Study No. 168 February 2018 CANADIAN ENERGY A COMPREHENSIVE GUIDE TO ELECTRICITY RESEARCH GENERATION OPTIONS IN CANADA INSTITUTE Canadian Energy Research Institute | Relevant • Independent • Objective A COMPREHENSIVE GUIDE TO ELECTRICITY GENERATION OPTIONS IN CANADA ii Canadian Energy Research Institute A Comprehensive Guide to Electricity Generation Options in Canada Authors: Ganesh Doluweera Allan Fogwill Hossein Hosseini Karen Mascarenhas Experience Nduagu Alpha Sow Evar Umeozor ISBN 1-927037-53-9 Copyright © Canadian Energy Research Institute, 2018 Sections of this study may be reproduced in magazines and newspapers with acknowledgement to the Canadian Energy Research Institute February 2018 Printed in Canada Front photo’s courtesy of various Google searches Acknowledgements: The authors of this report would like to extend their thanks and sincere gratitude to all CERI staff involved in the production and editing of the material, including Dinara Millington and Megan Murphy. The authors would also like to thank the following individuals and institutions for providing data and helpful insights: • Canadian Nuclear Association • Mr. Syamal Sen, SNC Lavalin • Mr. John Stewart, Canadian Nuclear • Dr. Sanjiv Save, HATCH Association • Mr. Greg Almquist, HATCH • Dr. Joe Vipond • Mr. Steve Grasby and Mr. Robert Kung, • Mr. Nick Martin, Canada West Foundation Geological Survey Canada • Canadian Wind Energy Association • Mr. Sochi Iwuoha, University of Calgary • Ms. Rimgaile Baliunaite • Dr. Tatyana Plaksina, University of Calgary • Dr. Sue Molloy ABOUT THE CANADIAN ENERGY RESEARCH INSTITUTE – CANADA’S VOICE ON ENERGY Founded in 1975, the Canadian Energy Research Institute (CERI) is an independent, registered charitable organization specializing in the analysis of energy economics and related environmental policy issues in the energy production, transportation and consumption sectors. Our mission is to provide relevant, independent, and objective economic research of energy and environmental issues to benefit business, government, academia and the public. For more information about CERI, visit www.ceri.ca CANADIAN ENERGY RESEARCH INSTITUTE 150, 3512 – 33 Street NW Calgary, Alberta T2L 2A6 Email: [email protected] Phone: 403-282-1231 February 2018 A Comprehensive Guide to Electricity Generation Options in Canada iii Table of Contents LIST OF FIGURES ............................................................................................................. v LIST OF TABLES ............................................................................................................... vii ACRONYMS AND ABBREVIATIONS .................................................................................. ix EXECUTIVE SUMMARY .................................................................................................... xi CHAPTER 1 INTRODUCTION ........................................................................................ 1 Objectives .......................................................................................................................... 3 Structure of the Report ...................................................................................................... 3 CHAPTER 2 THE CHALLENGE ....................................................................................... 5 Generation Options ........................................................................................................... 5 Methodology ...................................................................................................................... 6 Current State of Electricity Generation in Canada ............................................................ 9 CHAPTER 3 GENERATION OPTIONS ............................................................................. 13 Coal with Carbon Capture and Storage ............................................................................. 15 Natural Gas ........................................................................................................................ 22 Nuclear .......................................................................................................................... 26 Hydroelectricity .................................................................................................................. 31 Wind Energy ....................................................................................................................... 37 Capital Value of Wind Power ....................................................................................... 41 Solar Energy ....................................................................................................................... 43 Capacity Value of Solar PV Systems ............................................................................. 48 Incremental Transmission and Baseload Costs for Wind and Solar .................................. 49 Firm Power for Wind with NGCC ................................................................................. 51 Firm Power for Wind with a Compressed Air Energy Storage System ........................ 54 Firm Power for Solar PV with NGCC or CAES ............................................................... 56 Biomass Energy .................................................................................................................. 58 Geothermal Energy ............................................................................................................ 63 CHAPTER 4 GENERATION OPTIONS FOR THE PROVINCES ............................................ 69 Newfoundland and Labrador ............................................................................................. 70 Prince Edward Island .......................................................................................................... 72 Nova Scotia ........................................................................................................................ 75 New Brunswick ................................................................................................................... 77 Quebec ............................................................................................................................... 78 Ontario ............................................................................................................................... 80 Manitoba ............................................................................................................................ 83 Saskatchewan .................................................................................................................... 84 Alberta ................................................................................................................................ 87 British Columbia ................................................................................................................. 90 February 2018 iv Canadian Energy Research Institute CHAPTER 5 CONCLUSION ............................................................................................ 95 Fossil Fuel-Fired Generation .............................................................................................. 98 Nuclear Power .................................................................................................................... 98 Renewable Energy Options ................................................................................................ 99 BIBLIOGRAPHY ............................................................................................................... 101 February 2018 A Comprehensive Guide to Electricity Generation Options in Canada v List of Figures 2.1 Installed Electricity Generation Capacity in Canadian Provinces, 2015 ...................... 10 2.2 Electricity Generation by Technology in Canadian Provinces, 2015 ........................... 10 2.3 GHG Emissions Intensity of Electricity Generation in Canadian Provinces, 2015 ....... 11 2.4 Retail Electricity Prices, 1st Quarter 2017 .................................................................... 12 3.1 Projects at Operating Stage ......................................................................................... 16 3.2 Impact of Carbon Pricing on the LCOE of Coal Plants .................................................. 21 3.3 Canadian Natural Gas Production Forecast ................................................................. 23 3.4 Natural Gas Combined Cycle LCOE with CCS ............................................................... 26 3.5 Canadian Hydro Capacity and Potential ...................................................................... 32 3.6 Potential Sites to Develop Hydropower Generation in Canada .................................. 33 3.7 LCOE Distribution and Annual Hydroelectric Power Generation Potential in Different Provinces ...................................................................................................... 35 3.8 Installed Wind Power Capacity by Province ................................................................ 38 3.9 LCOE Distributions of Potential Wind Sites in Canadian Provinces ............................. 41 3.10 Average Capacity Value of Stand-alone Wind Power Generation Units ..................... 43 3.11 Capacity Factors for PV in Canada ............................................................................... 46 3.12 LCOE for Single Tracking Solar PV in Canada ..............................................................