Assessing the costs of energy transition through electrification


Since no country has yet completed the shift from fossil fuels to low-carbon sources of energy, the economic implications of energy transitions remain uncertain. While energy transitions are often expected to require substantial investments, diverging assessments suggest that they may either fuel future prosperity or become an economic burden. This chapter proposes an assessment of the net cost of electrifying Canada’s primary energy supply by comparing investments in low-carbon electricity production, transmission and storage with savings from reduced consumption of fossil fuels.

Special contribution by:

  • Guillaume Baggio, Consultant
  • Marcelin Joanis, Professor, Department of Mathematics and Industrial Engineering, Polytechnique Montréal
  • Thomas Stringer, PhD candidate, Polytechnique Montréal


  • REF and CP30 scenarios are projecting important increases in fossil fuel expenses in the next decades and declining investments in electrification.
  • In contrast, all three NZ scenarios suggest that the increase in electrification investments required by net-zero (especially in the 2030-2050 period) will be more than compensated with net annual savings from avoided fuel expenditure from 2050 onward (as much as $61 billion, when accounting from remaining electricity infrastructure cost).
  • Doubling the projected cost of new electricity transmission infrastructure and halving the cost of fossil fuels still results in net savings of up to $23 billion in NZ scenarios.
  • The cost of the infrastructure necessary for broad electrification of the economy is important in the next decades; if building those infrastructures will generate economic activities, it is also an investment that will generate substantial savings once completed.