Trending Topics – Canadian Hydro: A Lifeline for Northeastern Clean Energy Goals?

A version of this article was originally published on October 13th, 2016 on Greentech Media.

By Mike O’Boyle

Land-constrained Northeastern states looking for creative solutions to decarbonize their electricity system and maintain affordable, reliable electricity service have renewed interest in an old resource – imported Canadian hydroelectricity. Two recent policies from Massachusetts and New York have spurred this interest:

  • Massachusetts house bill 4568 requires public utilities to procure 9,450 gigawatt-hours (GWh) of new renewable generation, giving preference to proposals combining new in-state wind and solar with Canadian hydro, though large hydro doesn’t qualify for the state renewable portfolio standard (RPS).
  • In 2015, New York City pledged to reduce carbon emissions 80 percent from 2005 levels by 2050, and power 100 percent of the City’s operations with renewable energy. Governor Cuomo also signaled his intention to drive New York State’s emissions down to 40 percent of 1990 levels by 2030. Both lead New York to look north to Canadian hydro.

However, getting pollution-free hydro from Canada isn’t as simple as signing a power-purchase agreement (PPA) – it means utilities must build new transmission lines on both sides of the border.

Several projects underway across America, including a successful Minnesota model, show the Northeast how to overcome traditional siting challenges to access Canadian hydroelectric resources.

Why Canadian Hydro?

Carbon reduction. Hydroelectricity is a zero-carbon renewable resource. As members of the Regional Greenhouse Gas Initiative (RGGI) with carbon and renewable energy goals, Northeastern states pursue cost-effective renewable energy for environmental reasons, and hydro is a zero-carbon way to balance higher shares of renewables on the grid. A 2015 study by the nonprofit Center for Climate and Energy Solutions found seven U.S. states currently importing Canadian hydropower could make significant headway toward Clean Power Plan targets by importing modest amounts of additional hydro.

Growth potential. Canada has an estimated 160GW of technical additional hydropower potential, compared to the Department of Energy’s (DOE) high-end 13GW U.S. estimate. In contrast to the land-constrained Northeast, many potential Canadian hydro projects fall in sparsely populated areas with lower flooding and environmental impacts.

Resource Diversity. Massachusetts’ recent energy legislation aims at energy diversity and New York considers hydro as a necessary part of a cost-effective clean energy portfolio. Besides reducing natural gas reliance, resource diversity also reduces decarbonization costs. Many studies, including NREL’s Renewable Electricity Futures Study and California’s Low-Carbon Grid Study find least-cost renewable energy portfolios include diverse resources and geographies complementing homegrown wind and solar.

Cost-effectiveness. The cost of hydro projects are highly site-specific, but the best sites yield costs around $20/MWh, making hydro the cheapest resource available in some places. Other developers, utilities, and the Governor of Massachusetts are making the case that the same will be true in the Northeast.

How do we get it?

The Canadian and U.S. grids are highly connected and similarly regulated by the North American Electric Reliability Corporation (NERC). Still, new hydro projects require long-term contracts, new transmission, presidential permits, and sub-national regulatory approval.

New international transmission requires Canadian National Energy Review Board and the U.S. DOE approval. Luckily, a recent summit between the U.S., Canada, and Mexico produced encouraging pledges to increase transnational energy cooperation, including transmission interconnection, and achieve 50 percent clean electricity by 2025.

Even with national permits and long-term contracts in hand, Northeastern transmission developers accessing Canadian hydro must navigate siting in some of the most constrained corridors in the country. Policymakers and developers seeking resources from Canada should observe Smart from the Start criteria, which can obviate conflicts:

smartfromthestartpoliciescriteriaSource: Zichella & Hladik, Finding a Home for Renewable Energy & Transmission, America’s Power Plan, 2013.

Minnesota – a blueprint for the Northeast?

The Minnesota-Manitoba Great Northern Transmission Line (GNTL) is an example of proactive stakeholder engagement and international collaboration using Smart from the Start principles producing cost-effective, streamlined access to Canadian hydro.

GNTL would bring 883 MW of Canadian hydro into Minnesota, diversifying and decarbonizing the electricity system via a new 500kV (~1,200MW) transmission line. GNTL was approved by the Minnesota Public Utilities Commission and will provide Canadian hydro at costs comparable to a new combined-cycle gas plant while increasing resource diversity, reducing carbon, and limiting exposure to gas price volatility.

Several reasons stand out for the line’s success. First, renewable energy (25 percent by 2025) and decarbonization (30 percent below 2005 levels by 2025) goals created clear policy support for renewable energy projects.

Second, Minnesota Power (MP) and Manitoba Hydro (MH) coordinated from the beginning, creating a mutually beneficial relationship. Besides getting size and economics right, their PPA’s novel “wind storage” provision financial mechanism takes advantage of how Canadian hydro complements Minnesota’s vast wind resource. The agreement allows MP to sell excess wind power to MH and buy hydro back later for the same price.

Finally, and perhaps most crucially, MP engaged early with stakeholders on siting and permitting. To increase odds of approval, MP engaged public agencies, landowners, and local tribes well before filing any PUC application. The utility used public land when possible, avoiding conflicts with landowners, and consulted local governments despite state preemption of county siting authority.

When the time came to submit a route for state and federal approval, the proposal and even border crossing point had been modified several times to accommodate stakeholders and received near universal support, including resolutions of support from border counties and the Red Lake Band of Chippewa Indians.

In addition to DOE, MP also engaged other federal regulators early, obtaining letters of support from the Departments of State and Defense to bolster its case for a presidential permit, which it hopes to receive this year.

Proposals to bring hydro into the Northeast leverage best practices

Northeastern renewable and transmission developers can learn from Minnesota and apply Smart from the Start principles to suit their unique needs, but important differences remain between Minnesota and the Northeast.

The land and resource constraints making Canadian hydro so attractive for the Northeast also make in-state transmission siting particularly difficult. But clear policy signals, burying or submerging lines, and using imported hydro to complement domestic renewables are driving new transmission. New lines can deliver Canadian hydro as well as wind resources from upstate New York, Maine, Vermont, and New Hampshire to load centers in the Northeast.

From Champlain to New York City
The Champlain Hudson Power Express is a 300-mile HVDC line seeking to deliver 1,000 MW of Canadian hydro to New York City. Developer TDI predicts it will save New York consumers money while helping to meet New York City and State clean energy and carbon goals.

Developers cite regulators’ demand for clean energy as justification for permitting and siting investment, having responded directly to requests for clean energy development from New York City. And TDI has already obtained a presidential permit for the line.

The line would be buried, minimizing landscape impacts. Typically, burying lines is cost prohibitive but using Lake Champlain waterways and parts of the Hudson River lowers costs. 24 times as much line can be laid before lines need to be spliced together, because longer cable spools can be carried by boat than by truck (imagine a single ball of yarn to make a scarf instead of 24). For portions requiring underground burial, developers used transportation right of ways to minimize siting conflicts, a best practice of Smart from the Start and followed in Minnesota.

Anbaric’s Green Lines
The Vermont Green Line is a similar project of independent transmission developer Anbaric linking onshore wind in Upstate New York, transporting existing hydro capacity, and delivering power to southern New England load centers in response to the New England Clean Energy RFP.

Like the Champlain Hudson project, Vermont Green Line is routed under Lake Champlain and buried along existing rights of way. Developers spent significant effort engaging stakeholders, leading to a proposal to bury the line, garnering greater support and increasing chances for regulatory approval.

Anbaric’s Maine Green Line project would similarly bring Canadian hydro and Maine wind across the Gulf of Maine 220 miles into Plymouth, Massachusetts, with no visual impact and relatively low cost. Anbaric seeks to incorporate Canadian hydro suppliers and deliver Maine wind to load centers in the Northeast. Combining complementary resources ensures the line is full more often, spreading costs over more customers and generators.

What can policymakers and developers do to optimize hydro for the Northeast?

  • Consider how Canadian hydro can best complement local renewable resources to improve resource diversity and obtain local support for transmission development where it’s needed.
  • Examine Smart from the Start criteria and require utility, developers, and state permitting authorities to follow the principles when determining where to site needed transmission
  • Seek presidential permits early and seek support from other national agencies. Leverage momentum for international transmission created by recent pledges from U.S., Canada, and Mexico.
  • In land-constrained areas, use existing rights of way for transmission pathways. Consider waterways and burying lines where overhead lines are undesirable or politically impossible.
  • Encourage domestic renewable energy and transmission developers to coordinate early with Canadian partners eager to find markets for exportable renewable hydroelectricity

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Thanks to David Moeller and Josh Bagnato for their input to this piece. The author is responsible for its final content.

(Feature image: Toba Montrose Run of River Power Plant Intake / Alterra Power