While some predict cross-border market will continue to grow despite new administration in Washington, others worry about the President’s positions on clean energy and buying American.
Canadian electricity exporters remain upbeat about their growth prospects in the U.S. market despite President Donald Trump's pledge to reverse Obama-era climate-change policies and boost the domestic coal and natural-gas industries.
Fortis Inc.-owned ITC Holdings Corp. received regulatory approval this month to construct a 1,000-megawatt transmission line under Lake Erie and is now in talks with prospective customers in Ontario to sell surplus power into the American market. The line will also allow U.S. power generators to export electricity into Ontario.
The Lake Erie line is one of several projects in various stages of planning that would bring hydroelectric or other clean-electricity imports into the U.S. market.
In Newfoundland and Labrador, Nova Scotia, Quebec, Ontario and Manitoba, companies and provincial utilities are either moving forward with or proposing transmission projects that are touted as supporting a transition to a lower-carbon electricity grid.
Despite the new administration in Washington, the cross-border market for electricity will continue to grow, Terry Harvill, president of ITC Grid Development, said in an interview.
"The electricity market in the United States is like a large ship and once it has its bearing and is moving forward, it takes a long time to turn," he said.
The $1-billion (U.S.) Lake Erie transmission line represents Ontario's first direct link to PJM Interconnection LLC, which manages the grid for a vast market of 61 million people stretching from Maryland to Illinois. The 120-kilometre line from Nanticoke, Ont., to Erie County, Pa., will provide Ontario a "large export market for excess electricity generation."
The Canadian government has long touted the country's capacity to supply the United States with increased supply of hydroelectric and renewable power.
Manitoba Hydro currently has an application in front of the National Energy Board to build a link with Minnesota which will facilitate an additional 885-megawatts in exports to a total of 3,185 MW. In its application, the provincial utility said the transmission capacity "supports the goals" of the North American clean-energy accord.
Last July, Prime Minister Justin Trudeau signed an agreement with former president Barack Obama and Mexican President Enrique Pena Nieto, with a goal of having 50 per cent of all electricity come from clean-energy sources by 2025. As well, Canadian utilities have positioned themselves to benefit from Mr. Obama's clean-power plan, which would force states to cut emissions from their electricity sector.
However, Mr. Trump has abandoned Mr. Obama's focus on renewable energy, vowing to kill Mr. Obama's clean-power plan and touting the benefits of fossil fuels, including coal and natural gas.
However, many states have their policies aimed at reducing greenhouse gas emissions in the power sector, and Manitoba Hydro says those state plans – as well as market fundamentals – support clean-energy imports.
"We are continuing to monitor changes in legislative requirements and energy policy in these markets, but I think it is fair to say we still see a bright future for reliable and flexible hydroelectric power in the energy mix," Manitoba Hydro spokesman Scott Powell said Monday.
Many analysts question whether Mr. Trump can spark a revival in coal power, or merely slow the decline that would have been hastened by his predecessor's climate-change policies. The more fundamental competition with coal comes from low-cost natural gas, which the new President is also championing, noted Devashree Saha, an analyst with the Washington-based Brookings Institution.
Many states have their own renewable standards for electricity, including ones such as Ohio and Indiana that are heavily reliant on coal. "This is a long-term trend and I don't think it is going to be reversed," Ms. Saha said.
However, Canadian exporters are likely to face increased competition from gas, as the Trump administration throws its weight behind the expansion of gas pipelines into the northeast, and from local renewable-energy developers who will tout their "Buy American" status, said Sarah Ladislaw, energy analyst at the Center for Strategic and International Studies.