Electricity is one of the foundations of the modern economy, accounting for about one-third of all non-transportation energy end-use. Electricity is clean and flexible at point of use but, most importantly, it has no substitute in the majority of applications. The effects stemming from disruptions such as the recent events in California or the 1998 ice storm in Ontario and Quebec clearly demonstrate how dependent we are on reliable electricity supply.
The future economy will likely be more electricity-dependent. Although electricity’s share of end-use energy has been stable for a decade, the newest areas of economic activity – the service economy – are most dependent on the interconnected electricity grid, its reliability, and increasingly, on the quality of the power delivered. Some long-term visions of a future of clean energy involve a much higher dependence on electricity in industrial applications, and most importantly, in transportation where electricity would provide the underpinning of the hydrogen economy.
But the generation, transportation and delivery of electricity pose challenges for society. Among the greatest of these challenges is managing for environmental sustainability.
Considerable progress has been made in managing the environmental consequences of electricity production, transmission and distribution. However, some of these consequences are inherent in the nature of the electricity system, including factors such as resource availability, scale, extent and interconnectedness. Some technologies – including the majority of Canada’s current generation mix – are virtually free of air emissions. Some can minimize the generation of hazardous wastes. But presently, no technology capable of delivering electricity at the scale required by society and in the way it requires can be deployed without having some impact on land, water, air, habitat, and local communities.
Complicating the equation is the fact that most technologies have some inherent locational limitations and therefore, the optimum choices will often vary from location to location. Different technologies also have different attributes that affect power availability and reliability, potential to be deployed in a decentralized manner, the need for interconnection, and the degree of reliance on other energy systems.
The challenge we face in managing the environmental sustainability of electricity is therefore one of balancing multiple objectives and multiple attributes. In this context, the fundamental question for policy is that of management models which will best enable us to achieve the needed balance.
The Canadian Electricity Association contends that sustainability is most likely to be achieved where there is a high degree of diversity of technologies and business models, where system connections are extensive and redundant, where rules across jurisdictions are highly compatible and where market barriers are minimized. With this as the backdrop, it is possible to envisage the key attributes of electricity in a sustainable future.
Electricity is affordable
Individual Canadians rely on affordable electricity to light, heat and cool their homes, manage their household tasks, and provide power for their information access to the world. In a sustainable world, electricity is available at a cost which encourages consumers to make appropriate choices about energy efficiency and conservation but which does not create undue burdens on the least fortunate.
Canadian business and industry also require affordable power. For some industries, competitiveness is heavily dependent on reasonably priced electricity supplies. In a marketplace interconnected across borders, power prices will tend to equalize, but power costs relative to the rest of the world continue to be a source of competitive advantage in North America.
Part of the affordability calculation is price stability since price volatility creates business risk and provokes consumer reactions with damaging political consequences. In a sustainable future, government policy facilitates investment and system expansion keeps pace with demand. Combined with regulatory and market instruments which help prevent uncompetitive behavior and manage the inherent volatility in electricity markets, these attributes ensure that power consumers are not subject to unreasonable price risk.
Electricity is secure and reliable
The system we have relied on for many decades has consistently ensured a remarkable level of protection against system failures. The system of the future continues to ensure such protection.
The system is built around technology and fuel diversity so that threats to any one source are mitigated in the short and long term by readily available alternatives. Market, regulatory and other policy factors encourage steady technology advancement and addition of new supplies consistent with the growth in demand. The system is highly interconnected with builtin redundancy so that reserve margins for any given interconnected market guard against unplanned outages and weather extremes. The system is effectively protected against threats of attack or sabotage. On an operating basis, effective regulatory structures and business cooperation reach across multiple jurisdictions to ensure reliability. The advancement of technology and effective regulatory systems ensure that very high degrees of power quality are available to consumers who need and will pay for it.
Electricity production and use is environmentally sustainable
Canadians and their North American neighbours want their electricity systems to be managed so that the environmental consequences are proportionate to the benefits of affordable, reliable power, and so that the consequences are consistently reduced by the effects of better management and better technology.
A growing economy is still accompanied by growing electricity demand but the steady decline in the electricity intensity of the economy allows such growth with ever smaller increases in electricity demand. Emissions which contribute to smog and acid rain or which pose health hazards are substantially eliminated by the application of advanced combustion technologies and related emission controls or by switching to inherently low emission technologies. The electricity industry is steadily advancing towards a very low greenhouse gas emissions profile. Hazardous wastes continue to be properly managed and long-term solutions are found to manage persistent wastes including radioactive waste.
Impacts on land, water and habitat continue to be subject to practical solutions including mitigation and offsetting actions. New, lowerimpact technologies, including emerging renewable technologies and distributed technologies, are a growing part of the mix, contributing to the diversity of options. Local communities are fully engaged in finding appropriate solutions to local impacts, and in some cases are business partners with electricity companies.
Realizing the Vision
Today’s electricity system embodies many of the above-described characteristics. Where improvement is needed, it appears to be within reach over the next several decades provided that we take the appropriate paths to get there. In some respects we are already on the right path and progress is being made. What is less clear is whether the pace is right and to what degree we risk misdirecting energy and investment through ill-advised policy choices.
Progress Towards Environmental Sustainability
It is a fact that we are making steady progress towards a more environmentally sustainable electricity economy. Where, how and to what degree we can accelerate it is a matter for debate, but the progress is certain.
Air Emissions
The application of technologies to improve combustion, fuel preparation and emissions control, together with a growing share of natural gas in the fuel mix, contributes to improved performance with respect to other air emissions. Such efforts have resulted in a decline in the rate of emission of sulphur dioxide (SO2) and nitrogen oxides (NOx) per unit of power produced in the electricity sector. As better measurement and control technologies are steadily deployed, similar results can be expected for particulate matter and mercury, two of the other key emissions from the sector.
Hazardous Materials
Over the past decade, the effective management of hazardous materials and wastes has become the norm for electric utilities. Until the early 1980s, polychlorinated biphenyls (PCBs), were routinely used as insulating oil in electrical equipment. Although this practice has been discontinued, significant equipment contaminated with PCBs remains in service. Utilities have been aggressively removing PCBs from their systems for a number of years, and have plans in place to continue this practice until they are PCB-free. Likewise, the electricity sector is addressing the issues associated with managing treated wood found in wood utility poles. The sector has taken a lead role in Environment Canada’s Wood Preservatives Strategic Options Process (SOP). Implementation of the SOP recommendations will ensure that wood poles are used, stored and disposed of in an environmentally sound manner.
Impacts on Habitat
Reducing impacts on habitat – especially aquatic habitat – has become a core part of the business of all generators, and hydro generators in particular. Habitat management is an essential element in the building and operation of hydro generation facilities. Flow regimes are closely regulated to ensure that habitat is neither flooded nor exposed. Hatcheries are under management by utilities to contribute to fishery development. Intake screens are closely monitored to keep fish juveniles from harm. Water-use planning programs are under development in several jurisdictions, and joint research efforts between government and industry continue to evolve.
Technology Diversity
Technology diversity is growing and set to accelerate. Wind power is starting from a small base in Canada compared to other countries but is on a growth trajectory. Installed capacity in Canada is now just over 200 MW, and response to the federal government’s recently announced wind power production incentive suggests that that capacity could grow dramatically over the next few years. The growing presence of independent power producers and the actions of traditional utilities are bringing on new biomass and natural gas fired cogeneration.
A New Contract for a Sustainable Future
For the long term, CEA believes that it is essential for industry and government to find new ways of doing business together. More often than necessary, industry and government are at crosspurposes in the short term even though their longer-term objectives are essentially compatible. We need to build a better dialogue leading to a new contract. To start the process, we offer several concepts that should underlie such a contract.
The member companies of the Canadian Electricity Association are taking action to move Canada’s electricity industry further along the road to environmental sustainability. We are working with many departments and agencies in all governments to accelerate progress and we count on government and other stakeholders to work with us to build the new contract needed to underpin these efforts.
The future economy will likely be more electricity-dependent. Although electricity’s share of end-use energy has been stable for a decade, the newest areas of economic activity – the service economy – are most dependent on the interconnected electricity grid, its reliability, and increasingly, on the quality of the power delivered. Some long-term visions of a future of clean energy involve a much higher dependence on electricity in industrial applications, and most importantly, in transportation where electricity would provide the underpinning of the hydrogen economy.
But the generation, transportation and delivery of electricity pose challenges for society. Among the greatest of these challenges is managing for environmental sustainability.
Considerable progress has been made in managing the environmental consequences of electricity production, transmission and distribution. However, some of these consequences are inherent in the nature of the electricity system, including factors such as resource availability, scale, extent and interconnectedness. Some technologies – including the majority of Canada’s current generation mix – are virtually free of air emissions. Some can minimize the generation of hazardous wastes. But presently, no technology capable of delivering electricity at the scale required by society and in the way it requires can be deployed without having some impact on land, water, air, habitat, and local communities.
Complicating the equation is the fact that most technologies have some inherent locational limitations and therefore, the optimum choices will often vary from location to location. Different technologies also have different attributes that affect power availability and reliability, potential to be deployed in a decentralized manner, the need for interconnection, and the degree of reliance on other energy systems.
The challenge we face in managing the environmental sustainability of electricity is therefore one of balancing multiple objectives and multiple attributes. In this context, the fundamental question for policy is that of management models which will best enable us to achieve the needed balance.
The Canadian Electricity Association contends that sustainability is most likely to be achieved where there is a high degree of diversity of technologies and business models, where system connections are extensive and redundant, where rules across jurisdictions are highly compatible and where market barriers are minimized. With this as the backdrop, it is possible to envisage the key attributes of electricity in a sustainable future.
Electricity is affordable
Individual Canadians rely on affordable electricity to light, heat and cool their homes, manage their household tasks, and provide power for their information access to the world. In a sustainable world, electricity is available at a cost which encourages consumers to make appropriate choices about energy efficiency and conservation but which does not create undue burdens on the least fortunate.
Canadian business and industry also require affordable power. For some industries, competitiveness is heavily dependent on reasonably priced electricity supplies. In a marketplace interconnected across borders, power prices will tend to equalize, but power costs relative to the rest of the world continue to be a source of competitive advantage in North America.
Part of the affordability calculation is price stability since price volatility creates business risk and provokes consumer reactions with damaging political consequences. In a sustainable future, government policy facilitates investment and system expansion keeps pace with demand. Combined with regulatory and market instruments which help prevent uncompetitive behavior and manage the inherent volatility in electricity markets, these attributes ensure that power consumers are not subject to unreasonable price risk.
Electricity is secure and reliable
The system we have relied on for many decades has consistently ensured a remarkable level of protection against system failures. The system of the future continues to ensure such protection.
The system is built around technology and fuel diversity so that threats to any one source are mitigated in the short and long term by readily available alternatives. Market, regulatory and other policy factors encourage steady technology advancement and addition of new supplies consistent with the growth in demand. The system is highly interconnected with builtin redundancy so that reserve margins for any given interconnected market guard against unplanned outages and weather extremes. The system is effectively protected against threats of attack or sabotage. On an operating basis, effective regulatory structures and business cooperation reach across multiple jurisdictions to ensure reliability. The advancement of technology and effective regulatory systems ensure that very high degrees of power quality are available to consumers who need and will pay for it.
Electricity production and use is environmentally sustainable
Canadians and their North American neighbours want their electricity systems to be managed so that the environmental consequences are proportionate to the benefits of affordable, reliable power, and so that the consequences are consistently reduced by the effects of better management and better technology.
A growing economy is still accompanied by growing electricity demand but the steady decline in the electricity intensity of the economy allows such growth with ever smaller increases in electricity demand. Emissions which contribute to smog and acid rain or which pose health hazards are substantially eliminated by the application of advanced combustion technologies and related emission controls or by switching to inherently low emission technologies. The electricity industry is steadily advancing towards a very low greenhouse gas emissions profile. Hazardous wastes continue to be properly managed and long-term solutions are found to manage persistent wastes including radioactive waste.
Impacts on land, water and habitat continue to be subject to practical solutions including mitigation and offsetting actions. New, lowerimpact technologies, including emerging renewable technologies and distributed technologies, are a growing part of the mix, contributing to the diversity of options. Local communities are fully engaged in finding appropriate solutions to local impacts, and in some cases are business partners with electricity companies.
Realizing the Vision
Today’s electricity system embodies many of the above-described characteristics. Where improvement is needed, it appears to be within reach over the next several decades provided that we take the appropriate paths to get there. In some respects we are already on the right path and progress is being made. What is less clear is whether the pace is right and to what degree we risk misdirecting energy and investment through ill-advised policy choices.
Progress Towards Environmental Sustainability
It is a fact that we are making steady progress towards a more environmentally sustainable electricity economy. Where, how and to what degree we can accelerate it is a matter for debate, but the progress is certain.
Air Emissions
The application of technologies to improve combustion, fuel preparation and emissions control, together with a growing share of natural gas in the fuel mix, contributes to improved performance with respect to other air emissions. Such efforts have resulted in a decline in the rate of emission of sulphur dioxide (SO2) and nitrogen oxides (NOx) per unit of power produced in the electricity sector. As better measurement and control technologies are steadily deployed, similar results can be expected for particulate matter and mercury, two of the other key emissions from the sector.
Hazardous Materials
Over the past decade, the effective management of hazardous materials and wastes has become the norm for electric utilities. Until the early 1980s, polychlorinated biphenyls (PCBs), were routinely used as insulating oil in electrical equipment. Although this practice has been discontinued, significant equipment contaminated with PCBs remains in service. Utilities have been aggressively removing PCBs from their systems for a number of years, and have plans in place to continue this practice until they are PCB-free. Likewise, the electricity sector is addressing the issues associated with managing treated wood found in wood utility poles. The sector has taken a lead role in Environment Canada’s Wood Preservatives Strategic Options Process (SOP). Implementation of the SOP recommendations will ensure that wood poles are used, stored and disposed of in an environmentally sound manner.
Impacts on Habitat
Reducing impacts on habitat – especially aquatic habitat – has become a core part of the business of all generators, and hydro generators in particular. Habitat management is an essential element in the building and operation of hydro generation facilities. Flow regimes are closely regulated to ensure that habitat is neither flooded nor exposed. Hatcheries are under management by utilities to contribute to fishery development. Intake screens are closely monitored to keep fish juveniles from harm. Water-use planning programs are under development in several jurisdictions, and joint research efforts between government and industry continue to evolve.
Technology Diversity
Technology diversity is growing and set to accelerate. Wind power is starting from a small base in Canada compared to other countries but is on a growth trajectory. Installed capacity in Canada is now just over 200 MW, and response to the federal government’s recently announced wind power production incentive suggests that that capacity could grow dramatically over the next few years. The growing presence of independent power producers and the actions of traditional utilities are bringing on new biomass and natural gas fired cogeneration.
A New Contract for a Sustainable Future
For the long term, CEA believes that it is essential for industry and government to find new ways of doing business together. More often than necessary, industry and government are at crosspurposes in the short term even though their longer-term objectives are essentially compatible. We need to build a better dialogue leading to a new contract. To start the process, we offer several concepts that should underlie such a contract.
- Environmental sustainability is only one part of the sustainability equation; at each decision step it is essential to consider the full range of economic and social ramifications.
- Investment occurs in a context of business and market realities; therefore, while industry needs to adapt to environmental needs, environmental rules need to be built with business realities in mind.
- Effective environmental policy needs to take both relevant environmental and economic geography into account.
- Any fundamental transformation that is sought will require a large societal investment in technology that will pay off only over several decades.
- Incremental progress has to be made in short time frames and unnecessary delay and uncertainty slow environmental as well as economic progress.
- Technology and fuel diversity create both environmental and economic choices and reduce both environmental and economic risk.
- Commitment on behalf of industry and government needs to be based on shared understanding, on ensuring that issues are managed at a strategic level, and on the timely and responsible sharing – and use – of essential information.
The member companies of the Canadian Electricity Association are taking action to move Canada’s electricity industry further along the road to environmental sustainability. We are working with many departments and agencies in all governments to accelerate progress and we count on government and other stakeholders to work with us to build the new contract needed to underpin these efforts.
