Hydro Could Power Alberta’s Oil Sands, But at a Hefty Cost

Hydro Power

By Maura Forrest

February 18, 2016

Hydropower could be used to power Alberta’s oil sands, but would probably not be viable without a price on carbon, according to a new study.

The Canadian Energy Research Institute has released the results of an analysis of different hydro power options in British Columbia, Alberta and Manitoba that could be used to supply electricity to the oil sands.

The six options considered include two different long-distance electricity transmission technologies that would connect Alberta to B.C.’s proposed Site C dam or to a hydro project on the Slave River. They also include a connection to Manitoba’s Conawapa site and a reinforcement of the existing B.C.-Alberta intertie to allow more hydro power to flow east from B.C.

“Each of these six hydro power options can deliver sufficient electricity to satisfy the demand of in-situ bitumen extraction operations with production capacity of 0.5 million bbl/day [barrels per day] to 1.1 million bbl/day,” the study found.

But the cost of delivering hydroelectricity to the oil sands would range from $81 to $162 per megawatt hour, compared with just $57 per megawatt hour for natural gas-fired cogeneration.

“Hence, without a price on greenhouse-gas emissions, the likelihood of hydro power options reducing the marginal cost of oil-sands operations is low,” according to the report.

The study found that reinforcing the intertie between B.C. and Alberta would be the least expensive option, while transporting hydro power from Manitoba would be the best choice involving a new hydro power project. The main strike against transmitting electricity from Site C is the “high forecasted electricity demand growth in B.C.,” which might reduce the amount of electricity available for export to Alberta.

Grid interconnections are not a new concept in Canada, though the idea has never amounted to much. But in an op-ed for the Edmonton Journal, Trevor McLeod, director of the Centre for Natural Resources Policy in Calgary, argued now might be the time to look more seriously at the possibility.

“Alberta has announced intentions to replace coal-fired electrical plants with renewable generation and Saskatchewan is increasing renewables, too,” he explained. “By 2030, 30 per cent of Alberta’s emissions are to come from renewables. Saskatchewan is aiming to produce half of its power from renewable sources by 2030.”

Alberta announced its Climate Leadership Plan last November. According to the plan, the province will phase out all pollution from coal by 2030 and will implement a province-wide carbon tax in 2017.