Alberta must forge more links to import electricity to meet local demand and export power to access growing markets, says an industry official.

Establishing new connections outside the province - especially with British Columbia - could give Alberta an economic shot in the arm and ensure stability to the provincial power market, says Duane Lyons, vice-president of business development with AltaLink, which serves 85 per cent of Alberta's population with more than 11,000 kilometres of high-voltage power lines.

"If you just compare Alberta with the rest of the provinces in Canada - on the interconnection capacity as a percentage of the system load - we are very low relative to all the other provinces, about 12 per cent here versus 40 per cent in B.C.," Lyons said during a conference hosted by the Canadian Energy Research Institute last week in Calgary.

This, in part, is a result of Alberta's electricity infrastructure being ignored for several years, he added. And while the provincial government has made expanding the power transmission system within the province more of a priority, the interconnect between Alberta and B.C. hasn't been upgraded since 1986.

"Alberta needs to be well integrated with its neighbours to import electricity, but also to export and have access to larger markets," he told conference delegates.

Lyons said B.C.'s hydropower generation and Alberta's thermal power production (the burning of hydrocarbons such as coal and natural gas to produce electricity) can complement each other when attempting to meet demand.

B.C.'s hydro system is usually constrained by the availability of reliable energy and system expansion is typically driven by the need to increase that reliable energy supply. However it tends to be able to put low-cost hydro capacity on the grid.

Alberta's system - dominated by thermal generation - is the other way around, he said.

"We (Alberta) tend to be constrained by the availability of peaking capacity and system expansion tends to be driven by the need to meet peak load. As a result of that, we tend to have off-peak excess thermal energy available.

"The B.C. system is tight for supply right now," he added, "and it certainly will need some additional firm energy supply by 2011-12 at the latest, if they don't need it already" while Alberta will require new capacity by 2007-08.

Alberta's system - which is market-based rather than centrally planned - will likely see incremental demand met by gas turbines, Lyons said. However, the alternative is to tap low-cost capacity from B.C.'s hydro system during peak times, and then send that province off-peak thermal energy to be stored and brought back later when peak periods return.

This alternative case would demand substantial new transmission to be built in Alberta, as well as some in B.C. It would also require some new generation capacity to be installed in the existing BC Hydro facilities to account for transmission losses from energy travelling to and fro.

Lyons said there are benefits to expanding interconnections between Alberta and B.C., but also challenges.

Besides gaining more stability and greater access to markets outside Alberta, an AltaLink study showed that once established, interconnections with B.C. would save the province tens of millions of dollars each year.

The challenges include trying to find common ground between the open market in Alberta and a government-owned utility in B.C. There would also be a requirement for strong stakeholder support on both sides of the border, both from government and industry, as well as a need to educate people about the benefits of such a system.

"Here in Alberta, when they hear interconnections they think export, and in some places that has a very bad connotations. It's the same with some in B.C., too," Lyons noted.

The issues facing the interconnection idea are more business related than they are technical, said Lyons, adding he believes there is motivation on both sides to get something done.

"From the point of view of the new interconnection, the point I'd try to make is that the additional hydro-thermal synergies cannot be achieved by Alberta by ourselves or B.C. by themselves. There is an opportunity I think ... to strike a different deal - there's motivation there on both sides."

Lyons added that strengthening Alberta's system could also prove a boon for new wind-power generation, a sentiment shared by one wind-power official at the conference.

"Wind energy needs capacity, it's one of the things that we have difficulty in supplying because of our intermittency" due to the wind's unreliability, Claude Mindorff, president of Medicine Hat-based West WindEau Inc., told delegates.

"To have a large, stable supply of power to the west that can provide capacity is something very compatible to our industry."

West WindEau is proposing a large 200-megawatt wind farm 25 kilometres southeast of Medicine Hat, which could be up and running by 2008.

Mindorff added that transmission capacity will be a key factor in the proliferation of wind-generated power in the province, which he said could grow almost ten-fold by 2024.

"Without stronger inter-ties (leading outside Alberta) and the ability to use markets such as B.C. or further south to Montana, we're always going to be susceptible to pitfalls of having a market (limited) by load or by generation changes," he added.

(John Ludwick can be reached at ludwick@businessedge.ca)