How Canada's other major energy export could light up New England states
Hydroelectricity, Canada’s lesser-known energy export, is helping New England states wean themselves off fossil fuels.
Eco-conscious New England states are shunning hydrocarbon-based energy that dominates Canada’s exports, but are increasingly becoming more receptive to another energy export from their northern neighbours — terawatts of sustainable hydroelectricity from Quebec.
Last week, Maine’s Public Utilities Commission approved a new transmission line connecting Quebec’s hydroelectric projects to the eastern United States. The US$950-million New England Clean Energy Connect (NECEC) project still needs approvals from the Maine Department of Environmental Protection and a U.S. presidential permit from the U.S. Department of Energy.
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If approved, the construction of the 1,200-megawatt transmission line will provide power to consumers in the six New England states at a time when the region’s ageing power plants are set to retire.
Maine’s approval of the project — which also faced criticism from environmental groups as it cuts through pristine Maine wilderness — comes as U.S. President Donald Trump signed two executive orders last Wednesday blunting the power of U.S. states to delay natural gas, coal and oil projects.
State governments in the northeastern U.S. have resisted new natural gas infrastructure projects in recent years, including the Constitution pipeline, that would move gas sourced from shale formations in Pennsylvania into New York and into the six New England states.
Another stalled project includes the Access Northeast natural gas pipeline, backed by Enbridge Inc., Eversource Energy and National Grid.
“It’s never been more clear that we need additional natural gas infrastructure and nowhere is that more evident than in the U.S. Northeast,” Enbridge CEO Al Monaco said during a conference call in February.
New England consumers suffer “higher priced, lower reliability peaking supply from oil generation and foreign LNG imports, and this is actually an unbelievable irony when the Marcellus is sitting right next door to this market,” Monaco said during the call.
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, which make up the six New England states, paid among the highest electricity rates in the country, according to Choose Energy website that tracks state power rates. The NECEC will “provide rate relief to Maine ratepayers,” according to the Maine regulator.
The hydropower project’s state approval shows New England regulators are eager to source Canadian clean energy from Quebec rather than fossil fuels.
Maine PUC chair Mark Vannoy said Thursday the power transmission line “will provide environmental benefits by displacing fossil fuel generation in the New England region and the associated greenhouse gasses that are generated from that.”
Vannoy said the state will need to either import more power from Quebec and other Canadian provinces or rely on new gas-fired power plans and possible liquefied natural gas (LNG) imports to meet its future power demand.
“If a sufficient import line is not built now, it will be built later, and in my view it is much more likely that a future build will be done under terms that are much less favourable to Maine,” Vannoy said.
While oil and gas exports to the U.S. dominate attention in Canada, the country’s massive electricity exports make it the world’s second-largest electric exporter behind only Germany.
Data from Natural Resources Canada shows the country exported 72 terawatt hours of electricity to the U.S. in 2017, the last year for which data is available. Canada imported 10 TWh over the same period, resulting in 62 TWh in net electricity exports.
There is scope for these figures to jump higher as U.S. states seeks alternative sources, despite the White House’s efforts to revive coal plants and expand oil and gas pipelines.
“There are some pretty big (hydropower) lines that are being considered. If and when those are built, it’s going to open up the possibility for greater exports,” said André Bernier, senior director, energy sector, electricity resources branch at Natural Resources Canada.
In addition to the NECEC, Bernier said there were transmission line proposals that would export Ontario power to the U.S. Midwest and export Manitoba electricity to Minnesota.
The line from Quebec to Massachusetts is “a very important project to Hydro Quebec” as it would allow the Crown corporation to market more of its surplus electricity, said the company’s spokesperson Lynn St-Laurent.
“Demand in Quebec has somewhat idled and also we’ve had increased water flow. Our reservoirs have been filling up,” St-Laurent said, adding the transmission line would allow the company to export 9.45 TWh of electricity to Massachussetts, adding to its record-high electric exports.
Quebec is Canada’s largest electricity exporter, followed by Ontario, Manitoba and British Columbia.
Hydro Quebec’s 2018 annual report shows net exports contributed $744 million to the company’s net income for the year, which totalled close to $3.2 billion.
The company lists the six New England states account for 47 per cent of its net exports in 2018, while exports to New York made up another 24 per cent of Quebec Hydro’s net exports. The remainder was sent to Ontario, New Brunswick and other markets.
Central Maine Power is “thrilled” with the decision, spokesperson John Carroll said in an interview. “It’s a regional issue for all of the New England states and it’s linked to the age of the generation fleet, which is going to retire over the next decade or so,” he said.
Indeed, the region is already facing the impending retirement of a 670 MW nuclear power plant on June 1 of this year and additional coal plants are slated to retire in the coming years.
“The choice would be to either bring in more natural gas or reduce our dependence on natural gas,” Carroll said, adding the region is actively looking to boost its renewable energy use and reduce gas-fired power generation.