Living the green life

by Keely Grasser

Aug 22, 2007

ALMAGUIN – Hydro.

It’s the juice that turns on our lights, runs our appliances and drives our industries.

‘Hydro’ is a Canadianism that kicks back to the days when almost all of the country’s power was supplied by hydroelectric generation. It’s still the common word for electricity, even though fossil fuel and nuclear-generated power have eclipsed hydroelectricity’s slice of the province’s power pie.

But as we strive toward looking to eco-friendly and renewable green power sources, hydroelectricity is making a renewed splash in the power generation of today, and the future. So perhaps it’s apt that Canadians have never abandoned the term.

Hydroelectricity has a long history in Ontario, thanks mainly to the natural abundance of waterways here. Using water for electricity generation started in Canada in the late 1800s.

Even up to three decades ago, Ontario’s waterpower resources made up almost all of the electricity produced in the province.

A relic of those days sits near the Village of South River off of Mill Road, just east of Hwy. 11. From the 1800s through to the 1960s, a privately-owned hydroelectric station generated power for the Village. The power house still sits there.

After the site sat dormant for nearly 25 years, the Village began thinking about re-opening the site, said former mayor Chris Hundley, who is still involved with the project. He explained that each month, council would get together for a meeting that featured a guest speaker. One speaker came in and discussed with council the possibilities of hydro generation.

Council began to wonder if they could get together with the site’s owners to see if it was feasible to begin generating power on the site again.

A feasibility study was completed, Hundley said. “It said, yes, it was (feasible) provided the hydro could be sold.”

In 2004, the Ontario government came out with a request for proposals for power generation, Hundley explained. South River was shortlisted, but not chosen.

“We were close but not close enough,” he said.

The government would then have paid nine cents per kilowatt hour (kWh) for power.

Time would bring a better deal.

In 2006, the government came out with the Standard Offer Program, designed to help Ontario meet its renewable energy supply targets by buying power from small electricity generators. The program has been extended to producers of solar, water, wind and biomass energy.

For hydroelectricity, the government pays 11 cents per kWh.

The Village saw a renewed opportunity.

“We had to re-price the project,” Hundley explained. “To make sure we could still do it.”

Prices, including for the steel needed in the site’s construction, had risen since the original price estimate, he said. The project’s pricetag was reworked at almost $3 million, about a half million more than the original cost.

The new generation site will make some use of the existing infrastructure there.

“We’re using some of the facilities, but not all of them,” said Hundley.

They will likely use the base of the existing power house, he said, but will go with new, top-of-the-line generation equipment, as well as a new penstock, the pipe leading from the water intake to the hydraulic turbine.

The site will have to operate within a set of Ministry of Natural Resources (MNR) parameters for water levels, meaning the Village “can’t just build water up to generate power,” Hundley said.

Council has signed a contract with the MNR, allowing them to use the water, as well as the existing dam there, which the MNR uses to control water levels in the area.

Studies indicate that the site will be able to generate about 800 kWh, with annual production of about 4,100 megawatts (Mw), Hundley said.

It’s difficult to estimate exactly how much revenue the site could bring in annually, Hundley said, because power wouldn’t be generated year-round. There are also variations in water levels and there are different pricelines for on-peak generation and other factors.

“It (the possible income figures) is all being figured out now,” he said.
They’ve estimated that the project would be paid off in about 20 years, Hundley explained. “Or less, depending on the generation.”

To go forward with the project, the municipality had to form a corporation. The South River Generation Corporation has the municipality as its sole shareholder, Hundley explained, and will lease the site from the current landowners.

With feasibility studies, environmental assessments, MNR approval and other hurdles cleared, the Village is now in the process of financing the project.
They were able to secure some funding for the completion of the pre-feasibility and environment assessments, but Hundley said they didn’t secure any for the capital cost of the project.

“There’re just so many power generation programs right now,” he said.
The financing’s all been arranged, he said.

“And we’re 99 per cent sure the taxpayers won’t have to pay for this project,” he said.

The generation site will likely be running in 2008, most likely in the fall, Hundley said. The benefits of the project will be great, and will begin as soon as the construction does.

Local contractors will be provided work through its construction, and some employment may be available once it’s completed. And it will provide a much-welcomed steady flow of income to the Village, Hundley said. Every municipality, he went on to say, looks at upgrades to their infrastructure, and could benefit from such income.

“All those projects will come in line when the money is there,” he said.

But the biggest advantage to this type of power generation, Hundley said, is that it’s eco-friendly, renewable and environmentally safe.

Generation plants also have a long lifespan. With routine maintenance and larger-scale maintenance every five to 10 years, Hundley said the lifespan of the site should be 50 years – or longer.

According to the Ontario Waterpower Association (OWA), a typical generation facility could have a lifecycle of up to a century.

The average facility converts energy to electricity at a rate of between 75 and 95 per cent. The energy payback ratio (energy required compared to energy produced), they say, is by far the highest among all generation sources. Relative to these other sources, hydroelectricity can be considered a form of energy conservation.

South River is not the only area municipality involved in this green form of power generation.

Due to the deregulation of the electricity market in early 2000, generation facilities had to be owned by a company other than a local utility. The villages of Sundridge, Burk’s Falls, Magnetawan and the towns of Huntsville and Bracebridge beforehand had their own generation holdings, so Lakeland Power was formed as a holding company. All five municipalities are shareholders.
At the time of its creation, Lakeland was producing roughly two megawatts, explained the company’s CEO, Chris Litschko.

Since then, they’ve been moving toward expanding their hydroelectric portfolio, including the purchase of the Burk’s Falls plant, on the Magnetawan River, in 2005.

That, as well as other new or renewed sites, has brought Lakeland’s generation capacity to 5.2 megawatts. Lakeland also has plants on High Falls, Bracebridge Falls and Wilson’s Falls.

“We can feed about 4,600 residential customers,” Litschko explained.

Residents in the involved municipalities get their power supply from Lakeland. Their actual customer base is about 9,100.

Lakeland’s wholly hydro-generated power doesn’t fulfill all of their customer’s needs, Litschko explained. Depending on the water levels and other generation fluctuations, as well as customer demand, the percentage of Lakeland-generated power going to customers can vary from 20 to 30 per cent.

They import the rest.

Lakeland continues to look to future opportunities for generation. Right now, Litschko said, the company is looking at the plants they own and re-evaluating their systems.

“We’re looking if they can be more efficient,” he explained, since some are running with old generators and turbines.

The study’s underway right now.

The company’s also “keeping our eyes and ears open” for opportunities for other sites or partnerships with others on new sites.

The Municipality of Magnetawan was one of those. Lakeland did a study on the waterflow on the municipality’s portion of the Magnetawan River. They were looking at the dam right in the Town of Magnetawan, Lischko explained.

“When we ran the numbers, just financially it didn’t make sense,” he said.

Magnetawan mayor Dick Smith said the water flow there wasn’t sufficient, and the capital costs to produce power there made it financially unreasonable, with the generators currently on the market.

But the municipality continues to watch as technology improves, he said. “We haven’t forgotten about it…We’re kind of seeing what happens with the new style generators.”

They will likely be developed soon, with the push for green energy sources, Smith said. “This has to sit on the municipality’s table.”

According to the OWA, there are more than 2,000 locations across the province identified with the raw hydraulic capacity to produce energy.

There are currently about 200 sites operating, from large-scale operations that harness the power of Niagara Falls to micro-operations, like the site South River is working toward. Smaller plants like that are the low-impact trend of the future of waterpower in the province.

For places like South River, hydroelectricity generation will bring a much-needed revenue source while producing power in a sustainable eco-friendly way.

It’s a win-win situation for all.