U.S. Northeast Taking in Less Canadian Power

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Decreased demand in the U.S. northeast, coupled with adverse Canadian weather conditions for renewable energy, have led to a decline in cross-border deliveries of electricity, the U.S. federal government found.

Over the last decade, the New York Independent System Operator (NYISO) and the Independent System Operator of New England (ISO-NE) have relied heavily on Canada for imports of electricity. That was largely the result of abundant hydroelectric power in Canada and higher natural gas prices in the U.S. market.

Henry Hub, the U.S. benchmark for the price of natural gas, averaged as high as $8.69 per million British thermal units (mmBtu) in 2005 and had settled to $4.37 per MMBtu a decade later. Until this year, prices had languished in the $2 range, discouraging imports even further. Meanwhile, persistent drought has curbed the potential to generate hydroelectric power in Canada.

Both combined to reverse the dependency in the NYISO and ISO-NE districts, the U.S. Energy Information (EIA) reported Friday.

"Although NYISO and ISO-NE typically import electricity from Canada, the shifting trends have led to multiple days of net electricity exports into Canada from the two ISOs," EIA analysts wrote.

The United States and Canada are each other's largest electricity trading partners, though exchanges are typically less than 1% of what each side can generate.

"However, the trade is important to grid balancing - constantly matching electricity consumption to electricity production - and helping to shore up electricity supply during low hydropower production periods particularly on the western coast of Canada," analysts explained.

Cross-border trade became more important to both sides after Donald Trump returned to the U.S. presidency in January with a pledge to upend global trade. Claiming Canada wasn't doing enough to deter the flow of illicit drugs, Trump has pressured Canada with sweeping tariffs, prompting Ontario Premier Doug Ford to do the same for electricity.

Much of Ontario, meanwhile, is still under some form of drought advisory, with regions near the provincial capital of Ottawa witnessing extreme drought, according to a federal drought monitor. On the other side of the border, New York is reviewing request for proposals (RFP) for a bulk energy storage system to ensure adequate supplies.

With an eventual goal of reaching 6 gigawatts (GW) in energy storage, the RFPs were all-encompassing, from pumped hydroelectricity to battery energy storage systems (BESS), the latter of which was spared from the culling of tax credits for cleaner energy in Trump's signature spending bill.

IIR's database shows there is approximately 6.2 GW of BESS capacity in various stages of development in the NYISO market. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a full list of plants.

Despite the need to ensure stable supplies, meanwhile, analysts at the EIA reported that the New York grid operator, NYISO, was a net exporter of power to Canada for 87 days last year. Through the end of August, NYISO has exported energy to Canada for a net 86 times.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).