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00:00:00 - 00:00:47
Lance Mortlock

Welcome to this episode of the Energy Drivers podcast. My name is Dr. Lance Mortlock and I'm your host of today's discussion with Mark Poweska, who's the President and Chief Executive Officer of Enmax and the Board Chair at Versant Power.

Throughout our series, we invite renowned, respected Canadian energy leaders to discuss the most pertinent issues and provide thought-provoking commentary. Our guest Mark has a great depth of experience leading electric utility organizations from coast to coast. He joined Enmax in September 2022 and previously served as the President and CEO of Hydro One and as an Executive Vice President of operations at BC Hydro. Thank you for joining our podcast.

 

00:00:47 - 00:00:50
Mark Poweska

Well, thanks for having me here today, Lance.

 

00:00:50 - 00:01:30
Lance Mortlock

Awesome. Alright. Well, Mark, let's get started. So, in recent episodes, we've been exploring the subject of energy transition quite a bit and its impact on various industries. And I guess to continue the theme, you know, we decided to get more insights into how the energy transition might affect, you know, electricity customers and electric utilities. I'm really fascinated to explore this important dialog with you. Maybe before we get started, though, Mark, can you maybe introduce Enmax to our listeners?

 

00:01:30 - 00:02:48
Mark Poweska

Sure, sure. Enmax is a leading provider of electricity services, products and solutions. And we've got operations right across Alberta and in the eastern US in Maine. Really, our team is focused on delivering safe, reliable electricity while continuing to advance innovative projects and our sole shareholder is the City of Calgary. Between our three business units, which are Enmax power, Enmax energy and Versant power, we operate across the entire energy value chain, particularly here in Alberta, where we have a regulated wires division, which is Enmax Power, and we serve the City of Calgary through the wires business. We also have a competitive business here in Alberta, which is Enmax Energy, and we bid into the wholesale market so we provide electricity into the wholesale market, and we're the largest retailer here in Alberta. And then in Maine, our power business there is Versant Power, which is on the east coast of Maine, one of two major utilities in Maine and that's a wires business as well. So, a regulated transmission and distribution company down there.

 

00:02:48 - 00:03:35
Lance Mortlock

Yeah. Thanks for that, Mark. And it's interesting, isn't it? Because, you know, your organization has a of a full blend of sort of generation transmission, distribution, and retail. So, you kind of cover all aspects of the lifecycle. So, a lot of integration there. Maybe, you know, on this theme of customers, you know, most Canadians have experienced or will experience changes to their energy consumption. So, in your opinion, how have electricity customer needs evolved over the last few decades? And maybe what are the main differences between customers today to, say, customers 20 to 30 years ago?

 

00:03:35 – 00:05:06
Mark Poweska

Yeah, you know, we are really seeing an evolution in the electricity business. And I've been in the business, like you said, over 30 years now between BC Hydro in BC and then Hydro One out in Ontario and now, now at Enmax in Alberta here. And traditionally customers didn't interact a lot, actually, with their electricity companies because, you know, provided the lights stayed on and they paid their bills, they didn't have a real driver to interact with their electricity company. What we're seeing now is, as people are relying more on electricity, as people are facing different choices and options, you know, if I look at Alberta here with the retail business, you can pick one of many retailers, you can pick different products and services. People are starting to interact a lot more with the electricity business and their providers. Think about things like EVs and if you want to buy an EV, you're now a bigger consumer. But there's also the possibility of you're a supplier of the grid from your EV, rooftop, solar, many different things. So, I think traditionally electricity was a bit of a passive play for customers, but as they're facing more choices, more options, they certainly interact more with either their energy provider or directly with the utility.

 

00:05:06 - 00:05:23
Lance Mortlock

Yeah, and so maybe like double-clicking on that a little bit. Do you think customers, are they being impacted by energy transition with everything that's going on, or not really? What's your perspective on that?

 

00:05:23 – 00:06:34
Mark Poweska

Yeah, I would say, you know, globally it depends on where jurisdictions are in the evolution and in the transition. If I look at Canada, 83% of the electricity generated in Canada is non-emitting today. So, Canada's really in an enviable position globally, but we do still have a ways to go to get to net zero on the entire grid. And, at the same time, the demand on electricity is growing as industry and consumers transition off carbon fuels onto electricity. So how people interact and the things that they're looking for are completely different. And instead of being a taker of electricity, customers both, you know, the residential like you and I or even industrial customers are looking to be not only consumers of electricity, but possibly providing electricity to the grid through things like rooftop solar or their EVs, or in the industrial perspective, if they were to build their own generation, they want to interact with selling back to the grid as well as plan their own needs.

 

00:06:34 - 00:07:04
Lance Mortlock

Yeah, I think I've told you this before, Mark. A few years ago, my wife and I, we installed a nine-kilowatt system on our roof, and with that we've got a bidirectional meter with Enmax. So I'm selling power when I'm not consuming at. So, consuming it back to you, Mark. I'm not, you know, I can always get a higher rate, but I'm pretty happy with the system. It's good.

 

00:07:04 - 00:08:21
Mark Poweska

Yeah. And I think that's what we're finding as more people like yourself are putting systems like that in. You don't want to interact directly with the wholesale or retail markets. You want to leave that to the people who, you know, deal with that on a day-to-day basis. So, in general, what we're seeing is people like yourself want a service provider who can make it seamless and easy for you if you are producing more than you're consuming, for you to maximize that value on the markets and, you know, I think that is the role of the energy providers of the future. And depending on the jurisdiction, that's different than the wires provider. So, our Enmax Power group provides the connection to the grid and the regulated wires businesses, you know, across Canada and North America will provide that service. But the other energy providers like our Enmax Energy, who are a retailer and a competitor, our competitive business, they're the ones that will offer different services like buying back your excess power provider and making that simple for you and maximizing the value for you as a customer.

 

00:08:21 - 00:08:35
Lance Mortlock

Yeah, and that's interesting. Any idea, Mark, like in a place like Calgary, what does rooftop solar penetration look like and just rough percentage numbers? Do you know off the top of your head?

 

00:08:35 – 00:09:38
Mark Poweska

Offhand, I don't know that number, but it's still quite low in Calgary. I would say Alberta's, you know, behind some other jurisdictions in Canada and North America as far as adoption of these types of, you know, technologies, but picking up very quickly. And on the grid level, actually, Alberta has the fastest-growing renewables at a grid scale in Canada. And so, you know, we do have good wind and solar resources available in Alberta and the landscape that makes it relatively easy to construct in Alberta, as well as the regulatory constructs that allows people to come here and build renewables. But we do have to make sure we find the right balance between renewables and baseload generation that provides other services like keeping the frequency of the grid and the reliability of the grid while you integrate renewables.

 

00:09:38 – 00:10:02
Lance Mortlock

Yeah, and that's maybe a good segue way to the second part of my question. When you think about energy transition and the impact of that on customers, you know, you're in this unique position, Mark, where, you know, you've worked coast to coast. What are some of the key differences that you've seen between, say, BC, you know, here at home in Alberta and say, Ontario?

 

00:10:02 – 00:12:08
Mark Poweska

Yeah, it's a great question because, you know, it's not a one size fits all. So, if I look at BC, BC is blessed with a lot of hydroelectric resources, they've been, their grid's been relatively clean for a long time. They don't have an electricity wholesale market in BC, so it's fully vertically integrated, owned by the Province of BC, Fortis has some operations in there, but primarily it's BC Hydro. And then I look at Ontario, which has a mix of nuclear, it's got renewable oils with wind and solar, it's also got quite a bit of hydroelectric with some gas generation to back that up, with I'd call it a quasi-market in Ontario for a wholesale electricity market because most of the electricity is either OPG which is a regulated entity or long-term contracted supply of electricity there. So there is a market, but it's not the same. If I look at Alberta, you know, we've got quite a ways to go before we decarbonize the market here. Eighty percent of the electricity generated in Alberta today comes from gas. And we've done a good job of transitioning off of coal and reducing the emissions. Enmax alone has reduced our emissions by 60% to 70% since 2015 and we transition away from coal to natural gas, which is much cleaner. But to get to zero, we have to look at different technologies. The other difference in Alberta is it's a true market. So the electricity market is our wholesale market. So, anybody can come and build and bid into that market and it really does, you know, drive a lot of competition in the market, which, you know, I believe is a good thing, brings innovation to the table from the suppliers through market forces.

 

00:12:08 – 00:12:36
Lance Mortlock

Yeah. And just in terms of competition, you alluded to it a little bit earlier around affordability. You know, one of the things that I think is front of mind of a lot of the energy industry right now is the new federal government clean electricity regulation. Could you maybe comment a little bit on what you think the impact that that will have on customers and the wider industry?

 

00:12:36 – 00:14:36
Mark Poweska

Yeah. And again, I think it goes back to the jurisdictional thing. And one of our issues with the clean electricity regulation is it's trying to just have one standard regulation that applies across Canada that doesn't recognize the regional differences across the country in the resources available to different regions. So, if I think of a BC or Manitoba or Québec, they're blessed with a lot of hydroelectric resources. Ontario has got a mix of hydro electric and nuclear. Whereas, you know, there's very few provinces left that, you know, have a long ways to go. And Alberta, Saskatchewan and, to a degree, Nova Scotia are those regions, and the clean electricity regulation doesn't recognize the resources available in those jurisdictions and the path that we need to get there. So, you know, given the timelines are allowing the clean electricity regulations, I think it really does limit our options. If we had more time, we would have the option to look at small modular reactors. We would have the time to look at evolving the hydrogen business and the ability to generate electricity through hydro and hydrogen, to build transmission lines to neighboring provinces to, you know, import and export and rely on the broader resources. And so the clean electricity regulation, the way it's written right now, really does limit places like Alberta and Saskatchewan to put in things like carbon capture on our gas generation fleet, which is good. But the technology is still kind of fairly new and the markets are evolving on carbon capture and what you do with the carbon and, you know, it doesn't give us a lot of time to look at other options as well.

 

00:14:36 - 00:14:47
Lance Mortlock

Yeah. While at the same time, I guess, trying to keep, you know, prices affordable for Albertans and folks in Saskatchewan as well.

 

00:14:47 – 00:15:47
Mark Poweska

Yeah. Yeah. And that's the thing, you know that the clean electricity regulation is a federal policy goal around net-zero 2035 on the electricity grid. And the cost of getting there given that, you know, provinces like Alberta and Saskatchewan, the cost can't go on the customers of those provinces because of a federal policy goal and requirements. It's got to recognize that if it is a federal policy goal and requirements, we have to socialize some of those costs to get the provinces who aren't as blessed with clean hydro or don't have existing nuclear that if we want to achieve it by 2035 in an affordable way, or at least a fair way across the country, that's to recognize that those costs can't go on Enmax customers and on customers of other companies in Alberta and Saskatchewan.

 

00:15:47 – 00:16:32
Lance Mortlock

And yeah, so maybe taking that theme a little bit further, you know, one of the things that, you know, I've read and seen a lot, you know, over my career is this balance between, you know, governments and, if you like, the private sector and government setting policy and regulation to drive innovation. And if you create the context, you know, you can force companies to innovate. Maybe on that theme, what do you think some of the technology solutions or services that will be more popular that will emerge as critical to energy transition success in the future from an innovation perspective?

 

00:16:32 - 00:19:09
Mark Poweska

Yeah, it's a great question that I get asked quite often. And quite often the way people ask that question is, is it one thing or the other? And quite frankly, if we want to get net zero in our existing grid as well as to help, you know, industries and commercial customers decarbonize, it's a bit of “all of the above” in the right mix for the right jurisdiction. And so, you know, combining renewables with storage, with behind the meter, call it distributed energy resources, rooftop solar, EVs, you know, it's the right mix of all of the above. And part of it is, you know, you started your question talking about kind of policy and regulations, is the policymakers have to, you know, define what the policy is and there's a lot of debate around that right now on the clean electricity regulation. But then the regulators have to enable the investments to make that happen. And so, that's kind of the next evolution after policy, you know, get settled and you get clarity on that. But you know, if I think of a little closer to home here in Alberta, you know, we need some good baseload generation, I believe, in integrating renewables into that. But you can only do that to a certain percentage if you want to keep the lights on and keep it reliable because, as you know, it gets cold and dark in the middle of winter in Alberta and when the wind's not blowing, the sun is not shining, you need something to be there. And that something can be a mix of gas with carbon capture, it could be hydrogen longer term, I believe, small modular reactors. So, nuclear is part of the longer term, but you know, it's still an evolving technology and the costs are still pretty high on that. I also believe that this idea of virtual power plants is a part of our future. So, you know, picture your EV or your rooftop solar that you have being part of the grid and having somebody who aggregates all those, you know, resources when you're not using them in the middle of the night to feed back in the into the grid and then charge your car back up before you're going to leave in the morning. And so, to optimize the use of all that, we've got to lean on technology and, you know, smarts like AI to help us kind of optimize the use of all those bits and pieces around the around the grid.

 

00:19:09 – 00:20:14
Lance Mortlock

Yeah. Now that's fair. And maybe again, on this theme of energy transition, I mean even though the electricity market stakeholders, you know, aim to promote electrification for decarbonization reasons, it appears that, you know, there's still a number of barriers to accelerating the deployment of, you know, some of these innovations that you talk about. So, for example, I know that the International Energy Agency's Future of Heat Pumps report argued that, you know, the upfront costs and isolated or disconnected product offerings are really challenging barriers to consumer adoption. What do you think, Mark, utilities can do to enable customers to really install and leverage more electrification solutions like heat pumps, like rooftop solar and other solutions? Because if we can figure that out, we can accelerate this, and we definitely need to accelerate it.

 

00:20:14 – 00:23:51
Mark Poweska

Yeah, I think there's a couple of parts to that. The first is, you know, the consumer want, to call it. And if you look at the evolution of EVs, you know, when EVs first came out, you know, people looked and thought, okay, well, those are kind of interesting. I remember back in my BC Hydro days years ago, we were piloting one of the first EVs in Canada. It was right-hand drive actually, came out of Japan and it was a bit novel. And then, you know, there was more available, and people started, you know, certain people started to buy them because for different reasons. But if you look now, people actually want them because they perform well, they're a good option, they're reliable, the maintenance is a lot less. So, there's different drivers along the way and any new technology needs a bit of a boost when it first starts to help get its adoption. And I think heat pumps would fit into that as well you know so you need some help to get people interested in the technology, whether that be through kind of subsidies or rebates or whatever that is. But as you go along, you know, people start to want these things and builders start to just install them as you go. If I think of the utilities, you know, one of the barriers to utilities really grabbing a hold of these things and helping is under the regulatory constructs, we actually don't have the ability to propose what we call non-wire solutions like that. So, under our regulations,. in the regulated businesses, you know, we have to make sure that the grid’s there, the wires are there and reliable and can connect people and provide them reliable service, which is super important. But one of the barriers right now is we're not able to look at saying, okay, well, instead of building a new power line, maybe we should be installing some batteries, or we should be incenting customers to install batteries, and we could use that to help reduce the peaks of capacity at certain times of the day instead of reinforcing wires. And so, it is a bit of a barrier. I think regulators are starting to evolve around that and starting to think about it in a different way. But it is a bit of a barrier for us right now. The other thing is in, and this isn't the case in Alberta because we do have a retail market where we can provide anything. But if I think of my days in BC or even to a large degree in Ontario, there wasn't really the ability to offer different market solutions. So, in Alberta here, our retail business at Enmax can offer different products. We can offer a solar product, we can offer kind of free evenings and weekends product if we wanted to do something like that. We're pretty open and flexible to do that because it's a retail market and, you know, we take the risk as the as the provider on that. Whereas a lot of the provinces in Canada, most of the provinces in Canada where it's fully regulated can't offer different products and solutions like that for individual customers. So it's a barrier, I think, right across Canada, not necessarily in Alberta.

 

00:23:51 – 00:24:19
Lance Mortlock

Yeah, I know. Just thinking about that Mark, that must make it pretty interesting for you as the CEO of Enmax, you know, potentially Enmax in the future, and you might argue Enmax already could be very innovative in terms of pushing the needle as it relates to new technology, because you have a bit more flexibility compared to the rest of the country. I think that's quite interesting and unique, isn't it?

 

00:24:19 – 00:25:10
Mark Poweska

It is. It is. And that's one of the things that I really enjoy about Alberta and Enmax, you know, coming from the last two companies I worked for, which were really, most of their products were regulated. So you had limited option to be kind of innovative and entrepreneurial, whereas through our competitive business here at Enmax, we really can be innovative and entrepreneurial, you know, and really we take the risks and, you know, that's fair if you're in a kind of competitive merchant wholesale market where you have true competitors, that's the way the game works. And yeah, but it's super exciting and I think there are lots of opportunities for us to really be innovative as we look forward to the energy transition.

 

00:25:10 – 00:25:56
Lance Mortlock

Yeah, yeah. I mean, maybe one other comment that I would make and, and don't take offence to this Mark, but, like, I always used to think, you know, the utility business was this sort of boring semi-government run, you know, business, but actually, you know, you fast forward to today. It's very exciting. There's a lot of innovation that's going on. There's a lot of transformation and there's a lot of big, hairy problems to kind of solve in the future. And I kind of look at, you know, various sectors and to me, utilities, power generation, the future of electrification, energy transition is kind of where the action’s at, isn't it, right?

 

00:25:56 - 00:27:33
Mark Poweska

Yeah, it's interesting, like I said earlier, 30 years in the utility business, we have been kind of, you know, the boring utility business. And I like to describe it, actually, as electricity in the utility business is straightforward but not simple. It's actually a super complex business. And I hear that back from even, you know, some of my board members who come from the oil and gas industry, they point to electricity being way more complex, actually, than the oil and gas industry. And I can see that. But, it is our time, you know, to not be the boring utilities anymore. And we've got to, you know, meet the challenge of how do we kind of be innovative, how do we be entrepreneurial, how do we really focus on the customer and make the customer at the centre of everything we do? And how do we work with our partners, with the others in the utility business, with governments to find the right balance in there? You know, on the energy trilemma. So that's the affordability, the reliability and then the sustainability. And you'll hear a lot of that from different electricity and energy providers. We really are trying to find out, you know, that balance, how do we get that balance right? And, you know, back to the clean electricity regulation, it gets the leg of sustainability, right. But I'm not sure it gets the leg of affordability or reliability right at this point, the way it's written.

 

00:27:33 – 00:28:10
Lance Mortlock

Yes, well said. So, with all this innovation, what I always wonder is like, what's it going to cost us? Like, what are we? We're going to transition, we are transitioning, but where's the money going to come from? According to RBC, Canada needs approximately $2 trillion between now and 2050 for the transition to net-zero economy in Canada. So, my question to you, Mark, is how can Enmax and other utilities across the country manage that massive scale of investment? Where's all the money going to come from?

 

00:28:10 – 00:31:06
Mark Poweska

Yeah, that's the that's the $2 trillion question, Lance. And, you know, that there's lots of numbers thrown around and, you know, lots of, you know, lots of different estimates we have to double or triple the size of the grid. You know, but one thing is the numbers don't actually recognize that, yes, you know, you're going to be paying, you're going to be using more electricity in the future, but you'll be using less of other products like gasoline or natural gas. And so, there is a bit of an offset there. You know, we've been blessed with super low-cost natural gas in Canada. So, it makes it even harder in Canada than a lot of other jurisdictions where gas prices is a lot higher. So that, you know, electricity can be more competitive. But in in Canada it’s still fairly low cost. So, you know, ultimately consumers are going to pay for it one way or another, either through kind of them as taxpayers or them as consumers, you know, and so I think the accountability and the responsibility on the utilities and CEOs like me is to make sure we are being innovative and make sure that we are focused on the customer and make sure that we're driving out as many costs in how we run our businesses as possible so that we don't have to pass those on to our customers and to make sure that we are optimizing the use of all aspects of the grid. And I think that there is an opportunity for us to do better in that. The other thing is, even though Canada, our electricity grid is very clean, 83% non-emitting, per capita, we're big energy users in Canada. Per person, we use, you know, more energy than many, many other countries in the world. And part of that is because of our climate. So part of the solution is also we actually have to get more efficient on our own personal energy usage and use less of the products and just be more conscious. You know, you've traveled a lot, I'm sure, and you go to other places in the world and Europe and things like that, like the lights don't go on when you go in a room until you put a key in the slot when, you know, turns all lights on. Just, you know, the essential loads are provided electricity all the time unless you make a choice to kind of turn the lights on and you can't leave your building and leave lights on. Whereas in Canada, you know, a lot of people still walk out of their house and lights are on and TVs are going on and things. So, I think there's a personal accountability for Canadians as well to recognize that we are a big consumer per capita, more than many places in the world. And we can do a better job there, too.

 

00:31:06 – 00:31:36
Lance Mortlock

Yeah, huge amount of waste for sure. Just going back to that question I asked you, Mark, about kind of new technologies and innovations, I just wanted to give you the opportunity maybe to mention anything that Enmax is doing specifically that you think is new or interesting, you know, new technology that you might be piloting with consumers. I mean, anything you can share that that you're quite excited about?

 

00:31:36 – 00:35:55
Mark Poweska

Yeah, sure. We've been piloting several things. Well, first of all, if I look at the generation business, and we've got some wind generation, but most of our generation is gas-fired generators. And so, you know how we decarbonize those is through carbon capture. And so, we've been studying the ability to install carbon capture on the exhaust of our gas turbines essentially, so you're not emitting it to the air. And really when we talk a lot about energy transition, it's not necessarily energy transition. It's really, we're trying to reduce emissions. That's really what the goal is. And so, if we're burning carbon, provided we're not emitting that to the atmosphere and we're capturing it and injecting it back into the earth where it came from, you know, that can get us to the same end as, you know, other technologies. So we are studying that for our largest facility, which is actually the largest combined-cycle generation plant in Canada and the cleanest. But we know that we have to eliminate the exhaust there. The other area we're looking at is how do we, call it, grid edge? How do we incent customers to use things like rooftop solar and then how do we kind of feed that back into the grid? So we have a community solar fund where we partnered with the city of Calgary and established the Enmax Community Solar Fund. And really what we're doing there is we're selecting community associations and we're installing rooftop solar on buildings across the city, which, one, it reduces the amount of consumption they need. So, it reduces their bills, but it also reduces the draw on the grid so we don't have to build more central generation to feed the grid as it grows, they're actually reducing their consumption, which makes room for others. The other thing we’re doing is, we did a pilot, a secondary network pilot we call it, and it's, Enmax Power was the first utility in North America to achieve two-way power flow on a specialized secondary network. And this was on rooftop solar that we installed along with the Chinook Centre. So the mall here. And the solution and really gives urban customers more choices in how they generate and use electricity while building a lower-carbon future. So again, back to my earlier comment on, you know, it's not one thing or another. It's going to take all these types of things to get us there. You know, EVs is going to be a big part of that, not only kind of reducing the emission from internal combustion engines, but also using EVs as a source on the system if used in the right way. So we did a study and we're preparing for the growth of electric vehicles on our wires business. So what is it going to take for us to be able to charge all these things? And how can we maybe leverage the use of them to help with offsetting other generation? And so we've been studying that and, you know, we also committed as a company to reduce our footprint. And so things like advancing our mobile fleet, where our light-duty vehicles, we're transitioning to electric and we're also piloting use of electric vehicles on medium-duty trucks. So the big cube vans you see around. And looking to use EVs or hydrogen fueled bucket trucks in the future as well. So lots of different things and, you know, like I said earlier, it's not one solution, it's all of the above. In the right mix, in the right usage.

 

00:35:55 – 00:36:25
Lance Mortlock

You'd mentioned, you know, the City of Calgary. I know your partnership with them is really important. Maybe a bit more broader, what are the wider alliances and partnerships that you think need to occur like this idea that, you know, to solve energy transition, we need an ecosystem of different organizations working closely together. Kind of thoughts on that and where we need to head to in the future in terms of alliances and partnerships?

 

00:36:25 - 00:38:31
Mark Poweska

Yeah, you know, the one thing I've really liked about the utility business in my 30 years is it actually it’s a super collaborative sector being. In general, in the past, we haven't competed with each other at a broad scale across North America. So, there's been a lot of good partnerships and sharing of ideas and associations and things like that. I think others can enter that ecosystem. So, I think of companies like, you know, Tesla entering, not only building cars, but also being part of the electricity supply and consumption ecosystem. I think of Amazon and they're installing big, you know, generation because they want to kind of decarbonize their footprint. But you know, they're also connecting to the grid. So, they're going to you know, they're part of the electricity ecosystem now., One of the interesting things is, and this is a new emerging one, is that the amount of energy consumption estimated to drive AI and artificial intelligence and all the computing background that you require for that is probably going to be our largest and quickest-growing consumer of electricity. And so it's one that's just come on us in the last couple of years. AI's been along around for a long time, but it's just exploding and the amount of computing that it needs is incredible. So, not only are we trying to decarbonize, you know, what we do today, there's huge growth in the in the needs for electricity. And we have to figure out how are we going to meet those future needs. And AI wasn't one that we were thinking of a couple of years ago as being a big consumer of electricity. But the amount of computing power it takes to drive that is incredible. And we do think it's going to be one of the largest-growing, you know, globally, consumers of electricity.

 

00:38:31 – 00:39:53
Lance Mortlock

That is crazy when you think about it. And you know the other thing that I think about listening to you there, Mark, is I think people don't tend to realize that, you know, with energy transition, it's not about just replacing, you know, the existing electricity that we consume that might be, you know, coal or more so gas generated. But it's actually supporting the needs of growing electricity demand as well, whether it be AI or the use of EVs, which, you know, if you believe EY teams estimate, probably Enmax estimates, estimates all around the world, is going to exponentially increase in the coming decade, decades. We need to remember that we need both. We need to support and transition existing generation and consumption and future. You know, as we kind of run out of time a little bit, Mark, here, maybe one last question. It might be a big question, but I'd love your maybe high-level thoughts. National infrastructure corridor. I know it's something that you've thought about quite a bit in the past. Are you still a believer in that or have you kind of moved on?

 

00:39:53 – 00:42:45
Mark Poweska

Yeah, it's a great question. And over my career, I've kind of flip-flopped on that and kind of where I'm at with that right now, Lance, is, you know, I think we could do a better job east-west in Canada on connecting and sharing resources and optimizing resources. But I think a national corridor across the country and the expense and the expansiveness of Canada, given our relatively small population, I'm not sure the economics work for that right across the country. That's not to say I don't think neighboring jurisdictions can't do a better job of connecting and in sharing resources. So I think of Saskatchewan and Manitoba. You know, Manitoba is blessed with a lot of hydroelectric, where Saskatchewan isn't. But, you know, Saskatchewan can build wind and solar and small modular reactors and things like that. And if you had better interconnections between those, you broaden your resource base and your options available to provide electricity across those. Similar with BC and Alberta. So I do believe that, you know, we need to strengthen our east-west connections as well as break down some of the trade barriers between provinces. Quite frankly, just like many things, we actually trade better north-south than we do kind of across Canada in a lot of ways. You know, you think of wine, you think of bunch of other things like that. And, you know, electricity is similar, partially because there's huge markets in the south. So if you're going to build corridors and you're going to trade, you’re going to trade with the bigger market. But if we want to, you know, pull together as a country and achieve our longer-term goals, I think there is the ability and the need to look at better, kind of east-west connection from utilities and pipelines, quite frankly. Because 80% of our energy use, somewhere in there, maybe 70% now, still comes from molecules or from carbon-based things. And so even though we're 83% decarbonized on the electricity system in Canada, there's still 70% to 80% of energy we use whether that's gasoline in our car or whether that's, you know, natural gas heating in our house, whether that be producing electricity through natural gas. We are still very reliant on, you know, on natural gas for our energy use in Canada and globally. So, you know, that’s that $2 trillion number you threw out. It starts trying to reduce that 80% or 70% down less. But we still have a long ways to go.

 

00:42:45 – 00:43:35
Lance Mortlock

Yeah. There's never a dull moment. Well, Mark, we're kind of running short on time here. So I wanted to, you know, thank you for your time and insights. You know, it's always a pleasure talking to you about these thought-provoking topics. And I guess for our listeners, if you have your own questions or queries, you know, please reach out to EY via the attached contact details. And to complete this episode, you know, I wanted to just, yeah, thank you again, Mark. Appreciate having you on the show. And before I maybe share any of my personal reflections, any kind of final comments, Mark?

 

00:43:35 – 00:44:41
Mark Poweska

Yeah, I guess just to kind of close it off from an Enmax perspective. We do view ourselves as enablers of the energy transition. We know, you know, we've got a responsibility to make sure we meet the needs of our customers. And we do recognize that, you know, it has to be a balance of that affordability, that reliability and that sustainability and that we need to continue to strive for safe, reliable and affordable electricity. We can't kind of miss the affordability part in the energy transition. And that's why there is kind of this big debate, you know, amongst the players in the sector with the clean electricity regulations and, as I said before, it meets one of those legs, but it doesn't meet the other two legs very well. And our responsibility is to make sure that we're representing our customers in that, and making sure we find the right balance between the three legs of the energy trend, the stool, I guess, of the energy transition.

 

00:44:41 – 00:45:45
Lance Mortlock

Yeah, I know. Fascinating discussion, Mark. So, I mean, my three reflections. I think firstly, customers have been and will continue to be at the centre of change, particularly in energy transition. Secondly, stakeholder collaboration and ecosystem approach, including customers, will be critical to deploying electrification solutions and advancing the energy transition. And thirdly, electric utilities have plenty of untapped opportunities which are driven by evolving customer needs.

I am personally curious to see how these technologies will help improve the lives of my friends, family, but also the wider community of Canadians.

However, utilities will need to effectively manage the growing operational complexity, introduce new technologies and watch out for those ever-increasing costs. So once again, thank you for joining our podcast and we'll see you on our next episode.

 

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