Governments are implementing a growing number of environmental demands on the sector, through legislative regimes and international commitments (such as the Kyoto Protocol commitments). In response to these trends, the industry’s environmental performance continues to improve: electricity intensity is declining, air emissions from fossil generation (coal, oil and gas) are declining; waste and hazardous materials are being reduced or more effectively managed; and species and habitat management is a bigger and bigger part of decision-making on new and existing projects.

Measuring and documenting this performance is often a challenge. To meet it, the Canadian Electricity Association (CEA), representing a majority of the country’s generation, transmission and distribution assets, has undertaken a number of initiatives. CEA’s Environmental Commitment and Responsibility Program, its work on climate change, mercury, and fisheries issues, and most recently its pilot studies on measuring environmental performance1, are all examples.

Since the first hydroelectric generating station was constructed at Chaudière Falls in 1886, Canada has made continual strides in technological innovation to develop and utilize natural resources in the service of electricity production. Hydroelectric, coal, oil, gas, uranium, wind, and biomass resources fuel Canada’s generation portfolio, region by region, depending on the availability of the resource and whether the technology is suitable to the location. In addition, there is an ongoing investigation into how new resources, or new technologies utilizing existing resources, can be applied.

Canada possesses a diverse generation portfolio, covering a range of mature and emerging electricity-producing technologies (see Figure 1). Hydro power produces the largest share at close to 60% of Canada’s electrical production, followed by fossil fuels (coal, natural gas and oil) at 28% and nuclear at 12% (a number that is increasing due to planned refurbishments). Wind, bioenergy and other sources are now being considered as contributors to the overall portfolio, although combined, they currently provide only about 2% of Canadian electricity production.

The combination of an increasing population, economic growth and greater use of electrical equipment means that electricity demand will continue to grow at an annual average rate of 1.5 to 2% percent. Utility energy efficiency and demand-side management (DSM) initiatives are helping to alleviate some of the pressures on the system, while also enabling consumers to better manage their electricity bills. Still, the significant scale of new generation required to meet growing demand was made apparent in a 2003 National Energy Board (NEB) report [NEB 2003]. According to an average of two NEB scenarios, Canada’s electricity supply will need to reach 814 TWh in 2020 to meet requirements. CEA estimates that energy efficiency efforts could reduce this figure to 779 TWh. Yet with the anticipated retirement by 2020 of approximately 20% of facilities operating in 2000, the needed growth in supply must compensate for these requirements as well. Thus, a total of 314 TWh in 2020 will be generated by new facilities. Given a generating capacity of 111,000 MW in 2000 (20% of which is expected to retire by 2020), CEA projects that 60,000 MW will need to be added by 2020 to meet both system demand growth and plant replacement needs.