Electric Power: A Canadian Specialty
The Canadian Electric Power Industry At the Service of the
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© Her Majesty the Queen in Right of Canada (Industry Canada)
Cat. No. C2-435/2001-3
Electric Power: A Canadian Specialty
A Time for Trade
As the World Trade Organization and other international
institutions attack trade restrictions around the world, the
challenge of providing reliable electric power - long recognized as
one of the surest ways of bringing tangible benefits to a country's
population and stimulating its economic growth - is increasingly
being met in a competitive marketplace. Canada's electric power
industry stands ready to meet this challenge.
The purpose of this document is to provide an overview of the
Canadian industry's capabilities and highlight some of the Canadian
companies that contribute to the development of electric power in
Electric Power in Canada
Electricity has become a cornerstone of the Canadian economy and
Canadian life. Canadians are the third highest per capita users of
electricity in the world. Plentiful, inexpensive energy is required
to provide heat in a northern climate, to transport goods in the
second largest country in the world and to run a large industrial
economy. High quality electricity supply is essential to provide the
medium for Canada's rapidly growing information economy.
Canada's great needs for electricity are met through abundant
energy resources: falling water, coal, natural gas and uranium.
Installed generating capacity totalled 109.8 GW in 1999 and 557.2 Twh were produced.
Sixty-one percent of Canada's electric power is generated from
hydro, 26 percent from thermal and 12 percent from nuclear energy
Over the years, Canada's electricity needs have been met by
innovative engineering and technology leadership:
- from 1883, when Thomas Alva Edison installed the first
electric generator in Canada
- to 1962, when Canada produced its first nuclear-generated
- to 1965, when Hydro-Québec installed the world's first 735 kV
transmission line, transporting electricity 1100 kilometres to
market from northern Québec
- to today, as the Ballard Fuel Cell powers new, emission-free
The preponderant portion of Canadian electricity supply is
generated by means that minimize adverse environmental effects. The
industry has made commitments to finding environmentally beneficial
solutions to every aspect of its operations and to contributing to
Canada's pursuit of its air pollution control objectives. Canadian
thermal, nuclear and hydro technology is state-of-the-art, and
Canadians are helping to pioneer some of the emerging alternative
The Electric Power Industry
The electric power industry in Canada has assets of $148 billion
(1997) and earns $35 billion in annual revenue. Canadian utilities
directly employ approximately 78 000 people, and an additional 25
000 people are employed in electric power production for
manufacturing and engineering companies.
In terms of global rank:
- Canada is the fifth largest producer of electric power in the
world, generating 4 percent of the world's total.
- Canada is the world's largest producer of hydro power.
- Canada is the world's second largest electricity exporter.
Attaining this level of performance despite extreme terrain,
severe climate and long distances has made Canada's electric power
industry an international leader. Moreover, the capabilities gained
in bringing reliable, low-cost electricity to far-flung communities
in Canada can also serve the development needs of other
Among Canada's major electric power development projects, the
James Bay hydro-electric project in Québec is perhaps the most
renowned. Completed in its current configuration in 1984, this
electric power complex features a spillway three times higher than
Niagara Falls and the largest underground powerhouse in the world.
It has five major power stations, with capacities ranging from 1368
MW at LG-1 to 5328 MW at the Robert-Bourassa power station,
for a total of 15 000 MW.
In the nuclear field, Atomic Energy of Canada Limited (AECL) developed
reactor. Major nuclear generating sites are located in Ontario at
Pickering, Bruce and Darlington, in Québec at Gentilly and in New
Brunswick at Point Lepreau. There are 700 MW class CANDU6 reactors designed
operating in Canada, the Republic of Korea, Argentina and Romania.
Three more are under construction, two in China and one in Romania.
larger 900 MW class reactor,
CANDU9, is an
evolutionary design based on the proven multiunit reactors at the
Darlington and Bruce B nuclear generating stations.
In thermal generation, Ontario Power Generation operates one of
the world's largest coal-fired generating stations, at Nanticoke on
Lake Erie. Its eight power units, built by Babcock & Wilcox,
provide a total capacity of 3900 MW. Construction of the site began in 1973.
All eight units were completed in 1978.
The transmission of electricity over long distances constitutes
another significant achievement. Canada's many economically
attractive hydro sites are often located far from their markets.
Canadians have had to pioneer new transmission technologies such as
the world's first 735 kV transmission line, which is
state-of-the-art in extra high voltage (EHV) alternating current and
high voltage direct current (HVDC).
The map (last page) shows the predominantly north-south pattern
of high voltage, long-distance transmission lines. Hydro-Québec's
system extends more than 1100 kilometres from Churchill Falls in
Labrador to Montréal, and from James Bay to southern load centres
that include U.S. markets. In Manitoba, pioneering work was done to
successfully develop the ± 500 kV HVDC system bringing
hydro-electric power from the Nelson River (Gillam) to customers in
the Winnipeg area of southern Manitoba. In Ontario and British
Columbia, major EHV
systems in the 500 kV class bring electric power from northern
generating sites to markets in the south.
Counting all transmission and distribution lines rated 50 kV and
higher, Canada's bulk transmission network measures 158 156
kilometres of high voltage power lines.
Electric utilities in Canada are largely under provincial
jurisdiction and tend to be highly integrated within each province.
Most, but not all, utilities are owned by the provincial or
A striking characteristic of Canada's utilities is their
participation in international trade in electricity. In 2000, Canada
exported 50.06 Twh (valued at $4.08 billion) to the United States.
This trade has helped customers in a number of provinces enjoy
electricity rates that are among the lowest in the world.
The electric power business is going through dramatic changes.
Deregulation is well under way in many jurisdictions, opening up
this industry to competition and new kinds of electricity companies.
Competition is spreading at the wholesale level, and is expected
shortly at retail levels in some provinces. The utility functions of
generation, transmission, distribution and retail are being
unbundled. For example, on April 1, 1999, Ontario Hydro was split
into a number of successor organizations, including Ontario Power
Generation Inc. and Hydro One. The former manages generation assets,
and the latter handles transmission and distribution.
Growing ranks of industrial companies are installing combined
heat and power (cogeneration) systems, enabling the efficient
consumption of fuel. Independent power producers (IPPs) have emerged
across Canada, with companies such as TransAlta and Atco Power
playing leading roles. There are new convergences developing among
electricity companies, natural gas firms and telecommunications
Cost pressures are increasing relentlessly, and planning horizons
are becoming ever shorter. Power quality and system reliability are
becoming much more important, calling for specialized engineering
techniques. Environmental issues have placed new constraints on the
planning and management of all forms of generation.
Canadian utilities are meeting these challenges vigorously. The
Canadian electric power equipment and services industry is providing
solutions that offer high-yielding, environmentally sensitive
designs and upgrades, turning refurbishments into major capacity
gains. These solutions represent solid proposals from builders and
operators who have proven track records and who can offer
Over the past 10 years, the electric power equipment and services
industry has consolidated, restructured and re-created itself. It
now puts a much greater emphasis on defining a field or niche in
which Canadian operations have the best capabilities and track
record, and it competes on a global scale. At the same time, as
subsidiaries of multinational corporations based in Europe and the
United States, many of the large power equipment manufacturers in
Canada have the benefit of their parent companies' contacts, sales
forces, technologies and access to capital.
Several Canadian companies have become major players in the
international market. For example:
- The GE
Hydro plant at Lachine, Québec, has a global product mandate for
large hydro turbines and generators.
- The Babcock & Wilcox plant in Cambridge, Ontario, is the
world's leading manufacturer of replacement nuclear steam
- ABB Canada maintains Centres of Excellence, with many of its
plants specializing in specific types of transformers and other
systems for the management and transmission of electricity.
Canada's electric power sector is not known solely for its large
companies. Small, highly innovative companies are springing into
existence all over the country. Their products and services cover a
wide range, from alternative generation to controls, monitoring and
testing. They are capable of pursuing market niches on their own or
of partnering with larger companies to provide customers with total
solutions, particularly if these are aimed at improving efficiencies
and environmental performance. Three examples are Trihedral
Engineering Limited, with its software for industrial monitoring and
control, Thermal Energy International Inc., which can enable power
generators to reduce the cost of meeting emission reduction
requirements, and Intracoastal System Engineering Corporation, a
world leader in automated meter reading systems. These are just a
few examples of exciting high technology companies that are
transforming the Canadian power sector and penetrating international
Consortia and partnerships often bring together the best Canadian
players in various specialties and enable the pooling of skills and
resources that are in short supply. For example, two of Canada's
largest engineering firms, Acres and SNC-Lavalin, formed Canadian
International Water & Energy Consultants to undertake projects
in Nepal. In the nuclear power field, strong partnerships are formed
between utilities and Canadian nuclear industry participants for
servicing and refurbishing nuclear plants.
Partnership is an essential component of research and development
(R&D) efforts in the industry. The Canadian Electricity
Association plays a valuable role in pooling Canadian R&D
resources in joint projects. At the bilateral level, Hydro-Québec
and ABB Canada have partnered in the CITEQ
(Centre d'innovation sur le transport d'énergie du Québec) R&D
Centre to produce a new submersible transformer.
Globalization and rationalization have had a huge impact on the
electric power equipment manufacturing industry over the past 10
years. To provide solutions to today's utility needs, Canadian
suppliers are emphasizing short lead times, flexible product
offerings, more standardized products, performance guarantees and
strong support services.
In 1997, Canadian power equipment shipments were valued at $6.2
billion. That figure includes $4.1 billion in exports, a 145 percent
increase in real terms between 1991 and 1997. Currently, the top
export destinations for Canadian electric power equipment are the
United States, the United Kingdom, China, Germany, the Republic of
Korea and Mexico.
Canada is an open trading nation. Its electricity providers want
to be able to look anywhere in the world for solutions from
companies with the talent, capabilities and experience to supply
their needs. Increasing export and import trade reflects the
international specialization of the industry and ensures that
domestic manufacturers compete with, and rank among, the world's
In power generation, products range from small hydro
installations to modular, efficient gas turbines for distributed
generation, to the world's largest air-cooled hydro generator, at
Guri 2 in Venezuela, built by GE Hydro. Other major
manufacturers include Alstom, Siemens, Foster Wheeler and Babcock
In the nuclear power reactor market, AECL is the third
largest global supplier of nuclear energy systems and technology.
Major subcontractors include Babcock & Wilcox for nuclear steam
generators, Alstom for calandria, and CAE Electronics for operations
training simulators. Today's CANDU power reactors
represent proven technology and have a long history of evolutionary
advancements to reduce capital costs, enhance safety and exploit
this design's exceptional fuel cycle flexibility.
Other generation technologies that possess considerable
environmental advantages are emerging in Canada. Examples include
wind power, photovoltaics and fuel cells. Some of these emerging
technologies are also well suited to fill growing requirements for
distributed generation and customized energy services. This is very
much the case for Ballard Generation System's 250 kW natural
gas-powered Fuel Cell Power Plant for stationary power applications.
There is a growing fuel cell industry including such companies as
Global Thermoelectric, a leader in solid oxide fuel cell technology,
and Hydrogenics Corporation, a developer of fuel cell power
generators and test equipment.
Transmission and Distribution
Canada's electric power industry has experienced and highly
competent suppliers of equipment and services in transmission and
distribution, in particular, advanced transformers, switchgear, and
wire and cable.
In high voltage transmission systems, major projects by Manitoba
Hydro, Hydro-Québec, BC
Hydro and Hydro One showcase a capability that Canada has defined.
Pauwels Canada specializes in HVDC converter
transformers, and ABB Canada has recently developed a system of
low-voltage transmission to link the main grid with distant loads
such as Aboriginal communities. Such a system could be an economical
solution to the enormous cost of diesel fuel currently being
consumed to serve these loads.
To manage the challenges of transmission and distribution in
open, deregulated markets, the latest generations of supervisory
control and data acquisition (SCADA)
and other network management systems are being integrated into
Canadian power systems. SNC-Lavalin Energy Control Systems Division
(formerly CAE Electronics ECS) is active in this field in Canada and
worldwide, notably in the supply of a high voltage transmission
system to EDESUR (Empresa
Distribuidora Sur) in Argentina.
There are more than 200 firms of consulting engineers and
engineering contractors in Canada's electric power industry. Several
Canadian utilities also provide expert services to international
This sector is composed almost entirely of Canadian-owned
companies that have a long international track record in power
projects. The largest companies are able to take on the role of an
engineer-procure-construct (EPC) contractor. They
provide services such as taking full responsibility for a plant's
construction and start-up, generally on a fixed-price, turnkey
basis, including design and procurement of subcontracted equipment
and services, together with the construction and start-up risks.
Some go further to provide total project solutions, including full
financial structuring, occasionally taking their own investment
positions. The following companies are among the Canadian service
providers active in international power development:
- AMEC, with 7000 employees and offices in 40 countries, has
completed projects in more than 100 countries. A world leader in
hydro-electric and thermal generation projects, it also brings
environmental and financing capabilities in order to provide a
- SNC-Lavalin is one of the leading engineering and construction
firms in the world, with over 8000 employees in offices in some 30
countries. SNC-Lavalin is involved in services, turnkey packages
and ownership of power facilities. Its financing arm, SNC-Lavalin
Capital, has helped put together packages worth over $5 billion in
- Acres International, a leader in hydro-electric developments,
is an employee-owned firm with a staff of 700. Acres currently has
projects under way in more than 25 countries and has completed
assignments in 110 countries. Associate firms with more than 200
employees are active in Africa, Latin America and Asia.
- Dessau-Soprin, with nearly 1,000 employees, specializes in
hydro-electric production, transmission and distribution, and
- Canatom NPM, with 250 highly specialized employees, provides
engineering, procurement and project management services to the
- Teshmont, with 35 employees, is a good example of a number of
distinguished and specialized smaller firms in the sector that are
active internationally. Teshmont has provided services in 18
countries, in projects representing more than half of the world's
installed capacity of HVDC transmission
Several utilities sell their expert services internationally.
TransAlta and Canadian Utilities are notable as active investors and
operators of IPPs. Hydro-Québec
International is active in IPP, build-own-operate
build-own-operate-transfer (BOOT) projects. Canadian
utilities, such as Hydro-Québec and New Brunswick Power Corporation,
have been involved in training nuclear plant operators from other
countries. Manitoba Hydro has signalled its intention to take a
larger role in selling its expert technical and management
consulting services internationally through the formation of
Manitoba Hydro International, which continues the parent company's
work in delivering training and technology transfer programs to
utilities around the world.
Repair, Modernize, Upgrade
For aging plants, choosing refurbishment and/or repowering rather
than building new generating capacity can lead to substantial
improvements in capacity, efficiency and environmental performance.
Canadian utilities have turned increasingly to the repair, modernize
and upgrade (RMU) option as
plants reach the end of their life cycle, and have developed
state-of-the-art techniques and equipment for this purpose. Among
numerous RMU projects under
way across Canada, Ontario Power Generation is currently performing
a major overhaul and upgrade of the Sir Adam Beck Generating Station
Number Two at Niagara Falls, which will increase capacity by about
150 MW when completed.
New Brunswick Power Corporation has partnered with Westcoast
Energy to redevelop an oil-fired unit at Courtenay Bay into a 280
MW natural gas-fired combined
cycle unit. Several utilities have completed refurbishments of
existing conventional steam electric power plant units to enable
these units to operate in a more efficient and environmentally
Canadian consulting engineers and contractors, as well as
companies such as Hydro-Québec International, are active
internationally in providing a full range of consulting services for
power station rehabilitation. Canadian advanced products in this
area range from robotic repair and maintenance units, to diagnostic
and control systems, generation scheduling and river management
No matter how good the team of project managers, consultants,
contractors and manufacturers may be, financing often makes or
breaks a deal. That is where Export Development Corporation
Canada's export credit agency, comes in. For more than 50 years,
supported Canadian exporters and Canadian investors in international
projects, with a world-class range of finance and insurance
Services include project financing, insurance to cover a range of
political risks, support for contract bonds, as well as accounts
receivable insurance and financing. These services are provided
through a specialized team of financing and insurance experts
dedicated to helping the Canadian power industry export and operate
In 2000, EDC provided over
$45 billion of insurance and financing support to Canadian
businesses, with close to $1 billion specifically for the Canadian
accumulated considerable experience in arranging, structuring,
preparing and negotiating the financing security and political risk
insurance arrangements for projects. It is prepared to consider
transactions at the forefront of sector and market developments.
strongly believes in combining its expertise with that of other
financial institutions, key project players and exporters. With its
financial partners, EDC has been very
active in IPPs and merchant
power projects across the world.
In summary, Canada's electric power industry has the capabilities
needed to develop electric power throughout the world, with:
- skilled, experienced specialists
- proven international capability and competitiveness
- attractive financing.
Annex: Selected Projects
Canadian electric power firms have a long-standing international
presence. The following selected projects illustrate the four major
capability areas of the industry.
- Teeside 1875 MW combined
cycle (United Kingdom): AMEC provided EPC services.
- Suralaya 4 x 400 MW thermal
(Indonesia): Boiler island supplied by Babcock & Wilcox, with
- Three Gorges 18 200 MW hydro
Hydro is supplying turbine generators.
- Wolsong Nuclear Generating Station (Republic of Korea):
was project manager for Unit 1 and prime contractor for plant
design and engineering for all four units. Canatom NPM was
subcontractor for architect engineering scope for all units. GE
Canada provided initial fuel loads for Units 1, 3 and 4. Zircatec
provided the initial fuel load for Unit 2.
- Chamera II 300 MW hydro
(India): SNC-Lavalin is supplying electromechanical equipment,
design and financing.
Transmission and Distribution
- 161 kV transmission system
reinforcement for Volta River Authority (Ghana): Acres conducted
expansion, new construction and modernization of transmission
- 220 kV, 660-kilometre
transmission line (Peru): Hydro-Québec International carried out
this project on a build-own-operate-transfer basis.
- Tambak Lorok 2 x 530 MW
combined cycle station blocks (Indonesia): SNC-Lavalin provided
design audit, project and construction management, commissioning
supervision and technical assistance.
- Akosombo 912 MW hydro
generating station retrofit (Ghana): Acres is providing
engineering, procurement and construction management services.
Repair, Modernize, Upgrade
high voltage transmission system for Buenos Aires (Argentina):
SNC-Lavalin Energy Control Systems Division (formerly CAE
Electronics ECS) supplied the RMU services.
High voltage, long distance transmission lines in Canada