When it comes to renewable energy, hydro should be the future

Affordable power source has advantages over wind and solar, writes Naomi Christensen

The Alberta government’s rapid transition away from coal-fired electricity plants depends a great deal on developing renewable sources to replace them.

It is also a reminder not to overlook the most reliable and affordable renewable option. That option is hydro. An analysis the Canada West Foundation published in June looked at the cost and other variables associated with the renewable electricity options available — wind, solar, biomass, nuclear and hydro. We compared the levelized costs of the various options, which takes into account a facility’s lifespan, utilization factor, emissions intensity and capital and operating costs.

Hydro, thanks to its long lifespan and very low operating costs, is the cheapest source of renewable electricity.

Other renewables, though promising, have less mature technologies that tend to have shorter lifespans and provide power on an intermittent basis.

Yet the province has issued a call for proposals to supply solar electricity beginning in 2018 to government facilities currently supplied by wind-generated power, and asked Alberta’s solar industry to figure out how it could fulfil the contracts.

This would be a major scaling up for solar in Western Canada, which has typically been used for small-scale needs, like powering road signs and individual homes.

The province would do well to balance its desire to encourage new technologies with its own financial challenges.

In our analysis, solar has the highest levelized costs of all electricity options.

There are other barriers to developing solar farms in Alberta, as well, including land-use requirements. Unlike wind turbines, land cannot be used concurrently for both solar panels and agriculture. And, as we have seen with failed projects in Ontario and Quebec, neither wind nor solar farms are immune to public support challenges.

Hydro, which provides just two per cent of electricity in Alberta, has two significant advantages over other renewables: lower cost and greater reliability.

Unlike wind and solar, it provides base load power as reliable as coal or gas.

Its big drawback, however, is the high capital costs of adding capacity. There is potential to develop large-scale hydro on the Slave River in northern Alberta, for example, but the upfront investment is estimated at about $10 billion.

There is an alternative. Alberta could import hydroelectric power from B.C. or Manitoba. Southern Alberta already has an intertie with B.C., and there is capacity to double the line.

Doing so would allow Alberta to offset about 10 per cent of the electricity generated by coal.

Other import options, such as linking to the Site C hydro dam under construction in B.C., or a hydro facility in northern Manitoba, would require the building of new transmission lines. The federal government has shown interest in upgrading the western electrical grid as part of its spending on green infrastructure. Yes, solar is getting better. Technological improvements are bringing down the cost of solar modules.

The dilemma is to what degree a government, as stewards of the public purse, should provide assistance to help a technology become commercially viable. From WestJet to the iPhone, history has shown the marketplace, not government, has the best track record at picking winners.

Where government can really help is in taking care to create rules that do not advantage one technology over any other.

Alberta has a lot of renewable energy options.

All come with different price tags. The right regulatory framework will ensure that the best technology will rise to the top.

Alberta power companies will do best when they make their own choices about which renewables to pursue. If Alberta companies choose to pursue large-scale solar energy and can provide it to consumers at competitive prices, then great.

If wind with a natural gas backup makes sense, let it be so.

If, on the other hand, importing additional hydro holds promise to keeping electricity costs the lowest for Albertans, there is a compelling argument to explore that option first. Naomi Christensen is a policy analyst with the Canada West Foundation, a non-partisan think-tank focused on the concerns of western Canadians.