Canada Needs a Serious Conversation on Electricity

This was one of the key messages from yesterday’s Canada 2020 panel on the future of Canada’s electricity sector.

A conversation on electricity for us, of course, means Talking Nuclear. Nuclear energy is an affordable, available and reliable source of energy, meeting growing demands for electricity, now and in the future – if we let it. And nuclear provides a clean and reliable source of power too making it an important part of Canada’s clean energy portfolio – because there are virtually no greenhouse gas emissions from our power generating plants and it doesn’t contribute to climate change or smog.

Canada 2020 has made quite a name for itself by hosting a number of high-profile panels on pressing public policy issues. Today’s Power Talk event was no exception: with Don Newman as the moderator, some of Canada’s leading thinkers took two hours out of their busy days to discuss the future of Canada’s power infrastructure.

For decades, Canada’s public has become used to cheap, reliable electricity. Got a Flat Screen TV ? Plug it in. New computer? Plug it in. That’s the current reality in Canada – and one of the reasons life in Canada is as good as it is.

In his opening speech, Pierre Guimond – President & CEO of the Canadian Electricity Association – reminded the audience that much of Canada’s electricity infrastructure is now more than 50 years old, and that it was originally built to provide electricity to about 20 million people. And while the system was set up – fortunately – with considerable overcapacity – it is becoming quite stretched, now that Canada’s population has reached about 35 million people, and continues to grow.

Since the 2003 Blackout, the Ontario electricity system has come more than once very close to the point of becoming overloaded from excessive demand – and while excellent management and a bit of luck succeeded in avoiding widespread outages, the risk of major brownouts and blackouts is increasing from year to year. Already, some companies have decided against doing business in Ontario, simply because they have looked at the local electricity system and found it wanting.

The Cost of Not Investing in Canada’s Electricity Infrastructure

If Canadians want to continue living in a country where electricity comes from a plug in the wall whenever it is needed, it will be necessary to invest at least $15 billion every year, for 20 years.

This certainly is a lot of money – particularly during the current economic downturn – but certainly also pales before the costs of not investing enough.

Jayson Myers – President and CEO of the Canadian Manufacturers & Exporters – provided the audience with a good illustration of what can happen when the electricity system is not reliable: a small Ontario-based food manufacturing company lost more than $25,000 when it suffered a series of power surges lasting no more than 6 seconds. Most consumers probably wouldn’t have noticed this – beyond a brief flickering of the room lights – but since all the company’s control systems were electronic, the entire factory reset and needed to be restarted.

As several speakers pointed out, Canada as a whole currently invests only around $10 billion annually into the electricity system – almost a third too low.

And while some analysts have pointed to the recent slump in electricity demand, Craig Alexander – Senior VP and Chief Economist at TD Bank Financial Group – was adamant that expecting Canada’s electricity demand to stagnate, or even drop further, is unrealistic. Just on the consumer side, there is an increasing demand for electronic devices across the board. And once the economy finds its footing again, industry demand is bound to rise as well.

Not only are current investments too low, according Derek Burney, Canada’s regulatory system is needlessly cumbersome and often delays desperately needed energy projects by decades, while companies spent billions just to go through the process. This is no argument against good regulation to protect the environment and public health, but regulators should take steps to make it more efficient.

Nuclear Power Part of the Solution

There also was broad agreement on the need to pursue an energy policy that focuses on ensuring improved environmental performance, and a reduced reliance on fossil fuels. However, while going ‘green’ is generally a good thing, care should be taken to invest in technologies that are likely to provide Canadians with sufficiently reliable energy over the years. In this context, John Manley summarized the sentiment around the table by saying that nuclear must remain part of the solution, particularly in Ontario, where its role as base load power is irreplaceable.

A Pan-Canadian Strategy

Finally, all participants agreed that Canada needs to find a way for a national strategy – not just provincial or regional solutions. This country is blessed with some of the richest and cleanest energy sources in the world. Energy should be Canada’s economic advantage, not challenge. While the federal government does not determine provincial energy policies, there is a role for the federal government to provide leadership and encourage cooperation between provinces and across the country on energy.

This could involve streamlining the regulatory system throughout Canada, helping to improve interconnections across provincial borders, raise awareness for the need of greater energy cooperation and improved energy policy.

To this end, the Canadian Nuclear Association, along with the Canadian Electricity Association and others, is a member of Energy Policy Institute of Canada (EPIC), an organization whose sole purpose is:

to develop a comprehensive, pan-Canadian approach to energy which will provide the foundation for recommendations to federal, provincial and territorial government authorities responsible for energy and environment policy. We believe better analysis, based on better information, will lead to better policy.

Whatever the roles of the federal and provincial governments maybe in the future, one thing is clear: Canadians cannot afford to postpone serious conversation and decisive action on electricity much longer. Every year we wait is a year closer to the point where our current system becomes so unreliable that it no longer enables economic growth in this country, but undermines it.

Among the documents handed out during the event was this little graph. Puts the cost of electricity into perspective, doesn’t it?

An event recording of the PowerTalk symposium, and other materials, is now available online.