Market Snapshot: Electricity trade trends affected by recent low precipitation

Release date: 2024-08-07

Since mid-2023 there has been a noticeable decrease in electricity volumes exported to the United States (U.S.) from Quebec, and increased electricity imported from the U.S. Pacific Northwest to British Columbia (B.C.). In 2023, Quebec exported 13.3 terawatt hours (TWh) compared to 25.9 TWh in 2019, and B.C. imported 16.8 TWh in 2023 compared to 11.2 TWh in 2019 (Figure 1). Depending on precipitation levels and provincial demand, surplus Canadian electricity can be exported to U.S. markets. Precipitation levels (rainfall and snowfall) have been abnormally low across Canada for the past two years, leading to a change in normal trade volume trends due to the lower hydroelectricity generation. Besides precipitation and weather, electricity trade flows are also affected by operational requirements, grid maintenance, strategic requirements, and other impacts to supply and demand in both the origin and destination markets.

Figure 1: Monthly Electricity Trade Volume by Province (2019 to 2024)

In 2023, B.C. generated 56.1 TWh of electricity, and it was a net electricity importer of 10.2 TWh from the U.S. (a deficit of 18% of its production). In comparison, in 2023, Quebec generated 195.6 TWh of electricity, and its net electricity exported to the U.S. was 12.1 TWh (or 6% of production). In 2023, Ontario generated 156.3 TWh of electricity, and net electricity exported to the U.S. was 13.5 TWh (or 9% of production). In 2023, Manitoba’s electricity producers generated 33.3 TWh, while net electricity exported from Manitoba to the U.S. totaled 5.2 TWh (or 16% of production).

Big Hydro Producers in Canada

Quebec, Ontario, Manitoba, and B.C. are Canada’s major electricity exporters, in large part due to their significant hydroelectricity generation capacity and electricity transmission infrastructure. Hydroelectricity generation capacity^Footnote 1 is highest in:

• Quebec: 41 gigawatts (GW)
• B.C.: 16 GW
• Ontario: 9 GW
• Newfoundland and Labrador: 8 GW
• Manitoba: 6 GW
• New Brunswick: 1 GW

Collectively, central Canada exports the most electricity. Quebec, Ontario, and Manitoba sell to large, competitive power markets in the U.S. Northeast and Midcontinent regions. However, the amount of electricity exported from central Canada is a fraction of the total demand in the corresponding U.S. receiving markets.

Recent Electricity Price Trends

Electricity import prices can be higher than export prices, and this is particularly true in central Canada. There are fewer financial and strategic benefits for wholesale buyers in Quebec and Ontario to import relatively higher priced electricity from U.S. power trading regions like ISO New England and New York ISO. As reported to the Canada Energy Regulator (CER)^Footnote 2, between 2019 and 2023, the price paid by companies in Quebec to import wholesale electricity from the U.S. averaged $78.49 per megawatt hour (MWh) compared to wholesale export prices from Quebec to the U.S. averaging $47.81 per MWh. Between 2019 and 2024, the price paid by companies in Ontario to import wholesale electricity from the U.S. averaged $57.15 per MWh, while wholesale export prices from Ontario to the U.S. averaged $41.77 per MWh.

B.C. is the leading electricity importer in Canada. There are many months its imports surpass exports or come close. Provinces tend to import electricity if it is cheaper than generating it, if there is a generating shortfall, or if demand is higher than anticipated. In B.C.’s case, its trade flows with interconnected utilities in the U.S. Pacific Northwest are generally driven by electricity market conditions and operational needs. The electricity prices during low demand periods in the U.S. Pacific Northwest are generally lower than power generated in the province.^Footnote 3 B.C.’s hydroelectric system can respond quickly to supply and demand changes. As such, B.C. can conserve water in its reservoirs for periods of high demand while importing at lower prices to partially meet domestic demand when it is a lower cost option.

In Manitoba’s case, it has limited need to import wholesale electricity from outside the province because it already has significant generation volumes^Footnote 4 relative to its demand. Manitoba exports over 15% of the electricity it produces to the U.S.

Data on the electricity volumes exported by marketers and resellers is also available in the CER’s monthly commodity statistics (electricity exports, Table 2A).

For related information, the CER compiles data about electricity generation and capacity in the data appendices of its long-term energy outlook projections in Canada’s Energy Future.

Additionally, the CER compiles information from multiple sources about electricity generation, consumption, capacity, and more in: Provincial and Territorial Energy Profiles.

The voltages and capacities of international power lines can be found on the International Power Lines Dashboard and Open Government dataset.

Date modified:

2024-08-06