Mr. Chairman, thank you for inviting me to speak to the committee.
You have invited us here to speak about cogeneration, or the simultaneous production of thermal heat and electrical energy. While cogeneration is not the main focus of our work, it is nonetheless one of the many factors to be considered in our market and energy analyses. We are planning to publish one of these analyses, the Report on Energy Futures, in October 2007.
Like many of the reports of this nature, it is a long-term balance of supply and demand in Canada, going out to the year 2030.
We have a number of other studies that we have conducted over the years, and I've distributed to the members of the committee a list of those studies. The ones I'd like to draw attention to, which will be the basis of our remarks today, are a study on emerging technologies that was conducted in June 2006 and a report that we completed on the challenges related to oil sands, which we produced in October. We were here with the committee in October to discuss that report.
We undertake all this work in the context of our mandate under the National Energy Board Act. Today I'd just like to very briefly touch on our mandate. I'm sure most of the committee is very familiar with it, and I won't go into great detail. I'll talk briefly about cogeneration, and my colleague Mr. Bob Modray will focus more on some sectoral and regional aspects of cogeneration, some benefits and challenges that come from the work. Then we will talk a little bit about our ongoing work on energy futures, which I referred to earlier.
Firstly, with respect to the National Energy Board, we are an independent federal tribunal. We are located in Calgary. We have been there since 1991.
Our responsibilities are twofold: regulatory as well as advisory. It's in the construct of the advisory role that we're here today, primarily talking about how we monitor energy markets and how they're functioning, and we produce a number of reports.
Just moving on to cogeneration, the focus of our comments today, it really has to do with the simultaneous production of thermal heat as well as electric energy, and it's often referred to as combined heat and power. Generally speaking, conventional power plants will emit a fair amount of heat that's created as a byproduct in the production of electricity, and cogeneration systems are a means to capture that lower-grade heat and turn it into a useful purpose, such as paper drying from the chemical processing, or space heating. The important thing is that you do need a use for that heat in order for cogeneration to work.
The next two slides are really just a very simplified process of how that heat is captured and reused. Essentially, you can take a standard thermal generation station from an efficiency of about 35% of the usage of the heat, and through cogeneration you can bring it up to 75% efficiency. So it's a significant gain as far as the reduction of waste heat and the use of that energy.
With that, I'll turn it over to my colleague, who's one of our senior economists who has been focusing mostly on electricity markets.
Bob.