Prime Minister Mark Carney stated he wants to “double” the electricity grid. But how can he do that without driving up rates and bills for people and businesses?

Expanding the electricity system with fixed-cost infrastructure is a recipe for higher costs and more pollution. The amount of electricity produced and infrastructure built matters far less than if electricity is doing useful things and displacing less secure fossil fuels. The key to affordability is understanding the potential to get more value from the electricity system already built by increasing efficiencies and utilization.

Below, I propose a five-step “ladder” of solutions to guide public investments that will grow the electricity system affordably. The first steps of the ladder rapidly support affordability and efficiency, as well as enabling the cost-effective development of the technologies in the upper steps.

The ladder starts with saving electricity because it is lower cost than producing it. Utility “demand-side management” strategies offer incentives to customers to save electricity at a cost of 3 to 5 cents per kilowatt-hour. Compare that to BC Hydro’s recent renewable energy procurement (7.4 cents) or Hydro-Quebec’s estimate that new supply will cost 13 cents. 

Increase grid utilization

Because utilities traditionally plan for the worst-case scenario of almost all customers demanding high amounts of electricity at the same time, they build power plants, poles and wires to meet demands that might only exist a few times a year. This means that most of the time, these fixed-cost assets that everyone pays for are underutilized. Before spending a lot of ratepayer or taxpayer money on new infrastructure, we could make better use of the existing grid by using modern communication technologies.

Electricity systems can avoid overbuilding by matching customers’ demands to the existing grid. Utilities frequently offer large energy customers incentives........

© National Observer