Spending on Canadian electricity infrastructure to be $293 B

By Michael Morrison

The Conference Board of Canada has issued a report entitled “Canada’s Electricity Infrastructure: Building a Case for Investment.” The report analyzed the current state of Canadian electricity infrastructure and determined the future investment that would be required to meet electricity needs through 2030. The report also notes that the electricity sector contributed $24.6 billion to the Canadian economy or about 2 per cent of the total gross domestic product.

            From 2010 to 2030, the electricity sector is expected to spend $293.8 billion to maintain existing assets and respond to market growth. It is anticipated that $195.7 billion will spent on generation, $35.8 billion on transmission and $62.3 billion on distribution. The average annual spend of $15 billion, which is higher then in any other previous decade, must accelerate to accommodate the changing generation supply mix, which will include more renewable generation, and to replace or refurbish aging assets. The report notes that half of the electricity generating stations in Canada were built before 1980.

            For generating capacity that is either under construction or in advanced planning stages, Québec leads the way with 5,238 MW of capacity, with Ontario second at 3,839 MW, followed by Alberta at 2,636 MW. However, Ontario has the most proposed projects, representing 11,572 MW of capacity followed by Alberta at 7,543 MW and British Columbia at 4,258 MW. Of the $195.7 billion expected to be spent on generation from 2010 - 2030, Ontario requires the most investment with $60 billion, followed by Alberta at $44 billion and Québec at $29 billion.

            The report notes that Canada has a primarily north-south transmission network that connects with the United States. This north-south focused alignment is expected to continue during the timeframe of the report even though there is some appetite to increase the east-west network. Although it is reported that the investment required for transmission is $36 billion, it is noted that this figure is likely underestimated due to the lack of public documents that identify transmission investment plans; also, some transmission requirements associated with new generation are currently not known. Of the known transmission projects, Alberta will require the greatest investment with $17 billion, followed by Ontario at $5 billion and British Columbia at $4 billion.

            Over the next 20 years, the investment in the electricity distribution sector is anticipated to be $62 billion. Québec will require the greatest investment at $22 billion followed by Ontario at $21 billion and Alberta at $11 billion. The report notes that increasing levels of distributed generation, smart grid developments and changing demand will affect the level of future investment spending.

            The report concludes that, “the key challenge is to manage costs to consumers.” What is not mentioned in the report is the ability to manage consumer expectations. The report identifies what investment will be required to maintain, and respond to the future needs of, the electricity system. However, customer education regarding why these investments are required, and therefore acceptance of the associated costs, will be the corner stone for gaining consumer support for cost recovery mechanisms.

            The full report can be viewed on-line at e-library.ca.

            — Energy @ Gowlings email: This email address is being protected from spambots. You need JavaScript enabled to view it.