Energy in Canada and the UK - Compared

Across the vast landscape of Canada, encompassing a variety of geographies, climates and cultures, there lies an eclectic mix of energy production and transportation. Its difficult terrain and harsh weather creates a difficult challenge for transportation companies and prevents an entirely unified country in terms of gas and electricity. Canada is roughly 41 times bigger than the UK, meaning the energy market is extremely different and much more complex due to its size and geography.

Deregulation

Each of Canada’s provinces has their own local energy company which deals with the transmission, distribution and supply of the nation’s natural gas and electricity. Because of the country’s geography it would be extremely difficult to have a comprehensive transmission and distribution system, so this is divided and handled on a province-by-province basis. This is similar to how things work in the UK with regards to transmission and distribution; however, when it comes to the end product, the actual energy that you receive, the customer has complete choice of the company from which they wish to purchase their electricity and natural gas. At the present time just two Canadian provinces are fully deregulated, whilst four have a choice on their natural gas. The rest, and those who have not yet changed their supplier, will be provided by their local energy company’s default supplier which is usually the most expensive tariff available to maximise profit margins. Below is a map showing the current status of each province:

This process is called ‘deregulation’. It is still a relatively new concept in Canada; however, in the UK this has been the case nationwide since 1990, when Margaret Thatcher and her government privatised the energy industry. That said, however, there remain many people who do not know they are able to switch, and many that are too sceptical or lazy to change. This is costing people in both the UK and Canada hundreds of pounds and dollars per year in potential savings.

Electricity Generation

Both Canada and the UK are big players in the renewable energy scene: each of the two nations are enforcing an array of regulations for energy generators and utilities that force them to adhere to certain green standards, Ovo Energy in the UK being a great example, who at the very least supply 33% green electricity in all of their tariffs, whilst in some, they provide 100%.

Although both countries are making a large effort in terms of reducing their generation through fossil fuels, they still make up 63% of the UK’s production mix, whereas in Canada it only represents a tiny 22%. In part, this is because of Canada’s huge effort in using Hydroelectric generation, which represent a massive 58% of the country’s electricity.

Despite that by amount of energy produced Canada beats the UK in all categories, the UK’s power mix places a greater emphasis on wind generation. Electricity coming from wind generation represents 8% of the UK’s production mix, whereas it only makes up 2% of Canada’s.

Energy Transportation

Canada does not have the sufficient infrastructure cross-country to be able to make their transmission and distribution networks function as one country. The electricity grid is not a national grid. It is divided into north and south. The south is connected to the United States, where over half of the energy produced in Canada goes to. This is not the case in Great Britain. It is clear to see from one quick glance at Scotland, England and Wales, it would not be too difficult to link the three countries together. However, the UK does not have the harsh geographies of Canada. For example, people believe that Scotland is an extremely cold country, especially in the north, although the lowest ever recorded temperature was -16.96°F (-27.2°C) in Altnaharra in 1995; however, Eureka, Nunavut regularly exceeds -40°F (-40°C), and the lowest ever recorded temperature was -81.4°F (-63ºC) in Snag, Yukon.

The gas pipeline transportation system in Canada is in the same situation as the electricity system. It stops at the Ottawa River, separating Ontario and Quebec. At the moment it is not possible to get Western Canadian oil into Quebec or Atlantic Canada; they import oil to their refineries.

Energy Price Comparison

We all rely on natural gas and electricity heavily today to fuel our modern lifestyles. We’re all paying for the same product, surely there can’t be much of a difference between pricing? Wrong. The price difference in unit rates for both natural gas and electricity between Canada and the UK is massive, especially electricity, which can be as much as 10 times cheaper in Canada. Also, in the UK, there exists a separate price to cover static costs charged to energy utilities, such as transmission, distribution, meter readings, etc. This is called a 'standing charge'. It also means that the price for your energy will not stop at the unit rate cost. Although this is the case, the average household consumption in Canada is wildly different than the UK:

Average annual energy usage per household

Canada
Electricity - 11,111 kWh (converted from GJ)
Natural Gas - 25,555 kWh (converted from GJ)

Source: Statistics Canada

United Kingdom
Electricity - 3,100 kWh
Natural Gas - 12,500 kWh

Source: UK Power

From the above statistics we can see that the average Canadian household consumes over three times as much electricity and twice as much natural gas than in the average UK household. This is due to a number of reasons, such as: extremities in climate; habitual discrepancies; eco-friendly household installations; etc.

Because of the sheer difference in pricing and consumption between the two countries we thought that it would be interesting to see if there was a difference in how much the average household from each country was paying for their natural gas and electricity. As such, below we have made a price breakdown for each country and made a comparison.

(All units have been converted to kWh to allow an understandable and consistent comparison)
(All prices have been expressed in both Canadian Dollars and GB Pounds.)

UK Tariff Breakdown

Both electricity and natural gas tariffs are estimated through EDF Energy’s ‘Blue: Price Protection’ for the Birmingham area.

Electricity

Unit rate = 21.54¢ per kWh
                = 13.58p

3,100 kWh x 24.54¢ = $667.74
                                    = £420.93

Natural gas

Unit rate = 4.64¢ per kWh
                = 2.922p

12,500 kWh x 4.64¢ = $580
                                    = £365.62

Combined

$: $667.74 + $580 = $1247.74 per year
£: £420.93 + £365.62 = £786.55 per year

Canada Tariff Breakdown

Both of natural gas and electricity for this tariff breakdown have been made based on the Calgary, Alberta region.

Electricity

Tariff: ATCO Electric's 'SureLock 36'

Unit rate = 5.79¢ per kWh
                = 3.65p

11,111 kWh x 5.79¢ = $643.33
                                    = £404.39

Natural gas

Tariff: ATCO Gas's 'SureLock 36'

Unit rate = 1.6164¢
                = 1.02p

25,555 kWh x 1.6164¢ = 413.07
                                         = £259.65

Combined

$: $643.33 + $413.07 = $1056.40
£: £404.39 + £259.65 = £664.04

Summary

As we can see above, even without the UK standing charge, the Canadian tariff is around $200 cheaper than the UK tariff. If we add the standing charge on top, which would be about $261.43 (£164.80) for the year, the difference gets even bigger, meaning the canadian tariff is $461.43, almost a third, cheaper, despite the drastic difference in consumption.

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