Canada plans hydropower push as Biden looks to clean up U.S. grid

Canada Energy Partners

09/02/2021 17:24

By Nia Williams and Allison Lampert
    CALGARY, Alberta/ MONTREAL,  Feb 9 (Reuters) - Canada sees
an opportunity in U.S. President Joe Biden's push to achieve a
carbon-free electrical grid by 2035: hydropower exports.
    With Canadian crude exports taking a hit from Biden's
decision to scrap the Keystone XL oil pipeline, Ottawa is
increasingly focused on sales of clean energy.
    Around 60% of the 4 trillion kilowatt-hours of electricity
consumed in the United States in 2019 came from fossil fuels,
government data show. Biden's push to convert that to clean
energy gives Canada, the world's third-largest producer of
hydropower, a window to sell more hydro exports to its southern
neighbour.
    Canadian Prime Minister Justin Trudeau told Reuters last
week the United States is interested in boosting hydro imports.
 urn:newsml:reuters.com:*:nL1N2KA2LK In a separate interview Environment Minister
Jonathan Wilkinson said combining Canada's clean energy with
U.S. wind, solar and geothermal power was a priority for early
talks between the two countries.
    "We do think that's a big economic opportunity," Wilkinson
told Reuters.
    A White House spokesman, asked about Canadian hydro exports,
said the new administration is "leaving no sources of renewable
energy off the table."
    Canada generated about 440 billion kilowatt-hours from
hydropower in 2020, just over half its maximum installed
capacity. Canada's electricity exports to United States dropped
in 2019 to a six-year low of 47 billion kilowatt-hours, worth
C$1.9 billion ($1.5 billion), influenced by factors like water
levels and domestic demand, Canada Energy Regulator specialist
Matthew Hansen said.
    While a massive U.S. effort to build renewable energy
infrastructure might meet Biden's targets, an interconnected
grid and sharing resources with neighbouring countries would
keep energy more affordable, said Steve Clemmer, director of
energy research and analysis with the U.S.-based Union of
Concerned Scientists.
    "Having the hydro from Canada gives some more flexibility to
control costs," Clemmer said.
    
    POWER STORAGE
    Hydro Quebec, Canada's largest electricity producer, has
already been working to advance two new high-voltage lines to
neighbouring New England and New York.
    "We share Prime Minister Trudeau's optimism and we are
enthused by President Biden's commitment....as we believe HQ can
play a major role in our neighbours' decarbonisation efforts, at
the lowest cost possible to rate payers," said Hydro Quebec
spokeswoman Lynn St-Laurent.
    When more renewable energy comes online, power storage
facilities that Canada's reservoirs provide to the U.S. grid
should become even more valuable, experts said, noting
reservoirs can function like giant batteries. When demand is low
but the sun is shining or wind is whipping, the power generated
can pump water for release later to run a turbine when
electricity is needed.
    "There's this version of Canadian hydro not only being firm
(capacity) but being something like a battery. That's the big
picture informing the vision of some policymakers," said Justin
Gundlach, senior attorney at the New York University School of
Law's Institute for Policy Integrity.
    Potential problems include integration of cross-border
grids. Local communities often object to efforts to build more
high-voltage transmission lines. Another worry: provincial
utilities may be leery of long construction times for power
projects and lack of finalised U.S. clean energy regulations.
    Hydro Quebec's proposed New England Clean Energy Connect
project has secured state and federal permits but could face a
fall referendum. Opponents, including the Natural Resources
Council of Maine, argue it will displace U.S. clean energy
projects at a time when Biden is touting domestic production.
    "We hope that facts, science and trust in the robust
regulatory review of the project will prevail," Hydro Quebec's
St-Laurent said, adding other projects would not reduce
emissions on the same scale as quickly. 

        ($1 = 1.2751 Canadian dollars)

 (Additional reporting by Steve Scherer in Ottawa and Valerie
Volcovici in Washington; Editing by Denny Thomas and David
Gregorio)
 ((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters
Messaging: nia.williams.thomsonreuters.com@reuters.net))