Transcript Document
Diversifying the Mix: Alternatives to Conventional Generation CEA-NRCan Workshop Background Materials November 25, 2002 1 Topics Part 1 – Setting the scene Part 2 – Business context Part 3 – Managing the environmental agenda Part 4 – A focus on alternatives 2 Overview We need to assure supplies of affordable, reliable power for Canadians delivered in an environmentally responsible way. Industry and Government have to work together to create the right conditions for attracting the investment needed for a sustainable electricity future. 3 Part 1 Setting the scene 4 Canadian Demand, 1980 to 2000 and Projections to 2020 Net Electricity Demand (TW.h) 700 600 Historic 1.5% yr (1990 to 2000) 500 Historic 3.5% yr (1980 to 1990) 600 400 NEB 1.5% yr 580 560 300 NRCAN 1.2% yr 540 Expect slower than historical demand growth from 2010 to 2020 but still likely in excess of population growth. 520 200 MARKAL 1.1% yr 500 100 480 2000 2002 2004 2006 2008 2010 0 1980 1985 1990 1995 MARKAL (1.1% yr) 2000 2005 NRCAN (1.2% yr) 2010 2015 2020 NEB (1.5% yr) 5 Canadian Supply Growth: Average of Modeling Results for 2010 and 2020 New Demand, plant replacement and exports require significant new capacity build over the next twenty years. By 2020, 205 TW.h from new, replacement & life extension – 35% of 2000 production. Indicates new and replacement investment of over 20,000 MW per decade to 2020 (2000 6 capacity ~ 112,000 MW). Transmission Capacity Existing major NorthSouth inter-ties reflect historic market realities. Growing interest in interprovincial transmissionbut infrastructure is underdeveloped. New transmission needed to support competition, ensure reliability. Regulatory and tax changes needed to support transmission expansion. 7 Canada/United States Trade (Volume of electricity Imports and Exports) 60,000 Expor ts and Im por ts (GW.h) 50,000 40,000 30,000 20,000 10,000 Canadian Exports in 2001 to the U.S. represent approximately 7% of total Canadian generation and 1.2% of total U.S. consumption. U.S. exports to Canada have increased over the last few years. Time of day exchanges account for much of the growth. 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Exports Imports 8 Part 2 The business context in 2003 and beyond 9 Economic Context Growing demand despite economic uncertainty Market restructuring continuing but on a less certain track North American integration Risk averse Capital Markets 10 Security Context Electricity is a fundamental underpinning of the modern economy. Security, reliability and power quality of growing importance Security issue has long and short-term dimensions. Fuel/technology diversity Adequacy of supply Operating reliability Infrastructure protection 11 Environmental Context Climate Change Air Quality Habitat/Species Hazardous Materials and Waste Health & Safety Working with local communities 12 Part 3 Managing the environmental agenda… 13 We are making progress… Electricity intensity is declining in part as a result of energy efficiency. Emissions intensity of fossil production has been declining over the last ten years – and is set to decline further. Effective habitat management is now the norm. Waste & hazardous materials are increasingly subject to effective management regimes. Community engagement is now the norm. 14 Industry is making a contribution: efficiency and emissions intensity… Electricity intensity Utility DSM programs – promoting energy efficiency Association Quebecoise pour la Maitrise de l’Energie Action By Canadians on climate change program (ABC)/Energy Council of Canada Emissions intensity of fossil fuels Electricity climate change covenant proposal Electricity Industry Mercury Program 15 Industry is making a contribution: habitat/species protection & haz. waste… Habitat/Species Improved industry practices CEA/DFO Memorandum of Understanding on the Fisheries Act Hazardous Waste: Nuclear waste – Bill C 27 16 Industry is making a contribution: alternatives… Clean Coal: Canadian Clean Power Coalition Improvement to CCA class 43.1 Strong response to the Wind Power Production Incentive (WPPI) from the wind industry Beginnings of technological diversity 17 PART 4 A focus on alternatives… 18 Defining terms…. What is alternative power? Sample definition: power produced from sources other than conventional generating technologies (nuclear, oil, gas, coal, and hydro) such as: wind, bio-gas, bio-mass, solar, geo-thermal, and distributed technologies such as micro-turbines and fuel cells. 19 Justifying the focus… Need for continued diversity Industrial development opportunities Public demand Environmental preferability 20 Identifying Barriers… Fuel availability Technology development Capital costs Barriers to market integration Public knowledge Division of authority between levels of government 21 Policy instruments to address the barriers… Information programmes R&D and related support initiatives Production/consumption tax initiatives Regulation Encouragement for cooperation 22 Opportunities for Cooperation Bilateral pilot projects between established utilities and alternative power developers/promoters Investment by utilities in alternative power companies In-house development of alternatives capacity by utilities Gov’t-industry cooperation in promotion and development Gov’t-industry dialogue on policy tools 23 Key Questions Is there a priority ranking of barriers? Is there a priority ranking of instruments to address the barriers? Who are the key stakeholders in the debate on alternative energy? How can cooperation between the stakeholders be facilitated? How does the debate engage the consumer? What is the role of the Government of Canada? What is the role of electricity companies? How does this play out in the broader North American context? 24 Conclusion Three objectives underlie a sustainable electricity future: Security & Reliability Affordability Environmental Performance These three objectives require continuing investment. Government and Industry need to continue working together to create the right conditions. 25