Evidence of meeting #65 for Natural Resources in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was interties.
A recording is available from Parliament.
Liberal
Denis Lemieux Liberal Chicoutimi—Le Fjord, QC
My last question is for Mr. Brouillette.
You talked about an increase in electricity consumption. Since the electrification of transportation is going to become more and more popular, would you have any figures to share with the committee on the increase in electricity consumption in Canada over the next few years?
Principal Consultant, Strategic Policy Economics
I have done the analysis for Ontario. I can say that to get to the 2030 targets, we must consider the electrification of transport, which includes the trucking system, the rail systems, electric vehicles, hydrogen-powered options, and all sorts of stuff like that; as well as winter heating. Between all of that, Ontario is going to need 60% more electricity than it currently has. To get to 2050 you can double that again, so it's a lot.
That equates to 14 new nuclear plants in the next 15 years if you want to meet 2030 targets. That's how much electricity is needed. It's a lot.
Conservative
Ted Falk Conservative Provencher, MB
Thank you, Mr. Chairman, and thank you to all of our guests at committee here today.
Mr. Brouillette, I would like to start with you. You said, “If Canada is smart....” Can you finish that?
Principal Consultant, Strategic Policy Economics
The smart part has to do with actually doing the analysis related to the engineering implementation, looking at the costs, looking at the demand, and optimizing the system. The hard part of smart is playing those three assets I talked about in conjunction with one another.
There's a nuclear advantage; presumably Canada can build these things faster and cheaper than anybody else. There's a hydro advantage, which has a limitation because there's only so much water that can be built, and we need more electricity than that can provide. We do have natural gas assets that can play a significant role for quite some time, particularly when we start putting in those additional “hydrogen into the gas system” ideas.
To make all that work does involve the provinces, it does involve interties, and it does involve thinking this through. As a citizen, I would like to see an emphasis on making this cheaper than the U.S. can and becoming an energy superpower exporting electricity to the eastern U.S. It's there. I'm doing a study right now to put the facts behind that. That would be a smart thing for Canada.
Conservative
Ted Falk Conservative Provencher, MB
Do you see the interties we have right now as being a bottleneck to exporting power? Do we have sufficient interties?
Principal Consultant, Strategic Policy Economics
If you wear the lens of today, we don't need any more. If you wear the lens of tomorrow, it depends if you believe there's going to be a lot more electricity required. I believe that. Depending on where you build the new supply, it affects whether you need to build interties.
If we're not smart about it, we might build expensive stuff in Ontario that may have been better built in Quebec and vice versa, and take away an opportunity. As long as the economics are looked at and decision-making around that is properly considered in a collaborative manner, we can end up with something that's unique and a gift to future Canadians.
Conservative
Ted Falk Conservative Provencher, MB
When it comes to interties, what does the construction of a typical intertie cost?
Principal Consultant, Strategic Policy Economics
The last time Quebec and Ontario got together to build an intertie, which was about eight years ago, I think it was $3.5 billion to $4 billion to put those things in place. That's the equivalent of two nuclear plants, 1.2 gigawatts of capacity.
Conservative
Policy Analyst, Canada West Foundation
I don't have too many numbers in the back of my head. We are more on the policy side, but we definitely think that you have to weigh the costs versus the benefits that will come about from these interties. There is a reason why we are not talking about strategic interties to Iceland, for example. It would be really expensive, even though there would be benefits from integrating those grids. You have to look at both.
Conservative
Ted Falk Conservative Provencher, MB
You stated in your comments that we do not have an integrated grid at the moment.
Policy Analyst, Canada West Foundation
We could have a much more integrated grid. There are limited interties between the provinces. In western Canada, I believe, there is a small intertie between Saskatchewan and Manitoba, and a small one between B.C. and Alberta, but if you look at the map, it's more north-south, between the United States and Canada, than east-west.
Conservative
Conservative
Ted Falk Conservative Provencher, MB
You made a comment about there being interprovincial trade barriers with the transmission of electricity. Can you talk a bit more about that?
Principal, Tom Adams Energy
Historically, electricity has been a guarded fiefdom of the provinces. Where there have been opportunities for interties, we have exploited some and not others.
One example is the long, decades-old conversation around further Atlantic Canadian electricity integration. Following on the comments of Mr. Martin, I would say that a barrier that prevented the maritime provinces from further integrating their power systems was purely a protectionist notion. They were trying to avoid job losses, which means efficiency gains, within their own jurisdictions. As a consequence, although there is electricity trade among the maritime provinces, it is not nearly as beneficial as it could be if looked at from the perspective of the customer, rather than the interest groups that feed off the customer's money.
The federal government could go a long way in encouraging the provinces, where there are efficient opportunities, to put customers first and encourage the kind of integration that could reduce the inefficiency of power systems. I am thinking particularly of Atlantic Canada, and also the B.C.-Alberta interconnection.
In the case of the Ontario-Quebec interconnection, Quebec's best customer for electricity, historically, was the U.S., and that's certainly the case today. Ontario has very extensive electricity interties with Quebec, but they are mostly underutilized. They are utilized primarily for reliability purposes.
Conservative
Ted Falk Conservative Provencher, MB
Are most interprovincial interties tariff-free or barrier-free?
Principal, Tom Adams Energy
They are tariff-free. We don't have tax measures or rate measures that interfere with these interconnections. What we have, primarily, is policy measures. For example, the 1995 federal review of interprovincial trade had a chapter on energy. It was left blank. This is an illustration of the kinds of things that have interfered historically with better electricity interconnection among provinces.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you all for being here.
Mr. Brouillette, you briefly mentioned distributed energy sources, and I think you said that as those grow, they would increase the value of interties and balancing the grid. I wonder if you could expand on that.
