Canada, U.S., Mexico Face Unique Energy Challenges

By John Stewart
Director, Policy and Research
Canadian Nuclear Association

Many serious challenges currently face utilities and major energy projects across North America.  That was the overarching message from the World Energy Council’s North American Regional Forum, which brought Canadian, U.S. and Mexican representatives together in Calgary on June 26.

• Marie-Jose Nadeau, WEC chair, said big projects are increasingly “all-of-society” issues, and once-national energy questions are increasingly international issues (as North Americans have seen with, for example, the EU’s Fuel Directive).
• Pollster Greg Lyle of Innovative Research presented research on low public confidence in authority. Only about half of Canadians agree that “government and regulators do a good job protecting the public interest on major developments.” This is consistent with an increasing lack of trust in authority. Large minorities of Canadians and Americans believe that corporations deliberately suppress environmentally beneficial technologies.
• Toronto Hydro President Anthony Haines noted that while one-third of his company’s infrastructure is past its expected lifespan, it is currently supporting unprecedented growth in high-density housing (“becoming another Manhattan”) and bracing to host the 2015 Pan Am Games. A 20-year period of strong electricity cost increases is just beginning.
• Jim Burpee, Canadian Electricity Association (CEA) president, said that increases in the cost of a commodity that accounts for about two per cent of household expenses draw a disproportionate emotional response. This may be because consumers have no option to test price-quality trade-offs as they do for most products. CEA has worked with Innovative Research on how best to explain electricity’s value proposition, and they focus on two tactics: comparing electricity to other necessities, and emphasizing the need to leave a reliable system for future generations. The result is a 30-second ad with the tag line, “Invest today. Power tomorrow.”
  
• While the U.S. and Canada have experienced the shale gas revolution, Mexico’s demographic and economic growth has made it a net importer of oil and gas. Mexican delegates fleshed out their country’s dramatic reform plans for the energy sector, which they expect will return Mexico to net exporter status.
• Mexico’s electric power monopoly CFE, which is currently plagued by financial losses as well as power theft, will remain a state monopoly in transmission and distribution. However, the generation sector will be thrown wide open to private investment and new legislation will promote clean power generation.
• Mexican participants described the various challenges of integrating renewables, particularly solar, into their electricity grid.
• Mexican energy regulator Francisco Barnes said his country, whose two nuclear power reactors are aged, “must eventually reopen the question of re-launching its nuclear energy program.”