The Future of Electricity in Canada

Though it won’t be as instantaneous as turning on a light switch, Canada’s electricity industry is definitely brightening up.

In 2008, Canadians consumed 548.8 terawatt-hours (TW-h) of electricity, primarily in the industrial (40 per cent), residential (29 per cent) and commercial (26 per cent) sectors. The lion’s share, more than 60 per cent, was generated from hydropower, with the remainder from fossil fuels (23 per cent) and nuclear power (about 15 per cent). While initiatives like Ontario’s feed-in tariff (FIT) program are incenting a variety of renewable power sources, wind and solar continue to remain relatively small parts of the total electricity mix. But that isn’t to say that Canada’s electricity system is going to stay the same.

“In the long term, call that 20 years, there are probably options we’ll be deploying that are in the late phases of development at the moment,” said Pierre Guimond, president of the Canadian Electricity Association (CEA). “What we’ll be doing with energy way in the future is the unknown. But if the past is a guide to the future, it’s safe to assume that many of the things we’ve done we’ll do again except better.”

Doing things better is one of the most essential changes currently taking place in Canada’s electricity sector. Despite Canada’s large hydroelectric capacity, electricity accounts for a little less than a fifth of the country’s greenhouse gas emissions, primarily because of carbon-intensive, thermal forms of electricity production like coal-fired plants. And with energy use projected to continue to increase, that means that unchecked power use would provide a commiserate increase in emissions. The future, then, will involve both scaling back our consumption — assisted by smart grid technologies like the ones being rolled out across Ontario, as well as related efficiency measures — and expanding the use of less emission-intensive sources.

Natural gas has already been cited as a bridging fuel to a lower carbon future. With Ontario’s plan to retire all coal-fired facilities by 2014, and the continuing need to provide cogeneration alongside renewable sources like wind, there’s no shortage of demand. Just as important, unconventional natural gas resources are being accessed across the country, including previously untapped areas like Quebec, providing a significantly increased supply. But natural gas, like other fossil fuels, could ultimately face limits in a carbon-restricted economy, and its use in heating could conceivably drive up the price of thermal-fired electricity.

Nuclear power too, generally considered a low-emission power source, is one of the existing electricity options that’s likely to continue and increase its profile. It already accounts for 15 per cent of the country’s total electricity generation.

But beyond the challenges of managing nuclear waste and the public’s uneasiness, Guimond admitted there are still logistical hurdles that nuclear would have to surmount before its profile increased again.

“In the last decade or so, every project has been over budget and late,” he said. “But in the end, when the work is done plants operate providing low-cost baseline electricity. Nuclear has a bright future.”

Meanwhile, alternative renewable sources like wind and solar continue to be the most talked-about future technologies for electricity generation, given that they are emission-free. But while natural gas’s strength as a power source is its stability, wind and solar are still struggling with the ability to provide continuous, rather than intermittent power. Still, as storage technologies continue to evolve, there’s no doubt that wind and solar generation, on a variety of scales, will eventually be an important part of the country’s electricity systems.

“I think we need all options on the table,” said Guimond. “I’m especially looking forward to the development of technology that will allow us to store electricity so that we can turn the power created by wind and solar from being nondispatchable [sources that can’t be activated on demand] to dispatchable power.”

“I’m looking forward to the day when we’re able to fundamentally alter the basic physics and performance of the electricity systems by storing off-peak power for on-peak use,” he continued. Integrating new sources of electricity, as well as managing the expansion of existing sources, will ultimately fall to the provinces and their electricity providers. One of the unique aspects of Canada’s electricity system is the particular way in which responsibility has been parcelled out across the country.

“Remarkably, the Canadian constitution is very clear on who is responsible for electricity generation. Section 92.1, sub paragraph A is clear: it’s the provinces,” Guimond explained.

Based on principles of self-sufficiency and the use of local fuels, each province’s electricity mix has tended toward the resources available. This is why, for example, British Columbia and Quebec employ substantial amounts of hydroelectricity while Alberta and Saskatchewan are primarily powered by thermal generation. But with transmission infrastructure upgrades pending across the country (between $150 billion and $220 billion will be required to build the necessary infrastructure over the next 20 years), and a fresh emphasis on less emission-intensive generation methods, a new national approach is being considered.

“Nowadays, there’s a new option: Why don’t you buy from you neighbour?” said Guimond.

Currently the country’s 74,640 km of high-voltage transmission lines run primarily north-south, providing a natural method of exporting electricity to Canada’s largest trading partner, the U.S. The Canada-U.S. trade relationship is influenced by the economics of our proximity, the abundance of Canada’s electricity and by seasonal differences between the countries — Canadian peak demand tends to occur during our colder winters, while the U.S.’s demand tends to peak during their hotter summers. But with increasing energy demand, there is also a desire among the provinces to trade with each other, creating a country-wide connection that is currently not reflected in the provincial focus of electricity generation.

Much of the pressure to change the future of Canada’s electricity generation will ultimately come from the public. In fact, Guimond recently chaired an issue session at the 2010 World Energy Congress in Montreal focused specifically on public awareness and involvement in decision-making.

“The whole idea was to talk about energy projects and involving the public in the decision-making, the planning and the benefits,” explained Guimond, noting how differently the electricity industry now approaches its consumers. “We have to invest billions of dollars into our infrastructure; new communities are popping up, the system has to grow. It has to be rejuvenated. The whole idea was to talk about the fact that the decision-making that must occur nowadays is very different than it was 50 years ago, the first time we tried to build up the grid.”

And it isn’t just a question of electricity providers trying to engage the public. More than at any time before, consumers themselves are demanding to be involved in the production of their energy, a trend that’s driven largely by the increasing profile of the environment.

“We really built the infrastructure out in the ’60s, ’70s and ’80s, but it was only later on in the ’80s and ’90s that environmental concerns really surfaced in an organized way,” said Guimond, citing the Canadian Environmental Protection Act of 1999 and the performance controls imposed on coal-fired plants. “Those are new values in society, and those values are fully internalized in the public and also in industry. Now the question is: Given that we care about protecting the environment, and we’re on board, how do we do projects in the future? How do [industry and the environment] coexist happily?”

That peaceful coexistence cuts to the central hope for our electricity future. The current electricity system is based on a (theoretically) simple formula: generation is built to accommodate peak demand plus a reserve margin. “Baseload” production remains on at all time, and generation options are added as demand rises to meet the peak. And because those electricity generating options that meet peak demand have to be turned on and off at will (dispatchable power), they tend to be more expensive. The more efficient our electricity production becomes — assisted by smart metering and other technologies — the lower that peak will ultimately become and, as a result, the less expensive and more reliable our electricity will be. If we can provide cheaper, more efficient electricity based on a variety of sources to meet the increasing needs of the country, Canada’s electricity future will definitely be a bright one.

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