CLEAN ENERGY CHOICES WILL DOMINATE CANADA'S FUTURE POWER MIX

In most of the larger provinces reserve margins are now tightening significantly, requiring new choices to be made on fuels to meet future power generation needs. These decisions will be made not only on the basis of pure economics but also through conscious environmental choices. Despite the retreat on climate change policies by Canada's new federal government, this issue remains very much on the agenda of many provinces and will have a major bearing on fuel choices to meet future generation requirements. The Canadian electric power industry is already a lower emitter of greenhouse gases than the transportation and industrial sectors and will become proportionally even more so in the future.

After many years of being starved of investment, transmission will also require capital injection, particularly for upgrading the system intraprovincially (notably in Alberta and Ontario) as well as potentially interprovincially into Ontario. Transmission expansions will, however, face challenges in terms of siting and aboriginal land issues in many areas.

The following are key highlights of this Private Report regarding the future of power generation in Canada:

* Canada has the luxury of a wide array of clean fuel choices to meet its future power generation needs.
* But there will be broad differentiation in the choice of fuels within provinces to meet these requirements.
* Canada's power sector will largely shun further liberalization of power markets.
* Future resource adequacy will focus on regulated solutions in many provinces, but there has been an increasing role for competitive options on the fringes, particularly through long-term requests for proposals.
* There will be an increasing need to invest in transmission to solve some key bottlenecks in the system.

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