Canada's power grid needs $293B infusion: report - Action News
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Canada

Canada's power grid needs $293B infusion: report

A study says the country's electricity grid needs an investment of $15B a year for the next 20 years to service old infrastructure and boost power generation from renewable sources.
A new report suggests that Canada's power grid needs an investment of $15 billion for the next 20 years to strengthen and maintain its infrastructure. (Jacques Boissinot/Canadian Press)

Canadas power grid will need an annual investment of $15 billion for the next 20 years in order to maintain aging facilities and meet rising demand, according to a report released Thursday.

Canadas Electricity Infrastructure: Building a Case for Investment, a study funded by the Canadian Electrical Association and conducted by the Conference Board of Canada, suggests that a total investment of $293.8 billion is necessary between now and 2030 to service old infrastructure and boost power generation from renewable sources like wind, solar and biomass energy.

"We want to be open and frank with Canadians, because this will all be reflected in the price of electricity," says Pierre Guimond, president and CEO of the Canadian Electricity Association.

Special Report: Power Switch

ThisCBC reportlooks at how power is generated and distributed in Canada today, at the huge changes coming over the next decade, and what those changes will cost. We all need electricity this is what you need to know about Canada's electricity plans. You can also:

Use thepower price calculatorto find out how much you'll likely pay for electricity in different parts of Canada by 2020.

Exploreaninteractive mapof all the major power plants in Canada and how the mix will change over the coming decade.

Balance Canada's power budgetby seeing how increasing or decreasing the use of different generating technologies affects greenhouse gas output and household electricity prices.

Investment in Canadas electrical grid was high in the 1970s and '80s, as power producers attempted to meet a significant growth in demand. The result was overbuilding, and supply overwhelmed demand. That helped to keep the cost of electricity low for several decades, but now major new investment is needed to replace worn out plants.

"Most of what is out there was built before 1980. We have been focused on keeping prices low and keeping reliability high for all these decades. Weve maintained the system, but weve not added much large capacity to it, except for some Hydro Quebec projects," says Guimond.

"New neighbourhoods have popped up all over the country as the population increased and we became more urbanized, and this led to a lot of increase in the distribution sector investment."

According to the report, the largest chunk of the recommended investment $195.7 billion is required for power generation, with another $62.3 billion required to improve the distribution system and $35.8 billion for transmission.

The necessary investments in generation identified in the report include building new plants with renewable energy sources as well as refurbishing, repowering or retiring existing stations.

Quebec is the biggest generator of power in Canada, with a 2010 capacity of 47,013 megawatts (MW), while Ontario is second with 33,845 MW and British Columbia third with 15,093 MW. According to the report, Ontario is proposing the largest increase in capacity (11,572 MW), followed by Alberta (7,543 MW) and B.C. (4,258 MW).

Canada is a net exporter of electricity and diverts seven to nine percent of its capacity to the American market. Canadas electricity sector employs 116,000 and contributed $24.6 billion to the economy in 2010.

Len Coad, director of environment, energy and technology policy for the Conference Board of Canada, says building a new diesel, fuel oil or natural gas facility costs about $2 million for every megawatt of generating capacity, while nuclear and coal technology costs about $4.5 million per megawatt.

Canadian power plant database

Wondering about power plants near you? Search CBC'spower plant databaseto find out details about existing or planned generating stations across Canada. Search by plant type, owner or location.

Refurbishing an existing facility can cost up to 90 per cent of building a new plant, he says.

"Essentially what it comes down to, especially for thermal plants coal, natural gas, fuel oil, diesel is at the end of the [plants] useful life, when you repower, youre essentially taking everything out, leaving the site and the connection to the grid, and starting over," says Coad.

To generate the report, the Conference Board of Canada first identified all facilities that are operational, under construction, planned or proposed across the country. To determine future energy demand, Coad and his fellow researchers used the National Energy Boards outlook up to 2020, and then did their own analysis to project demand to 2030.

The report forecasts a continued reliance on both public and private investment in Canada's electrical grid, without recommending specific arrangements.

"In B.C., Manitoba and Quebec, you have a private entity thats actually building the generation facility, but the revenue stream is guaranteed or has strong assurances because theres a long-term contract with a Crown utility. Here in Alberta, where I live, everythings private, so you dont have the same situation," Coad says."But what should be public or private, we didnt address."

"Consumers are the ones who pay for electricity, and because of these investments, they will be paying more for electricity," Guimond says. "But, I can add quickly to that, electricity in this country is a bargain always has been, and if we have anything to say about it, always will be."