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    Hydro's Strong Future in Canada

    Canadian hydropower is already a top goal scorer in the clean and renewable electricity game. With an additional proposed 163,000 MW of capacity, it’s looking to also lead in assists across North America and secure a reputation as “The Great One.”

    By Jacob Irving

    When Wayne Gretzky retired from professional hockey in 1999, he held 40 regular-season records, 15 playoff records, six All-Star records and the all-time goal scoring record. But individual records alone did not cement his legendary status. Ask hockey aficionados and they’ll tell you, one of the main reasons Gretzky earned the label as “The Great One” was because he made others great as well.

    Much like Gretzky, Canadian hydropower holds some impressive records. Hydropower is the leading source of electricity in Canada, at more than 60% of overall generation. With 74,000 MW, the country ranks fourth internationally in terms of installed capacity. Because hydropower has some of the lowest life-cycle greenhouse gas emissions and produces no air pollution, it allows Canada to boast an electricity system that’s among the cleanest and most renewable in the world. Canada is also the world’s third-largest hydropower producer, with only China and Brazil generating more.

    As new renewable energy options work toward sustained commercial viability, Canadian hydropower can provide a solid base on which success can be built.

    The quiet leader

    Hydropower has been the quiet leader for Canadian electricity consumers for many years. It is so deeply rooted in Canada that many people use the terms “hydro” and “electricity” interchangeably. Canadians often refer to paying their phone bill, their cable bill and their hydro bill. Even so, many would be surprised to learn that hydro supplies 97% of Canada’s renewable power. It is the key playmaker that helps make Canada’s electricity generation system the cleanest and most renewable in the Group of Eight or G8 (the world’s eight major industrialized economies).

    As energy consumers hold producers to ever-higher standards of environmental and social responsibility, hydropower becomes better positioned as the No. 1 pick for electricity generation.

    Keep in mind that hydro facilities typically convert more than 90% of the energy content of flowing water flowing into electricity. The best fossil fueled power plants convert only 60% of their input energy into electricity. On a full-life cycle basis, hydropower’s GHGs are as low as wind power and in many cases are even lower.

    Hydropower facilities are designed to have long service lives that can be extended indefinitely through refurbishment and upgrades. At more than 100 years old, the Chaudiere Falls Generating Stations are a perfect example of this.

    The Chaudiere Falls Generating Stations, located on the Ottawa River at the center of Canada’s national capital and within sight of Parliament Hill, are run-of-river installations that have a combined output of 110 GWh per year. The newer of the two is Station No. 4, which was built in 1900. The older Station No. 2 dates from 1891. This site was the first to use water to produce electricity in Canada in 1881. Far from being museum pieces, the stations were refurbished in 2001 and capacity was increased. Tens of thousands of office workers pass by the stations each day, and probably only a handful would understand the historical significance.

    Building for the future

    Canadian industry observers and regulators forecast continued expansion of hydropower. Population and economic growth will drive the demand for new capacity. At the same time, aging electricity generation facilities will need to be refurbished or replaced. Canada is not constrained for opportunities to expand the industry. In fact, the needed investment will underpin economic activity in the years to come.

    The Canadian Hydropower Association estimates that Canada has an additional 163,000 MW of technical potential, more than double the current installed capacity of 74,000 MW. Developers across the country have about 25,000 MW of projects that are planned or under construction.

    In a recent research report, CIBC World Markets, a major Canadian banking institution, focused on projects totaling C$45 billion (US$43 billion) that would add more than 11,000 MW of generation capacity. The report’s authors estimated that the construction activity alone could create the equivalent of 14,600 jobs lasting 20 years. Other studies of the industry illuminate the bank’s conservative approach. The full economic impact of hydropower investment is likely to be much higher.

    In an environment where clean and renewable energy sources are highly prized, renewables like wind and solar promise to make important contributions. But these technologies can struggle with the challenge that the sun shines and the wind blows intermittently and with varying intensity. In contrast, water can be stored and managed by hydro facilities. This allows hydro to be ramped up or turned down quicker than any other form of generation. This in turn makes hydropower the most flexible form of electricity production.

    Hydro’s flexibility is valuable to consumers because it follows the variability in customer loads. This also makes it important for the development of new alternative energy technologies. The industry can step in to smooth the production peaks and valleys that variable sources such as wind and solar present to the grid. Canada’s abundance of capacity, and hydropower potential, will make the integration of wind and solar generation in North America less challenging than it might be elsewhere in the world. This increases the continent’s ability to add more clean, renewable electricity from more sources. This is where Canada is well placed to chalk-up many more assists.

    Construction of the 200-MW Wuskwatim project in Manitoba is nearly complete, with the project expected to begin generating power in early 2012.
    Construction of the 200-MW Wuskwatim project in Manitoba is nearly complete, with the project expected to begin generating power in early 2012.

    Below are examples of hydro projects currently under development in Canada:

    Manitoba: The Wuskwatim Project, a 200 MW run-of-river generating station on the Burntwood River in northern Manitoba, will begin generating power early in 2012. Manitoba Hydro began building the C$1.3 billion (US$1.25 billion) project in August 2006 and expects the first of three units to be commissioned in February 2012.

    The project comprises a three-unit powerhouse, spillway, transmission lines and a 30-mile access road. The project’s developers, Wuskwatim Power Limited Partnership, designed it in such a way that it will create less than one-quarter of a square mile of flooding.

    The partnership is a joint venture between Manitoba Hydro and the Nisichawayasihk Cree Nation. This enterprise is the first power project in which Manitoba Hydro has entered into an equity partnership with a First Nations community.

    The Wuskwatim Project reflects the effort, commitment and hard work required to bring a power project to completion. The joint venture partners negotiated, planned and conducted studies for almost a decade to get to this point.

    Ontario: Ontario Power Generation is adding 440 MW to its Lower Mattagami Hydropower Complex in northeastern Ontario, about 500 miles north of Toronto. The expansion will almost double existing capacity by increasing it to 924 MW from 484 MW.

    The work will involve both adding units to three existing stations and replacing a fourth station. Construction is under way on the C$2.6 billion (US$2.5 billion) project. OPG expects to complete it in 2015.

    British Columbia: Fortis Inc. has entered into an arrangement with Columbia Power Corp. and the Columbia Basin Trust to construct a new powerhouse, with a capacity of 335 MW, on the Pend d’Oreille River. The new facility will be immediately downstream of Waneta Dam’s existing 450-MW powerhouse and will share the existing hydraulic head. The new installation will make use of flow that would otherwise have been spilled.

    The powerhouse is under construction, and the developers expect to begin commercial production in the spring of 2015. BC Hydro and Fortis BC Inc., have entered into long-term agreements to purchase the power.

    BC Hydro is also adding to its own generating capacity. It began construction in the spring of 2011 to add two 500-MW units to the existing Mica Dam facility at a cost of C$1 billion (US$965 million). Regulators took two and half years to approve the environmental assessment of the capacity increase for the hydro facility, which was originally constructed in 1973.

    Mica Dam, one of largest earthfill dams in the world, began producing power in 1977. The two new units will complete the original design from the 1970s, which was to include six units. Units 5 and 6 were deferred until increases in electricity demand justified their installation. BC Hydro expects Unit 5 to be on line in 2014 and Unit 6 in 2015. The additional capacity will almost double the existing amount, raising it to 2,085 MW from 1,085 MW.

    Quebec: A critical element in Quebec’s plan to increase export capacity to the U.S. is under construction on the Romaine River. Provincially owned utility, Hydro-Quebec, is building a 1,550-MW complex that it expects to be producing power by 2020. The price tag for the project is C$6.5 billion (US$6.27 billion).

    The utility plans to install four generating stations capable of producing 8 TWh a year. Green Mountain Power Corp., and Central Vermont Public Service Corp signed agreements with Hydro-Quebec in 2010 to purchase up to 225 MW each year for 26 years, starting in 2012. The La Romaine facility will help meet the contract requirement in the years following its commissioning in 2020.

    The North American energy arena

    The trading relationship between the U.S. and Canada is unique and powerful. The neighbors engage in the largest bilateral trade relationship in the world. For example, out of every dollar the U.S. spends on Canadian energy, it gets back an estimated 91 cents from the American-made goods that are sold to Canadians.

    Hydropower is a shared and integrated North American resource that helps Canada and the U.S. reduce dependency on foreign energy supplies. Canada offers U.S. consumers an electricity source that is secure and affordable and that is produced in an environmentally and socially responsible way. Hydropower is essential in maintaining the stability of electricity supply on both sides of the border. It is a readily available energy source that guarantees rapid responses to changes in demand such as peaking spikes or crisis management situations.

    Canadian hydro also helps keep rates affordable for American customers, which is a key to U.S. economic development and job creation. Communities serviced and supported by hydropower can attract industries precisely because of the unique operational and environmental attributes of this energy source. BMW automobiles recently chose to build an advanced carbon fiber manufacturing facility in the U.S.’s Pacific Northwest specifically because of the availability of hydropower.

    Hydropower produced in Canada can combine with U.S. hydropower to provide continued economic and environmental benefits to both countries. If only half of Canada’s total undeveloped hydropower potential could be built and dedicated to powering plug-in electric vehicles, the positive impact on transportation emissions in North America would be enormous. This relatively modest amount of additional hydropower capacity could power all of Canada’s current light-duty vehicle fleet if it was converted to plug-in electric power. After that, there would still be enough capacity left over to power a quarter of the U.S. light duty vehicle fleet, if it too was converted. That would mean millions of drivers switching to clean, renewable and secure North American energy whenever they got behind the wheel.

    While this is a theoretical scenario, it is but one illustration of how hydropower can meet North America’s need for sustainable energy.

    Canadian and U.S. hydropower resources together represent more than 80% of total renewable electricity generation in North America. The North American industry’s output is estimated to displace about 385 million tons of GHG emissions per year. The same hydropower characteristics that will support the development of renewables such as wind and solar in Canada can also help the development of U.S. renewables. Like Gretzky, Canadian hydropower clearly plays well on both sides of the border.

    As in the States, Canadian hydropower projects face stringent environmental regulation. Each stage of a project is assessed to avoid, minimize, mitigate or compensate any impacts while encouraging positive outcomes for the environment. The industry makes use of low-impact design, which means flooding is minimized, fish and wildlife impacts are carefully managed and land use is kept to a minimum. In this sense, the Canadian hydropower industry has internalized many of the externalities previously associated with its operations and has demonstrated constant improvement in its approach to sustainable development.

    Keeping the winning streak alive

    In short, hydropower is the dominant generation technology of the Canadian electricity industry, with a long history of meeting the needs of Canadians and Americans.

    Hydropower was the ideal technology to drive the electrification of Canada in the late 19th and early 20th centuries. Its abundance, stability and affordability allowed it to become the kind of energy player that a team could be built around.

    As we move into the 21st century, North Americans continue to ask more of their energy producers. They have looked for a different approach to the relationship between the benefits of development and the impacts on the natural environment and the communities that either host the development or are served by it. Today, that same concern has spread to the more global nature of our energy choices. Canadians and Americans are right to make demands of their electricity generators to ensure the service we need to sustain our quality of life does not impose unacceptable costs on the environment or society at large.

    The Canadian hydropower industry has worked hard to find better ways to build and operate its facilities. The industry has made efforts to enlist the support of local communities to become part of the development team and it incorporates more perspectives from more stakeholders than ever before.

    Canadian hydropower, which grew from small, local installations into an industry that is anchored by large publicly owned generation utilities and private developers, is ready to both score and assist. The industry is large, and so is the potential to meet the full variety of demands that North Americans will make of their energy systems. The future looks bright for a great electricity source that helps other electricity sources become great, both in Canada and in the U.S.

    And it doesn’t get much more Gretzky than that.


    Hydropower could create 1 million jobs in Canada

    Results of a Dec. 14, 2011, study commissioned by the Canadian Hydropower Association show that hydropower investment could produce 1 million full-time equivalent Canadian jobs over the next 20 years from construction activities alone.

    Business school HEC Montreal conducted the study, entitled Job Creation and Economic Development Opportunities in the Canadian Hydropower Market. The report’s authors employed the commonly used Statistics Canada Input – Output Model of the Canadian economy to test various scenarios.

    Hydroelectricity generation projects already under consideration in Canada for 2011 to 2030 would create 776,000 FTEs for construction firms and their suppliers, or the equivalent of 38,800 positions lasting 20 years. (A FTE represents one person employed for one year.) A further 224,000 induced FTEs are forecast to be created through increased spending by those directly or indirectly employed by the projects. The study’s results indicated that hydropower’s benefits extend well beyond simply providing clean, renewable electricity.

    The 158 potential projects that industry members identified for the study would require investment of C$127.7 billion (US$123.2 billion) and would result in 29,060 MW of both refurbished and new generation capacity. The model results predict that gross domestic product would be about C$15 billion (US$14.5 billion) per year greater over the study period than it would have been otherwise, due to construction of the capacity and its subsequent operation.

    The researchers referred to this as the optimistic scenario. However, CHA points out that the researchers limited their analysis only to projects currently under some degree of active consideration.

    While the employment totals generated by the model are impressive, the study did not attempt to quantify employment created by investment in new and upgraded transmission and distribution capacity that would be necessary to handle the increased hydro production. Moreover, these infrastructure expansions could also enable increased investment in other electricity projects, such as wind and solar. The impact on employment of this type of activity also fell outside the scope of the research.


    Jacob Irving is president of the Canadian Hydropower Association.

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