Thank you.
Mr. Chair, ladies and gentlemen, and committee members, thank you for the invitation to appear today. My name is Blake Shaffer. I'm an associate professor of economics at the University of Calgary, where I co-founded the university's electricity centre. I also co-direct Canada's energy modelling hub and lead a new initiative, western transmission catalysts. I'm a frequent policy adviser to the governments of Alberta, British Columbia and Canada. Before academia, I spent 15 years in industry, trading electricity and natural gas.
Let me begin today with the big picture. The IEA has recently declared that we are entering “the age of electricity”. That phrase captures two simultaneous shifts. The first is cleaner supply, which means more wind, solar, nuclear, geothermal and hydro in the generation mix. The second is greater electrification, which means more of our vehicles, furnaces and factories running on electricity instead of fossil fuels. Canada has a strong starting point on both. Nationally, we are already over 80% clean, although that number differs greatly from province to province. We also have a flexibility advantage from our large hydro fleet that the rest of the world can only envy.
Other countries are moving faster on the second dimension, which is electrification. In the last 15 years, China has gone from electricity making up 15% of its final energy demand to over 30%. Over the same period, Canada has moved from 21% to only 24%. The world is electrifying. Canada has every natural advantage to lead, but we can also be left behind if we don't act.
Today I want to flag two areas, one macro and one micro, in which I see significant wins on the table if we seize them.
The first area is interprovincial transmission. Forty-three years ago, my father testified before a federal committee, much like this one, arguing for stronger interties between the western provinces. The case he made then is essentially the same one I will make today. Critically, much has changed to make this idea even more compelling. We now have far more variable renewables that benefit enormously from geographic diversity—for example, pairing BC Hydro's reservoirs with Alberta's abundant and cheap wind and solar. Similarly, Manitoba offers flexibility that can help enable Saskatchewan's nuclear ambitions. A surge in expected load growth, from data centres and broader electrification, means opportunities abound. These are opportunities we simply cannot capture working province by province.
Finally, our relationship with the United States has become more tenuous. Canada still trades more power with the U.S. than we do across our own provincial borders. That trade is valuable, but we should also look within to reduce our dependence and to strengthen our competitiveness. The political ambition to expand interprovincial transmission is here. What's missing is the “how”. This is where the western transmission catalysts project comes in. With the support of all four western provinces, and working with utilities, grid operators and first nations across the west, our team is tackling the long-standing commercial, regulatory and physical barriers that have kept stronger interprovincial transmission stuck on the drawing board. We will have more to share publicly on this initiative in the coming months, but I will tell you this: In 25 years in this sector, I have never seen a stronger likelihood of success.
The second big win is flexible demand. Consider electric vehicles: one million EVs in my home province of Alberta would add roughly 3% to 4% to annual electricity demand. That is manageable. However, one million EVs all charging at the same time would increase our province's peak capacity needs by 50%. That is not manageable.
We stand at a fork in the road. One path leads to the bad place: higher peaks, massive upgrades to our distribution networks and higher costs spread across everyone. It doesn't need to be that way. The other path is flexible demand: consumers shifting consumption away from peak periods, making fuller use of existing networks and spreading system costs over a larger base, resulting in lower average costs for all. Around the world, we're seeing the growth of time-varying rates and demand flexibility services as low-cost alternatives to expensive peaking supply.
Mr. Chair, Canada has an enviable starting position, and all the tools needed to succeed, but we must act. In the age of electricity, a robust and affordable electricity system will be a key competitive advantage. Interprovincial transmission and a concerted push on demand flexibility are two big wins on the table.
Thank you.