A new report from the Canadian Climate Institute, entitled Heat Exchange: How today’s policies will drive or delay Canada’s transition to clean, reliable heat for buildings, analyses multiple pathways to net zero for the heating systems in Canada, finding that electricity is the most cost-effective path.

The report examines net zero and the future of building heat, the implications for energy systems (electric and gas), the stakes of being off-track, the limitations of current climate policy and current utility regulation. They say a status quo inertia puts the energy transition at risk. They also make a number of recommendations, including that provinces legislate targets and commission and regularly update independent, economy-wide pathway assessments.

A necessity, not an option 

“Affordable, reliable heating and cooling for Canadian buildings is a necessity, not an option, on the road to net zero. Delivering on that goal requires some big shifts from provincial governments, energy regulators, utilities and Canadians,” they write. “This report focuses on that system scale: the energy systems that Canadians rely on to keep their homes and businesses warm. We explore how those systems, and the regulatory frameworks that govern them, must adapt for Canada to reach net zero in a way that minimizes costs for ratepayers, governments and the economy as a whole.” 

Climate accountability 

The analysis also includes a look at the provinces which already have climate accountability acts and aspirations. Energy utilities, they say, are only beginning to map out what the clean energy transition means for systems and customers.

Drawing on new, original modelling analysis, a literature review and expert consultation, the climate institute’s researchers say electrifying almost all building heat is the most cost-effective path to net zero. 

“In all provinces and across all sensitivities, a cost-optimal pathway to net zero for the economy results in electricity becoming the dominant energy supply for building heat. Nationally, electricity’s share of annual space heating energy demand rises from 21 per cent today to between 55 and 60 per cent by 2040 and between 78 and 91 per cent by 2050,” they write.

“Much of the policy work and transformative change in energy systems must be done province by province and even municipality by municipality, based on the specifics of each electricity and gas network,” they add. “That work must start now.”