Posted: 11/19/2018 3:00 AM

See also comment by "truthseeker" and "wfp-222569" at end of article

Manitoba Hydro and SaskPower recently announced progress on a deal to sell up to 215 megawatts of electricity from Manitoba to consumers in Saskatchewan beginning in 2022. This is on top of another 100 megawatts set to begin in 2020. This represents about eight per cent of Saskatchewan’s peak power demand — a good start, but there’s plenty more the two provinces can, and should, do.

While the exact financial arrangements of the deal are not yet known, this latest co-operation between the two provincial utilities is a boost for Manitobans and Saskatchewanians — for both their pocketbooks and their commitments to reducing greenhouse gas emissions. Yet even more co-operation will be needed in the future — an argument we make in a recent research paper titled "Power without Borders: Moving towards an integrated Western grid."

This is because Manitoba, Saskatchewan and the rest of Canada’s energy future is going to involve using a lot more electricity than is used today. To reduce emissions, electricity rather than traditional fossil fuels will be used to power more things such as electric vehicles or space heating. Studies suggest this could mean doubling or tripling electricity consumption over the next several decades.

But to actually reduce emissions, the electricity powering this future needs to be clean.

Supplying this clean electricity reliably and affordably will need greater integration between provincial electricity systems — the recently announced deal is a positive example.

A more integrated grid will let Manitoba and Saskatchewan take full advantage of their most valuable zero-emission electricity resources. With the announced deal, SaskPower will be able to use clean hydroelectricity from Manitoba to help achieve its 2030 goal of reducing emissions by 40 per cent.

But Saskatchewan won’t just rely on Manitoba — nor should it. The province also has significant potential to produce a lot more of its own clean electricity. Saskatchewan has great wind resources — a lot like Alberta, which recently procured nearly 600 MW of wind generation at record low prices.

Developing this potential will create new jobs and economic activity in Saskatchewan — but there will also be a limit. The variable nature of wind generation constrains how much wind energy can be economically developed in the province. Build too much and the province may have more electricity than it can use when it’s particularly windy. The solution to this problem is to find a way to store the excess electricity — something that is still very expensive at large enough scale — or find other markets to send it to. Improved electricity trade between Manitoba and Saskatchewan can provide this outlet.

The deal will be enabled by the construction of an additional transmission line between the two provinces, but more transmission capacity is needed to enable additional electricity trade. A recent study commissioned by Natural Resources Canada found that increasing transmission capacity between the two provinces beyond what is currently planned would lower electricity costs while also decreasing greenhouse gas emissions — a win-win.

Increasing electricity trade is good for both Manitoba and Saskatchewan.

Manitoba already exports 30 per cent of its generation — mostly to the United States — but it is never a bad idea to diversify. This point became clear with recent trade negotiations with our southern neighbours.

Saskatchewan needs clean electricity to meet its near-term emission goals and Manitoba hydroelectricity can help achieve those goals at a lower cost than Saskatchewan can achieve on its own. But Saskatchewan will also need outlets in the future to send electricity to if it wants to take full advantage of its wind resources. Manitoba can be that outlet by using cheap wind energy from Saskatchewan when it’s plentiful and filling the gaps with hydroelectricity when the wind subsides.

Study after study shows improving interprovincial electricity trade is a key component of supplying the clean electricity Canada will need in the future.

The electricity deal between SaskPower and Manitoba Hydro is a step in the right direction for the provinces’ energy futures, but ideally, it’s only the beginning.

Nick Martin is a policy analyst at the Canada West Foundation and the author of Power without Borders: Moving towards an integrated Western grid.

Comment by truthseeker:

This sale is only a good energy deal if it's profitable. Nowhere has Hydro revealed the selling price of this block of power. I strongly suspect the price of the energy is less than Manitobans are paying domestically and substantially less than Keeyask power, which is going to cost a minimum of 12 cents/kWh. It's just propaganda on Hydro's part to make you think we are all getting a good deal.

Comment by wfp-222569:

Still, there's another way of looking at this deal. Right now, Manitoba has an energy glut and the Americans know it. That's why an increasing percentage of our export sales to the US is from the spot market which is paying on the average of 2 cents per KWh for our energy, well below the approximately 12 cents to produce it. In recent years, that percentage has increased from 45% to 70%. The reason--the Americans have figured out that the electricity we offer for sale on the spot market sales is just about as secure as the more expensive energy they buy under contract. So why pay more when you can get it for 2 cents?

Beside helping Saskatchewan reach its renewable energy target, every KWh we sell to Saskatchewan is one KWh closer to bringing the lop-sided US market into balance. The Americans will not pay what our green energy is really worth until we deal with the glut. The sale also represents a significant step along a path toward sharing green resources within Canada, a path that can be nothing but beneficial in so many ways to Manitoba in the longer term.