U.S. Electricity Exports to Canada Rise Since September 2023: EIA

Monthly average electricity exports from the U.S. to Canada rose 70 percent to 1,809 gigawatthours (GWh) during 2023 compared to 2022, while monthly average imports from Canada to U.S. declined by 36 percent to 3,315 GWh, according to an Nov. 12 report published by the U.S. Energy Information Administration. The shift in trading dynamics can be attributed to reduced Canadian hydropower generation due to drought conditions leading to lower inflow to reservoirs in western Canada. Moreover, lower U.S. natural gas prices led to lower U.S. electricity prices and therefore made U.S. electricity more competitive.

On an annual basis, the U.S. remained a net importer of Canadian electricity last year, but the volume of imports saw a sharp decline from 42 terwatthours (TWh) in 2022 to 15 TWh in 2023. This led to the U.S. becoming a net electricity exporter to Canada by September 2023, a trend which continued for five of the subsequent nine months.

Electricity trade between Canada and the U.S. remains relatively insignificant, accounting for less than one percent of each nation’s total generation. Despite the trade volume being small it remains pivotal to grid balancing and assists in providing power supply during periods of low hydropower production predominantly on the western coast of Canada.

In 2023, the value of power sales from Canada to the U.S. amounted to $3.2 billion, around 30 percent less than during 2022. Contrastingly, the value of electricity exported from the U.S. to Canada increased $454.5 million during 2023, reaching $1.2 billion.  The average price of Canadian electricity exported to the U.S. was higher during 2023, despite a reduction in overall value due to a higher share of exports from Canada under contracts. Meanwhile, the average price of electricity from the U.S. to Canada was lower during 2023 compared to the previous year, since the majority of the sales were under interruptible contracts and took advantage of favourable market fundamentals last year.

Electricity transmission lines connecting Canada and the U.S. are part of a sophisticated and exceedingly interconnected power system, with transmission lines covering from New England to the Pacific Northwest. The Western Interconnection experienced a significant change in trading dynamics during 2023, as Canada began a net importer of electricity from the U.S.