Transactive Energy

Part
01
of three
Part
01

Grid Congestion - Canadian Utilities

After a thorough search using credible sources, we were not able to provide a list of Canadian utilities that currently experience the highest amount of grid congestion. However, the research team pulled together other relevant insights and presented them below, together with the details of the team's research strategies to find the required information.

Relevant Insights

  • Electricity generation, transmission, and distribution are either privately controlled or publicly owned by provincial or municipal governments, with the majority of utility companies under public ownership in Canada.
  • The electrical grid involves the electrical mix that supports the low-carbon transition and strengthening of the electrical grid.
  • Saskatchewan in Canada has launched Net Metering and Small Power Producers Programs for renewable energy generation produced by consumers.
  • Transmission infrastructure includes transmission lines, towers, transformers, and other substation equipment which costs around $8-14 billion per year over the next 25 years. The grid will need $57 billion over the next five years alone (i.e. 2020-2025).
  • Canadian Utilities has invested $2 billion in capital growth projects in 2018, of which $1.1 billion was invested in Regulated Utilities and more than $800 million was invested in long-term contracted assets, including Alberta PowerLine.
  • According to a recent report released by GlobalData on Global Smart Grid Projections for 2020, the market for national electricity grids is expected to grow globally at a compound annual growth rate of 1.6% by 2022, reaching $14.33 billion.
  • The climate action strategies in Canada that include the electrification of industrial activities and the decarbonization of transportation depends on the access to grow certain amounts of electricity which is generated from non-emitting, renewable sources.
  • TransAlta, ENMAX and Capital Power Corporation supply power by means of fossil fuels (coal and natural gas) in Alberta; BC Hydro supplies power by use of dams on rivers such as the Columbia and Kootenay in British Columbia; Manitoba Hydro supplies power by use of dams on rives such as the Nelson, Saskatchewan, Laurie and Winnipeg in Manitoba; Newfoundland and Labrador Hydro utilizes hydroelectric generation; Nova Scotia power provides power by thermal fire plants using a mixture of coal, petroleum coke, fuel oil, and natural gas; and SaskPower supplies electricity by use of coal-fired plants in Saskatchewan.

Research Strategy:

We were not able to provide a list of Canadian utilities that currently experience the highest amount of grid congestion. This is mostly because information involving players and their electricity transmission and distribution is more prominent and the information on grid congestion is very limited. It is not disclosed publicly as they have no obligation to do so, or it could be due to competitive reasons. Below is the deep dive into various strategies adopted to find the information.

We started our search by finding the information in government reports and sources such as The International Institute for Sustainable Development, the American Wind Energy Association, and IEEE Innovation at Work. The idea was to check the information for Canadian utilities in grid congestion. These government sources enumerated the information that electricity generation, transmission, and distribution are either privately or publicly controlled. Canada has launched several grids in the country including Net Metering and Small Power Producers Programs for renewable energy generation produced by consumers. But there was no information available for Canadian utilities that experience the highest amount of grid congestion.

Next, we looked for media news and articles on grid congestion in sources such as Transmission & Distribution World, Diesel Service & Supply, and Electricity Today. But here, the information was also specific to electricity generation and distribution along with consumption in Canada. No Information was available specific to a situation wherein the existing transmission and/or distribution lines are unable to accommodate all required load during periods of high demand or during emergency load conditions.
We broadened the scope and looked for the information in the North American region in the above-mentioned sources. These sources stated the information that the market for national electricity grids is expected to grow globally at a compound annual growth rate of 1.6 % by 2022, reaching $14.33 billion. But the list of North American utilities that experience the highest amount of grid congestion was not mentioned in any of the sources. Later, we looked and searched for the information at a global level as well. We found that worldwide, government entities are working to achieve favorable market conditions for improving electrification rates and grid expansion while supporting the power sector transition. But the list of utilities that experience the highest amount of grid congestion was not mentioned. Thus, this effort was not fruitful as well.

Since there was no pre-compiled information available for the Canada region, we opted to go for a triangulation approach. We first tried to look for the utility companies in Canada and the idea was to identify the grid congestion for them individually. We looked through reports such as Provincial and Territorial Energy Profiles in Canada, National Electric Transmission Congestion Study, Canadian Power Generation and Electrical Infrastructure, and Powering Cooperation on Clean Energy & the Environment. The sources mentioned the layout of electricity generation by different provinces in Canada. The Western grid, Eastern grid, and Quebec grid (including Atlantic Canada) comprise the power grid layout for Canada. But no information was available on Canadian utilities for grid congestion. Thus, this strategy did not yield any result. Thus, in the absence of this specific information, we have presented other relevant insights gathered in the course of our search as presented above.

Part
02
of three
Part
02

Distributed Energy Resource (DER) Device Adoption Rates - Canada

In Ontario, residents were adopting more on the devices that use Combined heat and power (CHP), followed by solar devices between 2015 and 2018. Manitoba and British Columbia are both offering programs for people who want to generate their own electricity and saw the increasing applications over time. DERs (Distributed Energy Resources) can include solar panels, combined heat and power plants, electricity storage, small natural gas-fuelled generators, electric vehicles and controllable loads, such as HVAC systems and electric water heaters.

ONTARIO

  • According to Independent Electricity System Operator (IESO), distributed energy resources (DERs) in Ontario are electricity-producing resources or controllable loads that are directly connected to a local distribution system or connected to a host facility within the local distribution system.
  • Distributed energy resources (DERs) in Ontario are typically smaller in scale than the traditional generation facilities that serve most of Ontario demand.
  • In 2015, contracted generating facilities that were embedded within the distribution network of local distribution companies started with the aim of helping to offset demand on the grid by supporting some needs of the local communities.

Adoption Rate for the period 2015-2018 By Type

  • Bio-energy
The total capacity of the bio-energy fuel type was 129.6 MW in 2015 and decreasingly grows to 111.8 MW, causing an adoption rate of -13.73% over the 3-year period.
  • Combined heat and power (CHP)
The total capacity of the Combined heat and power (CHP) fuel type was 117.4 MW in 2015 and increasingly grows to 218.7 MW, causing an adoption rate of 86.29% over the 3-year period.
  • Hydroelectricity
The total capacity of the Hydroelectricity fuel type was 336.2 MW in 2015 and decreasingly grows to 332.9 MW, causing an adoption rate of -0.98% over the 3-year period.
  • Natural Gas — Simple Cycle/Combined Cycle (SC/CC)
The total capacity of the Natural Gas — Simple Cycle/Combined Cycle (SC/CC) fuel type remained as 108.4 MW so no adoption rate was seen over the period.
  • Solar
The total capacity of the Solar fuel type was 2,010.0 MW in 2015 and increasingly grows to 2,204.6 MW, causing an adoption rate of 9.68% over the 3-year period.
  • Wind
The total capacity of the Wind fuel type was 669.1 MW in 2015 and decreasingly grows to 590.5 MW, causing an adoption rate of -11.75% over the 3-year period.
Therefore, in Ontario, residents were adopting more on the use of Combined heat and power (CHP) followed by solar devices.

MANITOBA

Solar

BRITISH COLUMBIA

Solar

  • Through BC Hydro, people in British Columbia have given the opportunity to generate their own electricity by applying to the net metering program.
  • The net metering program is designed for those who generate their own electricity and sell the excess energy back to BC Hydro.
  • Since 2004, over 1,330 customers have been participating in the net metering program and over 95% of customers chose to install a solar photo voltaic system.
  • Over 15 years, the net metering program had an adoption rate of 1,329 customers at 99.9%.

QUÉBEC

  • Hydro-Québec offers the self-generation programs designed for customers who produce electricity using equipment they own and operate to meet part or all of their energy needs.
  • This program comes in two options: net metering option is for customers connected to the Hydro-Québec grid who want to operate power generation equipment to produce electricity for their own use from renewable sources, and the self-generation without compensation plan is for customers connected to the Hydro-Québec grid who want to operate power generation to produce electricity for their own use, and are not eligible for the net metering option.

Research Strategy:

Initially, we searched for the Distributed Energy Resource (DER) device adoption rates in Canada by type and by province in the Canadian energy and power government agency websites such as National Energy Board, Energy Resourcing, Canadian Electricity Association, International Energy Agency, Natural Resources Canada, and Canada.ca. These sources usually contained information on energy consumption and programs of the nation. We tried looking for data on anything related to Distributed Energy Resource (DER). We looked into their annual reports, sustainability reports and their resources page which contain research papers and reports, however, after an in depth search, we were not able to find one. What we found was only the Provincial and Territorial Energy Profiles where only information about the centralized sources of energy or large scale transmission grids was found.

In case we missed anything from the energy agencies' websites, we proceeded to look for news, editorial and feature articles from news websites, blog sites and other sources that may contain facts and opinions about this trend. We looked at the CBC News, CTV News, CNBC.com, Toronto Star, and Huffington Post Canada, but was not able to find any adoption rates data on the Distributed Energy Resource (DER) device in Canada by type and by province. We were able to find a helpful finding about the agencies in the provinces of Canada that offer Distributed Energy Resource (DER) related programs, and also found some relative terms used such as self generation, Embedded Generation, local distribution, distributed energy and co generation.

Having found the relative terms and the hint that DERs were offered by either publicly integrated or private Canadian electric utilities, we searched for any Distributed Energy Resource (DER) related initiatives in each province using the relative terms found. Here, we obtained results but needed computation to get the adoption rates. We defined the adoption rate as the growth of active customers for a period.

Ontario

We found Independent Electricity System Operator (IESO) managing the distributed energy resources (DERs) in Ontario, which are directly connected to a local distribution system or connected to a host facility within the local distribution system. We looked into IESO reports and checked when the contracted generating facilities that were embedded within the distribution network of local distribution companies started, and found it to be in 2015. From the reports, we found the facilities were segmented by fuel type such as solar, CHP, bio-energy, natural gas, hydro and wind. To get the adoption rates between 2015 and 2018, we computed them using the following formula:
Adoption rate = ((end — start) / start) * 100

Please see below:
Adoption Rate for the period 2015-2018 By Type:
  • Bio-energy
2015 Total Contract Capacity — 129.6 MW
2018 Total Contract Capacity — 111.8 MW
Adoption Rate = ((111.8 – 129.6) / 129.6) * 100 = -13.73%
  • Combined heat and power (CHP)
2015 Total Contract Capacity — 117.4 MW
2018 Total Contract Capacity — 218.7 MW
Adoption Rate = ((218.7 – 117.4) / 117.4) * 100 = 86.29%
  • Hydroelectricity
2015 Total Contract Capacity — 336.2 MW
2018 Total Contract Capacity — 332.9 MW
Adoption Rate = ((332.9 – 336.2) / 336.2) * 100 = -0.98%
  • Natural Gas — Simple Cycle/Combined Cycle (SC/CC)
2015 Total Contract Capacity — 108.4 MW
2018 Total Contract Capacity — 108.4 MW
Adoption Rate = ((108.4 – 108.4) / 108.4) * 100 = 0%
  • Solar
2015 Total Contract Capacity — 2,010.0 MW
2018 Total Contract Capacity — 2,204.6 MW
Adoption Rate = ((2,204.6 – 2,010.0) / 2,010.0) * 100 = 9.68%
  • Wind
2015 Total Contract Capacity — 669.1 MW
2018 Total Contract Capacity — 590.5 MW
Adoption Rate = ((590.5 – 669.1) / 669.1) * 100 = -11.75%

MANITOBA

Manitoba Hydro launched the Power Smart Solar Energy Program which offers incentives and financial support for people to adopt solar power to generate their own electricity and sell the excess energy back to Manitoba Hydro.

Here, we looked for the number of approved applications of the time it started and the time it stopped receiving applications. Then we computed for the adoption rate using the same formula.
  • April 2017 – 38 approved applications
  • April 2019 – 790 approved applications
Adoption Rate = ((2019 – 2017) / 2017) * 100
Adoption Rate = ((790 – 38) / 38) * 100
Adoption Rate = 1,979%

BRITISH COLUMBIA

Since 2004, over 1,330 customers have been participating in the net metering program. Assuming that 2004 customer number is 1, therefore using the formula:

Adoption rate = number of new users / total number of users
Adoption Rate = (1330 – 1 / 1330) * 100
Adoption Rate = 99.9%

We were able to find the other programs of DER, related to the other provinces, however these provinces did not provide any figures of the number of users. We checked the websites but did not find any information. This is may be because these companies were smaller and privately owned, compared to the others, so reports were not published by them.
Part
03
of three
Part
03

Regulated And Non-Regulated Energy Markets - Canada

The regulated energy market in Canada is predominant in Quebec, Saskatchewan, Manitoba, British Columbia, Newfoundland, New Brunswick, Yukon, and Nove Scotia. On the other hand, there is only one province, Alberta, that is deregulated. Ontario is considered partially deregulated.

OVERVIEW

Canada has ten provinces, and each one of them has the responsibility of regulating the energy markets in their territory.
According to Direct Energy Business, regulated energy markets are regulated by the state and federal governments. On the other hand, deregulated markets are defined as various competitors offering services in the market, which means more choices for consumers, and because of that, the market sets prices by itself.

REGULATED ENERGY MARKET

  • Crown corporations regulate the energy markets in the provinces of Quebec, Saskatchewan, Manitoba, British Columbia, Newfoundland, and New Brunswick. Each of these provinces is in charge of its electricity provision services.
  • The crown corporations are private companies regulated by the government. According to Canada's official government website, these companies "are directly owned by the Government of Canada and are established through legislation, letters patent, or articles of incorporation under the Canada Business Corporations Act."
  • The crown corporations in the mentioned provinces are BC Hydro, SaskPower, ManitobaHydro, NB Power, Newfoundland & Labrador Power, and Hydro-Québec.
  • Yukon Energy Corporation, a publicly owned company, runs the majority of the electricity in Yokun.
  • The Canada-Nova Scotia Offshore Petroleum Board regulates Nova Scotia's offshore production.

DEREGULATED ENERGY MARKET.

  • According to the National Energy Board, Alberta and Ontario are the only energy markets that are deregulated, which means that the forces of supply and demand determine the price.
  • In 1995, Alberta produced 90% of its energy demands through three major vertically-integrated utility energy suppliers, under a service-regulatory model. However, with the Electric Utilities Act implemented in, 1996, Alberta implemented the so-called "Power Pool," which promoted the competitive open-access to the energy market in Alberta. Right after that, the deregulation of the natural gas market was approved.
  • The province of Alberta was the first to approve energy deregulation, and it is considered to be the most deregulated market in Canada. As a result, 40% of consumers can now choose among competitive suppliers.
  • Due to the competitive market, consumers have access to more suppliers and much lower rates.
  • In 2002, the Ontario energy market was deregulated until 2005, where it became partially deregulated since it was based on consumer usage patterns and the hourly market price of electricity.

RESEARCH STRATEGY:

To determine where the regulated and non-regulated energy markets exist in Canada today, we searched through articles written by energy experts, Canada's government databases, and pre-compiled information in trusted websites. While we were able to provide the requested information, please note that due to limited availability of relevant information in the public domain, two of the sources used to address the request are a bit older than two years. Also, note that we included a have screenshot of the database from which we identified the crown corporations for the sake of clarity.
Sources
Sources

From Part 01
Quotes
  • "Canadian Utilities announced adjusted earnings in 2018 of $607 million, or $2.24 per share, compared to $602 million, or $2.23 per share, in 2017"
  • "Canadian Utilities invested $2 billion in capital growth projects in 2018, of which $1.1 billion was invested in Regulated Utilities and more than $800 million was invested in long-term contracted assets, including Alberta PowerLine and a hydroelectric power station acquisition in Mexico."
  • "Canadian Utilities has increased its dividend per share for 47 consecutive years, the longest track record of annual dividend increases of any publicly traded Canadian company."
Quotes
  • "Worldwide, government entities are working to achieve favorable market conditions for improving electrification rates and grid expansion while supporting the power sector transition."
  • "Several smart grid initiatives aim to support global distribution transformer market growth. According to a recent report released by GlobalData, the market for national electricity grids is expected to grow globally at a compound annual growth rate of 1.6 percent by 2022, reaching $14.33 billion."
Quotes
  • "Electricity grids across the country face unprecedented pressures with the rise of renewable energy and the concurrent shift from status quo large-scale, centralized electricity generation to smaller-scale, more distributed generation."
  • "Many of Canada’s climate action strategies – including the decarbonization of transportation and the electrification of industrial activities – will depend on access to growing amounts of electricity generated from non-emitting, renewable sources."
  • "While electrical grid modernization does not itself offer a large amount of emissions reductions, it is a lynchpin of many of the strategies Canada will seek to deploy as we move toward our 2030 climate commitments. I"
  • "Canada’s electricity sector represents just over 85 Mt, approximately 12 per cent of Canada’s overall emissions in 2014 (732 Mt).15 Coal represents over 70 per cent of these electricity emissions, at around 61 Mt, while only providing around 10 per cent of our electricity."
From Part 02
Quotes
  • "Distributed energy resources (DERs) are electricity-producing resources or controllable loads that are directly connected to a local distribution system or connected to a host facility within the local distribution system."
  • "DERs can include solar panels, combined heat and power plants, electricity storage, small natural gas-fuelled generators, electric vehicles and controllable loads, such as HVAC systems and electric water heaters. These resources are typically smaller in scale than the traditional generation facilities that serve most of Ontario demand."
  • "DERs can offer greater customer choice – the IESO has heard from some communities, through the regional planning process, a preference for DERs to address regional demand growth or to replace aging assets. DERs may also present opportunities to optimize overall system investments and provide a range of grid services."
  • "However, increasing DERs creates a more decentralized electricity system and changes the traditional dynamic between local distribution systems and the province-wide transmission system. This creates a need to understand the impact on the transmission-distribution interface, which the IESO, local distribution companies, and other stakeholders are exploring through the Grid-LDC Interoperability Standing Committee. Collaboration is required to ensure the IESO can effectively forecast and have visibility of DER activity, benefit from the provision of reliability services, and explore opportunities to incorporate them into electricity markets."
  • "A local Demand Response (DR) Pilot in the Brant area aimed at better understanding the capabilities of DR to provide services as alternatives to transmission line solutions for meeting local-area capacity needs."
  • "The potential to aggregate residents who use solar and storage is being explored through PowerStream`s POWER.HOUSE project in the York region, which is funded, in part, by the IESO`s Conservation Fund."
  • "Two phases of an energy storage procurement that is exploring how batteries, flywheels and other storage technologies can offer ancillary services to support increased reliability and efficiency of the grid, and provide capacity value and price arbitrage through responding to market signals."
  • "A number of DER-related projects that are being supported through the IESO’s Conservation Fund. "
Quotes
  • "Last April, Manitoba Hydro launched the Power Smart Solar Energy Program to help Manitobans harness the power of the sun."
  • "It offers incentives and financial support for people to adopt solar power to generate their own electricity and sell the excess energy back to Manitoba Hydro. The program provides solar photovoltaic installations at $1 per watt installed, which covers about 25 per cent of the costs of a new installation."
Quotes
  • "The project received more than 1,000 applications, with 790 approved. In total, Hydro has paid $5.1 million through the program to install photovoltaic systems across Manitoba, with about 80 per cent of those in rural areas."
Quotes
  • "Our net metering program is designed for those who generate electricity for their own use. When you generate more than you need, you sell it to us. When you don't generate enough to meet your needs, you buy it from us."
  • "Since 2004, over 1,330 customers have been participating in our net metering program. Over 95% of customers chose to install a solar photovoltaic system."
Quotes
  • "Self-generators are Hydro-Québec customers who produce electricity using equipment they own and operate to meet part or all of their energy needs."
  • "The net metering option is for customers connected to the Hydro-Québec grid who want to operate power generation equipment to produce electricity for their own use from renewable sources. This attractive, environmentally-friendly solution can help self-generators optimize their energy use as part of a global vision of energy efficiency."
  • "The self-generation without compensation plan is for customers connected to the Hydro-Québec grid who want to operate power generation to produce electricity for their own use, and are not eligible for the net metering option."