America's Canadian Problem
service as scheduled before next summer, supply will continue to be stretched thin."
Nuclear power could provide a growing share of electricity in Canada, where political opposition to the fuel source seems less vociferous than in the United States. In Ontario, for example, the restart of the twin 750-MW Bruce Power plants has been scheduled for April and June of this year. "In the Ontario market it is anticipated that 3,500 MW of nuclear power will be returning to service over the next three-plus years, so if all that returns, during off-peak we would expect Ontario would go from a net importer to a net exporter," Dalton says.
Still, in some provinces, nuclear power is less welcome. In British Columbia, a new energy policy unveiled in November 2002 indicates that nuclear power will not be permitted in the province. This could suggest that in provinces where hydro- traditionally a publicly managed asset-is a strong option for new capacity, neither publicly nor privately financed nuclear projects may be feasible.
Similarly, a host of gas-fired plants also are scheduled to open across the country over the near term. In power-hungry Ontario, for example, the 578-MW ATCO Brighton Beach unit is scheduled to come on line in March 2004, and the smaller 98-MW Imperial Oil unit is slated for an April 2004 startup.
Merchant Plants To Gain Ground
Since the California debacle, private financiers' enthusiasm for merchant plants has waned in Canada, one source says. Cost recovery is the key. "From East to West there were a lot of merchant plant proposals, but there is not much activity now, and the biggest hurdle is firm contracts," Harvie says. But the provinces still are willing to sign longer-term contracts that can make merchant plants viable, given the province's responsibilities to its citizens.
In electricity-export-strong Quebec during 2002, the total volume supplied by purchase contracts with independent power producers amounted to only 387 MW. Hydro Quebec estimates that over the next few years, there will be only an additional 48 MW available from IPPs.
Similarly, in British Columbia, Canada's other export powerhouse, the province just recently decided to allow private sector participation in the development of generating assets in general, with the proviso that no more large-scale hydro projects will be approved.
Other provinces are less sanguine about the potential role of private sector equity in any hydroelectric projects. "Some provinces don't want to broach the subject of private money in hydro. Some provinces don't want to even go there. The politician who does bring it up doesn't want to stay in office very long," suggests one analyst.
While the mid-term outlook for U.S. imports of electricity from Canada is down, the longer-term view is somewhat brighter. Several new generating projects in Canada could breathe new life into exports to the United States. While some of these projects are based on merchant plant financing, others are expected to involve a higher level of provincial government capital, mitigating the risks resulting from the dearth of new long-term purchase contracts available in the North American market. And although Canadian