Challenges and opportunities

The abundance of water resources has led to hydro being a popular energy source throughout Canada’s history. This is expected to continue. According to Natural Resources Canada, the production of hydropower in Canada is projected to increase by about 14 per cent from 1995 to 2020, or about 0.5 per cent per year. How this future unfolds will be shaped by different challenges and opportunities:

• large projects face hurdles
  With large undeveloped sites still available in Quebec, Newfoundland and Labrador, Manitoba, British Columbia and the territories, another 118,000 megawatts of hydropower — about twice the amount in operation — could be developed. But environmental and social concerns, together with large capital costs and long construction periods, make large hydro projects increasingly difficult.
  
  
• increased interest in small hydro
  Since the 1980s, the number of independent hydro energy producers has increased. Selling their electricity to electric utilities, they develop small-scale projects (often between one and 30 megawatts) that help utilities to match electricity demand with small increments in capacity. This trend has increased industry and government interest in the potential of small-scale hydro developments. Over the last decade, the small-scale hydroelectricity industry has added about 30 to 50 megawatts yearly to Canada’s power supply.
  
  
• consultation linked to different needs
  Like other large resource projects, planning and developing new hydropower is linked with local environmental, economic and social concerns. This is especially the case in Canada’s North, where many potential projects are near lands and waterways used by Aboriginal people. In these areas, local community support is critical to project approval by regulators. A growing priority for industry is the use of consultation processes that involve Aboriginal communities in project planning, address project impacts and create jobs, training and other economic and social benefits.
  
  Many hydro projects in Canada are developed in northern areas near Aboriginal communities. This challenges hydro developers to foster cooperative partnerships that help to address the economic, environmental and social needs of the local people.
  
  
• climate change benefits
  By replacing greenhouse gas emitting sources of electricity generation such as fossil fuel power plants, hydropower can contribute to the control of greenhouse gas emissions. According to the Canadian Hydropower Association, Canada’s total greenhouse gas emissions would be 60 per cent higher if coal-fueled generation had been developed instead of hydro. At a meeting in 1998, Canada’s federal and provincial energy and environmental ministers concluded that hydropower can play an essential role in Canada’s climate change strategy. Government and industry interest in the climate change benefits of hydro has increased with Canada’s ratification of the Kyoto Protocol in late 2002. These benefits, together with growing demand for electricity, could encourage further growth of this energy source.