A Transitioning Energy System

Northern Canada is undergoing an energy transformation. As climate change drives action towards decarbonization, the adoption of electric vehicles (EVs) and electric heating is increasing. Electrification efforts are being put into action by government policies such as Our Clean Future in the Yukon and the 2030 NWT Climate Change Strategic Framework. The Yukon Government has set a goal of 4,800 EVs on the road by 2030, alongside a push towards electric heating solutions​ [1]​.   

While these technologies support decarbonization efforts for transportation and home heating, the increased electricity demand associated with them poses a challenge to the northern electric power grids. Similar challenges also exist in large interconnected grids in southern regions, but these effects are especially pronounced in northern grids that are isolated, have less generation options, and often have aging infrastructure.

The Impact of Electrification on the Power Grid

The charging of thousands of EVs and the electric heating of many homes could significantly increase demand for electricity. This large increase in electrical use risks overloading the grid (i.e. exceeding the capacity of the grid to provide the electricity demanded by consumers), especially around peak demand times. Peak demand times are the times throughout the day when electricity use is at its highest, usually occurring in the morning when people get ready for the day and in the evening as people settle down for the night.  

In order to keep providing the necessary amount of electricity during these moments of peak demand, one option is for utilities to invest in additional power generation and grid infrastructure upgrades. Traditionally, increases in electrical demand beyond that of the grid’s capacity have been met with rented diesel generators, an expensive and emissions-heavy solution. In 2019, Yukon Energy Corporation spent $2.2 million on portable diesel generators to meet demand during the winter, with costs rising to $4.1 million in 2020​ ​[2]​. Such a solution is costly, temporary, and not in line with climate goals. Furthermore, the grid infrastructure, particularly the power distribution lines and transformers that deliver electricity to consumers, would also eventually need upgrading to carry the larger volumes of electricity. 

How Demand-Side Management Can Help

Imagine all your friends and family want to come over at noon on Tuesday. That might be too many people to have over at once. Instead of building a bigger house, you may spread out the visits at different times throughout the week. This would still let you see everybody, while not being overwhelmed. Demand-Side Management (DSM) strategies work in a similar fashion, enabling electrical demand to be spread out over time to avoid overloading the grid while reducing the need for infrastructure upgrades. 

DSM strategies aim to shift energy demand away from peak times to reduce strain on the grid. These strategies vary in the form they take, from pricing incentives to consumer education initiatives. We will take a look at each strategy in turn, and analyze the potential benefits and risks associated with DSM. 

Advanced Metering Infrastructure

Advanced Metering Infrastructure refers to a network of smart meters that provide real-time information about electricity usage. Unlike traditional electricity meters, which only show how much electricity is used in a given billing cycle, smart meters track when and how much electricity is consumed throughout the day. This information not only helps utilities in planning ahead and forecasting demand, but consumers are also able to get a clearer picture of their own energy habits and make more informed decisions around their energy use. By making energy consumption more transparent, Advanced Metering Infrastructure could help northern communities manage their electricity use more efficiently. 

Dynamic Pricing

Dynamic Pricing encourages people to shift their use of electricity to periods when demand is low and avoid heavy use when demand is high. Instead of charging a flat rate for electricity regardless of the time of day, utilities use a dynamic pricing schedule with increased rates corresponding to times of increased demand. The most common form is Time-of-Use (TOU) pricing, where the price of electricity is increased during peak hours—such as around breakfast and dinner times when many people are consuming electricity at once—and cheaper during off-peak hours, like early morning or late evening. Another Dynamic Pricing method is Critical Peak Pricing (CPP), which raises rates only during extreme demand events, like a particularly cold winter evening when there is a large demand for electrical heating. The idea is to encourage, through increased costs, a reduction in non-critical energy use during these times, leaving more capacity for important uses and avoiding overloading the grid. 

Direct Load Control

Direct Load Control allows utilities to temporarily adjust electricity consumption in homes and businesses during peak demand periods. With the consent of consumers, utilities can remotely manage the electricity use of major appliances like electric heating systems, water heaters, and EV chargers. For example, if the grid is experiencing high demand, an EV charger might be paused until demand subsides, or a smart thermostat might slightly lower heating output for a short period. Importantly, consumers always have the option to override these adjustments if needed. By marginally reducing electricity consumption across a large number of households, the utility could take action in real-time to address demand spikes. 

Social Behavior Management

Even with smart meters and pricing strategies in place, energy conservation ultimately comes down to consumer behavior. Social Behaviour Management focuses on educating and motivating people to use electricity more efficiently. This can be done through real-time feedback, such as alerts that notify users when their energy use is high (a benefit of Advanced Metering Infrastructure) or reward programs that offer discounts or incentives for reducing consumption during peak times. Another effective approach is peer comparison, where households receive reports showing how their electricity use compares to average use in their general area.

Challenges of Demand-Side Management Strategies

In implementing DSM strategies, one important consideration is ensuring that the benefits are evenly distributed across all communities and income levels. Without careful planning, DSM methods can inadvertently create disparities, favoring those with greater financial resources, access to technology, or more flexible energy habits. These risks can be particularly relevant in northern Canada, where infrastructure, affordability, and accessibility vary widely. DSM strategies are intended to be in pursuit of a universal benefit—avoiding expensive grid projects—and thus should be equitable in their implementation. By integrating subsidies, customized approaches, flexible pricing models, and strong consumer engagement, DSM strategies can become a tool for energy equity, helping all northern residents transition toward a more sustainable and cost-effective energy future.

Contributors

Author: Trent Gardiner
Reviewed By: Andrew MacMillan and Maureen Charlie

References

1. Government of Yukon, “Our Clean Future,” 2020
2. C. Windeyer, “Yukon Energy eyes more diesel generators to meet winter demand,” CBC News, 2020