to reintroduce import taxes at rates ranging from 10% to 35% by June 2026 to encourage domestic investment. Subsequently, Chinese carmakers BYD, GAC and Great Wall Motor are all setting up local manufacturing plants with the promise of job creation and economic growth.

For its decision to block Chinese entrants, Canada has been hit with a 76% tariff on Canadian canola seed imports and a 100% tariff on canola oil, meal and peas. China also put a 25% tariff on certain Canadian pork, fish and seafood products.

Kyriazis points out that Canadians bear the cost in other ways as the two countries ratchet up import taxes. “We are walling off our car market so that it’s no longer competitive. Canada has an EV affordability problem. We found 20 EV models available today in the EU market for less than $40,000 Canadian, only one of which can be bought here.”

Kyriazis is not alone in this observation. Writing for The Conversation, Addisu Lashitew of McMaster University says that a freer trade regime with China would substantially broaden the range of affordable EVs available to Canadians, “who are currently limited to U.S. brands averaging more than US$55,000. By contrast, Chinese manufacturers offer numerous models priced near US$25,000, a factor that would likely spur a substantial increase in EV adoption.”

Building bridges instead of barriers

“This 100% tariff was meant to buy our domestic auto sector time to ramp up and get more competitive. Instead, we’ve seen many EV-related investments and production plans being delayed or cancelled. We’ve seen carmakers backtrack on their EV-related goals,” Kyriazis says.

According to the TD assessment, blocking entrance of EVs from China has curtailed domestic adoption of the most advanced battery technology on the market, noting that Chinese OEMs are miles ahead of everyone else in offering affordable vehicles that, in some cases, are cheaper than comparable models running on internal combustion engines.

Thanks to China’s formidable head start in EV production, Chinese auto manufacturers like BYD, SAIC and Geely produced 70% of the electric cars sold globally in 2024, according to the International Energy Agency. Automakers in the United States produced just 5%. The more electric vehicles that Chinese companies make, TD economists argue, the more difficult it will be for carmakers in North America to catch up.

Moreover, Canada’s protectionist policies may be encouraging a sense of complacency – or worse. “In 2019, the International Energy Agency published a report that placed Canada dead last in the world for fuel efficiency of its light-duty vehicle fleet and GHG emissions per kilometre driven,” Breton says. “This means that we’re driving gas guzzlers as a country. So when I hear that some carmakers want us to keep driving gas guzzlers by aligning with the U.S., to me this is completely stunning.”

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Given the gap in EV technology and heightened risk of falling too far behind, the TD report recommends that partnerships between Canadian and Chinese car companies could be formed so that Canada can improve its EV ecosystem. Simultaneously, joint ventures with Chinese automakers would likely help Canada return its EV adoption rate to an upward trajectory by overcoming cost concerns and range anxiety.

Canadians appear to support the prospect of opening the market to Chinese entrants. In a recent Nanos Research survey with CTV News, 62% of respondents said they either support or somewhat support removing the 100% tax on Chinese-made EVs.

Says Breton, “The carmakers want the free market when it suits them, but they don’t want the free market when it doesn’t suit them. And to me, the China conversation is about that as well.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post Economists say Ottawa should rethink tariffs on Chinese EVs appeared first on Corporate Knights.

A handful of start-ups, many based in California, see all that plant matter as a potential feedstock for making products routinely used in housing construction – think insulation, flooring, panelling and concrete additives.

Not only would these bio-based products greatly reduce a building’s carbon footprint; in side-by-side comparisons, building materials made from straw, hemp, flax and cellulose are more fire-resistant than their conventional counterparts – a top-of-mind concern in the Golden State following the January wildfires that razed more than 50,000 acres of land, destroyed more than 16,000 structures and killed at least 29 people.

British Columbia and other parts of Canada have likewise experienced extreme weather events, from flooding to wildfires. “There’s going to be a really big push to create more houses in the near future,” says B.C.-based Elli Terwiel, owner and lead engineer at Sage Structural Engineering.

Terwiel is part of a growing movement of engineers, designers and architects that are trying to convince the construction industry that natural materials such as grain straw, corn stover (the stalks, leaves and cobs left over after the corn harvest), husks and even sewage sludge can be turned into high-performance building products. “The question is, how do we build those buildings better?” she asks. “How do we make these buildings the best that they can be for Canadians? And I do think that bio-based materials, whether just as insulation or the entire structure, there’s a place for them in the conversation.”

A recent report put out by RMI notes that many bio-based products are market-ready and are at or near cost parity today, despite most of these products not yet having reached the economies of scale of the incumbent building materials.

Mainstreaming natural building systems could, essentially, decouple economic growth from greenhouse gas emissions by transforming the high-emitting building sector into a carbon sink.

How did we get here?

The buildings and construction sector is by far the largest contributor to climate change, accounting for at least 37% of global emissions. In the United States alone, new home construction emits nearly 30 million tonnes of GHG emissions each year.

Until recently, architects and engineers have focused on reducing carbon emissions generated by the maintenance and operations of a building – the GHGs created from heating, cooling and lighting, which are projected to decrease from 75% of the sector’s total emissions to 50% over the next few decades.

But this assessment of a structure’s carbon impact doesn’t account for so-called embodied carbon. Embodied carbon refers to the GHGs released during the entire life cycle of a building, starting with the extraction of the raw materials used for construction through manufacturing, transportation, installation, use and disposal. The built environment relies on concrete, steel and aluminum, which are especially difficult to decarbonize and are responsible for a considerable proportion of a building’s embodied carbon load.

Studies have shown that as much as 60% of an average building’s carbon emissions are embodied as opposed to operational.

Everything old is new again

Bio-based building products are a highly effective way to reduce embodied carbon. Roughly 50% of the weight of plants is photosynthetically sequestered carbon. Buildings that pack mostly plant matter into their structures store substantially more carbon than the amount required to process and transport the materials themselves.

Straw, which is plentiful and a natural by-product of wheat, rice, rye and oats, sequesters 60 times more carbon than it requires to grow, making it one of the most powerful carbon-storing building materials in the world. “You’re taking what would be an agricultural waste product,” Terwiel observes, “that might break down in the field, and you’re putting it into a building. You’re storing carbon in buildings.”

Using natural building materials is not an entirely new idea. Cob, a mixture of clay and straw, is a traditional building technique in the United Kingdom, where cob houses dating back several hundred years still stand. Traditional straw bale construction has been employed for more than a century in the United States. Using cellulose (finely shredded cardboard fibres and recycled paper) for building insulation dates back many centuries in both the United States and Canada.

Code work

David Arkin, a principal at Arkin Tilt Architects, a firm that specializes in ecological planning and design based in Berkeley, California, has built dozens of straw bale structures as well as a four-unit townhome project in Oregon that achieved an 85% reduction in embodied carbon through the use of natural building materials.

The challenge of such structures – and there are several – is that straw bales, like so many biomass products, must be purchased directly from the source, in this case the local farmer. “It’s a matter of scale,” Terwiel says. “You have these very small producers who are at the early adopter stage, who haven’t achieved scale to be able to go after Rona or Home Depot. You have to know where to look to find these products and the people who know how to work with them.”

Moreover, walls insulated with plant matter tend to be much thicker than typical ones. While this has its benefits – excellent thermal properties, soundproof rooms – it can also be impractical in high-density, urban settings. Which is why Anthony Dente’s firm, Verdant Structural Engineers, also based in Berkeley, has been developing a drop-in structural wall panel made from straw bales that fits conventional dimensions, complies with California’s building code and eliminates the need to visit the local farmer. Verdant plans on launching the panels in early 2026.

“I’ve given a lot of presentations to architectural firms,” Dente says. “I don’t talk about how they can buy 100 straw bales from the farmer and have a bunch of their friends stack them up in their walls. I’m talking to them about product development and efficiency and material science development and that they can start bringing these materials to their more conventional clients.”

The majority of plant-derived products, however, have yet to appear in building codes. Projects tend to be small-scale one-offs as a result, and mostly residential.

The compostable house

“Building for disassembly” refers to buildings that are designed so that every component can be removed and reused rather than tossed into a landfill where carbon is released into the atmosphere. For instance, hempcrete, derived from the hemp plant, is a superb insulating material and can also be used in place of concrete; it is lightweight, fire-resistant and entirely recyclable or reusable. “At the end of life, when you remove the finishes, you can take a building made with natural materials and it will compost itself. And that, I think, is pretty incredible,”  Terwiel says.

The RMI report cites a project that compared two residential homes, one built using standard, off-the-shelf materials, the other incorporating bio-based products in the flooring, panelling, rooftops and insulation. Equal in size, the carbon-storing model showed a 107% reduction in net emissions, tipping the building into net storage territory.

“By 2030? I’d like it if California has adopted and green-lighted the use of clay construction,” Dente says. “Clay construction is incredibly fire-resistant and high-performing – we make ovens out of clay! It’s kind of silly how hard it is to use a system that’s such a no-brainer fire solution.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post Biomass may be the climate-friendly building material we’ve been waiting for appeared first on Corporate Knights.

Aviation is responsible for 13.9% of the world’s carbon dioxide emissions from transport and 2.5% of emissions from all human activity. Between 2000 and 2019, emissions from the aviation sector have risen faster than those from rail, road or shipping – in 2024 alone, GHGs jumped by 5% – while efforts to decarbonize the aviation industry have made little progress.

Recently, however, there have been indications that this may change. The International Air Transport Association (IATA) set a target for international aviation to be 5% less carbon-intensive by 2030 and achieve carbon neutrality by 2050. This will primarily be through the use of sustainable aviation fuels (SAFs), which are typically made from used cooking oil and agricultural waste and mitigate the lion’s share of emissions produced by conventional jet fuel. Canada’s Aviation Climate Action Plan targets net-zero emissions for the aviation industry by 2050 and a goal of 10% use of low-emission aviation fuel by 2030.

Given the sluggish pace at which airlines are replacing jet fuel with SAFs, not to mention the projected growth of air travel, reaching these milestones appears unlikely. Passenger air travel is expected to double by 2050. “Even the most ambitious jurisdictions are falling short of tracking to net-zero,” says Nikita Pavlenko, director of aviation and fuels at the International Council on Clean Transportation’s Washington, D.C., office. “In aviation, there are no silver bullets to decarbonization. In the auto sector, there’s electrification. In the power sector, there’s renewables. In the aviation sector, there are not the same kind of easy answers.”

Others have struck a more hopeful note. Geoff Tauvette, executive director of the Canadian Council for Sustainable Aviation Fuels (C-SAF), a non-profit representing more than 100 industry members, writes in an email that “Canada has all the right ingredients from start to finish to build a leading and made-in-Canada SAF production market.”

While developing a healthy market for SAFs will require a long-term regulatory framework and investment strategy, the smart money is on cleaner fuels, more than initiatives to increase efficiencies, to drive aviation decarbonization in the decades ahead.

Air travel takes off

Between 2013 and 2019, global demand for air travel increased by 50%, jumping another 10% in 2024 – 4% above pre-pandemic levels, an all-time high, according to figures released by IATA in January. IATA expects air travel to climb 6% this year, causing another surge in emissions.

In addition to carbon dioxide, airplanes emit pollutants such as nitrogen oxide and soot and form heat-trapping contrails. Scientists estimate that the net warming effect of these may be up to three times as great as the warming caused by the carbon dioxide emitted.

To realize the 2030 target, airlines would need to boost consumption of SAFs more than 30-fold. Some fear, however, that even if airlines replace 10% of their fuel with low-carbon alternatives by the end of the decade, the climate benefits would be erased by the anticipated growth in the aviation business.

Bending the curve

Reducing the carbon footprint of the aviation sector is one of the most difficult pieces of the energy transition, largely because it requires multiple solutions and the technology required is not yet available at scale. Writing in Nature, a science publication, researchers point out that zero-emission aviation demands a holistic approach, which includes increasing efficiencies in propulsion systems, making improvements to aircraft design and using low-carbon materials.

Carbon reductions in the production of conventional fuel, electrifying ground operations and route planning designed to minimize stopovers all represent additional levers to lighten aviation’s climate impact.

While such efforts are worthwhile, the resulting emission reductions are marginal. Numerous experts have concluded that replacing diesel with SAFs is the most viable near-term pathway for meaningful decarbonization. SAFs are liquid fuels derived from sustainable sources, versus conventional jet fuel that comes from crude oil. The cleaner fuels can mitigate as much as 80% of carbon dioxide in life-cycle emissions compared to conventional fuel. Moreover, “SAF is appealing because you can use it in existing aircraft,” Pavlenko says, noting that the European Union is leading the pack in the deployment of sustainable fuels.

Says Tauvette in an email, “It is critical that government and industry work together to properly assess the impacts and develop an SAF policy that helps reduce actual aviation emissions, supports creating value from Canadian feedstocks by producing SAF in Canada and enhances the competitiveness of the sector.”

A flight path to net-zero

The European Union aims for a 55% reduction in aviation emissions by 2030 and net-zero by 2050, leveraging SAFs and emission trading systems. China plans to achieve carbon neutrality by 2060, focusing on green airports and SAFs. Japan and the United Kingdom also target net-zero by 2050 and have drafted strategies that emphasize sustainable fuel, hydrogen-powered aircraft, and optimized air traffic management.

In Canada, British Columbia became the first jurisdiction in North America to require the use of SAFs in 2023, when the province released its revised low-carbon-fuels program.

The regulations now require renewable fuel to comprise at least 1% of jet fuel starting in 2028, increasing to 2% in 2029 and 3% in 2030 and subsequent compliance periods. The regulations also require a carbon-intensity reduction for conventional jet fuel. (The federal Clean Fuel Regulations set life-cycle carbon-intensity-reduction requirements for gasoline and diesel but does not have a reduction requirement for jet fuel.)

Currently, the high cost of low-emission aviation fuels – often far exceeding that of conventional jet fuels – has prevented widespread adoption. “The reality is that there is going to be a significant cost premium for SAF in the foreseeable future. It’s just going to be more expensive than fossil fuel,” Pavlenko says.

In its 2023 road map, C-SAF put forward an optimistic target of one billion litres of SAF production by 2030. Uptake would result in a 50% reduction, or more, in life-cycle greenhouse gas emissions relative to fossil fuel, which translates into the elimination of approximately 1.6 million tonnes of GHG emissions.

Earlier this year, Boeing announced that it will invest $17.48 million to promote the production of SAF in Canada, an encouraging signal that some investors see a long-term future for decarbonization. “Just getting a handful of commercial scale projects built to produce those second-generation technologies comprises a significant step forward for the industry and would help achieve some of those longer-term targets,” Pavelenko says. Anything less, and “we’re going to fail to achieve our 2050 goals.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post As air travel booms, can the aviation industry decarbonize for real? appeared first on Corporate Knights.

A pillar of the EU economy, the automotive sector’s value chain accounts for more than 13 million direct and indirect jobs and 7% of the EU’s gross domestic product. As recently as 2019, the EU dominated the global auto market. 

Even so, the sector has lost some of its competitiveness, declining by 13 percentage points in market share since 2017. At the same time, Europe’s automakers are investing big in the electrification of their products as China’s low-cost, battery-powered vehicles gain a foothold in the European market. 

Replacing internal-combustion cars with battery-electric ones is essential to fighting climate change. But the transition is also a challenge for automakers facing down a possible slide in demand due to the Trump administration’s barrage of auto-related tariffs. 

“Social leasing,” as the strategy is often called, could be the key to unlocking a policy hat trick by providing low-income or otherwise marginalized consumers with access to zero-emission cars, creating demand certainty for automakers producing EVs, and reducing the carbon imprint of one of the planet’s most polluting sectors. 

Recent initiatives show big demand for social leasing

Simply put, social leasing schemes offer electric vehicles to low- and middle-income households at subsidized lease rates while creating new markets for the automotive industry by ensuring that the vehicles leased are made domestically. 

According to Transport & Environment, an advocacy organization for clean transportation and energy, millions of Europeans, particularly those living in rural areas, are car-dependent and vulnerable to volatile fuel prices. People driving older, less efficient gas cars are hit especially hard when fuel prices spike. 

France initiated a social leasing program that ran for less than two months at the beginning of 2024. The subsidy targeted commuters, and eligibility was based on income and the number of individuals in a household. The brevity of the program stemmed not from failure but from its success. Some 90,000 applications were submitted, out of which 50,000 orders of battery-electric vehicles (BEVs) were approved. It was so popular that funds were exhausted within six weeks of the program’s launch.

Washington State in the United States ran a similar program last year through its EV Instant Rebate Program. As in France, uptake was enthusiastic. More than 4,000 residents took advantage of the leasing option. Over the course of three months in 2024, Washington’s Department of Commerce offered $45 million (all figues in U.S. dollars) in rebates to lower-income residents to help them buy or lease zero-emission vehicles. Eligible recipients could receive $9,000 to lease a new EV for three years, $5,000 to buy a new EV, or $2,500 to buy or lease a used EV.

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Ryan Bird, a director at Energy Solutions, which played a central role in implementing the Washington rebate initiative, says that “the goal was really focused on accelerating equitable adoption of EVs. We wanted a program design that would lower as many barriers as possible.”

The funding was dispersed to 6,200 Washingtonians, and the average rebate was $7,400. Based on the Commerce Department’s calculations, the switch from gas to electric vehicles reduced carbon dioxide emissions by 16,783 metric tons and nitrogen oxides by approximately 5,700 kilograms. The department estimated that more than $18 million was saved in avoided costs associated with air pollutants.

Car dealers saw a welcome bounce in sales during the program’s short life. EV sales rose by 30% for an annual increase of 7% over the prior year. “We’re very pleased with the program’s reception and success,” says Amelia Lamb, a spokesperson with the Department of Commerce, via email. “The funds ran out months before we thought they would, which shows that the demand is clearly there for clean transportation and EVs, if people can get help with starting costs.”

Questions raised over who benefits from social leasing

An investigation by PBS (the Public Broadcasting Service) into the Washington rebate program found that the initiative was not entirely trouble-free. The Washington effort struggled to meet its targeted number of vulnerable populations and overburdened communities, according to the PBS account, and some beneficiaries failed to meet the low-income criteria.

Nevertheless, preliminary results from an audit show that more than 90% of recipients were genuinely eligible for the program, which was conducted on a self-reporting assessment system.

Bird notes that there was “incredibly high demand at every incentive level, and particularly among low-income customers,” adding that uptake was “a huge validation of the market potential for EVs throughout the entire market. EVs are not just for rich people; everyone wants to have an EV. Everyone wants to reduce their transportation emissions, wants to have clean air.”

Another knock on the program was that it did not foster long-term access to an electric vehicle among the program recipients. Because the rebate’s largest incentive of $9,000 could be used only to lease a new EV, compared to $5,000 to purchase one, rebates made leasing a more affordable option. But after three years the lease would expire, and the car had to be either purchased or returned.

Bird counters that when vehicles are not purchased by the customer once the lease has ended, the EVs enter the secondary market. “There’s a lot of really great data out there that shows that more vehicles on the secondary market are going to lower the prices for everyone,” he adds. (A fact sheet put out by the Commerce Department notes that vehicles coming off leases are a key source of used car inventory.)

EU drives forward with lease subsidies, while U.S. stalls

In an op-ed published in Euronews, Krzysztof Bolesta, Poland’s deputy minister of environment, and Thomas Pellerin-Carlin, a member of the European Parliament, argue that, over a 10-year period, a social leasing scheme could benefit up to 10 million European families while also increasing the automotive sector’s competitiveness. Furthermore, such a program would stimulate the market for used battery-electric cars. 

By pooling demand among member states, the authors note, as many as one million EVs could be sold in the EU every year for the next decade. The surge in volume would cause unit costs to go down, making the social leasing schemes cheaper.

But while enthusiasm grows in Europe, the future of Washington’s EV rebate program is murky, despite its success as measured by every applicable metric. “It’s an unfortunate situation,” Bird says. “Like other states, Washington is facing a challenging budget situation. A lot of actions at the federal level are creating a lot of chaos for state legislatures and the economy at state level.” 

Bird reports that funding for the rebate effort has been reallocated and there are currently no plans to relaunch the program. “The actions taken by the federal government right now are only increasing barriers to EV adoption, especially for low-income residents. We’ll have to wait and see what’s next. We’re certainly very proud of our partnership with Department of Commerce. It’s just been a really exciting program to be a part of.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post How subsidized leasing can drive EV adoption appeared first on Corporate Knights.

Based in Marana outside Tucson, Trico received US$83.5 million in forgivable loans through Joe Biden’s Inflation Reduction Act to expand its number of solar array systems and battery storage capabilities. The co-op has been on a growth spurt and now serves approximately 48,000 members in and around the Tucson area, extending southward for almost 160 kilometres toward the Mexico border. In this part of the state, small towns dot the landscape, several of which depend on a single power line for their energy supply.

“Trico started from humble beginnings,” says Eric Hawkins, COO of the cooperative, which was founded by six ranching families in 1945 who pooled their meager resources to buy a generator and install transmission lines. “As a distribution co-op, we purchased whatever energy was available. But as we grew, we gradually started adding renewables.”

Over the past 12 years, the energy mix increased from 3% to 4% renewables to nearly 40% today. Upon project completion, that percentage will leap to 50%.

Trico intends to use the government financing to increase grid resilience and reliability for its members and has initiated plans to install 43 MW of battery storage capacity. This is especially important given the energy precarity of some of the areas that Trico services. 

While the Trump administration’s determination to slash government funding, including to renewable-energy initiatives, has created widespread uncertainty across the United States, the corporate sector has been injecting serious money into clean energy co-ops that are delivering electricity to places where poverty levels are high and renewable energy scarce. Google, Intuit, Microsoft, Patagonia, Rivian and REI have all negotiated deals with rural energy co-ops that either supply clean power or support energy-efficiency measures. Microsoft is working with Clearloop, a Nashville, Tennessee, company bringing solar power to underserved communities. Google is supporting rural electric cooperatives in North and South Carolina with financing for energy-efficiency upgrades and other improvements. In return, corporations can purchase “environmental attribute certificates” – the equivalent of carbon credits – and count those toward their emission-reduction goals. 

It is a far cry from the typical Canadian clean energy cooperative, which is almost exclusively urban, receives little government support and must adhere to a regulatory regime built for a centralized energy distribution system that buys energy from large producers. (Alberta is the exception. There the energy system is not centralized; instead, it operates on an open, competitive market.)

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“Even Canada’s clean energy grants don’t recognize energy co-ops,” says Martin Boucher, research chair in sustainability at NorQuest College in Edmonton. “Those grants support specific programs or non-profits, but not a for-profit co-op.”

“You won’t find an energy co-op in rural areas,” he adds. “Here, co-ops are urban, and the investors tend to be middle class.”

Boucher and others believe that failing to recognize clean energy co-ops as another tool to help mitigate harmful emissions from fossil fuels while continuing to meet electricity demand – which is predicted to double or even triple by 2050 – is a missed opportunity. 

One key benefit is that energy cooperatives can be deployed in places that are difficult to access, offering emission-free energy at affordable rates. Because generation and transmission is local, the power supply is highly resilient: when there is an outage on the main power grid, small-scale energy systems like the ones created by co-ops can keep working.

“Our biggest challenge,” observes Marion Siekierski, general manager of the Ottawa Renewable Energy Co-operative (OREC), “is that people don’t understand what a renewable-energy co-op can do. It’s just not a concept that’s present here.”

Green power in the rural U.S.

A cooperative is a corporation owned by members who use the corporation’s products or services. Community energy cooperatives typically generate or invest in renewable energy. 

Cooperatives sell shares to people in the community to secure financing for the projects they wish to build or invest in. The revenue generated from selling that energy is used to pay back the investors and earn a return over time.

The economics of an energy co-op can be daunting in certain parts of the world. In Canada, co-ops must source financing from reluctant lenders who see collectives as a risky investment. In a 2021 census released by the Canadian Centre for the Study of Co-operatives, participants mentioned high transmission and distribution costs, and onerous grid-connection costs, as also being significant barriers. 

But in the United States, several legislative tools have rejuvenated clean energy cooperatives; so far, those tools are still active. Hawkins says that some of the biggest energy co-ops, including Trico, are lobbying the White House to retain the programs and that he is feeling “generally optimistic” that funding will remain in place given rising demand.

You won’t find an energy co-op in rural areas [in Canada]. Here, co-ops are urban, and the investors tend to
be middle class.

– Martin Boucher, research chair in sustainability, NorQuest College

The Powering Affordable Clean Energy (PACE) Program, created through the 2022 Inflation Reduction Act under the Biden administration, is a partially forgivable loan program for rural electric cooperatives, non-profits and other entities to install solar and battery storage projects in rural communities. Up to 60% of the loan is forgivable, depending on where the clean energy project is located. Awash with financing from PACE, other government programs and corporate interest, clean energy cooperatives have announced more than 5.3 gigawatts of renewable capacity additions through 2027. Some 900 rural electric co-ops provide power to more than 40 million homes and businesses.

On the other side of the Atlantic, 10,000 community energy associations operate in northwestern Europe, mostly in Germany, Denmark, Belgium, the Netherlands and Great Britain. The European Commission estimates that, by 2050, half of Europe’s population could be producing energy through rooftop solar on homes and other methods, with 37% of that energy coming from energy cooperatives.

Untapped superpower 

In Canada, there were just 97 renewable-energy co-operatives in 2021, with roughly half of those active. 

Simply put, the energy sector’s governing structures and regulatory regimes are not designed to accommodate the small scale and business model of a co-op. 

Yet, renewable-energy cooperatives can offer community benefits in the form of stable, low-cost power, as well as contribute to the energy transition. In April of this year alone, OREC’s combined clean energy projects posted 109.8 tonnes of avoided greenhouse gases. Since 2013, OREC projects have avoided 7,383 tonnes of greenhouse gases, equivalent to the emissions generated by 79,635 road trips between Ottawa and Toronto. In the United States, 16 rural electric cooperatives that receive government funding will avoid more than 43 million tonnes of carbon emissions annually, equivalent to the emissions from 10 million gas-powered cars each year.

Canada’s new prime minister has pledged that the country will become an energy superpower under his watch in both conventional and renewable power. While cooperatives may not have the swagger of superpower status, the energy sector may have underestimated their potential. Indeed, clean energy collectives could make a significant contribution to meeting demand in communities that can least afford to invest in renewables while continuing down the path to a net-zero 2050.

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post What Canada can learn from co-op power in the rural United States appeared first on Corporate Knights.

Chaos ensued. More than 50 million people were without power, metro and commuter trains were paralyzed, ATMs stopped functioning, the internet shut down. Although power was restored the next day, the precise cause of the blackout remains unknown. To fill the void, blame has been cast upon a wide variety of suspects, from the intermittency of wind and solar energy to a possible cyberattack (which was quickly ruled out).

In the wake of the power outage, the need to understand how to mitigate massive disruptions in the supply of electricity has come into sharp relief as the demand for power soars. From 2025 to 2027, global electricity consumption is expected to rise every year by the equivalent of what Japan consumes today, a stunning increase over a short period of time.

As Canada embarks on a push to become an energy superpower, some important lessons emerge from southern Europe’s power loss. Here are key takeways from the blackout that experts say can inform how to build a stable, fossil-free electrical grid, acknowledging that more insights are likely to surface over time.

What happened?

While the order of events is clear, the catalyzing factors that triggered the power outage in the Iberian Peninsula remain fuzzy.

Red Eléctrica de España, the Spanish grid operator, suggested that one likely factor was a drop in energy production at a solar plant in southwest Spain. This caused an initial power failure followed seconds later by a massive drop in other renewable production. This second drop was especially devastating, amounting to an approximate loss of 15 gigawatts of electricity-generating capacity, as much as 60% of Spain’s power demand at the time, according to Carbon Brief.

Some have argued that the high share of renewables in Spain’s electricity mix is the main culprit behind the blackout, including Pratheeksha Ramdas, an analyst at Rystad Energy, who told Bloomberg News that “Spain’s high renewable penetration exposed difficulties in balancing intermittent supply.” But others point out that only days earlier, Spain’s grid had operated on 100% renewables without problems.

Moreover, many systems fail in electricity supply, not only renewables, and outages at this scale happen somewhere in the world around once a year on average.

Despite the lack of definitive answers, experts cite the following as essential to grid stability as the world shifts to a clean energy economy.

Six takeaways

Backup supply

As leaders in the transition to a green energy system, both Spain and Portugal operate grids that are heavily reliant on weather-dependent sources of power: solar and wind contribute more than 75% of combined output. Few generators powered by fossil fuels, hydro or nuclear were running at the time of the outage.

“Wind and solar are intermittent by definition, meaning you can’t really plan for when these sources produce energy; they produce when the weather cooperates, not necessarily when we want them to,” explains Vidya Vankayala, director of the Smart Microgrid Applied Research Team (SMART) at B.C.’s Institute of Technology.

In an interview with the Vancouver Sun, Vankayala noted that the grid everywhere is experiencing pressures it hasn’t been built for. “We need to invest in our assets,” he adds in an interview with Corporate Knights. “Practically speaking, we cannot abandon conventional energy. Renewables must be introduced gradually.”

Grid maintenance

To ensure that a grid is balanced – meaning that there is neither too much nor too little generation in the network – distribution systems must be well maintained and upgraded over time. When a grid is not in balance, the system will shut down automatically, which is often the reason for power cuts.

Vankayala likens the electrical grid to a house. “Imagine you have a home that’s been built, say, 100 years ago, and over time, you keep adding to it, but the house is still sitting on the same foundation,” he says. “With an energy system, we don’t have the ability to demolish the existing house and build a new one. We are building as we are living in the house, and you want to cause as little disruption as possible. That’s where the difficulty is. We are expanding the energy supply while the system needs to be maintained and operated at the same time.”

Kesavarthiniy Savarimuthu, an analyst with BloombergNEF, pointed out that Spain’s grid investment is less than half the European average and lacks sufficient battery storage, which, he argues, could have helped the system respond more quickly to a drop in generation.

Kristian Ruby, secretary-general of Eurelectric, a federation representing Europe’s electric industry, told Euronews Next that investment into the grids “is not happening at the pace that’s needed and that’s something that needs to change,” adding, “we need to basically develop the grid infrastructure of our system at the same pace as we’re developing the generation side.”

Storage

Municipalities, developers, utilities and governments should not think of renewable energy as simply energy production through solar or wind but rather as a combination portfolio that includes extensive battery storage.

Many countries, such as Denmark and Germany, successfully operate electricity systems with high levels of variable renewable energy by using advanced grid management, energy storage and strong regional connections that, in combination, reinforce resilience and reliability.

Clean energy projects that include adequate storage capacity also offer a high degree of flexibility. Flexibility refers to the ability to adjust the generation, transmission and distribution of energy so that the variable supply in energy from renewables syncs with the daily peaks and valleys of demand.

Wind Europe put out a statement saying that a key lesson from the power loss is that Europe must speed up renewables; invest in stronger, smarter electricity grids; and expand storage capacity.

Demand response

The supply and management of renewable power is just one half of the equation. The other is demand response.

Brendan Haley, senior director of policy strategy at Efficiency Canada, says that “the first step is to mitigate the projected increase in demand with more energy efficiency. There are numerous ways to save electricity, and any savings across the entire grid network matter.”

Demand response refers to influencing the customer’s use of electricity in ways that encourage more efficient energy consumption and smooths out spikes in demand, putting less strain on the grid. “Demand-side solutions make the buildings where people live and businesses where people work resilient to power outages,” Haley says. “Batteries can keep the lights on, and well-insulated homes and buildings can maintain their internal temperatures.”

Vankayala agrees that demand management is key and leads directly to carbon emission reductions while lowering costs.

Cross-regional connections vs. close to home

The sprawling electrical network that connects Spain, Portugal and parts of France can be seen as both a strength and a weakness – a topic of particular relevance for Canada amidst a push to establish interties between provinces. (North–south transmission connections between Canada and the United States are more numerous than east–west connections between provinces.)

Inter-regional transmission can help systems respond to disruptions in electricity supply by providing access to energy from neighbouring systems, as noted in a report put out by the Canadian Climate Institute and research from Corporate Knights’ Climate Dollars project. This can be especially important when local supply is threatened by, for example, severe weather events. But cross-regional connections also raise the risk that problems in one place will affect the other.

Haley argues that the power loss across the entirety of the Iberian Peninsula “should make us question the resilience benefits of cross-border interties. The intertie was lost with France as that grid severed the connection to protect its own generators and grid infrastructure. Doing whatever is possible to balance supply and demand locally and domestically is important to keep the lights on when faced with an unanticipated grid event.”

Utilities across North America and Europe are increasingly looking at virtual power plants (VPPs) as a cost-effective, energy-efficient means of meeting the increase in consumption. A VPP consists of hundreds or even thousands of households and businesses that can connect their electrical devices – EVs, home appliances, batteries and the like – to the grid to be used as an additional energy supply source.

B.C. Hydro launched a pilot project in Sun Peaks near Kamloops and Harrison Mills outside Mission to test the potential for using household batteries to store energy when demand is low and release it into the grid when electrical use peaks.

In 2024, Puerto Rico began using batteries installed in private residences that connected to rooftop solar panels as backup power for its electrical system to help prevent sudden power losses and as an alternative to fossil-fuel-burning peaker plants. The goal is to enroll 6,500 participants, which would provide 26 megawatts of power.

Energy autonomy

A clean grid is far less reliant on imported or traded fossil fuels, allowing for much greater domestic control over supply, cost and reliability.

A report released by the International Institute for Sustainable Development highlights that “a well-designed renewable-based power grid not only protects consumers from sudden spikes in electricity costs but also enhances Canada’s energy independence, making the country more resilient in an increasingly volatile fossil fuel economy.” Not to mention an increasingly volatile geopolitical landscape.

Clean energy superpower

As Canada embarks on its goal to become a leader in the energy sector, it will need to develop a comprehensive national energy strategy, Vankayala says. “What I’m suggesting is [leadership], not just in production of energy, but also being able to call our own shots for the whole value chain. Canada has lots of capacity, lots of resources that we can bring to bear to produce energy. Canada can be a net energy exporter of all forms: hydro, technology, nuclear.”

“My dream,” Vankayala says, “is that one day I wake up and I can build an entire energy system with entirely Canadian-made components, Canadian-made technology, Canadian resources, and then we can sell all that at a profit to the rest of the world.”

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