Energy strategy could help rural Manitoba

Rather than being a solution to provide lower costs and prices, the Hydro monopoly has become a barrier to innovation

Manitoba’s energy strategy is inconsistent with current and future sustainable and renewable energy priorities. Overreliance on hydro-electric power from the Nelson River is no longer competitive, and is steadily increasing huge debts to be borne by future taxpayers/hydro customers. In particular, provincial policy and existing legislation does not encourage local rural solutions.

A fresh review of Manitoba’s energy strategy is needed, and a moratorium on current generation and transmission construction should be declared immediately, to avoid further excess costs. Ideally, surplus electricity might be sold to Saskatchewan and/or Alberta to offset some portion of their coal generation to meet climate objectives. In this case, Bipole III could be diverted north of Dauphin (or even near The Pas) to serve western markets. It certainly isn’t needed now within Manitoba.

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In recent years Manitoba has generated surplus electricity and often sold it at garage sale prices. Consequently, this dramatically increased provincial debt guarantees, and raised public concern about the viability of current projects.

Cheaper options

This is now an industry faced with a wide range of competitive production options that produce cheaper energy than that generated in Manitoba’s north which has to be transported over long distances.

Small-scale clean energy options, including solar, wind and geothermal systems can now provide opportunities for farm and small communities to generate much of their own power at lower generation and delivery costs.

Within Manitoba’s agricultural areas, Manitoba Hydro’s current generation and grid system can offset any low production periods due to lack of wind or sunlight locally. Excess production could be used either to flow back into the grid (if Manitoba Hydro would accept it and pay for it), or be used to produce hydrogen either on site or by Hydro.

A recent announcement by Toyota indicates they expect to have all their models fuelled by hydrogen by 2050. Hydro now sells surplus power through a “spot market,” but producing hydrogen from water would be more profitable.

There are now many viable options for producing power. These provide opportunities for small generating operations for one farm, or one community, or one industry, or a group of interested parties that have done their homework and concluded that together they can do it cheaper than Manitoba Hydro.

A monopoly such as Manitoba Hydro (subject to overview by a Public Utilities Board) made economic sense in the past. Production and transmission costs under technology existing at the time did not make economic sense to duplicate one or more times, so provisions were made for a large single ownership.

Competition would increase costs, given the huge capital requirements of each individual provider. However, in recent years, this monopoly has actually prevented innovation. Rather than being a solution to provide lower costs and prices, the monopoly has become a barrier to bringing online mixtures of power generation and transmission options at lower cost to consumers. It blocks the freedom to seek the most attractive production costs to maintain low rates for consumers.

Not viable

Undeveloped capacity on the Nelson River may not be viable for domestic use, but it could serve a new purpose: producing hydrogen from water on a large scale for export. This could accommodate a nuclear generating plant that has “exhaust” in the form of huge amounts of steam/hot water. Using this hot water for hydrogen electrolysis could improve the efficiency of the hydrogen process by 25 per cent. Hydrogen could be exported using existing roads, as the impact of melting segments of discontinuous permafrost could soon render the Churchill railway unserviceable.

The need for a fresh look at Manitoba’s energy strategy is an opportunity to consider an approach to the industry based on new and viable technologies. In addition, Manitoba industries could produce engineering components to link a mixture of energy sources that serve special units of demand, connecting to a grid that absorbs excess power while providing extra power when needed. Small hydrogen production units could also be worked into these local systems. Hydrogen, especially if produced by clean energy, could well become the energy of choice for mobile units (e.g. cars). It emits no greenhouse gases.

Manitoba has reached a multi-route intersection on the road to economically viable renewable and sustainable energy production and delivery in the future. Studies and consultations will be needed, carried out by qualified and objective persons. Their findings could serve as an unprecedented basis for future growth and essential economic underpinning of Manitoba’s economy over the coming decades.

Jim Collinson in an agricultural economist and consultant based in Kanata, Ont.

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