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Small Hydro – Canada’s Clean Energy for the 20th and 21st Centuries
Mike Martelli
President Renewable Generation & Power Marketing
June 30, 2016
Canada
36 million people
10 million sq. km
10 provinces and 3 territories
Ontario, Quebec, British Columbia and Manitoba have a large amount of hydroelectric power.
About 60 per cent of electricity generated in Canada is hydropower (355 TWh in 2014)
78,000MW installed capacity
past 10 years added 5,000MW of hydro, and approx. 5,000 MW will be added over the next 10 years
Supports about 135,000 jobs and contributed $37 B to Canada’s economy in 2013
Over the next twenty years, hydropower project development will benefit Canada with over $125 billion in investments and a million jobs
French & English are official languages
El español no es una lengua oficial de Canadá
2
Toronto, Ontario 43.650 N
Santiago, Chile 33.450 S
Ontario
About 37 per cent of Canadians live in
Ontario (13.6 million)
About 1 million square kilometers
Economic engine of Canada
Ontario Power Generation is owned by
the Province of Ontario
Ontario's installed generation capacity
totals 35,591 MW
More than 8,000 MW of hydro capacity
with a target of 9,300 MW by 2025
137 TWh demand in 2015
3
Ontario Installed Capacity (35,591 MW) by fuel type in 2015
Electricity Pricing
Electricity prices in Ontario are set through a combination of a wholesale market, contract prices for most generators, and a regulated price for most OPG generation
This blended price is charged to all customers in the Province
Contracted prices are confidential and vary depending on the facility
Residential and small customers are charged a Regulated Price set every six months by the Ontario Energy Board (OEB) based on a forecast of the market, contract and regulated electricity costs including a true up to previous costs
4
OPG - Who and Where We Are
99 per cent of generation free
of GHG and smog emissions
Approx. 17,000 MW generating
capacity
65 hydro, 3 thermal (including
2 biomass), 2 nuclear stations
2 leased nuclear stations +
co-own 2 gas-fired stations
About 9,200 regular employees
Over $44 billion in assets
5
The Company We are Today
Our history includes more than 100 years of operation - prior to 1953 all our generation was hydropower
Commitment to public, environmental and employee safety
Values set out in a Code of Conduct – safety, integrity, excellence, people and citizenship
Building long-term mutually beneficial relationships with Indigenous communities
Enjoy strong relations with site communities
Focused on continuous improvement and development in project management and operational excellence
Environmental Management System registered to ISO 14001 standard
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Coal Closure to Fight Climate
Change
Successful closure of OPG’s coal stations represents North America’s largest single climate change initiative
Since 2005 OPG has closed over 7,500 MW of coal capacity
Year closed and original capacity• Lakeview 2005 1138 MW• Lambton 2013 1980 MW• Nanticoke 2013 3976 MW• Thunder Bay 2014 310 MW*• Atikokan 2012 215 MW*
* Converted to biomass
Impacted over 1,000 staff
Community impacts – suppliers, local employment, taxes
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Lakeview Stack Demolition – June 12, 2006
Hydro Operations
65 hydro stations
Produce clean, renewable, reliable low-cost power
Many are heritage assets – providing value for generations
Over 7,400 MW of capacity
Baseload and peaking roles
Produce over 30 TWh per year.
• More than one-third of OPG’s electricity production
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Kakabeka Falls GS (24.6 MW) began generating electricity in 1906
OPG’s Small Hydro Fleet
Of 65 Hydro stations, 35
are less than 20 MW
13 have operated for 100
years or more
27 operated for 80 years or
more
Over the past decade we
have constructed or re-
constructed 6 small
stations.
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Lac Seul GS 12.5 MW completed in 2009
Small Hydro Expansion
Lac Seul Obishikokaang Waasiganikewigamig (completed in 2009) partnership with Lac Seul First Nation
• 12.5 MW VA Tech (Andritz) horizontal “pit” type Kaplan turbine
Upper Mattagami and Hound Chute (completed in 2010).
• Litostroj vertical Kaplan turbines (also considered as saxo turbines)
• Wawaitin (15 MW), Lower Sturgeon (14 MW), Sandy Falls (5 MW), Hound Chute (8 MW)
Healy Falls (completed in 2010). • added a fourth unit to a 100 year old station. The
unit is a 6.4MW, compact axial horizontal, Kaplan type turbine. Manufactured by Andritz (VA Tech), the unit is also considered as a “S” type Kaplan turbine.
Peter Sutherland Sr. GS at New Post Creek partnership with Taykwa Tagamou Nation.
• Two 14 MW Andritz horizontal Francis type units (exposed scroll cases).
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Turbine installation at Sandy Falls (2010)
Role of Hydro In Ontario’s Grid
Small Hydro• Generally run-of-river that feeds the
distribution system
• Many plants, e.g. Healy Falls, Seymour, were built to provide power to specific areas and industries over in the early 1900s
• Most are not dispatched by the system operator – compliment the system with renewable electricity
• No or minimal flooding to build – best liked form of sustainable generation
Large Hydro• Sir Adam Beck is our largest station
2,100 MW and most flexible
• Dispatched directly by system operator – a sponge for the system
• Larger storage capability – including pumped generation in Niagara
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Seymour GS 5.7 MW 1909
Sir Adam Beck Complex 2,100 MW Beck 1 1921 Beck 2 1954
Approvals
An environmental assessment must be completed under the Environmental Protection and Environmental Acts
Consultation with the public and Indigenous communities is part of the EA Process
Once the EA approval is obtained, numerous permits fall within federal, provincial even in some cases municipal jurisdiction under the Planning Act
In addition to permits, the project would not be financially viable without a contract with the Independent Electricity System Operator (IESO). The Minister of Energy can direct the IESO to negotiate a contract for the output of the plant
Site release process for both Federal and Provincial lands with defined processes. Once a site is released relevant legislation must be complied with.
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Former CEO Tom Mitchell speaks to members of the Mattagami First Nation about a proposed project.
Respecting the Environment Fish
• Fish are protected by the Canadian Government, The Fisheries Act, and by Ontario Environmental Protection Act, Environmental Assessment Act, Water Resources Act and the Lakes and Rivers Improvement Act
• OPG works to ensure that fish and fish habitat is protected and that mitigation measures are part of EA commitments.
• Installed eel ladders at Saunders G.S.
• Indigenous Peoples are consulted to obtain traditional knowledge
• OPG typically hires independent third party subject matter experts to ensure the integrity of data and overall assessment
13
OPG is the lead sponsor of a program to bring back the Atlantic Salmon in Lake Ontario
Communicating our plans
On new projects we consult with the
public and Indigenous communities
Share information and respond to
their questions and concerns in a
respectful and transparent manner.
Small communities are interested in
the local employment and economic
benefits that construction of hydro
facilities brings and we identify those
opportunities as part of the EA and
our communications
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Tour of Peter Sutherland GS Construction for Taykwa Tagamou Nation Members
Unique Relationship with
Indigenous People
OPG’s First Nations and Métis Relations Policy
Provides guidance in community engagement and outreach, capacity-building support, employment and business contracting opportunities
Two completed projects in partnership with First Nations
Lac Seul First Nation on the Lac Seul/Obishikokaang Waasiganikewigamig Generating Station in Ear Falls in northwestern Ontario - started generating electricity in 2009
Moose Cree First Nation on the Lower Mattagami River Hydroelectric Project (438 MW)
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OPG Board & Moose Cree First Nation Celebrate in service of 267 MW Smoky Falls/ Kâpâškilehtehk GS in 2014
OPG’s Relationships with Indigenous
Peoples
Redress past grievances
OPG takes a long-term approach in planning
Some of our generating stations are over a hundred years old and we go into projects with that time frame in mind.
We are in it for the long term. So are our partners
Communicate early and often with Aboriginal communities which may be affected by a project
OPG continues to consult with Aboriginal Communities after the EA is completed and the project moves on to construction and then into operations
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Moose Cree Chief Norm Hardisty Jr. with former OPG President Tom Mitchell commemorate the Amisk-oo-skow comprehensive agreement
Small Hydro First Nation
Partnerships Obishikokaang Waasiganikewigamig or Lac Seul GS (2009)
12.5 MW Station
Lac Seul First Nation has 25 per cent equity share
Completed in 2009, First Nation enjoy a steady revenue stream
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Mike Martelli & Chief Clifford Bull
Hydropower process at Lac Seul has enabled Lac Seul First Nation to invest in a Tim Horton’s Coffee Shop. Tabitha Jourdain and Chris Angeconeb(photo from North Ontario Business)
Taykwa Tagamou Nation (TTN) and
OPG have partnered to build Peter
Sutherland Sr. GS.
Two 14 MW unit, 28 MW station.
$300 million project expected to
employ 220 workers at peak.
2018 target completion.
Station named after a respected
community elder, the late Peter
Sutherland Sr.
Station will use a portion of the water
flowing down New Post Creek to
generate electricity by transporting
water approximately 600 meters to
the power house on the Abitibi River.18
Small Hydro First Nation
Partnerships
OPG’s Paul Burroughs and Mike Martelli at project ground breaking with TTN Chief Dwight Sutherland
Transmission & First Nations
Hydro One own and operate transmission lines.
Ontario Government recognizes Aboriginal participation in the energy sector is one of the keys to the economic development of Aboriginal communities.
The largest most recent transmission project in Ontario, the 180 km, $700 million expansion of the Bruce to Milton transmission corridor was completed in 2012.
• The Saugeen Ojibway First Nation was subsequently provided with a 30 per cent ownership in the completed line. The stake has a value of $72 million.
• Hydro One and the SON entered into the limited partnership on commercial terms and the venture will earn valuable revenue for SON’s community members.
The Pickle Lake transmission project in Northwestern Ontario is largely under First Nation ownership.
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Water Management
OPG shares the lakes and waterways with residents, Indigenous Communities, tourists and businesses.
Water management planning focuses on managing impacts related to water levels and flows.
Water Management Plans identify water flows and lake level compliance requirements for water power facilities and their associated control structures and the process used to develop these compliance levels.
Water use is also managed using permits e.g.Permit to Take Water under the Water Resources Act.
Limited experience with irrigation – it is more of a concern in areas in the U.S. like California.
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Water Management
Plans should deliver a net benefit to society, while protecting and enhancing the natural ecosystems.
Key to developing water management plans is public consultation.
• Advisory committees consisting of members of the public, input, comment and advise the Planning Team in developing the plans.
• With this input the Planning Team develops several objectives for that particular water system,
• While each plan is unique, waterpower is never first. Fish are the priority. (e.g. Nipigon River)
1. lake fishery (60%)
2. river fishery (25%)
3. water power (10%)
4. recreational users and owners (5%)
Water power is typically weighted lower except during emergency situations such as a blackout where it would come first
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Canadians Support Hydropower
Canadian Hydropower Association Survey• 44 % of Canadians
regard hydropower as preferred generation source (20% wind, 14% gas)
• 68% perceive hydropower as a clean, renewable, safe and reliable source of energy.
• 77% support the development of hydropower facilities. (only 1 per cent strongly oppose it)
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Ontarians Support Hydropower
Ontario’s electricity system was
built in the 20th century on a
foundation of hydropower.
In Ontario we call electricity
“hydro”.
Prior to the advent of thermal
and nuclear power in the
1950s and 1960s just about all
generation in Ontario was
hydropower.
Sir Adam Beck (1857 – 1925)
much revered founder of public
power in Ontario.
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OPG Builds Community Support Meetings with elected officials and
community members
Participation in community events (Fairs, Chamber of Commerce, Charity events, water festivals)
Regular outreach to water management plan stakeholders.
In 2015, provided community investment support (charitable, non-profit, and in-kind support) to 461 grassroots Hydro host community initiatives:
• environment; education
• secondary and post-secondary student awards
• community (health and safety, arts and culture, youth amateur sport, humanitarian and local causes)
• support of First Nations and Métis initiatives.
Measure level of support with independent market research
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Media Outreach:• Advertising – print, radio, TV• Employee communications• Social Media – Web, Twitter, Instagram,
Facebook • Virtual Town Halls• Media 24/7
Industry Associations – share common values
OPG staff make valuable contributions to:
Canadian Hydropower Association• Mike Martelli – Board of Directors
• Promotes the technical, economic, social, and environmental advantages of hydropower. Advocates for responsible development and use of hydropower to meet our present and future electricity needs in a sustainable manner.
Canadian Dam Association • Tony Bennett– President
• The CDA provides a forum for the exchange of ideas and experience in the field of dam safety, public safety and protection of the environment.
• Mission is "to be the recognized leader in advancing knowledge and practices related to dams, consistent with social and environmental values.”
Ontario Waterpower Association• Heather Ferguson – Board of Directors
• Mission: “be the collective voice advocating for the Ontario waterpower industry”
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Paramount Focus on Safety
“Safety first, nothing else in front of it”. J. Lyash, OPG President & CEO
Employee safety performance is consistently in top quartile of comparable Canadian utilities.
Stay Clear, Stay Safe water safety program raises awareness of the dangers of getting too close to OPG’s hydroelectric station and dams.
Rigorous dam safety program ensures our dams are safe.
Active world-wide in improving dam and public safety and sharing best practices. Pickering Nuclear Station
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Appendix 1:
Water Rights Treaties exist between the USA and Canada pertaining to rights and use of water from
bodies of water shared by the two countries (e.g. these apply to our Niagara and St. Lawrence facilities).
International Joint Commission consisting of representatives from both Canada and the U.S.A. The Boundary Waters Treaty, signed by Canada and the United States in 1909, guides the IJC.
Hydroelectric generating stations in the Province of Ontario are subject to the Electricity Act, 1998 (Ontario).
• 8 stations fall under federal government jurisdiction and are licensed with the Parks Canada Agency of the government of Canada.
• 37 - including those on the Niagara, St. Lawrence and Ottawa Rivers) are authorized by waterpower lease agreements with the Ontario Ministry of Natural Resources.
• 12 stations are owned outright by OPG (not subject to leases or licences).
Crown Leases (CL) – Ministry of Natural Resources and Forestry Typically provide rights to occupy land at dam sites and may include flooding rights; registered title; Variable length.
Licenses of Occupation (LO) – Ministry of Natural Resources and Forestry typically provides flooding rights for storage reservoirs; non-exclusive; not registered; Variable length, often coterminous with associated WPL.
First Nations claim they never gave up water rights in the same way they gave up land title. Aboriginal people have Aboriginal Rights to hunt fish and gather.
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Appendix 1:
OPG Pays for Water Use
Gross Revenue Charge (GRC)
• Based on amount of generation
Property component – paid by all
stations to Ontario.
Water Rental component – paid for
stations with a water power lease or
water power lease agreement
Total payment is about $325 million
OPG also annually pays about
$16 million in total to Canada,
Province of Quebec & St.
Lawrence Seaway
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Appendix 1: Water Rights
Both Ministry of Environment and Climate Change and Ministry of Natural Resources and Forestry (MNRF) have jurisdiction over Water rights. On the Niagara River it is the Niagara Parks Commission.
MOECC has jurisdiction over permits to take water- which manages the ‘taking’ of water; MNRF managers via Lakes and Rivers Improvement Act the dams and how water is held back and how projects impact levels and flow.
The Federal Department of Fisheries and Oceans manages fish and fish habitat- lakes rivers, streams etc.
Water Power Leases (WPL)/ Water Power Lease Agreements (WPLA) provide: rights to occupy land for the purposes of generating water power; registered title; variable length, generally with renewal terms up to a total of 100 years, longest is 999 years for plants on the Ottawa River.
New Water Power Leases (new sites) – initial term of 20 years, with opportunity to continue to extend the lease for 10 year increments in perpetuity, if the lease is maintained in good standing
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Appendix 2: Site Licenses
Need to determine whether the lands are privately owned or by the
Crown (either Provincial or Federal).
• Approvals are required from the Ministry of Natural Resources for site
releases on Crown Lands (85 per cent of the province). The current policy
is to consider only site releases for projects that have obtained a
procurement contract from the IESO for the power.
• The project is also required to undergo a provincial Environmental
Assessment (EAs) under the auspices of the Ministry of the Environment
and Climate Change. Class EAs have been established to reduce
requirements for relatively small and standardized projects.
A federal Environmental Assessment may be required where there is
an impact on fish and on a navigable waterway. Options exist for the
federal government to defer to a provincial assessment.
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Appendix 3: Municipal Ownership
In the past several municipalities in Ontario owned and operated their own hydro generation plants.
1999 restructuring of electricity industry prohibited distribution companies from owning generating stations.
Subsequently, distribution companies allowed to own some renewable projects.
Local distribution companies (mostly municipal owned) acquire virtually all of the electricity their customers consume from the wholesale market managed by the Independent Electricity System Operator.
33
Chaudiere Falls GS owned Hydro Ottawa (City of Ottawa)
Appendix 4: Indigenous Relations with Canada
is Evolving Section 28 of Indian Act does not allow land to be owned or sold by First Nations.
The First Nations Land Management Act is a federal law enacted in 1999. It provides signatory First Nations the authority to make laws in relation to reserve lands, resources and the environment as well as economic development decisions.
Reserve Lands, Traditional Territories, Treaty, and Aboriginal Rights• Treaties between the Federal Crown and Aboriginal people created reserve lands. The Federal Crown
has set these lands aside for the benefit of Aboriginal people, i.e., reserve lands are communal property versus private property.
• Traditional territory is defined as lands that were continually occupied by Aboriginal peoples since before European settlement or effective control. These lands are where Aboriginal people hunted, gathered and fished, and where they may have had cultural sites. In the north, traditional territories are usually land owned by the Crown.
• Early 1600s Champlain founded Quebec City. Contact had taken place prior to 1600s (as early as 1100)
• Section 35 of the Constitution, 1982 recognizes and affirms Aboriginal Rghts. It is important to understand that Section 35 recognizes Aboriginal rights, but did not create them—Aboriginal rights have existed before Section 35 and the federal government cannot override Aboriginal rights.
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Appendix 4: Canada Treaties with Indigenous
Peoples
Indigenous Peoples have Treaty and Aboriginal Rights
Important elements: • Two Row Wampum
• Silver Covenant Chain
• Royal Proclamation 1763
• Constitution, 1982
Treaties include historic treaties made between 1701 and 1923 and modern-day treaties known as comprehensive land claim settlements. Crown and Aboriginal people to be solemn agreements that set out promises, obligations and benefits for both parties.
Royal Proclamation of 1763 recognizes Aboriginal peoples as owners of the lands Europeans were using and occupying. Relationship is Nation to Nation.
Aboriginal rights have been interpreted to include a range of cultural, social, political, and economic rights including the right to land, as well as to fish, to hunt, to practice one’s own culture, and to establish treaties. Rights have been defined over time through Supreme Court cases.
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