U.S. electricity exports to Canada have increased since September 2023

For the better part of two decades, Canada has exported significantly more electricity to the United States than it imported. However, in the fall of 2023, electricity trade between the two countries became more balanced. The shift was due partly to Canada’s reduced hydropower generation, the country’s primary source of electricity generation, as drought conditions reduced inflow to reservoirs in western Canada. In addition, lower natural gas prices in the United States reduced power prices, making U.S. electricity more competitive.

Monthly average exports from the United States to Canada in 2023 increased 70% on a year-over-year basis to 1,809 gigawatthours, while monthly average imports from Canada to the United States decreased by 36% to 3,315 GWh.

In 2023, the United States remained a net importer of Canada’s power on an annual basis, but the amount of electricity received fell sharply from 42 terawatthours (TWh) in 2022 to 15 TWh in 2023. The decline in imports from Canada was large enough that by September 2023 the United States switched to become a net electricity exporter to Canada, which continued for five of the next nine months.

Electricity exchanges across the United States and Canada—historically each other’s largest electricity trading partners—remain relatively small, representing less than 1% of their respective total generation. However, the trade is important to grid balancing—constantly matching electricity consumption to electricity production—and helping to shore up electricity supply during low hydropower production periods particularly on the western coast of Canada.

The value of power sales from Canada to the United States totaled $3.2 billion in 2023, nearly 30% less than in 2022. In contrast, electricity exports from the United States to Canada increased $454.5 million in 2023 to $1.2 billion. Average prices for the export of electricity from Canada to the United States were higher in 2023 despite an overall decline in total value due to the greater share of exports from Canada under contracts. On the other hand, average prices for electricity from the United States to Canada were lower in 2023 compared with 2022 because most sales were under interruptible contracts and were able to take advantage of favorable economics last year.

Read more about cross-border electricity trade on Today in Energy.