May 25, 2014
Boost Quebec-Ontario hydro trade, experts urge
Ontario and Quebec have a chance to forge stronger energy links, a panel of experts told a York University forum
It doesn’t make sense to sell gasoline for twice as much in some provinces as others, and it doesn’t make sense to do it for electricity, a Quebec business professor says.
Electricity costs less than 5 cents in Quebec, and more than 10 cents in Ontario, Pierre-Olivier Pineau told a forum organized by York University’s Sustainable Energy Initiative on Friday.
That wouldn’t be accepted for gasoline,” he said.
But Canadian provinces act like energy separatists when it comes to electricity, he said.
Pineau said there’s an opportunity today to forge some sensible national policies over energy.
That’s something has hasn’t happened since the early 1980s, when the federal Liberals’ ill-fated National Energy Policy outraged western Canada.
But Pineau said many regions of the country now have something to gain from greater energy co-operation:
? Alberta and Saskatchewan want to pipe oil to the east coast through Ontario, Quebec and New Brunswick (and expand pipelines through B.C.) ;
? Ontario would benefit from low-cost Quebec hydro power;
? Quebec is embarking on a cap-and-trade carbon market venture, but has no Canadian partners.
“Put on the table: Ontario will join the cap and trade market, but we (also) sign a contract for hydro-electricity,” he said. “I think it’s politically realistic.”
It means all regions of the country have something to gain by dealing with the others, he said.
Pineau acknowledged it wouldn’t be simple. Quebec, for example, would have to increase its domestic hydro price in order to free up more power for export — which would be politically unpopular.
He also warned that the window to swing a deal could close. Quebec is currently considering three additional projects to expand its links to the northeastern U.S., where it already exports large amounts of power.
Jack Gibbons of the Ontario Clean Air Alliance also enthusiastically backed the idea of increasing imports from Quebec.
Gibbons said Ontario should scrap plans to refurbish the Darlington nuclear plant, which is due to begin in 2016.
Gibbons said the lowest possible cost for power from the overhauled plants is 8.3 cents a kilowatt hour – a figure unlikely to be achieved given the history of nuclear cost overruns.
Gibbons noted that Quebec recently signed a long term contract with Vermont at a starting rate of 5.7 cents a kwh.
Cancelling the Darlington refurbishment and boosting imports from Quebec would save $1.2 billion a year, Gibbons said. If the savings were divided between Quebec and Ontario, each province would gain $12 billion over 20 years, he said:
“There is a lot of money sitting on the table, waiting to be grabbed.”
Boosting transmission links between Ontario and Quebec could increase the trade, and the savings, even further.
Jack Burkom, senior vice president of Brookfield Energy Marketing, agreed that there is “great opportunity” to increase hydro trade between the provinces – trade in which Brookfield would participate.
He also noted there’s a risk of capacity shortage in Ontario if nuclear refurbishment projects run into difficulty. Bruce Power plans to refurbish six of its reactors in a period overlapping the Darlington refit.
That scope of work — 8,500 megawatts of capacity due to be overhauled over 15 years – is “unprecedented,” he said.