Key Findings

The Pan-Canadian Wind Integration Study findings indicate that the Canadian power system, with adequate transmission reinforcements and additional regulating reserves, will not have any significant operational issues operating with 20 per cent or 35 per cent of its energy provided by wind generation.

  1. In the 20 per cent and 35 per cent scenarios, wind energy displaced more expensive natural gas and coal-fired generation in both Canada and the USA. About half of the total displacement occurred in Canada, resulting in economic benefits for the Canadian systems. This study did not include any carbon tax. If a carbon tax were implemented, then more of the energy displacement would shift from natural gas to coal generation.
  2. Canada has high quality wind resources in all provinces. Capacity factors of potential wind plants range from 34 per cent in British Columbia to 40 per cent in Nova Scotia. The study results indicated that there is no significant advantage to concentrate wind resources in provinces with slightly higher wind capacity factors. Instead, it is more beneficial to add the wind generation in regions where the energy can be partially used within the province and partially shared with neighbouring USA states.
  3. Hydro generation, particularly hydro with pondage, provides a valuable complement to wind generation. Canada has several hydro-rich provinces. The combination of wind and hydro provides a firm energy resource for use within Canada or as an opportunity to increase exports to USA neighbours. Canada is unique in this regard. With 20 per cent wind penetration, annual hydro energy is still twice the annual wind energy and far exceeding that of the USA.

In addition, the study highlighted a value for ensuring flexibility in existing hydro resource utilization. While hydro resources typically have significant technical flexibility, other operational, political, and environmental constraints can limit this support. These potential constraints should be investigated in more detail.

  1. Inter-area transmission reinforcements are required to accommodate the increased levels of wind generation in order to limit curtailment. The 20 per cent scenarios require 4.6 to 4.8 GW of new inter-area transfer capacity with a total estimated cost of C$2.7B. The 35 per cent scenario requires about 10 GW of new transfer capacity with an estimated cost of C$3.7B. Production simulation results show that operating cost savings in all of North America (USA and Canada) from these transmission reinforcements would pay for the capital investments in approximately four years in the five per cent Business As Usual (BAU) scenario and three years in the 35 per cent Targeted Wind Locations (TRGT) scenario. This is an approximate straight line payback analysis, and does not account for interest, financing costs, etc.
  2. The production cost analysis shows that wind energy has a value (avoided cost) of about C$43.4/megawatt hour (MWh) in 20 per cent Dispersed Wind Locations (DISP) scenario and about C$40.5/MWh in the 35 per cent Targeted Wind Locations (TRGT) scenario. Recent projects in North America at sites with similar capacity factors have been developed with levelized cost of energy (LCOE) in that same range. This indicates that the wind energy postulated in the study scenarios is very likely to be economically feasible.
  3. Even in hydro-rich provinces, natural gas prices are the primary driver for the economic benefits of wind. This is because natural gas is the marginal fuel for the system, and increased exports from hydro systems will ultimately displace gas generation.
  4. The study assumed that hydro energy would be scheduled a day ahead, based on day-ahead load and wind energy forecasts, and that those schedules would be held constant for real-time operation. However, some hydro resources may have the capability to adjust output during real time operation, thereby compensating for forecast errors in wind energy. Production simulation results showed that re-dispatching hydro resources during real time operation would reduce annual operation costs by C$228M in the 20 per cent Dispersed Wind Locations (DISP) scenario for all of the Eastern Interconnection (EI). This essentially removes the negative impacts of wind forecast error, as the hydro resources “firm up” the uncertainty of the wind resources.
  5. Regulation reserve requirements to mitigate wind variability appear to be a small fraction of the additional installed wind capacity. For example, the 20 per cent scenarios require slightly less than a 40 per cent increase in load alone regulating reserves. The 20 per cent Concentrated Wind Locations (CONC) scenario requires a 38 per cent increase in the average load regulating reserves without wind. The 20 per cent Dispersed Wind Locations (DISP) scenario requires 34 per cent increase in the average load regulating reserves without wind; and the 35 per cent Targeted Wind Locations (TRGT) scenario requires a 68 per cent increase in the average load regulating reserves without wind. Overall the additional regulation across all of Canada was less than 1.7 per cent of the installed wind capacity across all scenarios.
  6. The Canadian power grid is tightly interconnected with the USA power grid, and operations are interdependent. In fact, most Canadian provinces have more interconnection capacity to USA states to their south than to their neighbouring Canadian provinces. Therefore, when wind penetration increases in Canada, impacts and benefits are shared by both Canada and the USA. For every 1 MWh of additional wind generation in Canada (relative to the five per cent Business As Usual (BAU) scenario), energy exports from Canada to the USA increase by about 0.5 MWh.
  7. Power plant emissions are reduced significantly with increasing wind penetration in Canada. Those reductions are shared by both Canada and the USA. See Table 1-2.

Table 1-2: Carbon Dioxide (CO2) Emissions Reductions Relative to five per cent Business As Usual (BAU ) Scenario (Million Metric Tons)

CO2 Reductions (MMT)
Scenario Canada USA Total
20% DISP 12.3 25.6 37.9
20% CONC 17.0 22.7 39.7
35% TRGT 32.3 46.5 78.8

 

  1. There is only a modest amount of curtailed wind energy in the study scenarios: about 6.5 per cent to 6.9 per cent energy curtailment with 20 per cent wind penetration in Canada. The amount of curtailment is higher in the scenarios with more wind energy. See Table 1-3. Curtailment is primarily due to transmission congestion in Alberta, Ontario, Quebec, and the Maritimes during periods of high wind generation. Options for reducing curtailment to lower levels include:
  • Additional transmission infrastructure, which would relieve congestion and enable access to load centers by more renewable energy. The optimum level of transmission reinforcements would depend on the value of additional recovered renewable energy versus cost of additional transmission.
  • Shifting of hydro energy usage, with hydro pondage acting as storage of potentially curtailable energy by reducing hydro generation and shifting discharge by hours, days, weeks, months, or seasons. This would involve changing the monthly hydro energy dispatch schedules to be more compatible with short-term variability as well as seasonal patterns in wind generation. Several Canadian provinces have large hydro resources with long-term pondage, so this option for mitigating curtailment offers significant opportunity to reduce energy curtailment with higher penetration of wind power.
  • Providing more operational flexibility in thermal generation, such as increasing ramp rates, decreasing unit minimum run time and down time, and lowering the minimum operating load of units.

Table 1-3: Wind Energy Curtailment in Study Scenarios

Scenario Wind Energy Available (TWh) Wind Energy Delivered (TWh) Total Curtailed Energy (TWh)* Curtailment (%)
5% BAU 34.7 34.3 0.5 1.4%
20% DISP 122.1 117.4 8.5 6.9%
20% CONC 121.6 114.6 7.9 6.5%
35% TRGT 212.7 196.1 23.6 11.1%
* Total curtailed energy includes curtailed wind, solar, and hydro energy to account for displacement of all zero marginal cost resources. Therefore the sum of total curtailed energy and delivered wind energy will not equal available wind energy.