Our very own Dudley Thompson wrote this Opinion piece that appeared in the Winnipeg Free Press on January 3, 2022. It makes a great case for Manitoba Hydro to embrace community-based renewable energy.
(Recommended reading by Ron Wasylycia-Leis)
Province needs community-based renewable energy
By: Dudley Thompson
Posted: 2:00 AM CST Monday, Jan. 3, 2022
AT the conclusion of COP26 earlier this fall, UN Secretary General Antonio Guterres issued the following statement: “Our fragile planet is hanging by a thread. We are still knocking on the door of climate catastrophe. It is time to go into emergency mode — or our chance of reaching net zero will itself be zero. Science tells us that the absolute priority must be rapid, deep and sustained emissions reductions in this decade. Specifically — a 45 per cent cut by 2030 compared to 2010 levels.”
In order for Manitoba, like all jurisdictions, to reach these reductions in carbon emissions and indeed net-zero carbon by 2050, we will face massive disruptions. We are comparatively well placed in this province due to our solid foundation of vast, northern, carbon-free hydroelectric resources.
However, there are two disruptions that will transform our existing hydroelectric system. The first disruption is climate change and the possibility of extended droughts. The second disruption is the decarbonization of our gas system and the massive new power capacity required primarily for the electrification of transportation and building heating.
Manitoba Hydro came before the Public Utilities Board last month to request a rate hike for this first disruption: “to address the financial impacts due to the current drought conditions to ensure the financial health of Manitoba Hydro.” There is no discussion of the second disruption. With these two massive paradigm shifts, can Manitoba Hydro continue to depend solely on run-of-river power and pipeline-delivered natural gas? I think not.
As Manitoba works towards zero carbon, we will need to dramatically reshape our major utility to go well beyond providing electricity from hydro and heating from gas. So, what can Manitoba Hydro do to make the utility more robust, more resilient and more quickly able to provide the increased energy requirements for a zero-carbon future? What have other jurisdictions done?
Let’s take Germany, for example, and see how they transformed their energy system from one based on coal and nuclear in 2000 to one that is 35 per cent renewable today and is aiming at 100 per cent renewable by 2045. This transformation is happening because the state invests in a Feed-in Tariff (FIT) system whereby renewable energy production is supplied by a wide diversity of small-scale local renewable installations of wind, solar, geothermal and biomass. The idea is quite elegant — establish a reasonable feed-in price that the utility will pay for supplied renewable energy and open the market to whoever can supply. Now more than 80 countries, including many states in America and provinces in Canada, use a FIT to increase the supply of available renewable energy.
Manitoba Hydro does offer a feed-in tariff in the form of an “excess energy price.” However, this price is currently 2.40 cents per kWh for renewable power delivered to the Manitoba Hydro grid. They currently charge 8.96 cents per kWh to supply residential customers. In other words, Hydro will purchase the renewable power from your solar roof for 2.4 cents a kWh and then sell it back to you, or your neighbour, for 8.96 cents.
Ironically, we only have to look to Alberta to see how this tariff works. Alberta has legislated that the energy utility must buy back produced renewable power at a rate equivalent to the customer’s retail rate. If you buy energy for eight cents per kilowatt hour, you will be credited at eight cents per kilowatt hour for energy produced. That is why Alberta currently has 19 privately developed wind projects generating and dozens of solar farms — the latest one is the Travers Solar Project, producing enough electricity to power 150,000 homes.
There is no business case in Manitoba. That is why there is so little third-party renewable energy production in the province. Indeed, it could be said that Manitoba Hydro actively discourages small-scale production, as it is messy and interferes with their big-infrastructure monopoly. Manitoba Hydro’s current “excess energy price” provides a negative incentive to reduce carbon. It is highly unlikely that any further dams will be added to the Manitoba Hydro system when delivered current power rates for power from Keeyask Generating Station are approximately 12.5 cents per kWh. Installed, local solar costs approximately 3.5 cents per kWh.
And this is why we need to urge Hydro to pivot quickly from its traditional culture and transition to a net-metering, market-driven Feed-in Tariff system that can encourage immediate supplies of renewable energy — including solar and wind. This is one of the fastest and most direct methods to provide new cost-effective sources of renewable power to augment Hydro’s existing green hydro-electric resources. As we begin the essential “rapid, deep and sustained emissions reductions” in the transition to zero-carbon, this new green power supply will build additional capacity to offset droughts and to supply the increased demand for electric vehicles and electric heating.