2. Electricity in Alberta

Table of Contents
1 Introduction
2 Electricity in Alberta
3 Options for meeting Alberta’s needs
4 An overview of nuclear power
5  Nuclear fuel management
6 Nuclear safety
7  Nuclear electricity in Alberta
8 Nuclear regulation in Canada
9 Conclusion

2.1 Overview
At the heart of most questions regarding Alberta’s electricity sector is the issue of supply and demand.  This chapter presents an overview of the current electricity market as well as how that market is expected to evolve between now and 2024.  (The information is based in large part on the ARC/INL study (ARC/INL 2008) which itself is based predominantly on the Alberta Electricity System Operator’s transmission outlook through 2024 (AESO, 2005)

Alberta’s need for electricity has grown strongly over the past decade, and this growth is expected to continue, driven by the province’s economy. While it is difficult to forecast electricity growth precisely, future needs for electricity can be correlated reliably with overall economic growth. Expansion of the energy sector in general and the oilsands in particular will greatly increase the need for energy, but all sectors of the economy are growing and demographic growth also continues to be strong.

The responsibility for responding to growth in demand, and more specifically the responsibility for building new plants, rests with the market, not government. Specific choices of technology or fuel type are also made by owners of prospective plants, not the government.

2.2 The structure of Alberta’s electricity market
Alberta started restructuring its electricity market in 1996. (For an overview of some of the history of restructuring in Alberta see Daniel, Doucet and Plourde (2007)) The most significant change is that any decision to build new generating capacity is made by a private sector owner without a guaranteed rate of return.

However, this does not mean that regulation is not present. The decision to build a plant – whether powered by thermal combustion, or wind or nuclear – is a private-sector decision taken by a company based on its assessment of the project’s economic viability. But, as with any large industrial construction project, all such plants must obtain approval from relevant government and regulatory authorities regarding their impacts or consequences (such as land-use, water-use, air emissions, zoning, etc). (The regulatory approval process for construction of a nuclear plant in Canada is described in Chapter 8.)

2.3 Alberta’s current use of electricity
The province’s overall need for electricity is characterized by two key measurements:

Capacity: The amount of electricity produced or consumed at any instant in time is measured in multiples of Watts (W). A 60-W light bulb draws 60 Watts from the electricity grid when it is turned on. A generating plant with capacity of 200 megawatts (MW) (The prefix mega means one million, thus a mega-Watt is equivalent to one million Watts.) can produce up to 200 MW at any given time. Capacity can be thought of as being like the diameter of a pipe that affects how much it can carry at any moment.  

‘Peak demand’ refers to the largest amount of capacity being used by the whole system at one time. In 2007-08, the peak demand for the Alberta system was 9806 MW.(Data from Alberta Energy, 2009). Between 2000 and 2007, peak demand increased on average by 3.7% a year. (AESO, 2005; Energy, 2008).

Energy: The volume of electricity produced or consumed during a period of time is measured in multiples of Watt-hours (W.h). A 60-W lightbulb operating for one hour will consume 60 Watt-hours. A generating plant producing at the rate of 200 MW (i.e. a capacity of 200 MW) for ten hours will produce 2,000 MW.h.  ‘Energy’ can be thought of as similar to the volume carried through a pipe over a given period of time.


In 2007 the total energy used by the Alberta electric system was just under 52,000 gigawatt-hours (GW.h) (Source: Alberta Energy. Giga means one billion.). This reflects an increase of 7.2% over the five-year period from 2002 to 2007.  Different sectors of the Alberta economy have different demands for energy.

Figure 1 shows how each sector contributes to the total energy demand:

• The industrial and commercial sectors represent the 13 majority of demand. Electricity demand from these sectors fluctuates with the provincial GDP, reflecting underlying economic activity.
• Residential demand tracks population growth very closely and is less directly tied to economic activity (though demographic shifts are obviously a function of economic activity).

2.4 Generation capacity
Alberta’s energy is generated from more than 280 units with a combined capacity of about 12,150 MW.  Between 2000 and 2007, generation capacity expanded at an average annual rate of 3.4% (Data and figures in the section come from ERCB, 2008).

Figure 2 shows that most of Alberta’s installed capacity is derived from coal (50%) or natural gas (38%). Note that actual energy generated from different sources does not match capacity figures, because plants have different operating characteristics. For instance, in 2007 coal-fired power plants made up 50% of capacity but generated 62% of the province’s electricity, while natural gas power plants made up 38% of capacity but accounted for only 32% of energy produced. 

These statistics illustrate an important distinction between different types of plants, and how they contribute to meeting demand for power as it goes up and down throughout the day:

Base-load power plants generally operate for many hours over the course of the year. They are often units with inexpensive fuel and/or less operating flexibility in terms of being turned on and off.

Peaking units can be used on short notice to satisfy peaks in demand, often use more expensive fuel, and therefore tend to operate fewer hours.

Of course the specific details of operation vary from plant to plant and across jurisdictions, but coal plants are almost always operated as base-load plants whereas natural-gas units have traditionally been considered peaking plants. (The underlying cost and operational characteristics of different plant technologies lead to this distinction. More on this in Chapter 3)

2.5 Alberta’s future needs for electricity
Unsurprisingly, given the growth in Alberta’s economy and population, its electricity demand is growing at one of the fastest rates in North America.  The most recent forecast by the Alberta Electric System Operator (AESO), carried out in 2007, indicates that by 2024, Alberta’s peak demand for energy could be over 16,800 MW – a 74% increase over 2007.(AESO, 2007a (Table 2))This would reflect an increase of 3.3% a year on average.

It is difficult to forecast electricity growth precisely.  However, demand for power is reliably linked to underlying economic activity, driven to a large extent by industrial expansion. Over the period 2007-2024, the AESO estimates:

• A 91% increase for the industrial sector, driven largely by growth in the oilsands. The extent of this growth depends on the cumulative production, including mined and/or thermally-extracted bitumen. The energy required in each case depends on the extraction and upgrading processes used.  (See Figure 3).
• A 71% increase for the commercial sector.
• An increase in Alberta’s population of 1.6% per year between now and 2020. This is the equivalent of an average addition of 25,000 residential customers per year, which would require about 53,806 GW.h more by 2024 (78% above the amount of energy consumed by this sector in 2007).

Figure 3, above, indicates how the power demands of oil sands operations (columns) are closely linked to production levels (represented by the line).  Based on an extrapolation from growth trends in Alberta’s economy, electricity demand in this sector is expected to more than double during the period 2003-2012 and could reach 3200 MW by 2030, based on the forecast production of 5 million barrels per day (ACR, 2004). SCO is synthetic crude oil.

Alberta’s electricity generation capacity is continuously expanding. While supply is considered adequate in the near term, an additional 3800 MW will be required by 2016 – an increase of 31% over today’s capacity(AESO, 2007a).

By 2024, the AESO projects a need for between 4600– 9500 MW of capacity in addition to today’s levels.

These forecasts of plant investment are prepared for planning purposes, such as transmission development.

(See chapter 7 for a further discussion of transmission in Alberta.) However, as noted earlier in this chapter, details of capacity expansion (such as the timing and the type, size and location of plants) are left to the market and private investor-owned companies.

Chapter 3>

return to nuclear main page