Hydro Review

Canadian News

Report outlines benefits of diverting 3 Quebec rivers

A report by the Montreal Economic Institute (MEI) says a proposal to divert flood waters from three northern Quebec rivers is economically feasible and profitable, with limited environmental effects. Former Hydro-Quebec hydro construction planner and manager F. Pierre Gingras wrote the proposal.

The proposed project would generate 14 terawatt-hours annually at 11 hydro plants and sell 25 billion cubic meters of water each year.

Requiring an investment of about C$15 billion (US$13.5 billion), the proposed project would have annual revenues from power generation alone of C$2 billion (US$1.8 billion), with additional estimated revenues of C$7.5 billion (US$6.78 billion) from water exports. Another several million dollars per year could be raised from sale of carbon emissions reduction credits from generation of hydropower.

"The profitability of this project is not in doubt because it is largely ensured by hydroelectric production before water export revenues are even considered," said Gingras, a specialist in industrial engineering who worked for Hydro-Quebec for 31 years.

To divert floodwaters of Broadback, Waswanipi, Bell

Northern Waters would capture only surplus water generated by seasonal flooding on three rivers in the James Bay Basin that have not been developed for hydropower: the Broadback, Waswanipi, and Bell. The water would be gathered in basins and diverted via natural riverbeds through a series of six pumping stations along the Bell River to the Val d'Or Pass, the highest point before waters can flow by gravity down the Ottawa River Valley.

That additional average flow of 800 cubic meters per second (cms) would flow down the Ottawa River to the St. Lawrence River just above Montreal. The report proposed additional generating equipment at 11 hydro plants totaling 3,000 MW to utilize the additional flows.

"It would be exploited by adding more power facilities to the existing dams on the Ottawa River or through a more intensive use of existing plants, which are not running at full capacity," the report said. "This would involve very modest civil engineering works compared to past Quebec projects — without flooding the surrounding landscape."

The report said the additional generation would total 14 terawatt-hours (TWh), compared to the estimated 8 TWh that is expected from the four-plant, 1,550-MW Romaine hydro complex now under construction in Quebec for an estimated C$6.5 billion (US$5.88 billion).

MEI: Northern Waters deserves economic, environmental study

"This project looks very serious to us at first sight and deserves at least a credible independent economic and environmental impact study rather than a back-of-the-hand rejection for strictly ideological reasons or irrational political fears," MEI President Michel Kelly-Gagnon said.

The report said the project would have limited impact on the environment, including the Ottawa River, which would have a stable flow, without natural flooding. About 860 of the 1,200 kilometers the water would travel consist of lakes and reservoirs that would remain unchanged. The rivers being diverted would not dry up and only a small land surface would be submerged, the report said.

The report considered several scenarios for water export. Flows of 800 cms from the new source could help regulate water levels on the St. Lawrence River and the Great Lakes, where levels have been dropping in recent years. Ontario and the United States also could choose to divert some of the water for consumption. Surplus could be delivered to the U.S. Midwest and South via the Chicago Canal and the Mississippi River.

"If public leaders choose to verify the feasibility and profitability of the project, this preliminary study can serve as a basis for more detailed technical and impact studies involving independent engineering firms, as was the case for the La Grande complex," the report concluded.

Canada's ecoEnergy program to finance 7.5-MW Fitzsimmons Creek

The Canadian government has agreed to provide incentive payments to the 7.5-MW Fitzsimmons Creek hydroelectric project in British Columbia under Canada's ecoEnergy for Renewable Power Program.

Project developer Innergex Renewable Energy Inc. says it entered an agreement with the government under which the ecoEnergy initiative is to provide incentive payments of C$10 (US$9.20) per megawatt-hour to Fitzsimmons Creek for the project's first ten years of operation. The incentive is expected to total about C$3.3 million (US$3.04 million).

"With this program, low-impact renewable energy developers such as Innergex can fast track their development, create new jobs, and allow the country to meet reduction targets with respect to greenhouse gas emission at a much faster pace," Innergex President Michel Letellier said.

BC Hydro signed a contract with Innergex to buy power from Fitzsimmons Creek under the British Columbia utility's Standing Offer Program.

The run-of-river project is being built on Fitzsimmons Creek between Whistler and Blackcomb mountains in Whistler, B.C. Construction began with a budget of C$33.2 million (US$28.8 million).

Innergex owns 66.66 percent of Fitzsimmons Creek, while Ledcor Power Group owns the remainder. Innergex acquired the project as part of a 2008 deal to acquire two-thirds of a joint venture with Ledcor to develop 18 run-of-river hydroelectric projects in British Columbia totaling more than 200 MW.

TransAlta extends offer for Canadian Hydro

TransAlta Corp has extended its C$654 million (US$600 million) hostile bid for Canadian Hydro Developers Inc. The move comes after securities regulators refused to block its target's poison pill.

TransAlta, Canada's biggest investor-owned power producer, extended its C$4.55 (US$4.13) per share offer to Sept. 11, as it looks to snap up Canadian Hydro's portfolio of green hydroelectric and wind power projects.

However the extension still doesn't meet the terms of Canadian Hydro's shareholder rights plan, which requires any offer to be open for 60 days.

TransAlta would have had to move the closing date of its offer to at least Sept. 21 to comply, but a company spokesman declined to say why it had decided not to align its offer with its target's poison pill.

"Ours is the only offer on the table right now," said Michael Lawrence, a spokesman for TransAlta. "The additional two weeks provides shareholders ... ample time to asses the merits of our offer."

TransAlta asked the Alberta Securities Commission to block the shareholder rights plan, a request the commission denied.

Such plans typically flood the market with new shares if a hostile bidder seeks to take a controlling interest, making an acquisition prohibitively expensive.

Canadian Hydro has rejected TransAlta's offer and its board is searching for a higher alternative bid.

Umbata Falls project boosts Innergex revenues

Second-quarter revenues more than tripled at Innergex Renewable Energy Inc., driven primarily by the commissioning of the Umbata Falls hydro project in Ontario and the Carleton wind farm in Quebec, the company reported.

In January, the 23-MW Umbata Falls project on the White River began generating power. The Ontario Power Authority agreed to purchase Umbata Falls' generation over 20 years.

For the second quarter of 2009, Innergex revenues totaled $7.5 million, up from $2.4 million during the same period in 2008. Net income totaled $8.4 million, or 36 cents a share, up from $1.3 million, or 6 cents a share, in the second quarter of 2008.

Meanwhile, the construction of the 7.5-MW Fitzsimmons Creek hydro project in British Columbia is about six months ahead of schedule, Innergex said. Company officials now expect to begin commercial production in the second quarter of 2010. The program provides a C$10 (US$8.5) per MWh incentive payment for the first ten years of operation.

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