Hydropower for a Sustainable Future:
Meeting Electricity Needs with Clean,
Renewable Energy

Submission to the Council of Energy Ministers
September 20, 2005
St. Andrews, New Brunswick

The Canadian Hydropower Association (CHA) is pleased to have this opportunity to provide an update to the Council of Energy Ministers on the status of hydropower in Canada.

The leading source of electricity in Canada, hydropower is clean and renewable, and therefore can meet demand while addressing climate change and fighting air pollution. Hydropower represents close to 60 percent of Canada's total electricity production and accounts for 97 percent of its renewable electricity generation. There are over 450 hydropower facilities in Canada (2002). Every province in Canada, with the exception of Prince Edward Island, has some hydroelectric capacity, the greatest being in British Columbia, Ontario, Newfoundland & Labrador, Manitoba, and Québec, which alone generates almost half of the hydropower produced in Canada.

Hydropower produces no air pollutants that cause acid rain and smog, no polluting or toxic waste by-products, and very few greenhouse gases. Greenhouse gas emissions from hydropower projects in Canada are about 60 times less than those from coal-fired plants and 18-30 times less than natural gas power plants. They are comparable, under a life cycle assessment, to those of other renewable sources of electricity, such as wind power. By replacing greenhouse gas emitting forms of energy such as fossil fuel power plants, hydropower can contribute to the reduction of air pollution and to the control of global warming. Today, Canada accounts for about 2 percent of world greenhouse gas emissions. If coal-fired generation had been developed instead of hydropower, Canada's total emissions would be 60 percent higher than they are today.

Canada exports significant amounts of electricity to the United States. Most of the electricity exported comes from clean, renewable hydropower. These exports primarily serve markets in the United States that rely on coal-fired electricity plants. In this way, hydropower improves air quality and reduces continental greenhouse gas emissions.

Hydropower plants have low operation and maintenance costs, and a very long service life. Therefore, despite high initial investment costs, hydropower remains economical in comparison to other large-scale generating options. Nor is it subject to the high cost volatility associated with gas or oil options.

Canada has large undeveloped hydropower resources. The Canadian Electricity Industry Issues Table estimates that 118,000 MW of hydropower could technically be developed, almost twice the amount in operation1. Québec, Manitoba, Newfoundland and Labrador, British Columbia, and the Northwest Territories in particular, hold significant potential for development - but there is potential available across the country.

The unique operational flexibility of reservoir hydropower, combined with its low emitting and renewable energy source, makes it the best support for the development of intermittent renewables such as wind and solar. As the production of electricity from intermittent sources of renewable energy increases, the need for complementary energy storage systems will also increase.

Despite obvious economic, technical and environmental benefits, strong public support2, and significant potential, hydropower's share of the electricity mix keeps falling and could diminish to 45% by 20203.

In recent years, the development of hydropower has abated because projects face serious regulatory obstacles under the Canadian Environmental Assessment Act (CEAA) and the Canadian Fisheries Act (CFA). Since hydropower competes with thermal electricity, these obstacles to hydropower will result in significantly more fossil fuel generation. For example, because hydropower projects are by nature more capital intensive and require longer construction times than fossil fuel power plants, they are more affected by the uncertainty regarding the outcome, timing and requirements of the environmental assessment process, and by the duplication of work due to insufficient harmonization between provincial/territorial and federal processes.

In addition, the present environmental assessment process puts excessive emphasis on local impacts and does not take into consideration large-scale negative impacts on the environment such as acid rain, smog or global warming, which have serious detrimental effects on the health of Canadians as well as fisheries and forests; that it does not do so privileges fossil fuel power plants over hydropower plants.

The Canadian hydropower industry supports the principle of environmental assessment of development projects; assessment is a critical aspect of good environmental practices. It also supports the principle of reasonable legislation to protect our fisheries. However, changes to the CFA and the CEAA and to their mechanisms of application are necessary to ensure that viable and environmentally acceptable hydropower projects continue to be developed in Canada.

Our recommendations:
  • Create, through a domestic emissions trading system (DET), combined with an equal allocation of permits to new clean electricity generation on the basis of a single national emission standard, an effective price signal in favour of hydropower and other renewable electricity sources
  • Improve harmonization between federal and provincial/territorial processes
  • Further improve the environmental assessment process of the CEAA by adopting regulations and guidelines that will set time limits for all phases of the process
  • Establish clear, timely, predictable processes under CFA and CEAA for the review and authorization of hydropower projects and for the maintenance, modernization and expansion of existing facilities
  • Improve the fish habitat provisions of the CFA and developing regulations to ensure that the permitting process becomes timely, predictable and fair to all categories of energy projects
  • Simplify the studies that are required under CEAA through improved guidelines and practices
  • Ensure that assessments under the CEAA reflect the environmental benefits of low emitting electricity sources
  • Include consideration of economic factors in determining the most appropriate form of mitigation or compensation for projects.

As a clean source of electricity, hydropower can play a significant role in helping Canada meet its international climate change commitments. To do so, regulatory obstacles must be lifted and incentives put in place - or we risk seeing fossil fuel plants displace hydropower to the cost of our health and environment.

1Electricity Industry Issues Table Foundation Paper, 1999.
2Léger Marketing, 2001; Environics 2003.
3Canadian Electric Power Technology Roadmap, 2000