2008 quebec forum on electricity: business opportunities in the rest of canada
DESCRIPTION
RON EZEKIEL Fasken Martineau Tel: 604 631 4708 Email: [email protected] With the assistance of: Brenden Hunter, Calgary Raziel Zisman, Toronto. 2008 Quebec Forum on Electricity: Business Opportunities in the Rest of Canada. Outline. Markets Participants Structure Opportunities - PowerPoint PPT PresentationTRANSCRIPT
2008 Quebec Forum on Electricity:Business Opportunities in the Rest of Canada
RON EZEKIEL
Fasken Martineau
Tel: 604 631 4708
Email: [email protected]
With the assistance of:Brenden Hunter, CalgaryRaziel Zisman, Toronto
Outline
MarketsParticipants
Structure
Opportunities
ChallengesTransmission
NIMBYism
First Nations
Markets: Participants
BCBC Hydro managed most of BC’s generation, transmission and distribution
In 2002 (and subsequent) energy plans and 2003 Transmission Corporation Act:
BC Hydro’s role in new generation is limited, with most new generation to come from IPPs.
BC Hydro’s transmission role transferred to new Crown corporation, British Columbia Transmission Corporation
Markets: Participants
AlbertaHistorically, no one dominant vertically integrated utility, but a variety with an integrated transmission network (ATCO, TransAlta, EPCOR)
1995 Electricity Utilities Act established:independent entity, Power Pool, to administer hourly wholesale market
Transmission Administrator role to operate Tx system
Markets: Participants
AlbertaNew 2003 Electricity Utilities Act consolidated Power Pool and Transmission Administrator functions into AESO
Markets: Participants
OntarioOntario Hydro managed most of Ontario’s generation, transmission and distribution
In 1998 Electricity Act, Ontario Hydro’s role was divided up:
Generation: OPG and IPPs
Transmission: Hydro One
Distribution: Hydro One and other D COs.
Market: IESO
Markets: Participants
OntarioSystem Planning left to market, resulted in demand supply gap in 2002
Electricity Restructuring Act of 2004 created the OPA, responsible for ensuring long term supply, including through planning and DSM/conservation
Markets: Participants
Summary
BC AB ON
Generation BC Hydro and IPPs
IPPs OPG and IPPs
Tx Owner BC Hydro Various (largely AltaLink and ATCO)
Various (largely Hydro One)
Tx Operator BCTC AESO IESO
Distribution BC Hydro Various (largely FortisAlberta and ATCO)
Various (largely Hydro One)
Markets: Structure
BCNo real wholesale market
BC Hydro predominant buyer
In 2005, BCUC approved BC Hydro tariff permitting industrials to purchase electricity from third parties, but stepped rates and uncertainty over assured supply limit attractiveness
Export opportunities limited; limited availability on interties; Powerex an option
Markets: Structure
AlbertaPool system
One hour bids for rolling 7 day periods
AESO develops a merit order, taking into account congestion and constraints
Scheduling is day-ahead
Pool price is weighted average marginal price over the hour – all sellers receive and all buyers pay the pool price
Markets: Structure
OntarioPool System - similar to Alberta
IESO balances supply and demand and dispatches generation accordingly
Pool price is weighted average marginal price over the hour – all sellers receive and all buyers pay the pool price
Where pool price less than PPA price, there may be a top up from OPA to seller
Markets: Opportunities
BC2007 Energy Plan
Energy self-sufficiency, through Special Direction No. 10, directs BCUC to regulate BC Hydro to achieve electricity self-sufficiency by 2016 and each year thereafter
Markets: Opportunities
BCBill 15, Utilities Commission Amendment Act, 2008
BCUC must consider the “government’s energy objectives” in assessing long term resource plans
reduce greenhouse gas emissions
demand-side management
produce, generate and acquire electricity from clean or renewable sources
Markets: Opportunities
BCBill 31, Greenhouse Gas Reduction (Emission Standards) Statutes Amendment Act, 2008 requires:
CCS of GHG emissions at least equal to emissions of prescribed GHGs attributable to use of coal for generation
Net zero GHG emissions from natural gas-fired generation facilities; existing facilities given until 2016 to comply
Markets: Opportunities
From BC Hydro LTAP Workshop materials, April 25, 2008 at http://www.bchydro.com/rx_files/info/info55971.pdf
Markets: Opportunities
From BC Hydro LTAP Workshop materials, April 25, 2008 at http://www.bchydro.com/rx_files/info/info55971.pdf
Markets: Opportunities
BCBioenergy Call
Phase I for projects immediately vaiable; Phase II for projects requiring new tenure
Standing Offer ProgramClean or high efficiency cogen; proven technologies; 0.05MW<Capacity<10MW
Clean Power CallClean power; 5000 GWh/year; COD by 2016; Buyout option
Markets: Opportunities
Alberta
Proposed Generation (2007-2016)Type Capacity (MW)
Gas 2073
Wind 3687
Cogeneration 2356
Coal 1873
Biomass 17
Hydro 100
Interconnection 300
Total Proposed Generation 10,406
Markets: Opportunities
AlbertaLoad growth forecast at 3.1%/year to 2027
From AESO Future Demand and Energy Outlook 2007
Markets: Opportunities
AlbertaAESO generation forecast (AMEC 2005)
2300MW new generation by 2011, and 4100MW by 2016
Comprised of 1600MW cogen; largely oil sands behind the fence
Small additions of aggregating 1100MW
Leaves 500-1500MW; forecast to be met with new coal or cogen
Markets: Opportunities
AlbertaBioenergy Plan
9 point plan aimed at developing and expanding biodiesel, biogas and ethanol
Wind2006 cap of 900MW eliminated
Markets: Opportunities
OntarioGovernment’s 2006 Supply Mix Directive
6300 MW peak reduction through DSM by 2025
10,402 MW of renewables by 2010, and 15,700 MW by 2025
Limit nuclear to 14000 MW
Phase-out coal ASAP
Gas for peak, high value applications
Build transmission
Markets: Opportunities
OntarioOPA filed Integrated Power System Plan in 2007 to implement Directive
OEB Issue List decision March 2008
Review expected to commence mid-2008
Markets: Opportunities
Markets: Opportunities
Markets: Opportunities
OntarioOPA is responsible for procurement of supply, but PPAs only provide for a revenue floor -- set to stimulate investment, but not to prop up or subsidize uneconomic generation
Generators, distributors, wholesale customers and retailers sell and buy energy through the IESO market
Markets: Opportunities
OntarioOPA procurement activities, largely competitive (RFP, RFQ, etc.)
Standard Offer ProgramWind, hydro, solar, biomass
Capacity<10MW
20 year EPA
Solar @ $0.42/kWh; others @ $0.11/kWh (20% indexed for inflation) + $0.0352/kWh for reliable peak deliveries
Challenges: Transmission
BC
Challenges: Transmission
BC10 yr $5.1B capital plan
One goal is integration of new clean and renewable energy
Northwest Transmission Line
BC to CA line
From BCTC
Challenges: Transmission
Alberta
The high cost of suboptimal generation being developed in response to transmission constraints is a substantial burden to customers that can be avoided if congestion is eliminated
Challenges: Transmission
AlbertaExamples
Restricted development of low-cost cogen potential in the Fort McMurray because of lack of transmission infrastructure
Development of uneconomic TMR and other Southern AB generation because of constraints on the north-south system
Source:http://www.crhnet.ca/casestudies/blackout/ alberta_restructuring.pdf
Challenges: Transmission
AlbertaExamples
Exhaustion of existing system capacity under normal conditions in Southern Alberta; RAS relied on to support the operation of existing generation; market has expressed strong interest in developing wind generation in this region, but no further generation development until the transmission system is expanded
Source:http://www.crhnet.ca/casestudies/blackout/ alberta_restructuring.pdf
Challenges: Transmission
Ontario
From OPA
Challenges: Transmission
Ontario
From OPA
Waterpower Potential
Wind Power Potential
Purchase Potential
Waterpower Potential
Wind Power Potential
Purchase Potential
Challenges: NIMBYism
Not In My Back Yard (NIMBY)
Build Absolutely Nothing Anywhere Near Anything (BANANA)
Challenges: NIMBYism
ExamplesThe Edmonton-Calgary 500kV
In May 2004 AESO submitted 13 “concepts” for a new tx line between Edm and CgyIn April 2005 EUB approved the need for AESO's preferred 500 kV line After the decision was issued, NIMBY opposition groups were formed, including LAVESTA Area Group and 566 Corridor Group
Challenges: NIMBYism
ExamplesThe Edmonton-Calgary 500kV
Because the NIMBY groups did not participate in the proceeding, the EUB granted their application for a review and variance (R&V) hearing to consider issues like land density and agricultural impactsOn December 6, 2005, the R&V Panel affirmed the earlier decision
Challenges: NIMBYism
ExamplesThe Edmonton-Calgary 500kV
In April 2006, the hearing for AltaLink’s facilities application commenced, but was postponed due to security concernsOn June 18, 2007, the EUB admitted hiring four private investigators to spy on landowners during the facilities application
Challenges: NIMBYism
ExamplesThe Edmonton-Calgary 500kV
On September 30, 2007, on its own motion, EUB voided all previous decisions related to the proposed 500 kV lineOn November 20, 2007, after approximately 3.5 years of regulatory proceedings and despite EUB’s September 30th decision, the Court of Appeal quashed all prior EUB decisions relating to 500 kV line on the basis of reasonable apprehension of bias
Challenges: NIMBYism
ExamplesUpper Pitt River IPP, BC
Required change of boundaries of provincial park to accommodate Tx lineLocal government (Squamish) voted against project, but insufficient – local governments lost control over IPP approvals in 2006 through legislative amendment responding to blocking of Ashlu projectMinister refused park boundary adjustment
First Nations
First NationsSparrow (SCC 1990)
Aboriginal rights still exist – constitutionally protected under section 35
Aboriginal rights are not absolute – can be infringed by government
Government must be able to justify infringement – duty to consult
First Nations
First NationsBadger (SCC 1996)
Treaty rights also constitutionally protected
Government must also justify infringement of treaty rights
First Nations
First NationsHaida (SCC 2004)
Crown may have to consult (and accommodate) prior to rights being formally established
No independent duty on industry but can be delegated certain aspects
Content of duty depends on circumstances
First Nations
First NationsHaida (SCC 2004)
Crown may have to consult (and accommodate) prior to rights being formally established
No independent duty on industry but can be delegated certain aspects
Content of duty depends on circumstances
First Nations
First NationsMany different paths to take in the building a relationship with First Nations
Various agreements may be used in the course of relationship-building and which, in some cases, can be relied on by the Crown to assist in fulfilling its consultation and accommodation obligations
Conclusion
Considerable need for new supplyRenewables preferred, but challenges including transmission, ability to serve base load and ability to meet demand
May leave opportunities for other generation
Questions?
Ron Ezekiel