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CEA identifies a vision for the system in 2050

Ottawa: The Canadian Electricity Association (CEA) released a report March 25 entitled Vision 2050: The Future of Canada’s Electricity System. The report sheds light on the urgent need for informed decision-making both in policy development and on-going infrastructure investment if Canada is to maintain the reliability, affordability and sustainability of the electricity system that Canadians rely upon.

           “We’re in the midst of unprecedented capital investment to modernize Canada’s electricity system,” said Jim Burpee, President and Chief Executive Officer of the Canadian Electricity Association. “Electricity infrastructure is replaced only very slowly and the lead times for planning are long. That means decisions being made today will impact what our system will look like in 2050.”

          By 2050, most of today’s electricity assets will have been renewed or replaced, the report notes. That fact needs to be understood within three fundamental characteristics that combine to determine its evolution, it adds:

• Slow turnover. The industry renews capital on a scale, typically, of 40-50 years, and sometimes much more. DeCew Falls Station No. 1 in Ontario entered service in 1898.

• Energy interdependence. More than 508 generating units at 265 power plants across Canada and the United States were shut down during the 2003 outage. With the exception of Nova Scotia, P.E.I. and Newfoundland, all Canadian provinces are connected to neighbouring U.S. states via more than 30 major transmission interties.

• The electricity system as a public good: Although electricity companies look to advance their own interests, as all businesses do, the industry is also a steward of the public trust.

          The report identifies a “most likely scenario” with some key themes:

• Overall, Canada is a hydroelectric power, with some 63 per cent of our electricity generated by large and small renewable hydro resources;

• Canada’s electricity system is already relatively clean and low carbon, with only 15 per cent generated from conventional steam (coal and natural gas), and a roughly equivalent amount generated from nuclear;

• Yet very little of Canada’s current electricity production is generated from sources of renewable energy other than hydro. In 2012, wind contributed some 1.5 per cent of energy production, solar 0.04 per cent, and tidal power is negligible. However, there are significant regional and provincial variations in the mix of assets.

          The report refers to a Conference Board estimate of $350 billon worth of investment needed by 2030, “just to maintain the reliability of the system we have today.”

          The report then identifies three likelihoods under this scenario:

1. Under virtually all scenarios, hydroelectric power will continue to be the dominant electricity resource in Canada in 2050;

2. Nuclear may remain part of the mix in those provinces where it now plays a significant role, such as New Brunswick and Ontario. Apart from the possibility of Saskatchewan, it is unlikely to expand outside those provinces where it is already part of the generation mix;

3. Renewable energy resources that currently have a relatively small market share – like wind, solar, biomass and tidal – are likely to grow their collective share of the overall generation mix.

          The report’s major recommendations:

• Accelerate Innovation and Customer Management of Energy

• Implement Financial Instruments for Carbon Reduction

• Enable Electric Vehicles

• Expand Collaboration Across Borders

          The report is available for free at www.electricity.ca/media/Vision2050/Vision2050.pdf.