Market Snapshot: Record-high Canadian electricity export revenue in 2022

Release date: 2023-09-27

In 2022, Canada’s revenue from electricity exports to the United States (U.S.) reached a record high of $5.8 billion. Despite export volumes being comparable to their historical average, British Columbia (B.C.), Quebec, Ontario, Manitoba, New Brunswick, Newfoundland and Labrador, and Alberta all had record-high electricity export revenues selling to U.S. markets.

These high electricity export revenues are due to favourable market conditions, which increased U.S. wholesale power prices. The main driver for higher electricity prices in the U.S. was above-average natural gas prices,^Footnote 1 which reached a 14-year high over the summer of 2022.^{Footnote 2Footnote 3} Since around 38% of U.S. electricity is generated by natural gas-fired power plants, higher natural gas prices led to higher average electricity prices. Another factor was increased power demand as the U.S. economy rebounded from its pandemic-related slowdown.^Footnote 4 Meanwhile, some areas faced heat waves and lower reservoir levels, which reduced hydroelectric power capacity.^Footnote 5 As a result, Canadian exporters received higher prices for their electricity.

Figure 1: Electricity exports to the U.S.

Electricity imported to Canada

To a lesser extent, similar market conditions also led to relatively high electricity import prices in 2022.

For example, Quebec’s average electricity import price from the U.S. went from $34 per megawatt-hour (MWh) in 2021 to $136 per MWh in 2022, while its average export price went from $35 per MWh to $57 per MWh. Despite this sharp increase in import prices, Quebec imported higher-than-usual volumes to meet additional demand, especially during cold weather.^{Footnote 6Footnote 7} Thanks in part to export volumes remaining significantly higher than import volumes, Hydro Quebec registered its highest net income ever recorded in 2022.^Footnote 8

B.C.’s average electricity import prices also increased from $59 per MWh in 2021 to $91 per MWh in 2022. In comparison, B.C. got an average of $89 per MWh for exported electricity in 2021 and $146 per MWh for exported electricity in 2022. As a result, despite trading volumes being similar to the historical average, net electricity exports nearly reached $1 billion ($963 million) for the first time.

Overall, electricity import volumes remain small compared with electricity exports. In 2022, Canada imported $1.3 billion and exported $5.8 billion.

Figure 2: Electricity imports from the U.S.

Date modified:

2023-11-24