Canadian Hydro: Canada’s Hydropower Boom

In August 2011, the Canadian government said it would back a loan to fund the first phase of the 3,074-MW Lower Churchill project. Also, an agreement to build the project was approved overwhelmingly by the Innu Nation, ending a decades-old dispute over Churchill Falls Dam.

By Russell W. Ray

Two proposed power stations on Canada’s lower Churchill River in Labrador promise to change the energy landscape in Canada and the eastern U.S.

The Lower Churchill Project calls for the construction of an 824-MW plant at Muskrat Falls, a 2,250-MW facility at Gull Island and 130 miles of subsea transmission that would carry the power around Quebec’s border to Nova Scotia, where it could then be exported to the U.S.

The proposed megaproject, downstream from the 5,428-MW Churchill Falls project, would produce nearly 17 terawatt hours of electricity and reduce greehouse gas emissions by more than 1 million tons annually. It is driven by demands for more clean energy in the U.S. and the potential to produce large amounts of renewable hydropower in Labrador.

The construction of an 824-MW hydropower facility at Muskrat Falls would be the first phase of a 3,074-MW project known as the Lower Churchill.
The construction of an 824-MW hydropower facility at Muskrat Falls would be the first phase of a 3,074-MW project known as the Lower Churchill. (Photo courtesy Nalcor Energy)

The Lower Churchill Project is one of many new hydropower projects that are in some stage of development across Canada. In fact, Canadian utilities plan to spend more than C$50 billion on new hydropower projects in the next 10 to 15 years, adding more than 14,000 MW to Canada’s hydropower capacity.

“We can realistically more than double the amount of hydropower in Canada,” said Ed Wojczynski, chairman of the Canadian Hydropower Association and manager of project development for Manitoba Hydro. “We’re in the process of doing that already.”

If the Lower Churchill Project is built, it is sure to change forever the way electricity is managed, bought and sold throughout the region.

For Newfoundland and Labrador, the 3,074-MW Lower Churchill Project would end the province’s reliance on Quebec’s electric system. For power providers in the eastern U.S., it would be another source to purchase renewable power for U.S. consumers.

The Lower Churchill Project is a development of Nalcor Energy, Newfoundland and Labrador’s crown energy company, and Emra Inc., the parent company of Nova Scotia Power. SNC-Lavalin has been awarded the engineering, procurement and construction management contract. Under the proposal, the Muskrat Falls plant would begin delivering power in 2017.

In August, Canada’s federal government pledged to cover the $6.2 billion cost of the first phase of the Lower Churchill Project — construction of the 824-MW Muskrat Falls plant — with a federal loan guarantee. Nalcor executives said the loan guarantee would lower borrowing costs by about 2 percent.

“Two percent on a billion dollars worth of debt is $20 million per year,” said Nalcor Vice President Gilbert Bennett. “So it’s significant value.”

The Quebec government criticized the federal support, calling it an “unfair advantage” because the rest of the nation’s utilities, including Hydro-Quebec, built their own network of plants and power lines without federal aid.

The project received another big boost in July when the Innu First Nation overwhelmingly approved an agreement that clears the way for the construction of both stations on the Churchill River.

In addition to giving the tribe a stake in the lower Churchill project, the agreement would pay the tribe about C$2 million annually through 2041 for the flooding created by the construction of Churchill Falls Dam in the late 1960s. Under the agreement, the tribe would receive another C$5 million a year for its stake in the Lower Churchill Project.

The Canadian government is providing a loan guarantee for the construction of an 824-MW hydropower project at Muskrat Falls.
The Canadian government is providing a loan guarantee for the construction of an 824-MW hydropower project at Muskrat Falls. (Photo courtesy Nalcor Energy)

Meanwhile, two separate assessments of the Lower Churchill Project have reached two contrasting conclusions.

The first, a review by a panel of Canadian authorities, said the project may not be the best option for meeting the region’s energy demands and pointed to concerns about environmental impacts and the financial claims of Nalcor Energy. The panel found that Nalcor failed to make its case for construction in either economic or energy terms. What’s more, if viable alternatives are found, the first-phase Muskrat Falls project should not be built, the panel indicated in its review.

The second assessment, a study performed by Navigant Consulting for Nalcor Energy, found that the Muskrat Falls project, including new transmission, represents the lowest-cost option for consumers in Newfoundland. Ed Martin, president and chief executive officer of Nalcor Energy, said the Navigant study confirms that Muskrat Falls is the “best option for the future energy supply of the island and provides the best value for electricity consumers.”

Canada, home to about 475 hydroelectric plants with a capacity of 71,000 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.

The biggest obstacle to hydropower development in Canada is the Federal Species at Risk Act, Wojczynski said.

The Canadian act isn’t as flexible as the U.S. Endangered Species Act and Canada’s hydropower industry is working hard to change the law.

“This act is so problematic for my company and other companies,” Wojczynski said. “Everybody agrees that it’s not workable and that it should be changed. From a regulatory point of view, that’s our No. 1 priority in Canada — to improve the Federal Species at Risk Act.”

A permit under the Canadian Species At Risk Act is required for construction activity that may affect listed species. The problem is the permit expires in three to five years, Wojczynski said.

“Most projects take longer than three to five years to construct,” he said. “You’re not even finished with construction and you have to apply for a new permit.”

The Canadian panel that reviewed the Lower Churchill Project recommended that the issues regarding the effects on Red Wine Mountain Cribou be resolved before making a decision to move forward with the project. But that could delay the project indefinitely, Wojczynski said.

“Who knows ho long that will take,” he said.

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.

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 following provides details about some of the project activity in Canada.

Wuskwatim Project to start power production in February

The Wuskwatim Project, a 200-MW run-of-river generating station under construction on the Burntwood River in northern Manitoba, will begin generating power early next year.

“We expect the first of three units to be commissioned in February,” said Wojczynski, the manager of project development for Manitoba Hydro. “It’s a project that involves essentially no flooding and it’s a daily run-of-river. It’s a world-class gem.”

The Wuskwatim Project, a 200-MW run-of-river generating station on the Burntwood River in northern Manitoba, will begin generating power early next year.
The Wuskwatim Project, a 200-MW run-of-river generating station on the Burntwood River in northern Manitoba, will begin generating power early next year. (Photo courtesy Manitoba Hydro)

The low-head design of the project will create less than one half of a square kilometer of flooding, the least amount of flooding of any hydro project in northern Manitoba.

Construction of the C$1.3 billion project began in August 2006 and includes an earthen dam, a three-unit powerhouse, spillway, transmission lines, and a 30-mile access road. Each generating unit has a vertical-shaft, fixed-blade propeller turbine. Although General Electric Hydro was awarded a C$46.2 million contract for the design, manufacture and supply of the three turbines and generators, the units were eventually designed and manufactured by Andritz Hydro.

The spillway has three bays, each 9 meters wide and 16 meters high, and is capable of passing a peak discharge of about 2,650 cubic meters per second.

The project was developed by the Wuskwatim Power Limited Partnership, a joint venture between Manitoba Hydro and the Nisichawayasihk Cree Nation. The Wuskwatim project is the first time Manioba Hydro has entered into an equity partnership with a First Nations Community on a power project.

The project stems from nearly a decade of planning, studies and negotiations between Manitoba Hydro and the Nisichawayasihk Cree Nation.

A consortium known as the O’Connell-Neilson-EBC Partnership performed the general civil construction for the project. Peter Kiewit & Sons Ltd. constructed several cofferdams and did the overburden and initial rock excavation. Andritz Hydro supplied equipment for the project.

Lower Mattagami expansion under way

Ontario Power Generation is adding 440 MW to its Lower Mattagami Hydropower Complex in northeastern Ontario, increasing capacity by 90 percent to 924 MW.

The utility is adding more units to existing power stations at Little Long, Harmon and Kipling, Andritz Hydro was awarded the contract by Kiewit Alarie a Partnership (on behalf of OPG) for the model testing, design, manufacturing and installation of the turbines and generators for these three plants.

In addition, OPG is replacing a fourth generation station, Smoky Falls, with a three-unit, 215-MW powerhouse. The C$2.6 billion project is expected to be completed in 2015. Construction is under way.

A joint venture between Aecon Group Inc. and Peter Kiewit Sons Co. was awarded the C$1.7 billion design-build contract for the project. Alstom Hydro is providing the project three turbine-generator sets under a C$110 million contract signed last year. All three units will be installed at the new Smoky Falls station.

“This is a good example of redevelopment work that utilizes the best of Alstom’s capabilities,” Claude Lambert, president and chief executive officer of Alstom Hydro North America, said during a recent interview. “We will design and supply three new generating units, including propeller turbines, vertical generators, static excitation systems, speed governor systems and protection and control systems.”

During construction, the project will employ about 800 workers annually.

The low-head design of the Wuskwatim project will create less than one half of a square kilometer of flooding, the least amount of flooding of any hydro project in northern Manitoba.
The low-head design of the Wuskwatim project will create less than one half of a square kilometer of flooding, the least amount of flooding of any hydro project in northern Manitoba. (Photo courtesy Manitoba Hydro)

Waneta Project on schedule

Last fall, construction began on a 335-MW powerhouse immediately downstream of Waneta Dam and its existing powerhouse on the Pend d’Oreille River. The new powerhouse is expected to begin commercial production in the spring of 2015.

So far, the project remains on schedule, as workers move forward on the excavation of the intake, powerhouse and tunnels for the C$900 million project.

The new powerhouse will share the existing dam’s hydraulic head and will produce power from flow that would otherwise be spilled.

The project is being developed by Fortis Inc. in partnership with Columbia Power Corp. and the Columbia Basin Trust. The power will be sold under long term agreements to BC Hydro and Fortis BC Inc.

“The Waneta Expansion will substantially resolve capacity shortfall issues for Fortis BC and will enable Fortis BC to serve its customers with long-term, reliable electricity from a renewable resource,” said Stan Marshall, president and CEO of Fortis Inc.

Voith Hydro is supplying the turbine, generator, governor and excitation equipment for the expansion project. A joint venture between Aecon Group Inc. and SNC-Lavalin Group Inc. was awarded the design-and-build contract for the project.

Construction camp being built for 695-MW Keeyask station

A 15-mile access road and camping facilities for the construction of the 695-MW Keeyask Project are now under construction in northern Manitoba.

The C$5.6 billion project on the lower Nelson River will be built upstream of Manitoba Hydro’s existing 1,220-MW Kettle Generation Station near Gillam. The first of seven units is expected to be placed into service in 2019.

The project is being developed by Manitoba Hydro through a partnership with the Keeyask Cree Nations. The Keeyask Hydropower Limited Partnership will manage the construction and operation of Keeyask. Under the partnership, the Cree Nations will own up to 25 percent of the project.

The project is being built to service new export sales to Minnesota and Wisconsin. Manitoba Hydro is still working to obtain a license and finalize the environmental impact assessment for the project.

La Romaine project to boost power exports to U.S.

At the center of Quebec’s plan to boost export capacity to the U.S. is a 1,550-MW hydropower complex under construction on the Romaine River. The C$6.5 billion La Romaine project along Quebec’s Lower North Shore is expected to be up and running by 2020.

The project calls for the construction of four generating stations capable of producing 8 terawatt-hours a year. Most of the power will be exported to the U.S. Profits from those export sales could reach C$2 billion in the first 12 years, the province estimates.

Hydro-Quebec, the provincially owned utility, agreed to pay Alstom Hydro 70 million euro (US$98 million) to supply and install two 320-MW vertical Francis turbines and related generating equipment for the Romaine project.

In August 2010, Hydro-Quebec signed an agreement with two Vermont utilities, Green Mountain Power Corp. and Central Vermont Public Service Corp., to sell up to 225 MW of power each year for 26 years beginning in 2012.

“This agreement will help ensure a clean, competitively-priced energy future for Vermonters,” said Vermont Gov. Jim Douglas.

Construction begins on Mica project

BC Hydro is adding two 500-MW generators to the powerhouse at Mica Dam at a cost of about C$1 billion. Construction began in May 2011.

The project contractors are Andritz Hydro and Peter Kiewit Infrastructure Group. Peter Kiewit is now placing all concrete necessarty to install the turbine draft tubes.

The space for the draft tubes was excavated when the powerhouse was originally constructed in 1973. Concrete needed for the work will be produced by a concrete batch plant installed in June just below the dam.

Regulators approved the environmental assessment for the expansion in April 2010 after a two-and-a-half-year review. Preliminary construction began in October 2010.

The additional units will boost the plant’s capacity 55 percent to 2,085 MW.

The four existing units can generate up to 1,085 MW. The plant was originally designed to hold six units. Installation of Units 5 and 6 was deferred until the additional capacity was needed.

Unit 5 is expected to be up and running by 2014 and Unit 6 by 2015.

The Mica project, featuring one of the largest earthfill dams in the world, began generating power in 1977.

Russell Ray is senior editor of Hydro Review.

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