Issue

The government has made strides towards providing for a transmission system capable of handling the current needs, however, Alberta needs a transmission system capable of handling both current and future provincewide demands of Alberta businesses and industries, not to mention any opportunity for energy export. If Alberta is to regain its claim as Canada’s leader in wind power, a system must be put into place that not only meets current energy needs but allows for significant future capacity. 

Background

When this province held the crown in wind power, the government credited “our open competitive marketplace and commitment to a robust transmission system to serve customers across the province.” This statement is no longer true. Upgrades to Alberta’s transmission system are necessary to provide business and industry access to clean, reliable and consistent power, and the electric transmission system is essential to the economic development of Alberta. 

For this reason, Alberta should focus on ensuring that our transmission system is capable of managing the demand for energy today, while addressing our future electric energy needs, as well as maintaining reliability and securing energy while taking advantage of the lowest-price power offers. The Alberta Interconnected Electric System (AIES) connects to British Columbia and Saskatchewan and, through these connections, enables the lowest-price power to be imported or exported when needed and provides for reliable electricity supply. 

The Alberta government has previously stated that transmission is the backbone of the electric industry. It has also declared that “a key objective of the transmission policy is to support new investment in generation including renewable energy.” Maintaining the transmission system at the minimum capacity necessary for today’s demand does not allow new forms of energy to prosper in Alberta. Alberta losing its crown as the Canadian leader in wind power is a direct result of the government not providing the electrical capacity necessary to bring new projects onto the grid. 

According to the Alberta Electric System Operator (AESO), the following points describe the provincial transmission grid: 

• From 2001 to 2010, Alberta Internal Load (AIL) peak demand grew by an average of 255 megawatts (MW) or 2.9 per cent per year, from 7,934 MW to 10,236 MW, an overall increase of 28.9 per cent. 
• Electricity consumption grew from 54,467 gigawatt hours (GWh) in 2001 to 71,723 GWh in 2010, for an overall increase of 32 per cent. This trend in growth is expected to continue with peak demand growth forecast to be 3.3 per cent each year on average. 
• Consumption was expected to grow 3.2 per cent each year on average during the same time period. 
• Alberta has been averaging three-per-cent growth in power consumption annually, the same as adding two cities the size of Red Deer and that growth is expected to continue for the next 20 years. 
• Development of additional generation in Alberta will be driven by growth in demand as well as the need for capacity to replace retired units. The reduction in generation capacity due to plant retirements, in combination with the consumption forecast by the AESO, means that approximately 6,000 MW of new effective generation is expected to be developed by 2020, with 5,000 MW to meet load growth and 1,000 MW to replace retiring capacity. By 2029, nearly 13,000 MW of effective additions are expected to be added in Alberta, approximately 8,700 MW to meet load growth and 4,300 MW to replace retiring capacity. 
• The long-term plan also identifies the increasing demand to integrate renewable and lowemission sources of electricity, such as wind, hydro, biomass and gasification. 
• Over 2,000 MW of current supply is expected to retire in the next 20 years. 
• There are more than 3,600 MW of applications for wind power waiting to come online in southern Alberta alone. 
• Alberta has interties with Saskatchewan and B.C. for stability. Alberta can import between 0-780 MW from B.C. and export 0-800 MW. Through Saskatchewan, Alberta can import between 0- 150 MW and export 0-60 MW of power. 
• The regional transmission system has been reinforced but there has only been one major transmission line built in the last 20 years. Alberta’s backbone, or major transmission system, requires reinforcement and expansion to continue providing power efficiently and reliably to meet the needs of the province’s growing population and flourishing economy. 
• Transmission is essential for a competitive power market. Alberta needs transmission to deliver power to customers, and if it can’t be built in time to connect new generators, then investors may decide to build their power plants or wind farms elsewhere. 
• In conjunction with AESO’s long-term plan, the Alberta government’s Provincial Energy Strategy, released in December 2008, emphasizes the need for renewable energy and low transmission energy. 
• The industrial sector uses 60 per cent of Alberta’s transmission capacity (including oil sands development), commercial customers account for 19 per cent and residential customers account for 12 per cent.

 Recommendations

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Reinforce Alberta’s power grid system by adding transmission system upgrades that will sustain current demands, accommodate future growth needs, and allow for additional opportunities for export. 85 
2. Support a stable, reliable electricity grid conducive to a fair, efficient and openly competitive electricity market. 
3. Encourage rural growth and diversification by providing reinforced transmission to support new businesses and industries. 
4. Ensure needs identifications and any regulatory approvals are completed in a consistent and timely manner