Canada : November 11, 2010

Electricity prices in Canada’s two competitive markets (Alberta and Ontario) have been depressed since the onset of the economic downturn in October 2008, but the same cannot be said about the cost of adding new generating capacity.  With Alberta closing some of its coal-fired plants and Ontario being committed to decommissioning all of its coal-fired stations, the potential does exist for a supply shortfall in the not so distant future.

Ontario had plans to install two new 1,200 MW nuclear reactors in 2009, but when the bids came in at about $26 billion the project was placed on hold.  Other provinces are encountering smaller, yet sizable bills for the expansion of their infrastructure.

Faced with the mounting cost of adding capacity, the country’s provincial electricity utilities have begun to look at demand reduction initiatives.  Currently, most utilities run incentive-based conservation programs having determined that the costs of such programs are far less than adding additional generating capacity. Ontario Power Authority’s ERIP (Electricity Retrofit Incentive Program) is being expanded and extended.  The program was initially slated to expire at the end of 2010, but is now extended until the end of 2014.  ERIP is also moving away from simple “equipment replacement” to a more holistic approach that will soon include such enhancements as incentives towards energy audits (up to $35,000), engineered solutions, training and building commissioning.  Additionally, under the revised ERIP, the payment cap will be raised from 40 to 50 percent of the project cost.

Hydro Quebec’s Ener-Wise program includes grants to reduce project pay-backs to one year by covering up to 75 percent of the project cost to a maximum of $350,000.  BC Hydro’s Power Smart program will recognize leading-edge technologies during both retrofits and new construction as well as adjust the Customer Base Load (lowering electricity prices by up to 10 percent) to help pay for the new technology.