Energy Evolution: June 2, 2008
Guimond Takes Helm Of Canadian Electricity Association
Canada’s electricity industry has experienced a reversal of fortune in the past decade, from having too much capacity to not having enough and the industry will be preoccupied for the next several years with adding more generation and transmission, while at the same time having to make its power greener, says the new head of the group that represents the industry.
Pierre Guimond, who became president and CEO of the Montreal-based Canadian Electricity Association (CEA) on May 27, replacing retiring former head Hans Konow, who had held that position for 26 years, told Energy Evolution that utilities and others involved in the power industry will have to raise several billion dollars to develop new facilities, just one of many challenges they face.
“Across the country there’s a need to build new generation,” says Guimond, who worked for the CEA for seven years through to 1999 as its senior adviser, government relations, before becoming executive assistant and political adviser to a number of federal cabinet ministers, followed by a stint at the Canadian Nuclear Association, where he co-ordinated regulatory activities and guided policy development.
He says new nuclear power plants alone will cost about $40 billion over the next decade or so, with another $80 billion likely to be spent on non-nuclear power generation.
In addition, he says billions will have to be spent on new transmission across the country.
Canada is one of the largest per capita users of electricity in the world, thanks to its cold climate and large land mass.
For instance, California, with a population of over 38 million, five million more than Canada, has total installed generation capacity of about 50,000 megawatts (MW), while Canada has installed capacity of 120,000 MW.
Guimond says the CEA, which is now largely an advocacy body for industry, works closely with governments when they’re drafting policies that will impact the electricity industry.
“We meet with government regularly,” he says. “We have helped design environmental laws [that affect the industry].”
The industry is “getting greener,” he adds, with a shift from coal-fired power to wind, solar and other renewables.
The Ontario government, for example, wants to have all of that province’s coal-fired plants closed by 2014 because of the impact of coal-fired generation on the environment.
But the industry is already much more environmentally sustainable than it’s often given credit for, he says.
For instance, 60% of Canada’s power comes from hydroelectric facilities, which produce no greenhouse gas (GHG) emissions.
About 17-18% of Canada’s electricity comes from coal-fired plants, with about 15% generated from nuclear facilities and the rest by gas-fired plants and by renewables.
The provinces each have much different mixes of generation, something the CEA is mindful of when dealing with governments, he says.
For example, British Columbia, Manitoba, Newfoundland and Quebec generate most of their power from hydro facilities. Alberta, Saskatchewan and Nova Scotia rely on coal for a large percentage of their generation, while Ontario, New Brunswick and Prince Edward Island rely on a mix of power sources, including nuclear in the case of Ontario and New Brunswick (Quebec has the country’s only other nuclear plant).
Nuclear power, long a dormant source, is showing new signs of life, Guimond notes.
The Ontario government wants to see new and refurbished nuclear plants provide over 50% of the province’s power in the future, New Brunswick is refurbishing its Point Lepreau nuclear station and is considering allowing private developers to build another nuclear plant, and the governments in both Saskatchewan and Alberta have opened their arms to the possibility of nuclear development.
Although the CEA is supportive of government efforts to make Canada’s power mix greener, Guimond says its members are also concerned about regulatory delays that are causing projects to take increasingly longer to be approved and built.
“There’s a real concern among our members about the time it is taking to produce more generation,” he says.
Other issues that are of concern to the CEA include access to financing to develop power facilities, especially in the wake of the financial crisis surrounding derivatives and the deflation of real estate assets worldwide, the need for the best new technologies in developing those facilities, and the growing issue of labour shortages in the power industry, where a large percentage of workers are likely to retire over the next decade.
“In North America in the next 10 years an estimated 75 million people will retire and there are only 45 million people to replace them,” says Guimond.
The shrinkage of the industry’s talent pool, caused by those retirements, will create more engineering and technical challenges as the needed new facilities -- as well as replacement facilities -- need to be brought online, he says.
“We need to rely on a lot of engineering talent and the oilsands industry is using a lot of the engineering talent in Canada,” adds Guimond.
Ironically, the new CEA head may himself be one of those aging workers who need to be replaced in the next decade. He is 55.