Clean energy is cost-effective

Clean energy is cost-effective

Comparing '60s-era BC Hydro infrastructure with new, private generators is akin to apples and oranges

The panel appointed by Premier Christy Clark and the Minister of Energy and Mines to review BC Hydro made some good recommendations to reduce rising electricity costs for B.C. families. British Columbians should be pleased with their report.

It is unfortunate, however, that critics were quick to use the report to continue to spin misinformation about the cost of electricity generated by B.C.'s clean energy producers.

Clean energy producers are smalland mid-sized companies, often B.C. entrepreneurs and engineers, as well as renewable energy innovators working on an international scale. They develop renewable energies like wind, run-of-river, biomass or solar projects in rural and first nations communities across our province.

No less than two-thirds of B.C.'s first nations are also participating in B.C.'s clean energy sector through direct ownership, equity investments and various partnership arrangements. Their involvement in this industry means new jobs and economic benefits that would otherwise not exist.

Moreover, clean energy's contribution to a healthy environment is recognized by leading climate scientists such as Nobel laureate, Dr. Andrew Weaver.

Lost in the critics' misinformation is the fact that clean energy producers provide good, fair and long-term value for money for B.C.'s ratepayers. Our electricity costs less if not the same as electricity produced by BC Hydro.

The reality is that new supplies of electricity cost more to build and generate than old supplies of electricity, whether it is from clean energy producers or BC Hydro.

Regardless of who builds it, you can't compare the cost of a new electricity project with one that was built by BC Hydro in the 1960s or '70s. That's like comparing the cost of building a house in the 1960s with the cost of building a house today, and complaining that the house built in 2011 is more expensive. It's an apples-to-oranges comparison critics frequently trot out - and they're wrong. Based on BC Hydro's most recent competitive bidding process - the Clean Power Call - the estimated cost to BC Hydro to purchase firm electricity and handle it in its system is about $124/MWh.

But the average price paid to the clean energy producer at the "plant gate" is about $100/MWh.

Clean energy producers produce non-firm electricity that BC Hydro pays a much lower price for, which is included in the $100/MWh price.

This price is fixed in a contract in today's dollars for terms of 20, 30, or even 40 years.

BC Hydro conducted a review of the Clean Power Call that showed that the prices they paid for this clean electricity were "at the lower end of the energy price ranges of other North American jurisdictions."

The clean energy assets being built today are tomorrow's low-cost generating assets.

The cost of their electricity in 20, 30 or 40 years will be much lower than the cost of new electricity generated at that time.

The same principle was at work when W.A.C. Bennett built B.C.'s large hydro dams. British Columbians paid the upfront capital costs and locked in the operating costs at a long-term and stable price that later generations enjoy today, at low cost.

Today's contracts with clean energy producers are no different, with one exception: the project development responsibilities, business risks and project costs are borne by the private sector, not the ratepayer.

B.C.'s electricity system, owned by the public and augmented with clean private sector electricity, is a common sense model that uses the best of both worlds to deliver cost-effective electricity to B.C. families and industry.

Thus, despite the allegation that BC Hydro's rate increase was caused by private sector power purchases, our electricity accounted for only $94 million, or 2.6 per cent, of BC Hydro's proposed 32-per-cent rate increase over three years. Critics make another apples-to-oranges comparison by comparing the cost of firm, clean electricity generated in B.C., with nonfirm, brown electricity purchased on the U.S. spot market.

Increasing spot market purchases is not a sustainable solution for ratepayers or our economy.

Spot market power is dirty power from American coal plants. It's also volatile. BC Hydro even forecasts that spot market prices are set to rise 50 per cent in 10 years, and 100 per cent in 20 years.

Further, importing U.S. power means we are exporting B.C. jobs.

It's time the critics of private sector power come clean. Stop comparing apples to oranges. And stop risking made-in-B.C. jobs and economic benefits for B.C. communities and first nations.

It's time for the province to continue to build on its leadership and innovation in clean electricity.

Paul Kariya is executive director of the Clean Energy Association of British Columbia.

Ontario’s energy outlook: The perfect storm | The Chronicle-Journal

Ontario’s energy outlook: The perfect storm | The Chronicle-Journal

COMMENTARY

By Byron LeClair

I liken the challenges facing Ontario’s energy planners to that of the perfect storm. Past debt and inadequate investment in electricity generation and transmission are three major hurdles planners will have to overcome and ratepayers will have to pay for, which will inevitably lead to substantial increases in the rates we pay for energy in Ontario.
When the Tories wound up Ontario Hydro in 1999, the utility managed to accumulate $22 billion of unfunded debt (Ontario Hydro’s total debt was a staggering $38.5 billion of which $16.5 billion was supported by existing assets). This debt represented an electricity “cost” not passed onto the ratepayers of the 1980s and ’90s. Instead, this “cost” was handed off to future generations to deal with.
But the impact of this debt goes beyond the debt retirement charge ratepayers see every month on their Hydro One statements. It has fundamentally flawed our perception of what the true cost of electricity is.
Most of us can remember our parents fretting over their monthly hydro bills, when rates were at about 8.5 cents per kw/h, bundled to include transmission, distribution and generation costs.
We were led to believe that our parents were paying their fair share for their electricity, but little did we realize that all of Ontario ratepayers were subsidizing their electricity rates against future generations of ratepayers.
In 1999, there were approximately four million Ontario Hydro customers (one million retail, three million residential). This means for each customer, the total unfunded debt equaled $5,500.
Had each customer paid their fair share for the preceding 20 years, each ratepayer should have been paying $275 more per year or an additional $13.75 per month. Assuming an average two-storey home uses about 1,500 kw per month, the average consumer should have been paying an additional one cent per kw/h to cover the unfunded debt. As we know, this did not happen.
The deficit of one cent per customer per kw/h was the first part of the perfect storm that provincial planners are now faced with.

The next wave of this energy storm to hit the province was its failure to invest in new generating capacity or refurbish its existing assets. The provincial policy to eliminate coal from our supply mix only exacerbated the supply problem.
We know that the province will require new energy. How much depends on the future growth of the province’s economy and population.
Ontario’s energy plan is to build 2,000 megawatts of new nuclear energy in combination with investment into renewable sources. This new generation will require new funding over and above what we already pay for. It will be an inescapable reality for current ratepayers that new projects will require new financing — whether this is supported through the private sector with feed-in tariff programs, or power purchase agreements or capitalized through Crown corporations and then passed onto customers is all semantics.
The hard reality is that we will all pay more for our electricity in the very near future. The cost of this new generation is also in current year dollars. Developers such as OPG have to pay 2011 dollars for cement, steel, copper, labour — all the input costs associated with bringing new generation online or refurbishing existing capacity. This adds substantially to the cost of electricity.
The final triumvirate of this perfect storm is the woeful investment made into transmission, either in the form of new infrastructure, maintaining our current system or modernizing the existing system.
Despite $7 billion of investment made by Hydro One over the past eight years, the province’s transmission system is congested to the point where new generation is challenging to connect. With an additional $2 billion expected to be invested in five priority transmission projects, it will still be insufficient to ensure adequate supply to meet the province’s growing energy needs.
Furthermore, these new projects still do not enable the province to secure abundant hydro-electricity in either Manitoba or Quebec. The province will still need to integrate its transmission network inter-provincially.
As an aside, I often find the commentary made about Northwestern Ontario’s surplus of electricity forgetful of the fact that while we may have a surplus of supply (though this is debatable), our transmission costs are the highest in the province with low population density and the vastness of the territory adding significantly to our cost of electricity in the Northwest. The costs are in fact so high that many of our communities are not yet connected to the provincial grid.
Facts are facts. We have a historic debt load that must be paid. We do not have enough electricity to meet future needs. We do not have enough transmission infrastructure to deliver this electricity to the ratepayers. To address these needs, new money is required, which means increases in our electricity rates.
As we move towards a fall election, I would urge all ratepayers to listen carefully and consider what the parties are saying. Any party platform calling for reduced electricity rates in the face of this perfect storm is a promise that will be broken.

Byron LeClair is director of energy projects at Pic River First Nation. These are his personal observations, not those of the First Nation.

Hydro reservoirs produce less CO2 than believed - CBC News

Hydroelectric reservoirs emit about one-sixth of the greenhouse gases previously attributed to them, says an international team of scientists.

They emit 48 million metric tonnes of carbon annually, a downgrade from earlier estimates of 321 million metric tonnes, according to a study of 85 reservoirs published in this week's online version of Nature Geoscience.

"Our analysis indicates that hydroelectric reservoirs are not major contributors to the greenhouse gas problem," Jonathan Cole, a limnologist at New York State's Cary Institute of Ecosystem Studies, said in a release.

"But there are some caveats," he warned. "To date, only 17 per cent of potential hydroelectric reservoir sites have been exploited, and impacts vary based on reservoir age, size, and location."

In particular, emissions are correlated with latitude and the amount of vegetation being flooded.

"Reservoirs in tropical locations, such as the Amazon, emit more methane and carbon throughout their life cycles," said lead author Nathan Barros of the Federal University of Juiz de Fora in Brazil.

Hydro reservoirs are created by damming rivers and flooding large swaths of land so that when water is released it can turn turbines and generate electricity. The water not only displaces wildlife and people, but drowned vegetation and soil also give off the greenhouse gases carbon dioxide and methane.

As reservoirs age, emissions decline, with cold-water systems giving off fewer emissions than warm water ones.

Hydroelectricity supplies an estimated 20 per cent of the world's electricity and accounts for more than 85 per cent of electricity from renewable sources.

Hydro reservoirs produce less CO2 than believed - Technology & Science - CBC News

Don’t blame renewables for hydro prices, study says

Don’t blame renewables for hydro prices, study says

Ontario electricity prices are heading higher with or without controversial renewable energy contracts, says a study by the green-leaning Pembina Institute.

The study, released Wednesday, says that the relatively high prices paid to wind, solar and biogas power producers under Ontario’s feed-in tariff program, or FIT, are being blamed unfairly for rising power prices.

Even if no more FIT contracts are signed, the study says, the outlook for rising prices doesn’t change much — because the alternatives are no cheaper.

“Prices are going up, and in some ways people need to know that’s inevitable, whichever path one chooses,” says Tim Weis of the Pembina Institute. “There’s no silver bullet to bringing prices down.”

The difference in prices, with or without the FIT program, is never more than 1.5 per cent, or about $2 a month on a typical consumer hydro bill, the study contends.

Curbing renewables produces lower bills until about 2025, the study says; after that, prices are likely to be cheaper with more renewable power in the system.

The issue is likely to be a hot one in this October’s provincial election. The Conservatives have vowed to end the FIT program, calling it “unsustainable.” The Liberals are firmly committed to pushing for more green power.

FIT contracts pay 13.5 cents a kilowatt hour for onshore wind power; an average 52.5 cents a kilowatt hour for solar power, and 13 cents for hydro.

The key questions if the FIT program is halted in its tracks, says Weis, are: What will replace it? And at what cost?

The Pembina study maintains that natural gas generation will pick up the slack if renewables are curbed.

That seems like a good idea, since gas prices have tumbled since 2009 with the discovery of massive shale gas deposits in North America.

But the study warns that won’t last. Resistance to the environmental damage wreaked by shale gas extraction may limit production.

Meanwhile, demand for gas could spiral as the United States shuts down more coal-burning plants and replaces them with gas-fired units. Electric cars will also spur demand for gas-fuelled generation.

The study also assumes that some form of carbon tax or carbon pricing regime will come into play in the medium term.

It notes that emissions regulations are already being introduced on U.S. gas generators, and Canada will probably follow suit. .

While natural gas prices rise, the study says the price of renewables will fall. The price of solar panels, for example, is declining steadily as more manufacturers flock to the sector.

Ontario also plans to review the price of new FIT contracts, with an eye to reducing them, later this year (assuming the Liberals are still in power.)

Meanwhile, whether or not the FIT program is shut down, other factors are at play in driving prices higher.

Nuclear reactors at the Darlington and Bruce B generating stations will have to undergo expensive mid-life overhauls in the coming decade, while the Pickering B station will need work to prolong its life for an extra 10 years.

The province also figures it will need two or more new reactors at Darlington, at a cost still to be determined.

As well, the wires that carry the power to customers are aging. Hydro One says it will need to spend billions to modernize its transmission grid. Local utilities such as Toronto Hydro have also said they face expensive upgrades.

Those costs are coming, no matter what kind of power is being produced.

“If it’s going to cost us roughly the same price, it seems to make a lot more sense to be investing money in cleaner renewable energy going forward than placing our bets on a volatile price of gas,” says Weis.

TheSpec - Don’t blame renewables for hydro prices, study says

Canada Hydropower: Liquid Cornerstone

Russell Ray
Canada -- Canada is already the world's second-largest hydropower producer behind China. But Canada is bent on producing more, driven by its vast potential for hydropower generation and demands for more clean energy in the U.S.

It's a major element of Canada's plan to boost its economy, as lawmakers attempt to wean the country off coal-fired power through landmark legislation that encourages the development of renewable energy, especially hydropower.

"The federal government is intending to introduce legislation to reduce emissions pretty significantly from coal-fired plants," said Colin Clark, chairman of the Canadian Hydropower Association. "I think that creates an opportunity for hydropower."

In the U.S., where restrictions on carbon emissions are anticipated and demand is growing, there's a big market for Canada's hydropower resources. A handful of deals to export that power to the U.S. have already been made and more are looming.

"The U.S. is constrained in how it can develop its own generation systems because of uncertainty around carbon," said Dan McCarthy, president and chief executive officer of Black & Veatch Water. "Canadian hydro companies have an opportunity to take advantage of that uncertainty and get some power purchase agreements in place."

Hydro-Quebec recently reached long-term agreements to export hydropower supplies to Vermont and New England.

Hydro-Quebec and Public Service of New Hampshire plan to build a 140-mile transmission line that will bring up to 1,200 MW of Canadian hydropower to central New Hampshire. In another agreement, Hydro-Quebec will provide up to 225 MW of hydropower to two Vermont utilities, Central Vermont Public Service and Green Mountain Power, for 26 years beginning in 2012.

Canada, home to about 475 hydroelectric plants with a capacity of 70,000 MW, produces about 355 terawatt-hours of hydropower each year. But Canada's untapped potential is far greater.

According to a study commissioned by the Canadian Hydropower Association, Canada has 163,000 MW of untapped hydropower potential, more than twice the country's existing hydropower capacity.

Already, hydropower accounts for 60 percent of Canada's electricity consumption. That number is sure to rise as construction of several new hydropower plants near completion while more coal-fired plants are shuttered in the name of clean air.

There has been "a very significant increase in the number of references to hydropower by the federal government," Clark said. "It shows that the politicians are strongly supportive of the hydropower development in Canada and policies that will encourage development."

Earlier this year, British Columbia approved an aggressive plan known as the Clean Energy Act to create jobs and reduce carbon emissions through the development and export of new hydropower capacity.

Among other things, the measure establishes a goal of energy self-sufficiency by 2016, requires the province to generate a whopping 93 percent of its power from renewable resources such as hydro, and raises the standard for meeting incremental power demand through conservation and efficiency improvements from 50 percent to 66 percent by 2020.

In addition, the bill authorizes significant public investments in expansions at BC Hydro's Mica and Revelstoke projects.

Another chief objective of the act is to make BC Hydro a net exporter of electricity. Under the measure, BC Hydro will be able to secure long-term export power sales contracts with other jurisdictions, something that was prohibited before the law was passed.

"We want British Columbia to become a leading North American supplier of clean, reliable, low-carbon electricity and technologies that reduce greenhouse gas emissions while strengthening our economy in every region," said British Columbia Premier Gordon Campbell.

In Ontario, the Green Energy Act has led to a surge of new interest in building renewable energy projects throughout the province.

The act includes a feed-in-tariff (FIT) program, which provides price supports for renewable-energy producers serving Ontario. The FIT program is a major part of the province's aggressive plan to eliminate coal-fired power.

Under the FIT program, the Ontario Power Authority (OPA) has offered contracts to 184 projects with a capacity exceeding 500 kW each. Altogether, those projects are expected to add nearly 2,500 MW of new capacity. Of the 184 projects, 46 are hydropower projects.
Canada Hydropower: Liquid Cornerstone | Renewable Energy World Magazine Article

The Magma/Plutonic Merger | Alternative Energy Stocks

The Magma/Plutonic Merger

A Great Deal for Plutonic Shareholders, Not bad for Magma
Tom Konrad CFA
As a shareholder of Magma Energy Corp. (MGMXF.PK), I'm reading through the joint information circular [PDF] on the proposed merger of Plutonic Power Corp (PUOPF.PK) and Magma to form "Alterra Power Corp." I'm not thrilled with the merger, although I plan to vote for it, now that it's arranged.

Overall, I think the merged Alterra will be a stronger company than either company alone. Both companies are in capital intensive niche Renewable Energy industries, so the added scale and diversification of Alterra should better enable the merged company to borrow money to finance projects at lower rates. Obtaining financing at favorable rates is essential to the profitability of renewable energy projects.

My misgivings about the merger arise from the price. Magma shareholders will have a controlling stake of 66.5% of the merged company, with current Plutonic shareholders owning the balance. Plutonic shareholders are being paid a 32% or 17.5% premium, based on pre-merger market capitalization or book value, respectively. That would be a normal buyout premium, except that Magma was a much stronger company, and so Plutonic shareholders also gain more as part of the merged entity. Although the two companies work in different renewable energy industries, their projects have much in common. In addition to raising finance, environmental permitting, grid interconnection, and negotiating with utilities are crucial to the success of any renewable power producer, and a larger company with more projects may be able to make more effective use of employees with specialized local knowledge or skills in these areas.

Before the merger, I considered Magma shares a good buy, but I would not have bought Plutonic shares, because the company would have needed to either do a deal like this or raise money in the next year or so. This put Magma in the stronger bargaining position, and so I would have liked to see a smaller premium paid for Plutonic shares. That said, since two thirds of Plutonic shareholders will need to vote for the merger in order for it to be a success, this premium is probably necessary to gain sufficient support. Passage by Magma shareholders is a virtual certainty, since the owners of 38.7% of Magma shares have already committed to vote for the deal, and only 50.01% support is needed.

As a Magma shareholder, I think the deal is acceptable, and will be a way for Magma to pursue opportunities for growth beyond Geothermal power, part of the company's current strategy. I also like Plutonic's Run of River and Pumped Hydroelectric assets, although until this proposed merger, I was unwilling to buy the company's shares because I felt its balance sheet wasn't strong enough.

Overall, I'm in favor of the deal. Too bad they couldn't have come up with a better name. Apparently "Alterra" means "Other Earth" or "Other land" in Latin, but it doesn't do much for me. I liked both Plutonic and Magma better.

Plutonic shareholders will gain an instant 32% premium on their shares, while the shareholders of both companies can look forward to steadier growth.


The Magma/Plutonic Merger | Alternative Energy Stocks

NHA Annual Conference: Hydropower leaders say hydro is gaining momentum

WASHINGTON, D.C., U.S. 4/5/11 (PennWell) --
Hydropower is a clean, efficient renewable energy source that is poised to play a larger role in the nation's renewable energy portfolio, U.S. Sen. Lisa Murkowski told hundreds of hydropower professionals gathered at the 2011 National Hydropower Association Annual Conference in Washington, D.C.

The senator's NHA address followed on the heels of her introduction of the bipartisan Hydropower Improvement Act of 2011, which is aimed at boosting U.S. hydropower generation.

"I am a strong, strong hydro proponent," Murkowski, R-Alaska., said, noting that her home state gets about one quarter of its power from hydroelectric generation. "I consider hydro to be one of our hardest working renewable resources."

Senator Murkowski, R-Alaska, is the current ranking member on the Committee for Energy and Natural Resources.

A record-breaking crowd of more than 570 hydropower industry professionals are gathered at the Capital Hilton for the 2011 National Hydropower Association Annual Conference. The event began April 4 and lasts through April 6.

A wide range of activities, meetings and sessions are planned for the NHA conference, covering many aspects of the hydropower industry. Subjects range from legislative and regulatory issues to dam safety and security, small hydro, pumped-storage hydro and an array of other topics.

Department of the Interior Assistant Secretary Anne Castle and Federal Energy Regulatory Commission Commissioner John Norris were among the industry leaders to address NHA conference attendees during the event's opening session.

Castle cited a recent DOI internal study that shows the department could generate up to one million megawatt hours of electricity annually and create jobs by adding hydropower capacity at 70 of its existing facilities.

"We clearly recognize the importance of the hydropower resource," she said, noting that inter-agency cooperation will play an important role in further developing hydropower's role in the nation's renewable energy mix.

FERC Commissioner Norris said increased generation from hydropower and other clean energy sources will diversify domestic energy production and lower dependence on foreign energy.

"There is great opportunity for hydro moving forward," Norris said, noting that "We are in a period of transition in our energy economy."

Prior to the start of this year's NHA conference, FERC and the U.S. Army Corps of Engineers signed an updated memorandum of understanding to ensure timely review of non-federal hydropower development applications.

NHA Executive Director Linda Church Ciocci and NHA President Andrew Munro said hydropower is gaining momentum and is ready to take a leading role in America's renewable energy mix.

"This is a historic time," Munro said. "It's a new era for hydro."

For more hydropower news and information, click here

NHA Annual Conference: Hydropower leaders say hydro is gaining momentum

Wind power output plummeted in 2010 with intermittent lows

A provocative new analysis of the UK’s wind power has indicated that the resource is considerably more intermittent than previously thought and that pumped storage hydro power cannot adequately be used to compensate for its fluctuations.

The analysis of UK wind generation was conducted with support from John Muir Trust, a UK-based charity dedicated to nature, to examine frequently made claims that the intermittency of wind power is mitigated by the ubiquity of the resource.

The study, which looked at wind energy supplied to the UK National Grid over 2010 and the start of this year, showed that wind energy generation ran at below 20 per cent of its rated capacity for more than half of the period compared to an anticipated average of close to 30 per cent.

The study’s findings for 2009 contrast with assertions that wind turbines generate on average 30 per cent of their rated capacity in a year, though not starkly, but the picture dimmed in 2010 when wind energy output fell further.

The average energy output from wind during the period was 27.18 per cent of metered capacity during 2009, compared with 21.14 per cent in 2010, averaging out at just over 24 per cent in the full period between 2008 and 2010.

The findings of the study point to the intermittency of wind as an energy resource, showing that wind generation was less than ten per cent of installed capacity for one third of the period examined.

Bringing the point home, the analysis found that in one day in late March 2011, the entire wind output for farms with a nameplate capacity of more than 3GW was just 9MW, while the average output from the resource during that month was 22 per cent.

For the equivalent of one in every 12 days examined, wind energy generation was running at less than 2.5 per cent of its full capacity, receding to below 1.25 per cent of full capacity for one day in every month.

The report said that wind output was particularly low at the four highest periods of peak demand in 2010, producing power at between 2.51 per cent and 2.59 per cent of metered capacity. Extremely low instances of wind were indiscriminate of seasons, according to the report, and not simply confined to winter months.

The authors of the report have warned the frequency of falling wind energy generation in the UK indicates that a major reassessment of the capacity credit of wind power is required.

On a more positive note the study found that wind output rose during March 2011 to in excess of 100MW and up to 166MW, but these moments were coupled with short drops in wind power output, indicating the need for a reassessment of the suitability of wind power to stimulate the output fluctuations of thermal power plants.

It also looked at whether pumped storage hydro can be used to fill an energy generation gap during prolonged periods of low wind.

But causing more reason for concern, the study found that the entire pumped storage hydro capacity in the UK can only provide back-up power for up to 22 hours, before the systems run out of water. The country’s pumped storage hydro capacity can provide up to about 2.78GW of power for up to five hours, which drops to just over 1GW before running out of the resource.

Wind power output plummeted in 2010 with intermittent lows

Hydroelectric Energy Advantages and Disadvantages « Green World Investor

Hydro Power is one of the largest sources of energy accounting for roughly 20% of the worldwide demand of electricity and for well resourced countries it accounts for majority of the energy.For Paraguay 100% of the electricity comes from hydro power and lot of it is exported as well.Compared to other sources of Energy, Hydroelectric Power is one of the cheapest,non Carbon Emitting,non Polluting,Mature Energy Sources.Hydro Power plants have been developed to almost full potential in developed countries because of their superior characteristics and many more are being constructed by developing countries like China and India.However Hydro Power like all other thins in life suffers from disadvantages as well.The failure of a Hydro Dam can result in massive losses of human life and cause widespread devastation.Large Dams have always been controversial leading to displacement of people and ecology.They have also been cited as the reason for earthquakes due to large land changes.Here is a list of the advantages and disadvantages of Hydro Power

Hydroelectric Energy Advantages

No Fuel Cost - Hydro Energy does not require any fuel like most other sources of energy.This is a huge advantage over other fossil fuels whose costs are increasing at a drastic rate every year.Electricity prices are increasingly rapidly in most parts of the world much faster than general inflation.Price shocks due to high fuel costs are a big risk with fossil fuel energy these days
Low Operating Costs and little Maintenance - Operating labor cost is also usually low, as plants are automated and have few personnel on site during normal operation.
Low Electricity Cost – The Electricity produced from Hydro Power is quite low making it very attractive to construct hydro plants.The payback period is estimated to be between 5-8 years for a normal hydro power plant.Hydro Plants also have long lives of between 50-100 years which means that they are extremely profitable
No Greenhouse Gas Emissions/Air Pollution – Hydroelectricity does not produce any GHG emissions or cause air pollution from the combustion of fossil fuels unlike coal,oil or gas.This makes them very attractive as a source of cheap,non carbon dioxide producing electricity.
Energy Storage – Pumped Hydro Storage is possible with most of the hydro power plants.This makes them ideal storage for wind and solar power which are intermittent in nature.Hydro Dams can be modified at low costs to allow pumped storage.
Small Size Possible - Hydroelectricity can be produced in almost any size from 1 MW to 10000 MW which makes it very versatile.Small Hydro Plants are being encouraged by government as they cause less ecological affects than large hydro plants.Even micro hydro plants are possible
Reliability - Hydro Power is much more reliable than wind and solar power though less than coal and nuclear as a baseload source of power.Hydroelectricity is more or less predictable much in advance though it can decrease in summer months when the water is low in the catchment areas.
High Load Factor - The Load Factor for Solar and Wind Energy ranges from 15-40% which is quite low compared to Fossil Fuel Energy.Hydroelectricity on the other hand has a load factor of almost 40-60% .
Long Life - Hydro Plants has a very long life of around 50- 100 years which is much longer than that of even Nuclear Power Plants.The long life implies that the lifecycle cost of a Hydel Power Plant becomes very low in the long term
Hydroelectric Energy DisAdvantages

1) Environmental, Dislocation and Tribal Rights - Large Dam construction especially in populated areas leads to massive Tribal Displacement,Loss of Livelihood and Religious Infringement as potentially sacred Land is occupied by the Government.

2) Wildlife and Fishes get Affected - The Fishes are the most affected species from Dam Construction as the normal flow of the river is completely changed form its river character to a lake one.Submergence of land also leads to ecological destruction of the habitat of land based wildlife.

3) Earthquake Vulnerability – Large Dam Construction has been linked to increased propensity of Earthquakes.Massive Earthquakes in China and Uttarakhand in India were linked to the building of Massive Dams in these countries

4) Siltation When water flows it has the ability to transport particles heavier than itself downstream. This has a negative effect on dams and subsequently their power stations, particularly those on rivers or within catchment areas with high siltation

5) Tail Risk,Dam Failure - Because large conventional dammed-hydro facilities hold back large volumes of water, a failure due to poor construction, terrorism, or other cause can be catastrophic to downriver settlements and infrastructure. Dam failures have been some of the largest man-made disasters in history.The Banqiao Dam Failure in Southern China directly resulted in the deaths of 26,000 people, and another 145,000 from epidemics.

6) Cannot be Built Anywhere - This disadvantage of Hdyro Energy is present with other forms of Energy as well.Some forms of Energy are just better suited to some places.For example you can’t build a nuclear plant on top of an earthquake prone region,you can’t build a wind farm near the Dead Sea etc.Hydro Energy can only be built in particular places though enough of those places exist globally

7) Long Gestation Time - The time to construct a large hydro power project can take between 5-10 years which leads to time and cost overruns.

www.esi-africa.com | Canada intent on producing more hydro-power

An African perspective on Canada's involvement in hydroelectric power production.

Ottawa, Canada --- ESI-AFRICA.COM --- 22 February 2011 - Ambitions for a better economy and a need for more clean energy in the United States are driving Canada's efforts to fund and expand its hydro resources.

Canada is already the world's second-largest hydropower producer behind China, and it is bent on producing more, driven by its potential for hydropower generation and demands for more clean energy in the U.S.

It's a major element of Canada's plan to boost its economy, as lawmakers attempt to wean the country off coal-fired power through landmark legislation that encourages the development of renewable energy, especially hydropower.

“The federal government is intending to introduce legislation to reduce emissions pretty significantly from coal-fired plants,” said Canadian Hydropower Association chairman Colin Clark. “I think that creates an opportunity for hydropower.”

In the U.S., where restrictions on carbon emissions are pending and demand is growing, there's a big market for Canada's hydropower resources, he adds. A handful of deals to export that power to the U.S. have already been made and more are looming.

“The U.S. is constrained in how it can develop its own generation systems because of uncertainty around carbon,” said Dan McCarthy, president and CEO of Black & Veatch Water. “Canadian hydro companies have an opportunity to take advantage of that uncertainty and get some power purchase agreements in place.”

Hydro-Quebec and Public Service of New Hampshire plan to build a 140-mile transmission line that will bring up to 1 200MW of Canadian hydropower to central New Hampshire. In another agreement, Hydro-Quebec will provide up to 225MW of hydropower to two Vermont utilities, Central Vermont Public Service and Green Mountain Power, for 26 years beginning in 2012.

Canada, home to about 475 hydro-electric plants with a capacity of 70 000MW, produces about 355 terawatt-hours of hydropower each year. But the country’s untapped potential is far greater.

According to a study commissioned by the Canadian Hydropower Association, Canada has 163 000MW of untapped hydropower potential ‒ more than twice the country's existing hydropower capacity.

Already, hydropower accounts for 60% of Canada's electricity consumption. That number is sure to rise as construction of several new hydro-power plants near completion while more coal-fired plants are shuttered in the name of clean air.

Coal's hidden costs top $345 billion in U.S.: study | Reuters

By Scott Malone

BOSTON | Wed Feb 16, 2011 11:57am EST

(Reuters) - The United States' reliance on coal to generate almost half of its electricity, costs the economy about $345 billion a year in hidden expenses not borne by miners or utilities, including health problems in mining communities and pollution around power plants, a study found.

Those costs would effectively triple the price of electricity produced by coal-fired plants, which are prevalent in part due to the their low cost of operation, the study led by a Harvard University researcher found.

"This is not borne by the coal industry, this is borne by us, in our taxes," said Paul Epstein, a Harvard Medical School instructor and the associate director of its Center for Health and the Global Environment, the study's lead author.

"The public cost is far greater than the cost of the coal itself. The impacts of this industry go way beyond just lighting our lights."

Coal-fired plants currently supply about 45 percent of the nation's electricity, according to U.S. Energy Department data. Accounting for all the ancillary costs associated with burning coal would add about 18 cents per kilowatt hour to the cost of electricity from coal-fired plants, shifting it from one of the cheapest sources of electricity to one of the most expensive.

In the year that ended in November, the average retail price of electricity in the United States was about 10 cents per kilowatt hour, according to the Energy Department.

Advocates of coal power have argued that it is among the cheapest of fuel sources available in the United States, allowing for lower-cost power than that provided by the developing wind and solar industries.

"The Epstein article ignores the substantial benefits of coal in maintaining lower energy prices for American families and businesses," said Lisa Camooso Miller, a spokeswoman for the American Coalition for Clean Coal Electricity, an industry group. "Lower energy prices are linked to a higher standard of living and better health."

HEALTH, ENVIRONMENTAL FACTORS

The estimate of hidden costs takes into account a variety of side-effects of coal production and use. Among them are the cost of treading elevated rates of cancer and other illnesses in coal-mining areas, environmental damage and lost tourism opportunities in coal regions where mountaintop removal is practiced and climate change resulting from elevated emissions of carbon dioxide from burning the coal.

Coal releases more carbon dioxide when burned than does natural gas or oil.

The $345 billion annual cost figure was the study's best estimate of the costs associated with burning coal. The study said the costs could be as low as $175 billion or as high as $523 billion.

"This is effectively a subsidy borne by asthmatic children and rain-polluted lakes and the climate is another way of looking at it," said Kert Davies, research director with the environmental activist group Greenpeace. "It's a tax by the industry on us that we are not seeing in our bills but we are bearing the costs."

The estimates came in the paper "Full cost accounting for the life cycle of coal," to be published in the Annals of the New York Academy of Sciences. Epstein discussed his findings on the Arctic Sunrise, a 164-foot-long (50 meter long) icebreaker operated by Greenpeace, and moored in Boston Harbor.

Leading users of coal in the United States include utilities American Electric Power Co Inc and Duke Energy Corp. The top producers include miners Arch Coal Inc, Consol Energy Inc, Peabody Energy Corp and Alpha Natural Resources.

Coal's hidden costs top $345 billion in U.S.: study | Reuters

Ontario’s offshore wind ‘flip-flop’ draws industry ire - The Globe and Mail

Ontario’s decision to put the brakes on all offshore wind power is drawing criticism from businesses behind several major wind projects in the province.

Executives in the renewable sector say the province's dramatic reversal, which effectively killed offshore plans, is highly damaging to Ontario's reputation as a leader in renewable energy. It also risks denting investment in an industry that was on the upswing as a result of the province’s green-energy policies.

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The McGuinty government announced late Friday that it will not allow any offshore wind projects to proceed until further scientific research is conducted into its environmental impact. The surprise decision drew praise from turbine opponents who are concerned over health effects and visual blight, but scorn from environmentalists and businesses that support renewable power.

Even though the policy change does not affect onshore wind projects or other renewables such as solar power, the fact that the government changed its policy so suddenly on offshore wind is enough to scare off investors from green energy projects, said John Kourtouff, president ofTrillium Power Wind Corp., which has been considering four large wind projects in the Great Lakes and has one in an advanced planning stage.

“This destroys Ontario’s credibility globally,” he said. “Nobody will touch Ontario for many years in renewables.”

Ontario Energy Minister Brad Duguid said in an interview on Wednesday that despite the reversal, the government remains fully committed to “building out renewables.” The province is determined to become a “clean energy global powerhouse,” he said, and only a tiny fraction of green energy was going to come from offshore wind.

But other executives in the sector sided with Mr. Kourtouff, arguing that Ontario’s decision could put a damper on investor enthusiasm.

“Anything can shake investor confidence, and there is really nothing worse than a government policy reversal,” said John Keating, chairman of Alberta-based startup BluEarth Renewables Inc. and former chief executive officer of Canadian Hydro Developers Inc., which was Canada’s largest independent renewable energy firm before it was bought by TransAlta Corp. in 2009.

The turnaround is especially problematic, Mr. Keating said, because Ontario was considered enlightened by environmentalists and developers. Now that reputation is in tatters.

“I was surprised and somewhat shocked, because the government has steadfastly supported its Green Energy Act since its introduction,” Mr. Keating said. Now, there is “increased risk” that other changes might be made to the rules, he said. “It sends a bad signal.”

Ian Kerr, vice-president of Canadian development at Brookfield Renewable Power Inc., (BRC.UN-T21.920.070.32%) said Ontario’s “flip-flop” raises questions about the stability of the province’s energy policies. “I can see some potential entrants, even in other sectors of the renewable industry, holding off on investment because of that,” he said.

The one company that had already signed a contract to supply power to the Ontario energy grid from an offshore project has said little about its plans since last Friday’s announcement.

“We’re assessing our options,” said Nancy Baines, finance director atWindstream Energy Inc., adding that the company was disappointed and surprised by the government’s move.

Windstream had a contract to sell the province 300 megawatts of power from a series of turbines offshore of Kingston, although it had not yet gained approvals from Ontario’s Natural Resources or Environment ministries. The contract is now dead.

For Trillium, a company built entirely on the prospect of constructing wind projects in the Great Lakes, the province’s decision is nothing less than a disaster.

“They are destroying the entire industry,” Mr. Kourtoff said. “This isn’t a moratorium, this is a St. Valentine’s Day massacre of the offshore wind industry in Ontario.” The industry had the opportunity to be a leader in fresh water wind power, he said, and there was the potential to create thousands of jobs.

Mr. Kourtoff said he is considering legal action against the government if his company does not get some form of compensation from Ontario.

He said he thinks Ontario’s decision was purely political, designed to appease voters concerned about wind power ahead of a provincial election, and had nothing to do with environmental concerns.

“If you are 28 kilometres out in the middle of the lake … and you’re on bedrock, there are no environmental issues that are problematic here.

Ontario’s offshore wind ‘flip-flop’ draws industry ire - The Globe and Mail

Abitibi hydro assets sold to unnamed buyer - Kenora Daily Miner and News - Ontario, CA

Abitibi hydro assets sold to unnamed buyer

By By Bob Stewart

Posted 1 day ago

AbitibiBowater has reached an agreement with a buyer for its Ontario hydro-electric assets which include power dams in Kenora, Fort Frances and Iroquois Falls.

The company released few details about the deal in a brief statement Friday. The buyers are were unnamed, described only by the company as "a major Canadian institutional investor and a private Canadian renewable energy company."

The hydro assets, spun off as a separate company called ACH LP in 2007, are co-owned 75/25 by Abitibi and Quebec pension fund Caisse de Depot et Placement du Quebec. ACH was valued at $640 million at the time of the sale.

The eight hydro-electric stations that make up ACH LP have a combined installed capacity of 137 MW, with a generating capacity of 131 MW and annualized production of 828 gigawatt hours. The stations include two in Kenora, one at the Fort Frances mill, two remote stations at Sturgeon Falls and Calm Lake in the Rainy River District, a station at Iroquois Falls and two remote stations in that region at Twin Falls and Island Falls.

As part of the ownership deal the company struck with the Caisse de Depot, it will also be selling its 25 per cent stake in ACH to the buying consortium.

In its news release the company said it will net $300 million in cash from the sale of which $100 million will immediately be applied to pay down company debt.

AbitibiBowater also noted its debt to Caisse de Depot of $250 million stemming from financing for the creation of ACH in 2007 will remain on the company books.

As a condition of the sale long-term power purchase agreements for the company's mills in Iroquois Falls and Fort Frances will also remain in place.

"We intend to protect the cost structures of the Iroquois Falls and Fort Frances mills and remain committed to reducing costs," noted Abitibi president Richard Garneau.

The sale of its the Ontario hydro assets comes after the company emerged from credit protection in Canada and the U.S. this year.

Between April 2009 and December of 2010 the company sold $940 million in assets including its $615 million stake in group of Quebec hydroelectric stations. When it emerged from creditor protection overall debt had been reduced to $850 million from $6.8 billion. Most of the reduced debt was settled by swapping debt of equity in new stock issue with unsecured creditors.

The hydro sale will require government approval and other conditions being met said the company, a process it expects to take about 60 days.

Municipal officials in Iroquois Falls have expressed concerns about the sale since the company announced it was looking for a possible buyer last year.

Earlier this month Iroquois Falls Mayor Gilles Forget said he would oppose any sale as he feared it would eventually mean an end to the low cost power supply the hydro dam supplies the mill in his community.

Forget said he would taking his case to the provincial government which holds the water lease required to generate power at the dams.

Forget said the dams have always allowed the Iroquois Falls operation to be a cost-efficient mill. Without them, he said, it lose its power advantage.

"I was quite vocal in telling him (Abitibi CEO Richard Garneau) that I was going to try and stop the process and the sale and I would fight this right to the end," Forget said.

The company will also have to satisfy Fort Frances of the security of its open-ended arrangement for a block of power, or the cash equivalent, it receives from the ACH power station there. As part of the original mill construction plans in Fort Frances begun in 1905, the municipality approved the transfer of water rights to the mill in exchange for 4,000 horsepower (3 MW) of electricity to be supplied annually to the town at a nominal cost. That arrangement, worth about $2 million annually to the town's residents in reduced electrical bills these days, was confirmed in a Supreme Court of Canada decision in 1983 when Boise Cascade, the mill and dam owners at the time, attempted to cancel the power supply arrangement.

Abitibi hydro assets sold to unnamed buyer - Kenora Daily Miner and News - Ontario, CA

International Water Power and Dam Construction

Innergex to acquire Cloudworks Energy

15 February 2011

Innergex Renewable Energy Inc has announced it is to acquire Vancouver-based hydroelectric developer Cloudworks Energy Inc for $185M.

Under the terms of the deal, Innergex has agreed to pay approximately $145.7M in cash for the company, with the remainder paid in shares.

The deal means Innergex will acquire a large portfolio of hydroelectric operating facilities and development projects, expanding the company’s asset portfolio and enhancing its growth profile. Cloudworks’ portfolio consists of an interest of 50.01% in six run-of-river hydroelectric facilities with a combined capacity of 150MW; full ownership of 76MW of run-of-river hydroelectric projects under development with 40-year power purchase agreements; and full ownership of run-of-river hydroelectric projects in various stages of development having a potential aggregate installed capacity of over 800MW.

“We are thrilled with the acquisition of Cloudworks”, said Mr. Michel Letellier, President and Chief Executive Officer of Innergex. “Cloudworks’ assets will further diversify our revenues and increase our installed capacity by as much as 23% (from 326 MW to 401 MW)”.

Innergex has previously partnered with Cloudworks for the development of its 50MW Rutherford Creek hydroelectric facility.

International Water Power and Dam Construction

Kelly McParland: Ontario quietly reverses field on wind, solar energy | Full Comment | National Post

Kelly McParland: Ontario quietly reverses field on wind, solar energy | Full Comment | National Post

Times of international turmoil are great moments for domestic governments to make important announcements they don’t want to be noticed. Especially if the announcement involves a sudden reversal in policy that could seriously embarrass the government.

So Friday afternoon was an ideal time for Ontario’s Liberal government to take a big chunk of its alternative energy program and chuck it overboard. Attention was riveted on Egypt, where spectacular events were unfolding.  The perfect opportunity for Premier Dalton McGuinty to engineer yet another major reversal, while paying a minimal price among voters.

After years of touting wind projects as a critical piece of the alternative energy puzzle, the government let slip — very quietly — that offshore wind projects are no longer part of the game plan. Turns out there just isn’t enough scientific evidence that offshore wind projects do a lick of good, said Brad Duguid, the energy minister.

“It’s simply a case of recognizing we need to take a closer look at the science on freshwater offshore wind projects,” said Duguid. “Right now there’s only one in the world we’re aware of, in Sweden. There’s a number of issues that need to be looked at before anything could ever be considered for approval.”

Gee, now wouldn’t you think the government would have checked out the sciencebefore insisting wind power was the way of the future? Evidently not. The McGuinty people have been pushing ahead vigorously on the wind front ever since they concluded they could squeeze more votes from trendy enviro-enthusiasts, who are in favour of anything that sounds remotely Greenish, whether it makes sense or not.

They’ve been running into a spot of bother, though, as rural residents grow increasingly agitated at the monster wind towers being slapped up wherever the government sees fit to put them. Turns out the government may have been a bit rash in dismissing complaints that the low-level noise from the turbines can cause health problems. A court challenge launched late in January claims that the 550-metre minimum setback is far too close for comfort, and argues the government didn’t do adequate homework into the potential health hazards when it declared the towers to be free of any danger.

Added to McGuinty’s problems with wind are similar signs of trouble on the solar front. After strongly encouraging individual solar projects, and offering outrageously generous pricing on solar-generated power, the province unexpectedly announced last summer it was slashing the rate it would pay  on some projects.  On Friday, hundreds more Ontarians were told that installations they’d erected at the behest of the government can’t be connected to the provincial grid because of technical problems. Rural residents, some of whom have invested large amounts in solar generating operations, will be left high and dry. The Toronto Star reports:

“I’ve got $70,000 sitting right out in my backyard,” said Brian Wilson, who lives near Belleville, of his 10-kilowatt solar array. “I can go two doors down and they’ve got $70,000 invested, too.”

But they’ve both been told that they can’t connect to the electrical grid because of technical issues.

“It’s a mess,” says Kim Doherty of Farmed Energy Inc., who supplies solar equipment. He started getting calls from clients this week, saying they’d been told no connections are available for their projects.

One of his clients, a father-and-son team near Strathroy, made a $170,000 down payment on solar equipment, and built four concrete support platforms at a cost of $20,000 each, Doherty said

Angering rural voters, and battering your credibility with the environmental crowd,  aren’t great ideas if you run a government that faces an election in eight months. So it’s no wonder that Ontario’s Liberals sought to hide the bad news by releasing it when (they hoped) no one was watching. But the excitement in Egypt won’t last forever, and eventually people will notice that Ontario’s government, once again, has been forced into a humiliating retreat at considerable trouble and cost to individual Ontarians.