CERI Electricity Report - Canadian Energy Research Institute
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March 2018
CERI Electricity Report
Electricity - The Year in Review Manitoba’s foray into new hydroelectricity projects
Allan Fogwill centres on the Keeyask project on the Nelson River. This
695 MW project is being built in a partnership between
Looking back to 2017, there were a number of key Manitoba Hydro and four First Nations. This project and
events. Most dealt with the transition toward low Bipole III, which is an approximately 1,400 km DC
emitting options including the increased use of transmission line addition, are currently facing cost
hydroelectricity, and the evolution to lower carbon overruns which have increased the concern of
generation. Manitobans regarding the financial viability of Manitoba
Hydro.
Electricity prices in 2017 were stable in each province.
The one exception is Ontario, where the Fair Hydro Act1 Manitoba Hydro’s debt is anticipated to escalate to
was passed in June. The Act adjusts the financing for a approximately $25 billion3 which will create added
portion of the electricity commodity expenses. The pressure to increase rates by upwards of 46 percent over
result is an average decrease in electricity bills by 25 five years.4 A realization of this cost pass-through would
percent and then increases limited to inflation until 2022. have significant impacts on industrial, commercial, and
Concerns have been raised suggesting some of the residential customers. Moreover, the higher cost of this
electricity costs are being paid by tax payers instead of hydroelectricity will be in direct competition in some
rate payers. northern US states for electricity exports. A recent study
by CERI shows that the cost of hydro reservoirs is around
2017 was a busy year for hydroelectricity projects. 9 cents/kWh while biomass, natural gas combined cycle,
wind and solar photovoltaic all range between 5 to 6
In BC, a new provincial government in June asked for a cents/kWh.5 That leaves future exports of Manitoba’s
review of the BC Hydro Site C project.2 This project had additional hydro capacity in question.
been proposed at various times over the last thirty years.
The argument from BC Hydro was that the project was Ontario and Quebec were seen to be forging a new
needed to supply low-cost non-emitting electricity to electricity market relationship in 2017, based on Hydro
meet provincial growth in demand and exports to Quebec’s hydroelectricity capacity and storage. The
Alberta and states on the US west coast. The concern relationship includes 2 TWh per year of energy to
was for the environmental footprint of this large Ontario, 500 MW of surplus capacity to Quebec, and the
reservoir project and the fact that under the previous use of storage hydro in Quebec to manage intermittent
government, the project was exempted from an resources in Ontario.6 Capacity commitments between
environmental review. However, after a review by the Canadian provinces are unique. The only other capacity
BC Utilities Commission, the provincial government commitment in Canada, currently, is the long-term
decided it was cheaper to continue work on the project contract between Quebec and Newfoundland and
instead of cancelling it. The 1,100 MW hydroelectricity Labrador regarding the construction and operations of
project is expected to be complete in 2024. the Churchill Falls project.
Along the Churchill River, a second hydroelectricity
CERI Electricity Report
project is being constructed at Muskrat Falls. 2017 saw a
Editorial Committee: Ganesh Doluweera, Dinara Millington, Megan Murphy, Allan Fogwill critical review of the decision making regarding the
About CERI
sanctioning of that project. An update of the project also
The Canadian Energy Research Institute is an independent, not-for-profit research in June 2017 indicated the final cost of the project was
establishment created through a partnership of industry, academia, and government in
1975. Our mission is to provide relevant, independent, objective economic research in estimated to be $12.7 billion.7 Costs associated with the
energy and related environmental issues. For more information about CERI, please visit project are projected to almost double retail electricity
our website at www.ceri.ca or contact us at info@ceri.ca.
Relevant • Independent • ObjectivePage 2
rates over 23 cents/kWh by 2022. If this does occur, The Atlantic link project was rejected by the
these will be the highest provincial rates in Canada. Massachusetts utilities, and Northern Pass accepted.
New Hampshire rejected the Northern Pass route
Two Canadian transmission projects were under through that state, and an appeal is underway.
consideration for the Massachusetts Clean Power RFP.
Both are underpinned by hydroelectricity generation. The transition to low-carbon electricity generation,
The Atlantic Link proposed by Emera Energy was a 1,000 beyond hydroelectricity, saw some significant
MW 600 km undersea HVDC from New Brunswick to advancements in Alberta.8 Round 1 of Alberta’s request
Massachusetts. The second project was proposed by for proposals for renewable power resulted in
Hydro Quebec – the Northern Pass Transmission Project. approximately 600 MW of wind power at a bid price of
This project is 1,090 MW and 79 km long. 3.7 cents/kWh. This price is supported by an estimated
$10 million annual fee to the generators. In total, then,
the generation costs are an estimated 4.7 cents/kWh.
This low cost reflects the technology innovation seen in
wind generation over the last ten years plus the high-
value wind resource in southern Alberta. The results of
the auction are also in part due to the competitive
bidding process that was used instead of contracting or
feed-in-tariffs.
Alberta also took another step toward the low-carbon
transition with the launch of Energy Efficiency Alberta.
This initiative brings Alberta in as the last jurisdiction in
Canada and the US to have an economy-wide program
promoting energy efficiency. The plan is to develop
industrial, commercial, and residential programs funded
by revenues from the provincial carbon tax. The budget
for this agency is $648 million over five years.9 Programs
will focus on improving efficiency in the consumption of
electricity and natural gas.
Finally, the federal government made some changes to
its coal-fired electricity generation regulations.10
Originally, the regulations set a timeline for the
retirement of these plants between 45 to 50 years; the
typical life of a plant. The deadline has been amended to
2030 regardless of the age of the plant. However,
further amendments are being introduced allowing for
the coal-to-gas conversion of some plants. The intent is
to encourage the early replacement of coal for natural
gas before the 2030 target.
At the same time, the federal government introduced
new regulations for the generation of electricity using
natural gas. These regulations provide two limits for
carbon dioxide emissions. For plants larger than 150
MW, the limit is 420 tonnes of CO2/GWh. For those
smaller than 150 MW, the limit is 550 tonnes of CO2/
GWh reflecting the larger percentage of variable
operations typically seen by these plants.
CERI Electricity ReportPage 3
Canada’s electricity supply system is approximately 84
percent zero emissions; much higher than most other
developed countries. With these hydroelectricity, wind
and coal changes in 2017, that percentage will increase.
Endnotes
1
https://www.ontario.ca/page/ontarios-fair-hydro-plan
2
https://www.theglobeandmail.com/news/british-columbia/
bc-to-proceed-with-site-c-hydroelectric-dam/article37290570/
3
http://www.cbc.ca/news/canada/manitoba/manitoba-hydro-
rate-increase-pub-1.4430914
4
http://www.cbc.ca/news/canada/manitoba/manitoba-hydro-
rates-increase-1.4101568
5
https://www.ceri.ca/studies/latest
6
http://www.ieso.ca/-/media/files/ieso/document-library/
sac/2017/sac-20170510-ontario-hydro-quebec-
agreement.pdf?la=en
7
http://www.cbc.ca/news/canada/newfoundland-labrador/
stan-marshall-muskrat-falls-nupdate-1.4174569
8
https://www.aeso.ca/market/renewable-electricity-program/
rep-round-1-results/
9
http://calgaryherald.com/news/local-news/new-head-of-
energy-efficiency-alberta-promises-agency-will-have-real-
impact
10
https://www.canada.ca/en/environment-climate-change/
news/2018/02/
technical_backgrounderproposedfederalregulationsforelectrici
tyse.html
Relevant • Independent • ObjectivePage 4
Major Generation Projects in Canada
Province/ Capacity Expected
Name Status
Territory (MW) In-Service Date
Site C
British Columbia 1,100 2024 Construction began in July 2015 and is ongoing.
(Hydroelectric dam)
The first generating station was
commissioned in 2014 and the
Romaine Hydro Project
second in 2016. Construction work on the Romaine-3 and Romaine-4
(Hydroelectric complex consisting of 4 individual Quebec 1,550
The third and fourth generating developments is underway.
plants)
stations will be operational in 2017
and 2020 respectively
Construction on the Muskrat Falls Generating Facility started
Muskrat Falls: 2018
Lower Churchill Project Muskrat Falls: 824 in 2013 and is currently ongoing. According to Manitoba
Newfoundland Gull Island: 3 years after Muskrat
(Muskrat Falls and Gull Island hydroelectric) Gull Island: 2,250 Hydro the project remains on track to meet the projected in-
Falls
service date.
Keeyask Project
Manitoba 695 August of 2021 Construction started in 2014 and is progressing.
(Hydroelectric power plant)
6 Pickering units extended to
Bruce: 6,300 2022; Refurbishement of the Darlington station is underway.
Bruce, Darlington and Pickering
Ontario Darlington: 3,500 4 further extended to 2024 Planning has already begun to refurbish Darlington Unit 3.
(Nuclear Power Refurbishment)
Pickering: 3,100 Darlington refurbishment will take Bruce and Pickering commences in 2020 onwards.
about 10 years to complete
Brazeau hydro expansion & adition of pumped
Currently under review
hydro storage Alberta 900 2025
Major Transmission Projects in Canada
Province/ Capacity Expected
Name Status
Territory (kV) In-Service Date
Bipole III Transmission Reliability Project
Manitoba 500 2018 Project construction is almost complete
(HVDC line)
Manitoba – Minnesota Transmission Project
Manitoba 500 2020 Currently under regulatory review
(AC line)
Labrador - Island Transmission Link
Newfoundland and Labrador 450 2020 Transmission towers installed
(HVDC line)
Maritime Link Transmission Newfoundland and Labrador,
200 to 250 2017 Construction began in 2014
(HVDC and HVAC line) Nova Scotia
Construction activities in the summer of 2017. First tower
Fort McMurray West Transmission Project (AC line) Alberta 500 2019 went into ground on Nov 9, 2017.
Chamouchouane–Bout-de-l’Île Transmission Line Quebec 735 2018 Construction began in 2015
500 km lines- 315 and
Romaine Complex Transmission Line Quebec 735 kV 2020 Construction began in 2011
CERI Electricity ReportCanadian Electricity Production 2017 Provincial Electricity Trade with the US
by Fuel Type January-December 2017
GWh
70,000 29,000
27,000
25,000
60,000
23,000
21,000
50,000 19,000
17,000
15,000
40,000 13,000
11,000
30,000 9,000
7,000
5,000
20,000 3,000
1,000
10,000 -1,000
BC AB SK MB ON QC NB NS NL
-3,000
-5,000
0 -7,000
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 -9,000
Export volumes Import volumes Net Exports GWh
Combustible Fuels Nuclear Hydro Geothermal/Wind/Solar/Other Previous Year Total 2016
Source: IEA, CERI Source: NEB, CERI
Electricity price ($/kWh) Range of Wholesale Electricity Prices 2017
Current Electricity Retail Rates by Province
(based on 1000kwh household monthly consumption) for Selected Regional Trading Hubs
> Trade Canada
$/kWh
0.45 Texas(ERCOT) > MB Hydro
0.40
Mid C > BC Hydro
0.35
0.30 New England > QC Hydro
0.25
Northern California > BC Hydro
0.20
0.15 PJM > Ontario Power Gen
0.10
Southern California > BC Hydro
0.05
-5 10 25 40 55 70 85 100 115 130 145 160 175 190 205 220
0.00
BC AB SK MB ON QC NB NS PE NL NT YT NU Price (US$/MWh)
Source: BC Hydro, Fortis Alberta, SaskPower, Manitoba Hydro, HydroOne, Hydro Quebec,
Energie NB Power, Nova Scotia Power, Maritime Electric, Newfoundland Power, Northwest
Territories Power Corporation, Yukon Energy, Qulliq Energy Corporation, Nunavut Energy,
Relevant • Independent • Objective
Page 5
CERI Source: AESO, CERIBritish Columbia Weekly Demand 2017 Alberta Weekly Demand 2017
Page 6
MW MW
11500 11500
10500 11000
10500
CERI Electricity Report
9500
8500 10000
7500 9500
6500 9000
5500 8500
1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan
Weekly average Weekly peak Weekly average Weekly peak
Source: BC Hydro, CERI Source: IESO, CERI
Ontario Weekly Demand 2017 New Brunswick Weekly Demand 2017
MW MW
23000 3200
22000 3000
21000 2800
20000 2600
19000 2400
18000 2200
17000 2000
16000 1800
15000 1600
14000 1400
13000 1200
1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan
Weekly average Weekly peak Weekly average Weekly peak
Source: NBSO, CERI Source: ICE data, EIA, CERIYou can also read
