A Multi-Criteria Analysis of Canadian Electricity Supply Futures

Article excerpt

Introduction

Environmental issues are defining a new agenda for energy research and energy policy development. At the 24th Annual Conference of the New England Governors and the Eastern Canadian Premiers, the Northeast International Committee on Energy (NICE 1999) tabled 'energy and the environment' as an area of key interest. NICE resolution 24-5 recognised the need to address issues regarding energy and the environment, including the consideration of new and existing energy alternatives and research into the development of sustainable energy policies. The traditional preoccupation of energy policy-makers, however, has been to increase electricity supply, exploit new resources and introduce new electricity technologies to meet projected demands independent of energy and environmental policies (Bregha et al. 1990). Energy policies have been largely incentive-based, relying on tax codes and deregulation to promote investment and development. Environmental policy, in contrast, has been largely interventionist, relying on regulations rather than incentives, to minimise the environmental impacts associated with energy resource development, distribution and use (Anderson 1994). While there have been increasing attempts to incorporate environmental considerations into energy policy design, such attempts are tacked on rather late in the policy development process, at a point where the relevant policy options have already been defined (Anderson 1994).

There is a fair degree of consensus among the Organisation for Economic Cooperation and Development (OECD) countries that long-term energy trends are unlikely to experience radical changes over the next 25 years (OECD 1999). While new technologies may come on-stream, the future energy mix for electrical generation is unlikely to present any major disruptions compared with recent trends (Lahidji et al. 1999). The dynamics of energy demand have been quite stable since the early 1980s, growing at an average annual rate of 1.2-1.6 percent annually and are expected to continue along this trajectory (National Energy Board [NEB] 1999). The period from 2025 to 2050, however, could prove to be a watershed in the transition of Canadian energy systems (Lahidji et al. 1999; Energy Technology Futures [ETF] 2000). While fuel sources for electrical generation are not expected to change significantly, concerns over energy security and new directions in socioeconomics, trade and environmental policy issues are expected to have significant effects on the energy scene (World Energy Council 1993; Natural Resources Canada [NRCan] 1997; OECD 1999). The goal of early studies in energy policy should not be to identify a precise figure for energy demand or consumption, but rather to give an indication of a practical and sustainable energy strategy and the direction of change needed to meet specified goals and objectives within the context of existing and future resources, technologies and market situations. Thus, developing a strategy for the development of Canada's electricity sector involves not only the consideration of existing and potential electricity sources, but also the consideration of broader socioeconomic and environmental policy issues.

The purpose of this paper is to evaluate alternative Canadian electricity futures and to explore the implications of a national electricity development policy. To accomplish this, a panel of energy and environmental experts was selected to evaluate five alternative electricity supply scenarios on the basis of several competing factors, and to identify the preferred direction for electricity and energy policy development. A brief discussion of alternative Canadian electricity supply futures is presented, followed by an analysis of electricity alternatives and a discussion of the broader implications of a national electricity strategy within the context of regional electricity resource siting.

Canada's Electricity Futures

Electricity supplies about one-fifth of all energy used in Canada, and electricity production consumes about one-third of all primary energy sources. …