National Energy Board

www.neb-one.gc.ca

Common menu bar

• Français
• Home
• Contact Us
• Help
• Search
• canada.gc.ca

Breadcrumb

Home > Speeches and Presentations > Speeches and Presentations 2009 > Interprovincial and International Electricity Transmission

Interprovincial and International Electricity Transmission

Presented by
Sheila Leggett
Vice-Chair and Member
National Energy Board

Canadian Nuclear Society
Calgary, Alberta

3 June 2009

Hello everyone.

My name is Sheila Leggett and I am very pleased to be speaking to you today as Vice-Chair and Member of the National Energy Board. I wish to thank the Canadian Nuclear Society for inviting me to participate in this year's conference here in Calgary.

The future of the electricity sector in Canada, as with energy overall will be challenging. Indeed, finding ways to use and produce energy that minimize the impacts on our environment and society is one of the key challenges Canadians face in the 21^st century.

NEB's Role

The NEB has two broad responsibilities that derive from the National Energy Board Act.

Our regulatory role includes: oversight of the construction and operation of international and interprovincial pipelines and international and "designated" interprovincial power lines; authorization of pipeline tolls & tariffs; and authorization of energy exports (oil, NGLs, gas and electricity) and imports of natural gas.

The Board's goal is to ensure that facilities under NEB jurisdiction are safe and secure, meet environmental criteria, and respect the rights of people who may be affected. Public engagement is a key aspect of this work. We endeavour to be an efficient and effective regulator. We want to ensure Canadians are provided with efficient energy infrastructure and markets. To meet these goals we have developed strategies based on market-based principles and goal oriented regulation.

Markets work best with good information. We believe that the free flow of information is part of what makes energy markets efficient, and providing this information to the marketplace contributes to economic efficiency. Our advisory work includes informing the government, industry and the broader public about developments in energy supply and markets through our Energy Information Program. This includes undertaking reports like Canada's Energy Future, other Energy Market Assessments and making energy information available on our web site.

We cannot work alone in pursuing these goals. Our partners inside and outside government are key to our achieving success. All of the NEB's work is fundamentally based on consulting with stakeholders.

NEB's Electricity Oversight

I'd just like to expand a bit on our electricity oversight.

Apart from authorizing electricity exports, most of the regulatory oversight of the electric industry resides with the provinces, that is, with respect to the siting and operation of generation, transmission and distribution facilities. Although the IPLs constitute only a small portion of the total transmission system, they link the provincial systems to adjacent U.S. markets and thus enable important international trade. They also provide reliability benefits on both sides of the international border.

On the subject of reliability, the NEB has "recognized" the North American Electric Reliability Corporation (NERC) as the Electric Reliability Organization in North America, as applicable to International Power Lines. In 2007 NERC reliability standards became mandatory in the United States. Canadian regulators, including the NEB, are working toward the implementation of mandatory standards in their respective jurisdictions. We contemplate introduction of appropriate reliability regulations in the near future. In recognition of the interconnected nature of the domestic and export facilities, we are working with the provincial regulatory authorities, industry and our counterparts in the U.S. and Mexico on the best way to implement the regulations.

Interprovincial & International Interconnections

As can be seen in this illustration, reproduced for the Canadian Energy Overview released in May 2009, while the majority of trade in electricity is between Canada and the United States, there are significant interprovincial flows as well.

Energy Futures Report & Reference Case Update

The key objectives of our Energy Future Reports are to provide a comprehensive analysis of Canadian energy markets and to provide a framework for public discussion on emerging issues and trends. Our 2007 report examines different possible energy futures that may unfold for Canadians up to the year 2030.

The report includes a baseline projection, called the Reference Case, to the year 2015. Three different scenarios, each with its own internally consistent set of assumptions, such as economic growth, action on environmental issues and energy prices, are then used to examine Canada's energy future. As part of the report we studied trends and issues related to electricity demand, generation and infrastructure. We looked at emerging technologies and alternative energy sources. While currently only a small part of the generation mix they are growing fast and will be important for sustainable development in the future.

A lot has changed since our report was issued in November 2007 and the Board has been working on an update for the Reference Case due to be released at the end of the month. This Reference Case Update will include the latest economic and policy information available, and cover the period to 2020. While the Reference Case Update is a single scenario, it looks at the effect of changes in oil and natural gas prices in High and Low cost sensitivities.

NEB - Energy Futures

Domestic demand for electricity is the primary driver of electric generation. Demand in turn depends on:

• Economic activity
• Relative prices of alternate types of energy
• Energy efficiency/conservation initiatives

The outlook for 2020 is largely determined by current facilities and plants on the drawing board.

Key messages:

• Hydro continues to dominate
• Significant "renewables" growth but from a small base. The growth is impressive but the absolute amount is still small.
• Coal down, mainly in Ontario, but some reduction elsewhere as well
• Nuclear grows, not only in traditional regions but in other parts of Canada
• No ONE form of generation can do everything. There are synergies when different types of generation are used.

Potential New Electric Transmission

A stylized representation of potential new transmission paths suggests significant new transfers:

• from Labrador and Quebec to Ontario and the U.S. northeast
• from northern Manitoba to Ontario and the mid-western U.S.
• from Alberta to B.C. and to the U.S. Pacific northwest and California
• from Alberta to Montana
• from Alberta to Saskatchewan and into the mid-western U.S.

Such projects, if they went ahead, would go some way toward strengthening the east-west interconnections and increasing north-south flows associated with international trade in electricity.

Such a representation conjures up the concept of an east-west grid. We have not analyzed that here, recognizing that large financial commitments would need to be made in both generation assets and transmission. Of course, some segments of such a grid may be justified on their own merits.

The other point this raises is the increasing interconnectedness of the North American grid and the need for strong reliability practices. This is another driver for the NEB's work on mandatory reliability standards with NERC and other stakeholders.

North American Developments

Ensuring a reliable supply of electricity at reasonable prices is an important issue in jurisdictions all across Canada as well as the United States.

There appears to be public and government interest in policies to control emissions of greenhouse gases. Such policies could have considerable impact on the electric generating sector.

The exact shape such policies could take is not known at this time, and key stakeholders are following developments closely.

Canadian Implications

Some of the obvious key developments in GHG reduction include:

• Increased use of renewables
• Implementation of Carbon Capture and Sequestration (CCS) technology
• Development of Emissions Trading Systems
• Demand management / Conservation!

In many instances the devil will be in the details, especially for CCS and permit trading.

One technical development that may play an important role in determining how much new transmission is needed is the concept of the "Smart Grid". This concept uses advanced control systems to monitor and control the flow of electricity, allowing more power to flow over existing wires.

Synergies

While every generating technology has its strengths and weaknesses, by working together many of them can be overcome:

• Hydro systems often have excess capacity but are limited by the amount of water available. Wind generation can add energy to a hydro system. Wind is intermittent, but hydro generation can respond quickly to changes in wind generation, smoothing out the changes and allowing easier integration of wind turbines than would be seen in a thermal generating system.
• Hydro plants can also be used to bank energy. That is, during off-peak hours a hydro system can buy cheap power from a nuclear unit, saving water that can be used to generate electricity when prices are higher.
• All systems require a certain amount of base load of generation. Nuclear and coal plants are well suited to providing this sort of power as their incremental fuel cost is low and they can run steadily 24/7. Cheap, base load power facilitates energy banking, leveraging the investment in hydro facilities and reducing overall costs. While technical considerations limit where wind and hydro power plants are located, new nuclear generation can be built where it can make optimum use of the existing transmission system.
• Combined cycle natural gas generation is well suited to following hourly changes in load, complementing base loaded nuclear generation in mainly thermal systems. Its comparatively low capital cost makes it feasible to build natural gas fired generation in hydro systems that is only run at full capacity in years when water levels are below average. Transmission ties systems together, facilitating all these synergies.

Conclusions

These are indeed interesting times.

NEB's analysis, and the contemplation of factors driving the future energy outlook, suggests that the challenges ahead will require a mix of supply and demand-side options. Nuclear power will be one of these.

Important choices will be made, and we look forward to continued discussion with you and our other partners.

Thank you for your time.

This concludes my presentation, although I do have some further information on references and how to contact the NEB.

Further Reference

Canadian Energy Overview

The Canadian Energy Overview provides an assessment of current trends and some comment on short-term developments.

Energy Futures Reference Case Update

To ensure that the Energy Futures report (November 2007) remains relevant and useful for our stakeholders, the NEB is updating and expanding the Reference Case. The Reference Case Update provides an all energy supply and demand outlook for Canada to the year 2020. In addition, it revisits and includes updated energy price assumptions, macroeconomic assumptions, supply cost assumptions as well as updated government programs.

Energy Infrastructure EMA

The scope of the Energy Futures Report and Reference Case Update does not include any quantification of interregional or international flows or any associated requirements for adding transmission infrastructure. The proposed EMA would focus on the Energy Futures Reference Case and the changes in oil, natural gas and electricity markets; develop an assessment of the changes in flows over the projection period and the resulting incremental infrastructure requirements.

Contact Us

I also encourage you to get in touch with us for feedback on how we are doing, for suggestions on our energy analysis, and also to discuss energy matters. While we are an independent regulator, we are not a cloistered agency. Our ongoing interactions with energy sector stakeholders, landowners, persons with environmental interests, and citizens from all walks of life, continually improve our understanding of what is on the mind of Canadians when it comes to energy matters. Having this understanding allows us to improve our performance and fulfill our accountability for results on behalf of Canadians. So please do contact us.

 

Primary navigation (left column)

Date Modified:

2011-10-28