It was a big announcement: shovels hitting the ground on Alberta’s biggest-ever electricity generator, the Cascade combined-cycle natural gas electricity-generation plant in late August. Nine hundred megawatts. $1.5 billion. And partly financed by the Ontario pension plan OPTrust, which just two years ago called for urgent government action on the climate crisis. Now, 90,000 Ontario pensioners, which includes the Ontario Teachers’ Pension Plan Board and multiple healthcare organizations, are investing in what is sure to be another fossil-fuel stranded asset in a few short decades. How did this happen? Are Ontarians even aware of this? Are they aware of the climate and financial risks of this investment?

In 2015, the Alberta government announced a phase-out of coal, eliminating coal-powered electricity generation by 2029. This means a lot of energy generation coming off in the next decade, which needs to be rapidly replaced. Over the last few years, surprisingly, utilities have outpaced the regulations in announcing the early retirements of old coal plants and the conversion of many newer plants to natural gas. Recognizing the risk of utilities engaging in a “dash to gas,” Rachel Notley’s NDP government instituted a 30% renewable energy requirement by 2030.

Why worry about a shift to natural gas? The concerns are twofold. First, even though its combustion produces about 50% fewer greenhouse gases (GHGs) than coal, it still produces GHGs. The push for net-zero emissions is happening at all levels of the economy. The Government of Canada has announced that Canada’s entire economy will be net-zero by 2050. In the U.S., Joe Biden’s platform has called for a net-zero electricity sector by 2035 – a mere 15 years away. The projected lifespan of a gas plant is at least 35 years, putting the forecasted closure of the Cascade project in 2058 – incompatible with a climate-transitioning world.

Source: Why are Ontario pensioners investing in future Alberta stranded assets? | Corporate Knights