Canadians tend to take their electricity for granted, except on the rare occasions when a blackout leaves us in the dark. But an aging electrical system, the increasing use of renewable power, and the looming shift to electric vehicles is forcing the industry to spend billions to update. At the forefront of these issues is the Canadian Electricity Association, which represents the widely diverse interests of private and public utilities and power producers. Despite the range of views of its members, there is common ground on many key issues, says CEO Jim Burpee.
Is Canada’s aging electrical infrastructure the biggest issue facing Canada’s electricity industry?
Yes, the No. 1 issue is dealing with the need for reinvestment and modernization of infrastructure. [That means] not only replacing what was built over the last 50 or 60 years, but also [new] technology. A study done in 2012 suggested that $350-billion [would be needed] from 2010 to 2030. That is about $15-billion a year, where in the past two decades we probably spent about $9 to $11-billion a year.
What parts of the infrastructure are most at risk?
It goes through the entire system, really. There is need for investment in generation [because of] aging assets that need to be replaced, or because of changes in regulation such as the new federal rules on coal fired electricity. On the nuclear side, in Ontario, there is the need for refurbishment.
With transmission, it is an issue of dealing with some older structures and lines out there, as well as tying in new facilities such as wind or new hydro, or new interconnections with the U.S. or between provinces. On distribution, there is a lot of aging infrastructure, and cities are getting denser, driven by the growth in all the condominiums and new office towers.
How do electricity prices stack up in Canada? Is our power cheap or expensive?
All our energy is cheap in North America relative to, say, Europe. But there are variances across the country. If you look at a residential user, the average cost of electricity for a standard house is $3 to $6 per day. We are really not paying a lot, considering the complex machine that delivers it all.
But some people have suggested the relatively high price of electricity in Ontario is keeping industry out.
There is no question that certain industries will look at what prices are and then locate accordingly, after they factor in a bunch of other things. Ontario is among the higher-cost provinces. So if you are a company that is very sensitive to electricity price, and you had the option of Manitoba, Quebec or Ontario, you wouldn’t go to Ontario.
How important is it for Canada to improve the transmission of power between provinces?
Because energy is controlled by the provinces, each province developed its own electricity system based on local resources, and did it independently. You are starting to see changes in that, as they look at how they can work together. The best example is in Newfoundland with the Lower Churchill development and its Maritime Link to Nova Scotia. A new tie line went in between Ontario and Quebec in 2009, and that was quite significant.
What about connections to the United States?
Ontario, Quebec and New Brunswick, have interconnections into New England, New York, and the U.S. Midwest. There is a large amount of trade that is going back and forth all the time. And this is all hidden – most people probably have no idea of how much trade is going on all the time.
With the growth of wind and solar in the U.S. and Canada, there is going to be need for more transmission to facilitate that. That is why it is critical to get proper transmission development on both sides of the border.
When more people put in solar panels and generate their own power, will that change how the whole system works?
It changes a lot. If more electricity gets injected [from homes or businesses], it requires changes to distribution, and sometimes transmission, because things were designed for one way movement, and now it is going two ways.
What’s the overall position of the industry on renewables?
Our starting point is that, in 2012 Canada generated 63 per cent of its power from hydroelectric, and that is renewable. But if you are talking about wind and solar and other technologies, the biggest issue is how you integrate non-dispatchable – or variable – power. Now you have variability, not only in demand, but also in the supply. [You have to figure out] how to integrate that and how to manage the storage aspect and line loading.
What is the future for electric vehicles?
Electric vehicles are going to produce a tremendous change over the next 10 or 20 years. If you live in a large urban area, the decision to move to electric vehicles will be one of economics, not of environment. That is because operating an electric vehicle is so much cheaper than a gas-driven vehicle. An internal combustion engine is extremely inefficient, whereas an electric motor is extremely efficient. And there are fewer moving parts in an electric vehicle.
Will the growth in electric vehicles force changes in the electrical infrastructure?
It certainly will have some impact on the distribution system. You have to manage when and how people charge their vehicles, so you don’t overburden the system. But it can be done. Your utility might tell you to to plug in your car between 10 p.m. and 5 a.m., but they will figure out the best time to charge it over that period. That way they can balance the loads. The system is intelligent enough to be able to do that now. But those pieces of infrastructure have to come along.
Your association has members from nuclear, coal and renewables organizations. How do you balance all that when each group has different interests?
We also have some entities that are owned by municipalities, some that are owned by provinces, and some are investor-owned. But there is a lot more common ground across all these than people might think.
The infrastructure issue is what binds all of them [and the fact that electricity] is a very complex system where, unlike other industries, there is no inventory of finished product. Other industries don’t have to have their production match their sales at all times. In electricity, everything has to line up all the time. Everything is interconnected and has to work together as a huge integrated machine.
President and chief executive officer, Canadian Electricity Association
Born in Toronto; 59 years old
BASc in mechanical engineering, University of Toronto
- Worked for 31 years at Ontario Hydro and its successor Ontario Power Generation
- From 2009 to 2011 was CEO of biomass startup Bridge Renewable Energy Technologies Inc.
- Named CEO of Canadian Electricity Association