Musings on a national grid July 16, 2009Posted by Maury Markowitz in power grid.
Tags: power grid, water power
I’ve advocated that Ontario buy it’s power from Quebec instead of building out new nuclear plants. The power is slightly more expensive per kW, but that’s production costs, there’s no capital costs. If you take that $26 billion that Darlington B was going to cost us, you can subsidize our power load back to local prices for a very long time.
But the flap over Darlington and OPG hides a larger story that I’ve hinted at before. I’d like to share that with you now.
What’s going on
There’s a lot that you can learn from the executive summaries of the Canadian Electricity Association reports. The Wikipedia does a nice job of formatting them up. Take a close look at the “Canada 2003” graph at the top of the page – note that we get quite a bit of our power from hydro, 334 GWh out of 569 GWh generated in total. That’s pretty impressive, it makes Canada one of the greenest countries in terms of electrical generation, if not for the tar sands we’d be the greenest of the major industrial countries. To put this in perspective, Canada generates almost 12 % of all the hydroelectricity in the world.
But now I want to focus on the second column, the “Generating Capacity” – the hydro number specifically. That 65,860 MW, or 66 GW for short, is a whole lot of power. If you were to run those turbines full-out 24 hours a day, 365 days a year, they would generate 577 GWh. That’s all the power used in Canada and a little left over. Now you can’t actually run them full out, because in most cases there’s not enough water. But we can do a lot better than the 59% capacity factor we’re getting now.
And that’s just the power we have now. Atco is saying the want to build 25 GW of new capacity in the north, feeding it south to Alberta. Manitoba has another 5 GW it can bring online if there’s a market – and there was, but Ontario Hydro decided to pull out. Quebec has about 11 GW left in their north, and Labrador has another 4 GW in the Lower Churchill Project. That’s almost 50 GW in these projects alone, and there’s a lot of other littler ones that are economically feasible as well.
If we were to fully built out the capacity we have now, using totally conventional hardware and no attempt to extract power from marginal sources, there’s about 115 GW out there, easy. At the same 60% capacity factors we’ve had historically, that’s just under 1000 TWh, almost double the electrical power usage of all of Canada.
There’s a lot of greenhouse gas sources in Canada, but there’s two we can do something about in the short term. One is to switch to plug-in-hybrid cars. The other is to switch the tar sands to electrical separation.
Cars and “passenger trucks” (SUV’s etc.) burned a total of about 1100 PJ of gas in 2002, which is about 305 GWh. Look at the numbers above: that’s right, the easily available hydro just sitting out there will power all of our houses, our businesses, and all of our cars.
And even then, we’d have another 200 GWh left over, 1/3rd of our current use. Better yet, we’re running at 60% average capacity, so we have lots of peaking capacity when we need it. We can sell anything we don’t need to the U.S. for a tidy profit.
Forget solar, forget wind, forget Darlington. We can become the greenest industrial nation in the world without any new technology at all. Better yet, there’s no fuel, so the only cost is capital. That means the price of the electricity is fixed when the switch is thrown, and if Quebec is any indication, that’s about 7 cents a kWh, sans carrying costs. Yes, this is a little more than the ~6 cents you pay in Ontario now, but over a 15 year buildout (say), that means the price will actually decrease compared to inflation.
Ok, so why not?
And here’s where the politics comes in. And it’s weird.
Energy is provincial, not federal. That means each province has its own monopoly power company that’s responsible for generation and distribution. Every kWh they need they can either generate themselves, or buy from someone else. Of course you typically sell power at a profit, so if you choose to buy it from elsewhere, you do so at a premium.
So what’s happened is that we have overbuilt our generation systems in order to provide local power. Each province has capacity that’s closely mixed to their own loads, and they sell any excess to the highest bidder. Because power’s cheap in Canada, that bidder is typically in the U.S., where they’re getting around 9 cents from James Bay, for instance.
Of course the companies could sell to each other, but they don’t want to when the U.S. is right there across the border. Moreover, there’s free trade laws in place that eliminate the red tape the provincial governments throw up around any such project in order to protect their Crown Corporations, laws that don’t apply within the country. So there’s lots of interconnects with the U.S., and very little within Canada.
Leadership is a ten letter word
If there’s ever been a time for the feds to figure out a solution to a problem, this is it. We need a national energy policy that levels the playing field between the provinces, and a national grid to make it possible. It’s possible all right, they’re building one right now in the U.S., and the entire thing costs about $20 billion. We need to cover more distance than the U.S. System, from Alberta to Labrador so as much as 5000 km, but we don’t need to move as much power around.
Once you have a grid, you have a market. Atco’s 25 GW up north is great for Alberta, but unless they agree to buy the power, the project doesn’t happen. With a national grid, Ontario can buy that power, and the project goes ahead. Better yet, we’ll interconnect with the grid being built in the U.S., and sell them our excess.
Finally, we’d need a tariff system to make it attractive to sell the power within the borders. One way to do this would be to impose a flat fee on transmissions across any province, and provide that out through transfer payments to the producers. Analogs of this already exist, both inter-provincially as well as within the provinces, between Hydro One and Toronto Hydro, for instance.
I’ll be the first to admit this won’t be easy, politically. The provinces all hate each other, a hatred that is only bested by their hatred for the feds. Trying to arrange a national grid will be, hmmm, “difficult”? But if you can do that, the rest is free. The powerplants themselves are already self-funding, and the only reason they’re not being built is that there’s no market. Inexpensive carriage to the east and the U.S. ends that.
So, here’s to the national grid… which I don’t expect to live to see.