Halifax, NS – Electric companies in Atlantic Canada may expect to find markets in New England and elsewhere in the U.S., but they face tough challenges.
That’s the conclusion of “Atlantic Canada and the U.S. Electricity Market: Projects and Perspectives,” a new (Atlantic Institute for Market Studies (AIMS) paper by Gordon L. Weil, Senior Fellow for Electricity Policy.
Atlantic Canada suppliers, from the long-time supplier at NB Power to the expected new participant at Nalcor, face a changing market and continued strong competition from Hydro Quebec.
In New England, demand for electricity is not expected to maintain sustained growth. Conservation and efficiency measures are beginning to appreciably affect consumption even after the effects of the recent recession have worn off.
Imports from Canada were expected to replace New England’s heavy dependence on oil-fired generation, which was both costly and environmentally undesirable. But low-cost natural gas derived by fracking in the U.S. has edged out imports.
In addition, the New England states have placed increasing emphasis on small-scale, in-region renewable resources, notably wind power, and development of such supplies have increased.
And, if it succeeds, Hydro Quebec’s proposed Northern Pass project could absorb some market potential.
Weil suggests that closer cooperation between Atlantic Canada and the single New England market might improve prospects.
“Ultimately, a merged market of the two regions could be seen as providing benefits to both,” he says. He notes the involvement on Manitoba in the Mid-America market as a precedent.
Nova Scotia-based Emera has acquired two Maine electric utilities, enabling it to operate on both sides of the border. That could presage further moves toward closer operating ties.
AIMS president and CEO, Marco Navarro-Genie, applauds the paper’s regional importance.
“As energy policy throughout Atlantic Canada becomes more and more complex, it is strategically important to balance and review all market options. I think Dr. Weil’s paper aptly achieves that goal.”
The new paper provides a catalog of current proposals for new transmission links between Atlantic Canada and New England. It notes that many projects have failed in the past, because of a lack of sufficient certainty about sales opportunities in the U.S.
To contact the author directly (media only):
Gordon L. Weil
About the Author
Gordon L. Weil is a former energy official and consultant. He was chair of the U.S. national organization of state energy agencies and of the negotiations leading to the creation of a single New England transmission system and market. He headed the Maine energy agency and two other state agencies. He is the author of Blackout, a book on the restructuring of the electricity market, and several papers published by AIMS. He received a Ph.D. from Columbia University.
The Atlantic Institute for Market Studies is a Canadian non-profit, non-partisan research institute that provides a distinctive Atlantic Canadian perspective on economic, political, and social issues. The Institute seeks to stimulate public debate with well-considered argument and evidence-based data. AIMS sets the benchmark on public policy by drawing together the most innovative thinking available from some of the world’s foremost experts and applying that thinking to the challenges facing Canadians.