Canada’s electricity infrastructure needs investment to transition to a cleaner, more prosperous future.
Narrow focus on ratepayer capacity
The provinces and their regulators have jurisdiction over investments in electricity infrastructure and innovation, which are funded on a user-pay basis that is passed on to ratepayers.
Provincial regulators tend to focus on immediate costs and keeping consumer rates as low as possible, linking rates closely to existing or immediately foreseeable requirements.
Broad government priorities
Regulators are reluctant to support experimental pilot projects, innovative technologies, renewable or green technologies, and extension of service to areas without enough ratepayers, such as in Northern Canada. Yet, these are the very areas that are priorities for both federal and provincial governments.
This focus on ratepayer capacity creates a gap that defers investment from transformational electricity projects.
That gap stifles innovation.
Closing the gap
To be effective, federal action must support the electricity sector’s central role in advancing Canada’s clean growth agenda.
Existing barriers must be resolved through policy, program design, and framework development.
Increase electricity sector research and development
By addressing existing regulatory and policy gaps, we can incentivize Canadian utilities to launch pilot projects and conduct technology trials that will help reduce emissions, increase efficiency, and make Canada a leader in the high-margin knowledge economy.
A national plan to increase electricity sector R&D should:
- Offer direct funding to the most promising areas, such as:
- Carbon capture and storage
- Grid integration of distributed energy resources
- Grid scale storage
- Grid integration of electric vehicles
- Demand response
- Optimization of asset use
- Fault detection and mitigation
- Bring government decision makers, electricity companies, and innovative suppliers together for a strategic discussion regarding how the regulatory gap can be bridged
- Integrate the Mission Innovation goals and aspirations into government programs and policies
- Ensure that the mandates of NSERC, SDTC, NRC, and R&D divisions of NRCan have the electricity system and electrification central to their research mandates