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Increased wildfires said to hike insurance costs for Alberta energy companies

A podcast hosted by the USEA Power Sector recently showcased how Alberta is a prime case study of how climate change affects the energy industry. 

This year, approximately 64 carry-over fires, ten times the five-year average, were seen in the province. These fires have caused significant damage, costing Canada tens of billions of dollars.

Founder and Principal of GT Strategic Gitane De Silva explained that the wildfire landscape in Canada is shifting: the number of fires is decreasing, but their size and intensity are growing. This surge is driven by hotter, drier summers and more frequent thunderstorms, doubling the average annual 6.2 million acres burned to an unprecedented extent in 2023. 

This widespread fire activity poses substantial risks to Alberta’s privately-owned electricity transmission and distribution networks, which could lead to escalating insurance costs.

Experts argue that traditional forest management practices need to evolve. Instead of focusing solely on fire prevention, it was suggested to acknowledge the impracticality of extinguishing every fire. Rather, there is a growing advocacy for controlled burns to reduce dry shrub accumulation, and learning from Indigenous wildfire control measures is becoming increasingly important.

De Silva also urged regulators to leverage their convening power to unite governments, the electricity sector, and consumers to address these issues. This is particularly crucial as the demand for low-emission and sustainable energy, driven by the proliferation of data centers, continues to climb.