Recently, the Canadian Electricity Association organized a joint strategic session where we welcomed members of our Corporate Partners Committee along with members of our Generation Council. Corporate Partners are the many firms that provide equipment, services and technology to the electricity industry, and the Generation Council is composed of the generators of electricity from across the country. The workshop engaged generation experts from the electric utility industry along with representatives of the industry supply chain, and led them through discussions relating to low carbon generation technologies, as well as risk containment in new project construction.
Here in Canada, as in other parts of the world, the appetite for clean, emissions-free technology in electricity generation has never been so great. Add to this a proactive policy push by provincial governments and by the U.S. Government for electricity that meets these parameters, and you have a recipe for heightened interest in clean-technology.
The time to move forward with emissions-free utility scale technology is now, and doing so will assist Canada in meeting lower greenhouse gas targets. But there are certain regulatory and financial liquidity hurdles on the path forward and they need to be addressed.
For a start, low carbon generation technologies need to be identified and deployed with support from governments and industry. Several methods currently exist to mitigate project and financing risks for new electricity infrastructure, and these will be required in order to successfully deploy innovative technologies. Scalable nuclear plants up to 400 MW, and both on-shore and offshore utility scale wind energy each hold promise in that regard.
In fact, scalable nuclear technology with five-year fuel cycles and underground containment is in the pipeline for regulatory approval in the United States. This is a complex process that falls under the purview of the U.S. Nuclear Regulatory Commission (NRC). While offering smaller project sizes of up to 400 MWs, scalable nuclear technologies still require long lead times, and significant financial obligations. Permitting requirements that could see commercialization deferred until 2018 are a concern.
With all the admiration and respect I have for the NRC, I point out that regulatory consideration of scalable nuclear reactors is a priority for all countries that want to explore the nuclear option. The reactors now offered as generation III-plus technology are simply too large for smaller markets. Our own Canadian Nuclear Safety Commission (CNSC) will keep pace with the NRC if given an opportunity to bring forward this particular technology.
The supply chain for large offshore wind is another area that should be developed in order to incent technology advancement in Canada. Coupled with financing hurdles due to lack of North American financing precedents and, in some cases, proper incentives (lacking outside of Ontario, which has its recently enacted Green Energy Act and Feed in Tariff), supply chain issues could delay the onset of utility-scale offshore wind in Canada in general, and in the highly industrialized Great Lakes region in particular.
In short, Industry needs to continue to make progress on streamlining regulatory processes and in finding risk mitigation solutions between developers and suppliers. Non-financial issues, such as greenhouse gases, and other environmental and social concerns, will only continue to escalate as important drivers of project risk mitigation strategies.
Stayed tuned for a follow-up post on projects where Canada is leading the global technology charge, including carbon capture and storage demonstration, and the only tidal project in the Western Hemisphere.
Pierre Guimond
President and CEO
Canadian Electricity Association