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Context

Electricity is fundamental to shelter and light, health care, food and water supply, communications, manufacturing, banking, travel and defence. Canada ranks seventh worldwide in installed generation capacity and third in electricity exports.

The key markets can be broken down into generation (including renewable energy), accounting for 50% of the total, transmission (20%) and distribution (30%). On the demand side, conservation and demand management are growing in importance.

Total utility revenue in Canada is about $25 billion per year and the electric power industry contributes about 3% to the GDP. This is a very capital-intensive industry, accounting for about 25% of energy sector investment and 4% of total investment in the Canadian economy.

Drivers

The main drivers of Power Sector growth are demand (based on GDP, electrification of processes, IT and population growth), fuel switching, environmental regulation and technology change.

Major hurdles to growth include high capital costs, long lead times, public opposition to new facilities, and policies encouraging switching end uses to other fuel sources.

Outlook

Capital investment is expected to run at more than $5 billion annually over the next five years to counterbalance the previous decade’s under-investment.

Renewable power generation is expected to grow at 35% per year over the next five years, including energy management services.

Changing Client Needs

The areas of greatest change would be the need for expertise associated with growth in gas-fuelled generation, renewable energy, emission reductions, demand management, energy efficiency and conservation.

Dillon’s Approach

Dillon has special expertise in the growing markets of energy management and the related green building business, and can offer clients a full range of more conventional services in conjunction with these. We have been in the Power Sector for 25 years, with a strong move into renewables and energy management occurring in the last three years.

Dillon is particularly strong in the practice of project management, planning and environmental services, especially in helping at the project approvals stage.