BC and Manitoba had to borrow hydro because of the drought
Two hydro-rich provinces have been forced to import power from other jurisdictions due to severe drought in Western Canada.
Both BC and Manitoba, where the majority of power is hydroelectric, experienced low reservoir levels that negatively impacted electricity production this fall and winter.
There is no danger in any province that the lights will go out at any time. But scientists say climate change is making droughts more common and more severe, which means more pressure on hydroelectric producers in the coming years.
In BC, many parts of the province are suffering from drought conditions that the federal government classifies as “severe.”
BC Hydro spokesman Kyle Donaldson used the word “historic” to describe the dry conditions, adding the Crown corporation’s large reservoirs in the north and southeast of the province are lower than ever.
While BC Hydro is working to conserve water by drawing on reservoirs in less affected regions of the province, it is also importing more power from Alberta and several western US states.
“These are steps we will continue to take in the coming months,” Donaldson said.
In Manitoba, below normal reservoir and river levels have meant that since October, Manitoba Hydro has periodically increased hydro production by firing its natural gas-fired turbines. Usually, it is used only in the depths of winter to offset the peak demand.
Spokesman Bruce Owen said there is no danger of power outages in Manitoba. The Crown corporation can import electricity from other jurisdictions, such as in high water years it can export the excess power it produces.
But paying to import power — and losing the ability to export excess power to the local market as generators do in high-water years — comes at a cost. Manitoba Hydro is already projecting a financial net loss for the current fiscal year – only the second in the last decade, with another in 2021.
That year, severe drought conditions also reduced Manitoba Hydro’s ability to produce power, and the company ended up posting a $248-million loss.
The 2021 drought also affected hydropower production in the United States, where total generation was 16 percent lower than average, according to the US Department of Energy. At Hoover Dam in Nevada, one of the largest hydro power generators in the US, production fell by 25 percent.
Drought is always one of the biggest business risks for hydroelectricity producers, and companies plan and operate their systems knowing it will happen.
Manitoba’s worst drought on record, for example, was 1940-41, and one of Hydro Manitoba’s principles is that it must be able to provide enough electricity to meet demand if water flows fall again.
But climate change is making once-rare events more common, creating the need for stronger back-up systems.
“If you know that drought conditions are predicted to worsen over time with a changing climate, then hydroelectric systems need to take that into account when they predict how much energy they’ll get. from their hydro system,” said. Blake Shaffer, an associate professor of economics at the University of Calgary who studies electricity markets.
Hydro generators are also facing an increase in electricity demand due to the increase in electric vehicles and the drive to decarbonize the economy.
Manitoba Hydro’s own modeling shows that the province’s electricity demand could double in the next 20 years, and new sources of electricity could be needed in the province within the next decade.
While drought can put a long-term strain on hydro generation, it is less volatile in the short term than wind and solar. That gives hydro producers the ability to choose individual times when they import power, taking advantage of low prices and market conditions.
But Shaffer said to ensure the long-term stability and efficiency of electricity production in Canada, this country needs to invest in more inter-provincial transmission ties.
Additional transmission ties would make it easier for Alberta to send electricity to BC when there is a drought, for example, and for BC to send electricity to Alberta when the wind is not blowing.
“If you’re better at doing something than me and I’m better at doing something than you, we can benefit from doing the thing we’re better at and doing business with each other,” Shaffer said.
“To the extent that (the provinces) don’t really have the same systems, which we don’t, there are benefits to linking.”
This report in The Canadian Press was first published January 29, 2024.