Monday, November 19, 2012

Hydro must compete against natural gas in Manitoba

The proposed investment of $13.4 billion to build two new hydroelectric plants in Manitoba is still up for debate, and the province has asked the Public Utilities Board to give an answer whether building these two new dams is really in province's best interests.

These two hydro projects could give Manitoba more clean energy in years to come, and thus satisfy the growing hunger for energy, not only in province, but in United States too, therefore providing conditions needed for major economic development of the area.

The main opposition to harnessing more hydro resources in province comes from natural gas proponents who argue that natural gas should get more closer look because it represents the cheaper energy option as compared to building new dams. The low natural gas prices have already reduced demand for Manitoba hydropower in United States, and this trend could likely continue in years to come. Canada is also among the world’s largest natural gas producers, and has plenty of natural gas reserves.

Natural gas is cheap because of the increased shale gas extraction, and the recession is still very much present in United States, meaning that the export sales to United States aren't exactly guaranteed, especially short-term speaking.

The destiny of Keeyask and Conawapa dam will be much clearer after the review is over, which should be done by the end of this year. Energy Minister Dave Chomiak explained that this review is standard for new mega-projects, and once done it will give an answer whether natural gas is better alternative to these two hydro projects.

Manitoba's Hydro that plans to build these projects has lost $43 million in the first half of this year. The company announced that these poor business results in the first half of the year were due to the infrastructure cost and reduced export sales, but are still confident to achieve a $30 million profit by the end of the fiscal year.

The Clean Environment Commission is about to held environmental hearings into Keeyask. Underway is also the assessment of Lake Winnipeg water levels.