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By the Rivers of .  .  . Quebec?

The cheap, green answer to our electricity needs.

Dec 3, 2012, Vol. 18, No. 12 • By ELI LEHRER
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Jake Irving looks excited. Sitting at a table in a noisy Washington, D.C., bistro, he pulls a chart out of a briefcase with a flourish. The numbers are simple: Canada’s untapped, undammed rivers have enough potential to make a serious difference in North America’s energy needs while helping the economy on both sides of the border. 

Generating plant at Niagara Falls, Ontario: More of this, eh?

Generating plant at Niagara Falls, Ontario: More of this, eh?

NEWSCOM

According to data his Canadian Hydropower Association has collected from its members, Canada has an estimated 163,000 megawatts of untapped hydro capacity: enough to meet any expected increases in U.S. demand for electricity, enough to transform about a third of the U.S. vehicle fleet to electrical power or to replace many scheduled-for-retirement power-generating plants. “This,” he tells visitors, “is where we’re going.” Irving has every reason to act the cheerleader, but hardly anybody doubts his fundamental point: Hydropower offers the potential of an energy boom almost as large as the one now associated with natural gas. 

Indeed, hydropower from Canada offers Americans an almost too-good-to-be-true source of energy. It’s clean and renewable like wind and solar power, while being reliable, proven, and cheap like coal and natural gas. In fact, developing more hydropower in Canada for use “down south” appears likely to achieve both the cost and efficiency goals prized by conservatives while satisfying the environmental goals of the political left. For the moment, however, the lack of interest groups that support more hydropower—and the presence (on both sides of the border) of groups that oppose it—makes it difficult to know what will happen, despite potentially massive benefits for the U.S.  economy. 

Hydropower is cheap and reliable. Only coal has the potential to be cheaper, and ongoing Obama administration regulations seem sure to make coal plants far more expensive—if they continue to exist at all. Places in North America like Quebec, Manitoba, and Idaho, where almost all power already comes from hydroelectricity, pay between six and seven cents per kilowatt hour, while areas like New York, California, and Ontario that have pursued “all of the above” energy strategies sock customers with bills ranging from 14 to 17 cents per kilowatt hour. Furthermore, existing power transmission lines make it surprisingly easy to send power to the United States from Canada. Manitoba, for -example, has high-capacity lines that connect it to Minnesota to its south, but not to Ontario to its east. 

While not environmentally harmless—no form of energy is—hydropower is among the most -earth-friendly energy sources around. It doesn’t require digging anything out of the ground and produces no emissions of particulates or greenhouse gases in the course of actual power generation. Building dams, it’s true, interrupts rivers, disturbs wildlife habitat, floods significant areas, and releases greenhouse gases when vegetation dies. Placing dams in Canada interrupts rivers, of course, but the areas likely to be flooded are very sparsely inhabited, have little rare wildlife, and will release far fewer greenhouse gases than would less icy areas. 

Hydropower’s track record is also by far the longest of any renewable power source. Water-powered mills existed in antiquity, and water has generated electricity since the 1870s. (Most large U.S. utilities can trace their histories back to hydro-power companies.) Unique among significant sources of power, hydro plants can also be turned on and off in minutes when demand spikes or plummets. 

In short, untapped hydropower in Canada is vastly more promising than any other form of emissions-free energy. The 25,000 megawatts of new hydropower already under construction or advanced planning in Canada, none of it requiring direct subsidies, is greater than the 21,000 megawatts of wind power that the United States has built (largely with funds from the stimulus bill and other efforts) since 2008. In addition, Canada’s untapped hydropower is enough to more than replace the 255,000 megawatts of coal-generating capacity that the United States has taken offline since 2008 because of obsolescence, new environmental regulations, and low natural gas prices.

Despite all of hydro’s advantages, there’s no plan to build new river dams in the United States. The reason is simple: There’s no good place to do it. Even the U.S. National Hydropower Association admits as much. While it talks of doubling U.S. hydropower with a variety of efforts (many of them requiring subsidies and tax credits), all but a minuscule fraction of the proposed increase would come from adding generators and capacity to existing dams to explore thus-far-unproven sources like tidal power and pumping excess capacity into storage areas. This additional power, although clean and thus satisfying to some environmental groups, remains undeveloped absent subsidies because, in many cases, it would be just as expensive as trendy renewables like wind and solar power. 

U.S environmental groups aren’t enthusiastic about building more dams, but even those that typically oppose dams say that more hydropower could make sense, particularly if it displaces dirtier forms of fuel. “If there aren’t renewable projects built, we’re never going to get out from fossil energy in the United States,” says John Seebach of the group American Rivers, which has often led opposition to dam projects. “The only power source that hurts rivers more than hydro is coal.” 

For all the great possibilities, however, bringing in more hydropower from Canada isn’t a sure thing. Even Jake Irving admits “these aren’t all going to happen” when looking at his own association’s predictions of new capacity. Furthermore, building lots of dams in Canada does nothing to satisfy the Obama administration’s sure-to-continue quest for “green jobs.” In fact, precisely because it’s so cheap to produce, increased hydropower capacity could well displace American jobs in high-cost wind and solar power. 

Indeed, the broad benefits of cheap power and a cleaner environment overall might even paradoxically be seen as a barrier to hydropower development. The most important real gains from developing hydropower will be distributed so widely that they’ll tend to boost living -standards for almost everyone rather than offering any particular group in the United States a huge payday. (Canadian construction interests will reap that reward.) Although untapped hydro capacity is enormous, it’s not enough to replace more than a fraction of coal plants that environmentalists and their allies in the Obama administration want to see eliminated. And, for those who want “energy independence” for the United States, building dams in another country obviously doesn’t achieve it.

Financing a big hydro expansion is also a challenge. All of the biggest Canadian hydroplant owners are “crown corporations”—government-supported enterprises—that the various provincial governments own and control. While all are generally profitable, they exist partly for public purposes and thus might well be stopped from making potentially risky investments largely for the benefit of people who aren’t citizens of their provinces, or even their country. Thus, the companies with the experience, knowledge, and political juice to get a massive number of projects built don’t necessarily have a motive to begin doing so. 

Nonetheless, building hydroelectric power plants in Canada—lots of them—offers a rare win-win situation for America’s energy future. Indeed, it’s by far the most economically viable form of green energy and a rare opportunity to meet the energy goals of both left and right.

Eli Lehrer is president of R Street.


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