Canadian Manufacturing

Canada’s electricity sector needs major investments for growth: CBOC

Report says required investments will total $293.8 billion by 2030

OTTAWA—Canada’s electricity sector needs more than $15 billion invested annually for the next 20 years to replace or refurbish aging infrastructure and meet growing electricity needs, according to a new Conference Board of Canada analysis.

“With half of the generation assets built before 1980, the industry faces a pressing need to accelerate investment in infrastructure at all levels. Much of [the existing] electricity infrastructure is in need of replacement or refurbishment,” said Len Coad, director of energy, environment and technology policy.

The study suggests the sector needs private and public investments of about $293.8 billion to replace aging facilities and meet demand requirements.

At least half of the expenditure is expected to be made by private companies, but a large portion of those investments will produce power under long term contract to a government agency. The remainder of the investment will be made by provincial government corporations or municipal utilities.

“The electricity gridwas built for a population of about 20 million, but is today servicing around 35 million,” said Pierre Guimond, president and CEO of the Canadian Electricity Association. “It’s time to make some of the decisions that previous generations also had to make to have reliable and affordable electricity.”

The largest share would be for generation, expecting investments totaling $195.7 billion. It is expected the majority of these investments will be in renewable and low-carbon-emission sources.

The distribution system will require about $62 billion in investment over 20 years to sustain existing infrastructure and to implement new systems.

Transmission systems will require about $36 billion in investments, but the study says the amount is likely underestimated.

In 2010, the electricity sector contributed $24.6 billion to the Canadian economy and employed 116,000 people, according to a Statistics Canada report on Canada’s energy sector released in March.

The study was funded by the Canadian Electricity Association.

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