Saturday, January 28, 2012

Manitoba Hydro's Questionable Projects

"Building generation for export costing more than seven cents per kW.h and selling it at even the long-term average of five to six cents is not reasonable."
The quote is from an extensive article by Al Myska on Manitoba's economically curious hydro projects - Newfoundland's grab much of the attention, and Quebec has some on the go too.

It's time to push Manitoba Hydro's 'pause' button - Winnipeg Free Press

There is no basis to forecast the price of electricity sold to the U.S. will rebound, and Manitoba Hydro's forecast of a 3.5 per cent per year increase is overly optimistic. Shale gas discoveries in the U.S. are projected to keep the price of natural gas low.
While Manitoba Hydro blacks out all prices, the fall 2010 Minnesota contract extension was submitted to the Minnesota Public Utilities Commission revealing Manitoba Hydro had to accept a reduction in the price and the volume of electricity it was selling.
What had been a potential 500-megawatt sale was cut by Wisconsin in the fall of 2011 to 100 megawatts...

It's a worthwhile article, with multiple good points, but pausing large projects is seldom a good idea.  Perhaps Manitoba should step up it's efforts to secure long-term power purchase agreements (PPA's)
Saskatchewan and Alberta both generate far too much electricity with coal - and Albertans pay continually higher costs for it.
And both claim to want a national energy strategy.

Perhaps the projects would find clients for PPA's if done by companies that include ownership based in the client jurisdictions - with current public ownership being a barrier.

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