2015 Electricity Exports and Imports Summary

Canada had another record electricity export year in 2015. Characterized by high exports and low imports, Canadian electricity set trade records in 2015, continuing the upward trend set in the last five years. Net exports increased by 10 TW.h, and net revenue increased by about $500 million, in 2015 over 2014. Export sales also surpassed the previous all-time high set in 2013.

Figure 1: Annual Canadian Electricity Exports, Imports and Export Revenue, 2011-2015

Figure 1: Annual Canadian Electricity Exports, Imports and Export Revenue, 2011-2015

Source: NEB international trade statistics (3 March 2016)

Net exports increased by 30% with record-high exports of 68.4 TW.h and import purchases of 8.7 TW.h, the lowest in almost 20 years.

Canada’s net revenue increased to 2.8 billion Canadian dollars, surpassing all previous records. Net revenue (the income from exports minus the cost of the imports) was 20% higher in 2015 than in 2014. While net exports of electricity surpassed previous levels, net revenues did not increase proportionally.

Export sales values increased more than 15% in 2015 over 2014 levels. Similar to 2014, the major hydro-producing provinces in 2015, Québec, Ontario, Manitoba and British Columbia, earned almost 95% of the value of export sales. Although record export sales have not yet translated into record export earnings, revenues continue to increase.

Prices in most of Canada’s traditional electricity export markets remain lower than historical values, with the exception of certain seasonal price volatility.

For example, exports of just over 55 TW.h sold for $3.8 billion in 2008. In 2015, exports were 25% higher than in 2008, at just over 68 TW.h, yet sold for 20% less, at $3.1 billion.

Electricity Trade

Canada and the United States (U.S.) have been electricity trading partners for more than 100 years. Since distances between Canadian generation and U.S. demand are often shorter than that of the east-west distances between adjacent provinces, electricity trade has occurred more often in a north-south direction, between provinces and states.

A stable flow of electric power is critical for electricity trade between any two countries. Having multiple connections that enable trade makes the entire North American electricity grid more stable.

The amount of electricity available for export changes year-to-year in response to domestic demand, outages, precipitation levels which impact hydroelectric generation and other factors. Many provinces have high reserve margins. This means they have more supply than needed on a day to day basis, above the standard 12 to 15% emergency buffer. Examples are the hydro-producing provinces of Manitoba and Quebec as well as Ontario with its abundance of nuclear resources.

Surplus generating capacity, and lower Canadian electricity consumption overall, have given rise to, or increased, surplus generating capacity in some markets. As a result, more electricity was available to be exported in 2015.

Canada benefits from electricity trade in many ways. By being able to rely on generation in adjacent U.S. jurisdictions, Canadian provinces are able to avoid the costs of building extra generation that may sit idle except at peak times. Opportunities to offset costs and optimize revenue are created when market participants have access to adjacent markets without having to spend capital on additional infrastructure.

Exports

Canadian electricity export sales increased by 10 TW.h, more than 15% higher than 2014 exports. Exports surpassed the 2013 record by almost 10% in 2015. Canadian electricity sales set records in four of the last five years.

Figure 2: Annual Canadian Electricity Export Sales, 2011-2015

Figure 2: Annual Canadian Electricity Export Sales, 2011-2015

Source: NEB international trade statistics (3 March 2016)

Annual quantities of electricity exports to the U.S. vary significantly. Over the past five years, electricity export sales averaged almost 60 TW.h, ranging between approximately 50 TW.h and 70 TW.h annually. Historically, high export years typically coincide with high precipitation years, and provinces with hydro-based generation export the largest amounts of power.

2015 was a record breaking export year for both British Columbia and Ontario. British Columbia’s export sales increased by almost 70% from 2014 to 2015 from 7.4 TW.h to 12.4 TW.h. Ontario’s exports increased by more than 20% from 16.7 TW.h to 20.3 TW.h. Manitoba’s export sales increased 7% from 8.6 TW.h to 9.2 TW.h) while Quebec maintained its export levels at its five-year average of 23.6 TW.h.

Imports

Canadian import purchases were at their lowest in almost twenty years, decreasing more than 30% from 2014 to 2015. Imports are about 25% below the 5-year average of 11.5 TW.h.

As Canada’s national electricity consumption peaked in 2009, and is still below that level, Canadian supply is fairly strong so Canada’s import needs are quite low.

Figure 3: Annual Canadian Electricity Import Purchases, 2011-2015

Figure 3: Annual Canadian Electricity Import Purchases, 2011-2015

Source: NEB international trade statistics (3 March 2016)

Canadian provinces have a greater capacity to exchange electricity with American states along north-south interconnections than between neighbouring Canadian provinces. Although electricity pricing in U.S. markets is usually higher than in Canadian markets, provinces frequently import electricity from the U.S. when domestic supply in Canada is limited or transmission capacity to other Canadian jurisdictions is constrained.

B.C. imported 7 TW.h, or almost 80%, of Canadian imports in 2015 even though it is a net exporter. B.C. imports were down by about 25% year-over-year.

Alberta was the only provincial net importer of U.S. power in 2015.

Net Exports

Canadian net exports (exports less imports) of electricity reached a record high, increasing to almost 60 TW.h in 2015, 30% higher than in 2014.

Figure 4: Annual Canadian Electricity Net Exports, 2011-2015

Figure 4: Annual Canadian Electricity Net Exports, 2011-2015

Source: NEB international trade statistics (3 March 2016)

Canadian net exports earned a record $2.8 billion in 2015 due to supply-demand conditions. This surpassed the previous record of $2.3 billion in 2014.

British Columbia trades significant amounts of electricity. More than half of the 2015 increase in net exports can be attributed to the 7.4 TW.h increase in net exports from B.C. Although the province imported more than half as much as it exported in 2015, it more than tripled its 2014 net earnings, which increased from $82.6 million to $303.3 million.

Revenue can be earned when power companies buy electricity from adjacent U.S. markets when prices are lower (e.g. during the night or during specific seasons). This allows them to store the water they would otherwise have had to use behind dams, so that it is available to sell later when prices are higher (e.g. during peak hours).

Exports by American Region

Relatively high U.S. prices, as compared against Canadian prices, supported increased exports.

Canadian exports to the U.S. West and MidWest increased considerably in 2015. Sales into the West increased by approximately 70%, from 7.4 TW.h in 2014 to 12.7 TW.h in 2015. Sales increased into the U.S. Midwest by approximately 25%, from 15 TW.h in 2014 to 18.6 TW.h in 2015. Severe drought in the U.S. Pacific Northwest and California significantly reduced hydro generation in those areas.

Figure 5: Gross Electricity Exports from Canada to the Continental United States by Region, 2011-2015

Figure 5: Gross Electricity Exports from Canada to the Continental United States by Region, 2011-2015

Source: NEB international trade statistics (3 March 2016)

The U.S. Northeast areas are shown in light green, orange and light blue on the accompanying map.

PJM (Pennsylvania-New Jersey-Maryland Interconnection), the New York ISO (NYISO) and ISO New England (ISO-NE) operate competitive wholesale electricity markets in the U.S. Northeast. Since market boundaries do not always coincide with the geographical categories used in NEB statistics, data attributed to these markets is approximate.

The U.S. Northeast, a relatively small region, buys the majority of Canadian exports, the bulk of which is shared between the New England (ISO-NE) and New York (NYISO) markets. Over the past five years, sales into this region averaged just under 35 TW.h annually, ranging from 27 TW.h in 2011 to 37 TW.h in 2015. Cold temperatures in the U.S. Northeast increased demand for Canadian electricity in that region, primarily into New York.

The Northeast received 37 TW.h in 2015, approximately 55% of all Canadian exports. In 2015, New York received 17.9 TW.h and New England received 18.2 TW.h.

Appendix

Value (Cdn$ billions)Note a
  2011 2012 2013 2014 2015

Source: NEB international trade statistics (3 March 2016)

Exports (Sales) 2.0 1.9 2.5 2.9 3.1
Imports (Purchases) 0.4 0.2 0.4 0.6 0.3
Net RevenueNote b 1.6 1.7 2.1 2.3 2.8

 

Volumes (TW.h)
  2011 2012 2013 2014 2015

Source: NEB international trade statistics (3 March 2016)

Exports (Sales)Note a 51.1 57.6 62.6 58.4 68.4
Imports (Purchases) 14.4 10.9 10.7 12.8 8.7
Net ExportsNote b 36.7 46.7 51.9 45.6 59.7

 

Volumes (TW.h) – Breakdown of Export Sales by U.S. Region
  2011 2012 2013 2014 2015

Source: NEB international trade statistics (3 March 2016)

Exports to West 9.7 10.9 7 7.4 12.7
Exports to MidWest 14.2 12.6 16.1 15 18.6
Exports to PJM 1.1 2.4 1.8 1 1
Exports to NYISO 12.1 16.2 18.7 16.9 17.9
Exports to ISO-NE 14 15.5 19 18.1 18.2
Exports (Sales)Note a 51.1 57.6 62.6 58.4 68.4

 

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