Electricity produced by wind and biomass generation are the least expensive power sources to connect to Canada's grid, according to a study by the Canadian Energy Research Institute.
The low cost of renewables means those projects should be competitive without subsidies in most requests for new power proposals, CEO Allan Fogwill said at a Feb. 28 meeting to unveil the study. While biomass is the lowest-cost option in Canada's most-populous regions, supplies of fuel for those generators are limited, giving wind an advantage in availability.
"Generally speaking, wind wins," Fogwill said. "It's the cheapest intermittent source and in some cases it's the cheapest firm source when you're including something else to firm up with."
The report by the Calgary, Alberta-based economic think tank, known as CERI, found that wind energy backed by hydroelectricity or natural gas combined-cycle generation on a firm power basis would cost between 7.4 Canadian cents/kWh and 7.8 Canadian cents/kWh in provinces east of Quebec. In Quebec and provinces to the west of it, biomass could provide the same power for between 4.3 Canadian cents/kWh and 5.1 Canadian cents/kWh, the study found.
On an intermittent basis wind was the cheapest power source across the nation, ranging from 5.6 Canadian cents/kWh in Saskatchewan to 6.8 Canadian cents/kWh in New Brunswick and Quebec. The CERI study looked at the all-in cost of power plant construction and connecting those sources to the existing power grid. When compared with the cost of natural gas combined-cycle generation, which CERI used as a reference case, the cost of reduced CO2 emissions ranged from a savings of C$20 per metric ton in Alberta to C$110 per tonne in Nova Scotia.
Canada already gets about 80% of its power from low-emissions generators. Hydroelectricity, the largest power source in the nation, has become a more-expensive option as province-owned utilities in British Columbia, Manitoba and Newfoundland and Labrador have struggled with massive projects that are unlikely to be profitable under existing market conditions. The study also found that building new, large-scale nuclear projects is unlikely.
"Large reactors are done," Fogwill said. "The reason why they're done is that they come on in big chunks. The way we're adding resources to most electricity grids these days is small, incremental amounts."
The study considered small modular reactors, along with emerging technologies such as battery storage, compressed air energy storage and carbon capture. In Alberta and Saskatchewan, where large coal-fired plants still provide much of the baseload power, super-critical coal-fired generation combined with carbon capture and sequestration would cost 11 Canadian cents/kWh. The two prairie provinces have the best wind resources in the nation, according to the study. Alberta announced long-term contracts for 600 MW of wind power in December 2017 at a weighted average price of 3.7 Canadian cents/kWh from Capital Power Corp., EDP Renewables Canada Ltd and Enel Green Power North America.
The study, which is available free on CERI's website, is Study No. 168 titled "A Comprehensive Guide to Electricity Generation Options in Canada."
