CANADIAN HYDROPOWER
AND THE CLEAN POWER PLAN
by
Kyle Aarons
Doug Vine
Center for Climate and Energy Solutions
April 2015
CENTER FOR CLIMATE AND ENERGY SOLUTIONS
CANADIAN HYDROPOWER AND THE CLEAN POWER PLAN
TECHNOLOGY
CANADIAN HYDROPOWER
AND THE CLEAN POWER PLAN
by
Kyle Aarons
Doug Vine
Center for Climate and Energy Solutions
April 2015
Center for Climate and Energy Solutions
ii
© 2015, Center for Climate and Energy Solutions. All Rights Reserved.
Canadian Hydropower and the Clean Power Plan
iii
CONTENTS
ACKNOWLEDGEMENTS iv
EXECUTIVE SUMMARY v
INTRODUCTION 1
TECHNOLOGY OVERVIEW 3
IMPORTS OF CANADIAN HYDROPOWER 9
HYDROPOWER IN THE CLEAN POWER PLAN 13
THE CLEAN POWER PLAN’S APPROACH TO INTERNATIONAL HYDROPOWER IMPORTS 19
CONCLUSION 27
ENDNOTES 29
Center for Climate and Energy Solutions
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ACKNOWLEDGEMENTS
This report was supported by funding from the Canadian Electricity Association, the Canadian Hydropower
Association, and Manitoba Hydro, along with institutional funding from a variety of businesses, foundations, and
individual donors. C2ES is solely responsible for the contents of this report.
Canadian Hydropower and the Clean Power Plan
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EXECUTIVE SUMMARY
Hydropower makes up a sizable share of the U.S. electricity supply. A signicant portion of this is imported from
Canada, which is linked to the U.S. electricity grid through dozens of connections along the border. Expansion of
this resource is possible in both nations, though greater quantities are expected to be developed in Canada in the
near future. As a zero-emission, dispatchable, baseload power source, hydropower has the potential to play an impor-
tant role as states seek to reduce power sector emissions to comply with the Environmental Protection Agency’s (EPA)
proposed Clean Power Plan. The proposed Clean Power Plan would require states to achieve certain power sector
emission rates by 2030. It is unclear how imported hydropower might be leveraged by states to help them achieve
their targets. This report assesses the benets and challenges of hydropower generally, explores the potential for
increased imports from Canada driven by the Clean Power Plan, looks at ways the proposed rule could be adjusted to
take advantage of this resource, and analyzes the impact of additional imports on selected states.
HYDROPOWER FACTS AND STATISTICS
Hydropower is renewable, non-emitting, exible, reliable, and cost-competitive with other sources of electricity. The
exibility and energy storage associated with hydropower projects allow generation to be adjusted quickly, meaning it
can reliably complement intermittent renewable sources such as wind and solar. Historical challenges of hydropower
include environmental damage and the displacement of communities due to ooding to create reservoirs, though
power companies have been working to address these concerns and mitigate facilities’ impacts. While there are no
direct greenhouse gas emissions from hydropower, there are some indirect emissions for the rst couple of years after
construction due to the decomposition of a fraction of the ooded biomass. On a lifecycle basis, hydropower emis-
sions are on par with wind generation and lower than those of solar photovoltaic generation.
Hydropower currently contributes about 6.6 percent of total U.S. generation, which is about 20 percent of U.S.
zero-emission electricity. While there is signicant technical potential to increase U.S. hydropower production,
the likelihood of new large-scale facilities is limited by environmental challenges, high up-front capital costs, and
long construction times. Instead, increased capacity in the United States will likely come through a combination of
upgrades at existing hydropower projects, the installation of power houses at dams that are not currently used for
electricity production, and run-of-the-river projects.
Canada’s current hydropower capacity is about the same as that of the United States, but it makes up a much larger
share of Canada’s electricity system due to its smaller size relative to the U.S. system. Hydropower contributes about
62.5 percent of Canadian electricity generation, which is about 80 percent of Canadian zero-emission electricity.
About 10 percent of total Canadian generation, from hydropower and other sources, is exported to the United States,
where it makes up about 1.5 percent of the U.S. electricity system.
Canada’s hydropower capacity has been growing in recent years, and that growth is projected to continue. Canada
added more than 5,500 megawatts (MW) of capacity between 2003 and 2013, which is enough to power about 2.4
million homes. As of early 2015, more than 4,000 MW of new hydropower capacity is either under construction or
nearing the construction phase. An additional 7,000 MW of new capacity is in provisional stages of development,
meaning it is in early stages of development or has been announced, but may not necessarily be completed.
The electricity grids and markets across the United States-Canada border are tightly integrated. Although elec-
tricity ows in both directions, Canada is a net exporter. Exports to the United States have generally been increasing
since 1990, and are currently near 60 million megawatt-hours annually. Increasing exports is subject to physical,
nancial, policy, and political constraints that are largely centered on large transmission projects. Several transmis-
sion projects in development could increase the ow of Canadian hydropower into the United States. They include
Center for Climate and Energy Solutions
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the Champlain Hudson Power Express, a 1,000 MW line from the Canadian border to New York City, expected to go
into service in 2017, and the Great Northern Transmission Line, recently approved by the Federal Energy Regulatory
Commission (FERC), which will provide 883 MW of capacity between Manitoba and Minnesota.
U.S. AND IMPORTED HYDROPOWER AND THE CLEAN POWER PLAN
EPA’s proposed Clean Power Plan, set to be nalized during the summer of 2015, would set a unique target emission
rate for the power sector of each state. In general, the proposal authorizes states to fully leverage non-hydro renew-
able generation in order to demonstrate compliance with their target emission rates. Hydropower, on the other hand,
would only be fully credited if put in place after the proposal was issued in June 2014. While new hydropower would
therefore be more valuable for compliance than existing hydropower, generation from existing plants would still help
states reduce power sector emissions to the extent that it precludes demand for fossil generation.
The proposed Clean Power Plan does not take a rm stance on the treatment of imported hydropower, and
instead solicits stakeholder feedback on this point. There appear to be three paths EPA could take:
1. Treat imported hydropower the same as interstate hydropower, including it as a qualifying resource when
coming from new capacity, but not when coming from existing capacity;
2. Do not include internationally imported hydropower as a qualifying resource in any circumstance; or
3. Include internationally imported hydropower from both new capacity and existing capacity that had not previ-
ously been fully utilized.
Of the dozens of sets of public comments reviewed on this topic, no stakeholder supports a categorical exclusion
of international hydropower. Stakeholder comments include concerns relating to the double counting of emission
reductions and the leakage of emissions caused by the shufing of resources within Canada to increase the export
of hydropower without any associated emission reductions. However, the existing electricity tracking systems could
be used to prevent double counting, and the existing resource mix in exporting provinces, combined with provincial
and Canadian greenhouse gas policies, makes leakage very unlikely. In addition to allowing full compliance credit for
imports from new hydropower projects, EPA could encourage states to pursue new transmission projects and long-
term contracts by crediting imports from existing hydropower capacity that is not currently being fully leveraged.
New Canadian hydropower imports could have a signicant impact on the emission rates of importing states. For
example, a hypothetical addition of 250 MW of imported hydropower electricity could help Massachusetts reduce
its power sector emission rate by about 10 percent, moving it 32 percent of the way toward its proposed 2030 target.
In Minnesota, imports from a new 250 MW project could help reduce power sector emissions by 5 percent, which
would move the state 19 percent of the way toward its proposed 2030 target. To enable these and other states to take
advantage of Canadian hydropower, EPA would need to clarify that new imports can fully qualify for compliance.
Canadian Hydropower and the Clean Power Plan
1
INTRODUCTION
Hydropower has been an important source of electricity
in the United States for more than a century. Typically,
plants have very high upfront capital costs and large
physical environmental footprints relative to other
sources of electric power, but provide zero-emission,
low-cost, reliable electricity once constructed. While
there is signicant technical potential for new proj-
ects and expansions of existing hydropower plants,
only around 2,300 MW of new domestic capacity is
expected to be added between now and 2040 under a
business-as-usualscenario.
1
Growing domestic hydropower capacity is not
commonly discussed as an approach to reducing power
sector emissions, even as other zero- and low-carbon
energy measures are considered to address the U.S.
Environmental Protection Agency’s (EPA) proposed
Clean Power Plan. The Clean Power Plan, announced by
EPA in June 2014 and scheduled to be nalized in the
summer of 2015, would set a target emission rate for the
electric power sector of each state based on a number of
factors, including the potential of each state to expand
its renewable energy (RE) generation. Overall, the Clean
Power Plan is projected to reduce power sector emissions
30 percent by 2030 relative to 2005 levels, primarily by
increasing the use of natural gas, renewables, and energy
efciency. Though the Clean Power Plan is a federal rule,
its implementation will be managed by states, leaving
many of the major policy decisions to state governments.
Canadian hydropower is projected to increase about
8,000 MW by 2035 under a business-as-usual scenario.
2
Canada already exports a signicant amount of hydro-
power to the United States and has the ability to greatly
increase this by harnessing a fraction of its potential.
Some technical and policy hurdles stand in the way of
increased hydropower imports to the United States, but
demand for zero-carbon electricity driven by the Clean
Power Plan could spur action to overcome these hurdles.
This brief assesses the potential for states to use
hydropower imported from Canada as part of their
strategy to implement EPA’s Clean Power Plan. The rst
section provides an overview of hydropower technology,
discussing its benets and challenges. Next, this brief
explores existing Canadian electricity imports and the
potential for expansion. The third section summarizes
the relevant aspects of the Clean Power Plan and EPA’s
proposed treatment of domestic and imported hydro-
power. The nal section analyzes the impact of potential
changes to the proposed Clean Power Plan on how states
can leverage Canadian hydropower to reduce their
power sector emissions.
Center for Climate and Energy Solutions
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Canadian Hydropower and the Clean Power Plan
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TECHNOLOGY OVERVIEW
A technology used to generate electricity for more than
130 years, hydropower is a renewable source of energy
that does not directly emit greenhouse gases or other
air pollutants. Hydropower facilities can be scheduled to
produce power as needed—depending on water avail-
ability—providing system operators with a reliable and
exible source of electricity or energy storage.
Hydropower makes use of dams to capture the energy
of owing water in rivers and streams as it descends from
higher elevations toward sea level to generate electricity.
As water travels downstream, it is channeled through an
intake structure (penstock) in the dam (Figure 1). The
falling water turns the blades of a turbine, generating
electricity in the power house, located at the base of
thedam.
The amount of electricity generated by a hydro-
power facility depends on three factors: 1) the turbine
maximum generating capacity; 2) the discharged ow
(the volume of water passing through the turbines in a
given amount of time), and 3) the site head (the height of
the water source or vertical distance between the highest
point of water source and the turbine). The higher the
head, the more gravitational energy any given amount
of water has as it passes through the turbine. Modern
hydropower facilities can convert about 90 percent of the
energy of falling water into electricity, which makes it a
technically efcient energy source.
3
There are several types of hydropower facilities.
Conventional hydropower plants can be built in rivers
with no water storage (known as “run-of-the-river” units)
or in conjunction with high- or low-storage reservoirs,
which can be used on an as-needed basis. Reservoir
storage can be designed to last for days, weeks, months
or even over a period of multiple years. Additionally,
hydropower head or elevation can vary signicantly.
4
FIGURE 1: Hydroelectric Power Generation
Source: Environment Canada, “Hydroelectric Power Generation.” March 2014. Available at: http://water.usgs.gov/edu/wuhy.html
Center for Climate and Energy Solutions
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In the United States, only 3 percent of the dams have
associated hydropower plants and generate electricity.
The vast majority of existing dams are used for irriga-
tion and ood control as well as for other domestic and
industrial uses. Dams in Canada, particularly in the
Upper Columbia River in British Columbia, provide
important ood control for cities like Portland, Oregon,
in the United States.
5
BENEFITS AND CHALLENGES
Hydropower has many well-known benets. It is a renew-
able, non-emitting energy source that is both exible
and reliable with the added characteristic of being able
to provide energy storage.
6
However, it also presents
environmental challenges, it is capital intensive, and
facilities take a long time to construct.
Hydropower is considered a renewable source of
energy, as it relies on water, which is continuously
renewed through the natural water cycle.
7
It is a clean
source of energy since it combusts no fuel and produces
no direct greenhouse gas emissions, other pollutants,
or waste like those associated with fossil fuels or nuclear
power. However, hydropower does produce indirect
greenhouse gas emissions, mainly during construction
and ooding of the reservoirs due to decomposition of a
fraction of the ooded biomass.
8
Additionally, land use
change (e.g. removal of native forests and/or grasslands)
permanently alters natural carbon sinks. Compared to
other renewables, on a lifecycle basis hydropower releases
fewer greenhouse gases than electricity generation from
biomass and solar and about the same as emissions from
wind and geothermal plants (Figure 2).
9
Hydropower is mainly criticized for its negative
environmental impacts on local people (displacement),
ecosystems, and habitats. Whether it is a run-of-the-river
or a reservoir project, damming a river alters its natural
ow regime and temperature, which in turn changes the
aquatic habitat.
10
Such change disturbs the river’s natural
ora and fauna. Fish are sensitive to hydropower opera-
tions, and sh species (especially migratory species)
have been signicantly affected by hydropower dams.
FIGURE 2: Lifecycle Greenhouse Gas Emissions by Electricity Generating Technology
Estimated range (minimum to maximum) of total lifecycle (from construction through useful operations to facility retirement and reclamation) greenhouse gas
emissions by electricity generating technology.
Source: IPCC, Summary for Policymakers, Figure SPM.8, 2011
Canadian Hydropower and the Clean Power Plan
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Generally, smaller facilities with smaller reservoirs have
less energy output and fewer negative environmental
impacts than large hydropower facilities with large
reservoirs, but even they can engender public concern.
11
In the case where a reservoir is created, land above the
dam is ooded to varying degrees, which may lead to
the displacement of local people, towns, infrastructure,
productive agricultural land, and hunting grounds.
Electricity demand uctuates daily, seasonally, and
regionally depending on several factors, most signi-
cantly temperature and the hour of the day. One of the
advantages of hydropower over other sources of elec-
tricity (e.g., variable wind and solar power or baseload
coal and nuclear plants) is its generation exibility. Such
exibility enables hydropower to meet sudden uctua-
tions in demand or to help compensate for the loss of
power from other sources. Due to its rapid response time
and storage capacity, hydropower can be used for base-
load and peak generation. When a facility is not being
called on to generate electricity, water will continue to
collect in its reservoir. This can be used at a later time on
as-needed basis, effectively providing a source of energy
storage to the electricity system.
Compared to other sources of electricity, hydropower
has high initial capital costs.
12
Nevertheless, its vari-
able costs, which are the costs required to operate and
maintain a facility (including fuel costs) are very low. In
fact, hydropower is competitive with other technologies
on a levelized cost basis (Figure 3), a measure for making
an apples-to-apples comparison of diverse technologies.
13
In the gure, levelized costs represent the present value
of the total cost of building and operating a generating
plant over an assumed nancial life and duty cycle.
14
They reect overnight capital cost, fuel cost, xed and
variable operation and maintenance costs, nancing
costs, and an assumed utilization rate for each plant
type. The availability of various incentives including state
or federal tax credits can also impact the calculation
of levelized cost.
15
The range of values shown below do
not incorporate any such incentives, nor do they include
FIGURE 3: Estimated Levelized Cost of Electricity for New Generation Entering Service in 2019
U.S. average estimated levelized costs (2012 USD/MWh) for plants entering service in 2019.
Source: U.S. Energy Information Administration, “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2014.”
April 2014. Available at: http://www.eia.gov/forecasts/aeo/electricity_generation.cfm
2012 USD/MWh
0
50
100
150
200
250
Conventional Coal
Advanced Coal
Advanced Coal with CCS
Conventional Combined Cycle
Advanced Combined Cycle
Advanced CC with CCS
Conventional Combustion Turbine
Advanced Combustion Turbine
Advanced Nuclear
Geothermal
Biomass
Wind
Wind-Offshore
Solar PV
Solar Thermal
Hydro
Levelized capital cost
Transmission investment
Variable O&M (including fuel)
Fixed O&M
Center for Climate and Energy Solutions
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potential costs such as a price on carbon, but do include
an array of other assumptions.
16
Whether a hydroelectric or other technology power
plant is constructed depends on a range of factors.
Compared to other facilities, hydropower takes longer to
construct. For example, large natural gas power plants
can be constructed relatively quickly, in as little as 20
months, while typical small hydro projects can take four
or more years.
17
Obtaining the necessary regulatory
approval is often more challenging for hydropower facili-
ties, as environmental reviews tend to be more rigorous.
Moreover, droughts or periods of low water availability,
as well as competition for scarce water (e.g. from agri-
culture interests) can also be a concern for hydropower
developers in some regions. Finally, transmission lines
required to deliver power from (often) remote hydro-
power facilities to demand centers is another important
consideration, as they can be difcult to site (e.g., face
local, regulatory and environmental hurdles) and costly
to install.
GENERATION AND CAPACITY
U.S. Hydropower
The United States generated more than 4,058 million
megawatt-hours (MWh) of electricity in 2013.
18
Fossil
fuels generated a little more than two-thirds of that
electricity. Zero-emissions power sources, such as
hydropower, wind, solar, and nuclear power generated
the remaining third of U.S. electricity.
19
In 2013, hydro-
power contributed 6.6 percent of overall U.S. generation
(Figure 4) and a little more than 20 percent of the
nation’s zero-emissions power—wind and solar combined
provided 14 percent and nuclear made up 60 percent of
zero-emission power.
Due to weather variability, the amount of precipitation
that falls over a given area over a period of time can vary
signicantly. Therefore, the amount of water available
for use by hydropower facilities varies year-over-year. In
2011 with above-average rainfall, hydropower generated
nearly 8 percent of total U.S generation, while in 2001,
hydropower was responsible for less than 6 percent. Note
that total U.S. hydropower capacity remained relatively
static over that time period.
Even though hydropower generation varies, it is more
manageable than other intermittent sources for at least
two reasons. First, the existence of reservoir storage can
help smooth away uctuations in precipitation, since
daily rain is not required for the facility to be productive.
In fact, some reservoirs can store water over multiple
years and many are capable of storing water from the
wet season (snowmelt) through the low water periods
to produce power during the following dry season.
Additionally, watersheds help smooth away some local
impacts because they are much larger than the power
facility itself, unlike wind and solar that depend on favor-
able conditions in a very site-specic area.
In 2013, the United States had around 79,000 MW
of hydropower capacity.
20
The technical potential for
new facilities is vast. A study by Oak Ridge National
Laboratories (ORNL) estimated that the potential for
new run-of-the-river hydro development, excluding
protected lands, is around 65,500 MW.
21
These projects
would likely generate around 347 million MWh per year
or roughly 128 percent of the average 2002–2011 net
annual generation from existing hydro facilities.
22
An
earlier report from ORNL determined that up to 12,000
MW of new hydropower capacity could be added to some
of the more than 80,000 existing non-powered dams
in the United States.
23
Additionally, a 2006 feasibility
study for small hydropower facilities by Idaho National
Laboratory found approximately 5,400 sites in all 50
states that could have a total hydropower potential of a
little over 18,000 MW.
24
FIGURE 4: U.S. Electricity Generation
by Fuel Type, 2013
Source: U.S. Energy Information Administration, “Electricity Net Generation:
Total (All Sectors). Table 7.2a.” February 2015. Available at: http://www.eia.
gov/totalenergy/data/monthly/#electricity
Coal 39.2%
Oil 0.7%
Natural Gas
27.5%
Nuclear
19.5%
Other Gas
0.3%
Hydropower
6.6%
Wind 4.1%
Other Renewable 2.1%
Canadian Hydropower and the Clean Power Plan
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In spite of the vast potential, the U.S. Energy
Information Administration (EIA) expects that around
2,300 MW of hydro capacity will be added between now
and 2040 under a business-as-usual scenario; in 2040
hydropower is expected to generate about 1 percent less
of total U.S. electricity than it did in 2013.
25
High upfront
costs, regulations, and cheaper alternatives like natural
gas combined cycle plants are among the reasons for the
limited supply additions.
Canadian Hydropower
Canada generated more than 620 million MWh of
electricity in 2013.
26
More than three-quarters of elec-
tricity generation came from extremely low emission
sources, while fossil fuels made up around 20 percent
(Figure 5). Over the past dozen years, hydropower has
contributed between 58 and 63 percent of total Canadian
electricity generation.
27
Policies that Canada has put in
place, discussed further below, are projected to make its
electricity generation even cleaner.
Like other regions, Canada is not immune to weather
variability. The potential for drought and excessive
rainfall exists in Québec, Ontario, British Columbia,
Manitoba, and Newfoundland and Labrador—the
primary hydropower producing provinces.
To ensure security of electricity supply from hydro-
power generation assets, electric utilities make use of the
historical record of watershed precipitation (decades of
inow data) to establish a planning baseline. This base-
line may be established by taking the lowest, average or
median ow on record and provides assurance that the
utility’s hydropower facilities will be able to adequately
meet their electricity demand. Without fail, utilities
want to ensure that they have sufcient hydropower
capacity to meet expected demand even under extremely
low inow conditions. As a result of this conservative
planning approach, there is often excess energy that
is generated and sold under higher than baseline ow
conditions. Note that some hydropower facilities also
have multiple-year reservoir storage available, which
greatly reduces the risk of having to reduce production
during low water years.
Canada, which has a population around one-ninth
the size of the United States, has an installed hydropower
capacity of nearly 76,000 MW—not much less than the
U.S. installed capacity of 79,000 MW—out of a total
electric capacity of around 127,800 MW.
28
A 2006 study
by the environmental consulting rm EEM found that
the total technical potential for new hydro across all
provinces and territories was around 163,000 MW.
29
Since approximately 3,000 MW have been developed
since the study was conducted the remaining technical
potential is now 160,000 MW. A 2013 study, focusing only
on small hydro across the country, estimated that the
economic and practical potential for additional capacity
ranged between 2,250 and 4,500 MW.
30
Power companies are actively taking advantage of a
portion of this potential capacity. In the 10 years since
2003, Canada has added more than 5,500 MW in new
hydro capacity. As of early 2015, more than 4,000 MW of
new hydro capacity was either under construction or had
been commissioned; including projects that have been
announced and are under early stages of development,
possible foreseeable new capacity rises to more than
11,000 MW.
31
FIGURE 5: Canadian Electricity Generation
by Fuel Type, 2013
Source: Statistics Canada, “Table 127-0007 Electric power generation by class
of electricity producer, and Table 128-0014 Electricity generated from fossil
fuels” February 2015. Available at: http://www5.statcan.gc.ca/cansim/a33?RT=
TABLE&themeID=4012&spMode=tables&lang=eng
Hydropower
62.5%
Nuclear
13.3%
Fossil Fuel
20.0%
Wind
1.9%
Solar, Tidal,
Other
2.3%
Center for Climate and Energy Solutions
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Canadian Hydropower and the Clean Power Plan
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IMPORTS OF CANADIAN HYDROPOWER
TRADE STATISTICS
Electricity systems and markets are tightly integrated
across the United States-Canada border.
32
Provincial and
U.S. power grids are physically interconnected; power
markets, particularly the Midcontinent Independent
System Operator (MISO), the New York Independent
System Operator (NYISO), and ISO New England
(ISO NE) facilitate cross-border trading; and reliability
entities like the North American Electric Reliability
Corporation (NERC) help ensure the power system func-
tions uninterrupted across North America.
33
Specically,
the U. S. and Canadian electricity grids are connected
at about three dozen locations stretching from the
Pacic Northwest to New England.
34
Since electricity
demand peaks in each country during a different
season—Canada in the winter and the United States
in the summer—the sharing of reserve services across
the connected grids reduces the need for new capacity
in both countries.
35
In formal comments relating to the
Clean Power Plan, several state environmental agencies
(e.g., Minnesota, Wisconsin and Michigan) cited the
benets of Canadian electricity imports, and hydropower
specically, which are discussed in this report.
36
Since 1990, Canadian electricity exports to the United
States have generally increased (Figure 6). In 2013, 62.5
million MWh was exported to the United States, which
was 1.5 percent of total U.S. generation and around
10 percent of total Canadian generation. Canada also
imports electricity from the United States at times to
help it meet peak demand.
37
However, over the past 20
years, Canada has been a net exporter of electricity to
the United States.
38
Around three-quarters of exports are
traded short-term on power markets and the remaining
quantities are sold through longer-term xed contracts.
39
In 2013, Québec was the largest electricity exporting
province to the United States, followed by Ontario,
Manitoba, and British Columbia (Figure 7).
40
FIGURE 6: Canadian Electricity Exports to the United States, 1990–2013
Source: National Energy Board of Canada, “Commodity Statistics: Electricity: Electricity Exports and Imports: Table 2A.” February 2015. Available at: https://apps.
neb-one.gc.ca/CommodityStatistics/Statistics.aspx?language=english
Million megawatt-hours
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
10
20
30
40
50
60
70
Center for Climate and Energy Solutions
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CHALLENGES TO INCREASED TRADE
There are physical, nancial, policy, and political
constraints that must be overcome in order to increase
Canadian hydroelectricity ows to the United States.
Additional infrastructure, including new hydropower
facilities and new transmission lines are required.
Furthermore, bilateral contracts in some regions can
assist in obtaining project nancing for new hydropower,
ensuring timely project development. Also, new projects,
transmission infrastructure, and power contracts are
subject to a variety of state, provincial and federal
regulations, which can become political matters with
many stakeholders to satisfy. Finally, policies like U.S.
state renewable portfolio standards (RPS) and the Clean
Power Plan, and their treatment of hydropower genera-
tion in general and international hydropower imports
from Canada in particular, will have a direct impact on
the future level of imports to the United States.
The border provinces of Québec, Ontario, Manitoba,
and British Columbia trade the majority of electricity
with the United States (Figure 7). While electricity
sources are more diversied in Ontario, hydropower
is responsible for more than 95 percent of electricity
generated in Québec, Manitoba, and British Columbia.
In a typical year, Québec, Ontario, and Manitoba
generate more electricity than they require, providing
an opportunity to participate in export markets.
However, to expand exports beyond the present level,
additional generation and transmission capacity will
berequired.
As noted above, more than 4,000 MW of new
hydropower capacity was either under construction or
had recently been commissioned in Canada as of early
2015. Some of this new generation will meet expected
domestic demand growth, and some will replace retiring
thermal plants. New projects face scrutiny from a range
of sources. First Nations, native people in Canada, who
have been directly impacted by hydropower project
development without serious consultation in the past are
today, more often than not, seeing their issues addressed
as part of the development process. Environmentalists
on both sides of the border have expressed opposition to
new, large hydropower projects. However, power compa-
nies have been working to address and mitigate many of
their concerns. In recent years, advances have been made
in the design of facilities, which minimize ooding and
impacts on sh. Additionally, many new plants in Canada
are being built far from populations, where there is very
little in the way of agriculture or existing infrastructure.
In most instances, individual Canadian province
electrical grids are better connected with bordering
U.S. states than with adjacent provinces. Still, additional
transmission capacity will be required to increase elec-
tricity exports. Several new international transmission
lines have been proposed, most along existing rights-
of-way; some projects are further along than others.
For example, the Champlain Hudson Power Express
is a 1,000 MW high-voltage direct current (HVDC)
transmission line from the Canadian border to New York
City expected to go into service in 2017.
41
Additionally,
the Lake Erie Connector is a 1,000 MW HVDC line that
is expected to link Ontario’s Independent Electricity
System Operator (IESO) and PJM in 2019.
42
Also in the
northeast, the proposed Northern Pass Transmission
Line from the Canadian border to a substation in
Franklin, New Hampshire, will provide 1,200 MW of
hydropower from Hydro-Québec to the New England
power grid, but project developers are still working
with stakeholders to resolve cost-responsibility, environ-
mental, and social issues.
43
In the upper Midwest, the
Federal Energy Regulatory Commission (FERC) has
recently approved construction of the Great Northern
Transmission Line.
44
The line from the Canadian
border to a substation near Grand Rapids, Minnesota,
will provide 883 MW of capacity, 383 MW of which will
be used to deliver hydroelectric power from Manitoba
Hydro to Minnesota Power’s customers.
45
This project
FIGURE 7: Canadian Electricity Exports by
Province, 2013
Source: National Energy Board of Canada, “Commodity Statistics: Electricity:
Electricity Exports and Imports: Table 2A.” February 2015. Available at: https://
apps.neb-one.gc.ca/CommodityStatistics/Statistics.aspx?language=english
New Brunswick
3.2%
Manitoba
16%
Quebec 43%
British
Columbia 11%
Ontario
27%
Alberta,
Saskatchewan
0.3%
Canadian Hydropower and the Clean Power Plan
11
should be especially benecial from the perspective of
zero-carbon electricity, as it will allow Minnesota to back
up intermittent wind power with hydropower and send
any excess wind power to Manitoba.
46
Electricity generators that have a power purchase
agreement (PPA) in place are likely to nd it easier to
obtain nancing for new power projects. A PPA is a
long-term contract for electric power between a power
generator and a purchaser, often an electric utility.
47
Generators value PPAs because the agreements guar-
antee a predictable revenue stream for delivered power
over many years, while utilities like these contracts
because they secure electricity price certainty in what
can be a volatile market. Notably in 2011, two Canadian
hydropower generators secured long-term PPAs with U.S.
utilities. Minnesota Power and Manitoba Hydro inked
a 15-year deal for 250 MW, beginning in 2020.
48
Also
in 2011, the Vermont Public Service Board approved a
26-year, 225 MW PPA between Hydro-Québec and 20
Vermont electric utilities.
49
Building new generation and new transmission, along
with crafting PPAs, are subject to regulation from state,
provincial, and federal agencies. Within these regulatory
processes, projects and contracts face challenges from
various stakeholders. Additionally, hydropower projects
face competition from other forms of electric generation.
For example, a public utility commission might be more
inclined to approve a new natural gas-red power plant
because it would save ratepayers money relative to other
forms of generation (Figure 3). In some instances, a state
RPS might favor other sources of generation, namely
wind or solar power. Additionally, states may prefer to
develop their own in-state generation because of the jobs
that in-state electric power projects bring.
50
Center for Climate and Energy Solutions
12
Canadian Hydropower and the Clean Power Plan
13
HYDROPOWER IN THE CLEAN POWER PLAN
EPA’s Clean Power Plan has the potential to drive
signicant changes in the electricity system of the United
States, including reducing the consumption of coal and
increasing the usage of RE, inclusive of hydropower.
First, this section summarizes the Clean Power Plan.
Next, it analyzes the proposed plan’s effect on domestic
and imported hydropower. Finally, it explores possible
changes to this element of the proposal.
The proposed Clean Power Plan distinguishes
between new and existing hydropower. In order to match
the approach of the proposed rule, “new” hydropower
in this report refers to hydroelectric plants built after
June 2014 and incremental generation at an existing
hydroelectric plant caused by an upgrade at that plant.
51
“Existing” generation refers to all other generation. In
general, new hydropower generation is given full credit
in the proposed Clean Power Plan while existing hydro-
power generation is ostensibly excluded.
CLEAN POWER PLAN OVERVIEW
On June 2, 2014, EPA released its proposedCarbon
Pollution Standards for Existing Power Plants(known as
the Clean Power Plan), per its authority underSection
111(d)of the Clean Air Act.
52
Once nalized, the Clean
Power Plan would establish different target emission
rates (pounds of CO
2
per MWh of electricity) for each
state due to regional variations in generation mix and
electricity consumption, but overall is projected to
achieve a 30 percent cut from 2005 emissions by 2030.
EPA is currently in the process of nalizing the rule,
which is scheduled to be complete in the summer of 2015.
This process includes the review of nearly four million
public comments submitted in response to the proposed
Clean Power Plan. Once the rule is nalized, states are
expected to have between one and three years to submit
plans to EPA to show how each will achieve its target
emission rate by 2030. EPA will then have to review and
approve these plans, which EPA intends to begin driving
emission reductions no later than 2020. This timeline
could be delayed by the courts as they consider a variety of
likely challenges, a few of which have already been led.
EPA proposed target emission rates for each state
based on the capacity of each to achieve reductions using
the following four “building blocks” identied by EPA.
53
Collectively, these four building blocks constitute the
Best System of Emission Reduction (BSER), which must
be used as the basis for setting emission performance
standards under Section 111(d).
1. Make coal-red power plants more efcient.
2. Use low-emitting natural gas combined cycle plants
more where excess capacity is available, offsetting
demand for coal.
3. Use more zero- and low-emitting power sources
such as renewables and nuclear and maintain
existing nuclear generation eet.
4. Reduce electricity demand by using electricity
moreefciently.
EXPLANATION AND CRITICISM OF RENEWABLE
ENERGY IN THE THIRD BUILDING BLOCK
A more detailed explanation of the third building block
is important to understand the role of hydropower in
the Clean Power Plan. This building block includes
both renewable energy (RE) and nuclear energy, but
only the renewable element will be addressed here. EPA
determined a projection of RE generation, in terms of
a percentage of the overall electricity portfolio, that is
achievable by 2030 for each state. To do this, EPA looked
at “the current goals of leading states in the same region,
and allows each state to grow RE generation over time
towards that target, based upon that state’s current level of
RE.”
54
This is done through the followingmethodology:
1. The nation is divided into eight regions (Alaska and
Hawaii are each a region);
2. A regional RE target is developed for each by
averaging the 2020 RPS of states within the region
that have such a standard;
3. An annual growth factor is calculated that would
allow the region to reach the regional target by
2029 assuming that RE generation would increase
from 2012 levels beginning in 2017;
Center for Climate and Energy Solutions
14
4. The annual growth factor for each region is applied
to each state within that region to calculate RE
generation in each state from 2017 to 2029. RE
generation is capped at the regional RE target.
The use of state RE targets in this process has been
criticized by a number of stakeholders due to the policy
variations in these targets across state lines.
55
One common
criticism involves hydropower since some state RPS poli-
cies, such as that of New York, allow electricity from large
hydropower projects to qualify, while others, such as that of
California, do not.
56
Thus, to some extent, electricity from
existing hydropower plants is involved in setting the target
emission rate for some regions but not others. In general,
however, existing hydropower is ostensibly excluded from
the Clean Power Plan’s target setting methodology. EPA
asserts that since existing hydropower projects provide
such a large portion of the RE in several states its inclusion
“in current and projected levels of performance would
distort the proposed approach by presuming future
development potential of large hydroelectric capacity in
other states,” though the agency solicited comment on
whether to take a different approach and nd a way to
include hydropower in its RE projections.
57
In addition to its proposed regional benchmarking
approach, EPA also details an alternative approach to
its RE projections in a Technical Support Document.
58
Under this alternative approach, RE generation projec-
tions for each state would be based on the technical and
market potential of the state to support additional RE
generation. The technical potential would be based in
part on analysis from the National Renewable Energy
Laboratory (NREL) showing the capacity of each state to
support each type of RE technology, including hydro-
power. Market potential would be determined using
output from EPA’s Integrated Planning Model (IPM). For
the alternative approach’s projections of hydropower,
EPA used an NREL analysis of the potential for new
low-power and small hydroelectric plants.
59
This analysis
includes feasibility criteria such as “site accessibility, load
or transmission proximity, and environmental concerns
that may hinder development efforts.”
60
As it did with its proposed RE projection meth-
odology, EPA specically sought comment on how
hydropower should be treated under the alternative
approach.
61
To facilitate this, EPA calculated RE projec-
tions for each state both with and without projections for
hydropower.
62
The methodology used projects hydro-
power generation to rise nationally from 273,441 GWh
in 2012 to 358,665 GWh in 2030, an increase of over 30
percent.
63
Including projections for hydropower leads
to more stringent targets overall, which would increase
demand for new renewables as well as other carbon
cutting measures.
From the perspective of international imports of RE,
whether EPA chooses the proposed or alternate approach
to building block three is technically irrelevant—the
key factor is the target emission rate assigned to each
state, regardless of how EPA arrives at this target. That is,
there should be higher demand for RE imports if states
generally have stricter emission standards. From this
perspective, the alternative approach leads to slightly
more stringent targets overall, though state by state results
feature considerable variation.
64
Although we will likely
not know which approach to RE EPA will take in the nal
version of the Clean Power Plan until it is released, EPA’s
alternate approach seems to have stronger support in the
public comments.
65
COMPLYING WITH THE TARGET EMISSION RATE
The proposed Clean Power Plan explains two critical
elements for the emission standards it establishes: 1) The
criteria for generation and efciency that factor into the
targets; and 2) The criteria for generation and efciency
that qualify for compliance. Fundamentally, it is critical
for practicality that anything included in the rst
group is also included in the second.
66
If EPA includes
a measure in its target setting methodology, it means it
applies that measure to the equation below.
Target Emission Rate
Power Sector CO
2
Emissions (lbs)
=
Generation (MWh): Fossil, nonhydro RE,
new hydro, some nuclear, efciency
When demonstrating compliance, each state would
use this same equation. In this case, the relationship
between the total generation in the equation above (the
denominator) and the emission impacts of those sources
of generation (the numerator) can be more complicated.
In most cases, any measure that reduces power sector
emissions would help a state move toward its target emis-
sion rate, regardless of whether that measure “qualies
for compliance.” However, only qualifying generation (or
efciency) would be explicitly included in the emissions
rate equation as a state seeks to demonstrate compliance.
This distinction is important for hydropower because
new hydropower is proposed to be a qualifying resource,
Canadian Hydropower and the Clean Power Plan
15
but existing hydropower is not. This distinction is
explained further below.
After EPA nalizes state emission targets, each state
would be authorized to meet its target however it sees t.
States could choose to either comply by meeting their
target emission rate, or by converting the rate to a total
amount of emissions and instead meet this mass-based
target.
67
Under either the rate-based or mass-based
approach, states could use a variety of policy tools to
reduce emissions, including power plant performance
standards, energy efciency resource standards, building
and appliance codes, renewable portfolio standards, and
carbon pricing, among other options.
A mass-based target approach could be much less
complicated than a rate-based approach. Under a rate-
based approach, a state would need to track emissions
from affected power plants as well as total qualifying
generation. This latter task would involve a number of
difcult determinations in the hydropower context,
such as the share of additional generation produced
by a specic hydropower project caused by an uprating
(increased capacity) rather than additional rainfall. In
contrast, a mass-based approach would only hinge on
the level of emissions from a state’s power plants. States
would still need monitoring protocols in place to ensure
its energy efciency programs are having the intended
effect, but these protocols would presumably not need to
be as robust.
EPA’S PROPOSED TREATMENT OF HYDROPOWER IN
THE CLEAN POWER PLAN
Although hydropower typically constitutes 6 to 8
percent of U.S. electricity mix and around 20 percent of
zero-carbon electricity generation, it is only addressed
minimally in the proposed Clean Power Plan. New
hydropower is treated identically to other new RE
generation. However, as noted above, there is relatively
limited likelihood for new hydropower generation in the
United States. Existing hydropower, on the other hand,
is not treated like other existing RE generation, and is
excluded from each state’s emission rate calculations.
68
This is clear when revisiting the equation states will use
to show their emission rates:
Emission Rate
Power Sector CO
2
Emissions (lbs)
=
Generation (MWh): Fossil, nonhydro RE,
new hydro, some nuclear, efciency
While hydropower is not credited in the proposed
Clean Power Plan the same way as other renewables,
it still implicitly factors into a state’s emission rate.
Fundamentally, each state must take steps to reduce its
power sector emission rate: CO
2
emissions/qualifying
generation. This means states have two broad methods
to achieve compliance: reduce emissions and increase
the production of qualifying generation, most likely in
combination. Most renewable forms of generation, such
as solar photovoltaic, wind, new hydroelectricity projects,
and geothermal, fall into the category of “qualifying
generation” for the purpose of the Clean Power Plan.
69
As a state increases generation from these sources, it will
likely reduce CO
2
emissions by displacing fossil-red
electricity or reducing the need for new fossil-red
generation, and increase the amount of qualifying
generation (or at least offset the subtraction of fossil
generation from the emissions rate equation).
However, existing hydropower is not counted as
qualifying generation in the proposed Clean Power
Plan. Changes in production of hydroelectricity from
existing dams will certainly affect a state’s CO
2
emissions
since fossil generation will likely increase or decrease
to balance variation in hydropower generation. For this
reason, maintaining the existing eet of hydropower
plants will be important in ensuring states can meet their
goals. New hydropower, on the other hand, is a type of
qualifying generation and would therefore be explicitly
included in the state’s emission rate calculation. For
compliance purposes, this makes new hydropower more
valuable to a state than existing hydropower.
If a state chooses to comply through a mass-based target
rather than a rate-based standard, the distinction between
new and existing hydropower disappears. Under this
approach, all zero-carbon generation, including both new
and existing hydropower, should have the same practical
effect—displacing the need for fossil-red generation. Put
another way, there will no longer be separate categories of
qualied generation and unqualied generation.
This highlights an important distinction between
the two effects hydropower would have on a state’s
emission rate. One is the “emissions effect,” or the
reduction in emissions from fossil generation displaced
by hydropower. Where present, the displaced fuel is
presumably coal to maximize the emission reduction.
This effect is generally present regardless of whether the
particular hydropower project is qualifying generation.
The “generation effect” is the reduction in emission
rate caused by adding the generation from a qualifying
Center for Climate and Energy Solutions
16
hydropower project to the state’s emission rate. The
policy options discussed below will generally only factor
into whether a state can take explicit credit for hydro-
power generation in its emission rate.
This distinction is illustrated in a highly simplied
example in Figure 8. In the baseline, the jurisdiction
features three fossil power plants and one wind farm,
each of which generate the same amount of electricity.
Between Rate 1 and Rate 2, hydropower is added to
entirely displace one of the fossil power plants, meaning
the emissions from this power plant (2,000,000 lbs
CO
2
) are no longer in the numerator of the emission
rate equation and its generation is no longer in the
denominator, bringing the emission rate down. In Rate 2
the hydropower does not count as qualifying generation,
so its generation is not included in the denominator.
In Rate 3 hydropower is qualifying generation, so it is
included in the denominator, further bringing down the
jurisdiction’s emission rate relative to Rate 2.
INTERPRETATION OF “INCREMENTAL”
EPA has proposed that both new and incremental
hydropower generation can directly count toward a
state’s compliance, but it is not clear in the text of the
proposal what is included in “incremental.”
70
A narrow
interpretation would be that states can only directly
count electricity from an existing hydropower plant if it
is the result of a plant upgrade. According to statements
of EPA ofcials, this is EPA’s current interpretation.
This would t with EPA’s general treatment of existing
hydropower generation and its explicit interest in driving
additional policy and technology measures through the
Clean Power Plan. The alternative, broader interpreta-
tion would be that any hydropower generation additional
to that in 2014, either domestic or imported, could be
included in a state’s emission rate denominator.
A broad interpretation would allow states to balance
variations from the 2012 baseline, as these variations are
likely to occur in both directions. That is, in some years
states could generate less electricity from hydropower
compared to 2012, which will likely have to be replaced
with fossil electricity, raising the state’s emission rate. In
other years, however, hydropower generation from existing
plants could be greater than it was in 2012.
71
In these
years, states would be able to both reduce fossil genera-
tion, thereby reducing the emissions in the numerator of
their emission rate calculation, and add the incremental
hydropower to the denominator, further reducing the rate.
EPA’s ultimate position on this point could have an
impact on the role of Canadian hydropower in the Clean
Power Plan. A narrow interpretation would support an
EPA position of only allowing states to take credit for the
generation effect of Canadian hydropower if it is from
a new project or the result of an upgrade to an existing
project. The broad interpretation could allow states more
exibility in the criteria used to determine if Canadian
hydropower can count toward compliance.
POSSIBLE INCLUSION OF EXISTING HYDROPOWER
IN THE CLEAN POWER PLAN
Although existing hydropower does not factor into state
target emission rates in the proposed Clean Power Plan,
EPA appears open to changing its approach. Within the
proposal, EPA notes:
With regard to hydropower, we seek comment
regarding whether to include 2012 hydropower
generation from each state in that state’s “best
practices” [RE] quantied under this approach, and
whether and how EPA should consider year-to-year
variability in hydropower generation is included in the
[RE] targets quantied as part of BSER.
72
If EPA were to include existing hydropower in the
Clean Power Plan without changing its general approach
to RE, it is unclear if this change would have much of a
practical effect. This change would increase the number
of zero-carbon MWh both in a state’s target emission rate
and the state’s real emission rates it submits to EPA during
the compliance period by roughly the same amount
(generation from existing hydropower plants in 2012 and
2020-2030). This is highlighted in the comments of RGGI,
noting that EPA should either include existing hydro-
power in both the target setting methodology and the
compliance demonstration equation, or in neither. The
RGGI comments do not indicate a preference between
these two choices, despite the region’s use of hydropower
for 11 percent of its electricity demand:
73
The RGGI states recommend that EPA either: (1)
include hydroelectric resources in the goal computa-
tion procedure, and permit all existing and future
hydroelectric resources to qualify for compliance
purposes; or, (2) remove hydroelectric power from the
goal computation methodology and permit only new
or incremental hydroelectric renewable resources to
qualify as compliance measures.
74
Canadian Hydropower and the Clean Power Plan
17
FIGURE 8: Illustration of emissions and generation effects of added hydropower
= 1500 lbs/MWh
Rate 2:
Emissions
effect
Rate 3:
Emissions and
generation
effect
= 1000 lbs/MWh
= 1333 lbs/MWh
Rate 1:
Baseline
Each icon represents 1,000 MWh
Each icon represents 2,000,000 lbs CO
2
In the baseline, there are three fossil fuel power plants. The emissions of these power plants appear in the numerator of the emissions rate
equation and the generation appears in the denominator. The generation of a zero-carbon wind farm also appears in the denominator to
reduce the overall rate. Hydropower is added to Rate 2, but it is not a qualifying resource in this case so it does not appear in the denomi-
nator. It does, however, displace a fossil fuel power plant to reduce the emissions rate relative to Rate 1. Rate 3 shows the emissions rate if
the added hydropower is a qualifying resource. The project in this case both replaces a fossil fuel plant (relative to Rate 1) and appears in
the denominator.
Center for Climate and Energy Solutions
18
Canadian Hydropower and the Clean Power Plan
19
THE CLEAN POWER PLAN’S APPROACH TO INTERNATIONAL
HYDROPOWER IMPORTS
The Clean Power Plan’s treatment of hydropower in the
generic domestic context will have an impact on the role
of Canadian hydropower, but the nal rule will likely
include a provision that addresses Canadian hydropower
specically. In a supplement to the proposed Clean
Power Plan addressing power plants in Indian country
and U.S. territories, EPA notes that it is looking for
feedback on the role of RE imports from Canada:
Some stakeholders are also interested in the treatment
of RE across international boundaries, particularly
in instances where entities in another country are
providing, or could provide, low- or non-emitting
electricity generation to serve an area in the United
States. In particular, stakeholders have asked whether
RE resources from Canada can be used to contribute
to meeting a jurisdiction’s goal. The EPA is soliciting
comment on all aspects of the treatment of RE…
generation across international boundaries in a
[Clean Air Act] section 111(d) plan, considering the
components for approvable plans…including any
mechanisms that could be used to ensure that the
low or non-emitting generation was in fact offsetting
fossil-fuel-red generation in the jurisdiction that
would use it to meet its goal.
75
This section discusses the feedback EPA has received
on this issue and explores the implications of a variety
of options it has in the Clean Power Plan’s treatment of
imported hydropower, rst in terms of target setting and
next in terms of compliance. This section also addresses
what would be needed in state plans to take advantage of
this resource.
FEEDBACK ON INTERNATIONAL HYDROPOWER IN
THE CLEAN POWER PLAN: TARGET SETTING
If EPA accepts international RE imports as valid for
compliance with state target emission rates, it also could
choose to include this electricity resource in the target
setting methodology for states with the potential to
increase imports. That is, in addition to an assessment
of each state to expand its RE generation factoring into
the third BSER building block, EPA could choose to
account for each state’s potential to import RE from
international sources as well. As discussed above, several
states already import a signicant amount of RE from
Canada, and we expect this to expand over the compli-
ance period of the Clean Power Plan. However, there
may be an issue of state authority, or lack thereof, in
including these resources in target setting equations.
Although there is an ongoing conict of opinion among
stakeholders over whether EPA should implicate agencies
outside of those typically associated with Clean Air Act
regulations, including grid operators and public utili-
ties commissions, these are all at least partially under
the authority of state governments. On the other hand,
electricity policy decisions made in Canada are outside
the authority of states.
At least one commenter, Clean Air Task Force (CATF),
supports the inclusion of imported RE in the target
setting equation of states that leverage this resource. “If
international renewable energy is expected to replace
generation at designated facilities, that renewable energy
potential must be identied and included in the jurisdic-
tion’s target setting and CPP plan.”
76
If EPA were to also
take interstate potential into account when setting RE
projections (for example, assuming states bordering the
Great Plains could take advantage of its wind potential
since it is greater than what states within the region
could consume), which CATF supports, this approach
would treat interstate and international imports consis-
tently. However, utilities have less certainty when dealing
with international imports than interstate. The Dormant
Commerce Clause of the Constitution is generally
interpreted to prevent states from adopting laws prohib-
iting the transfer of electricity across state lines, meaning
most decisions on the development and dispatch of RE
generation are made by the market. This assurance
does not exist across international borders, meaning a
provincial government (many Canadian electric utilities
are government corporations) could restrict development
Center for Climate and Energy Solutions
20
of renewable resources, meaning they may not be reliably
available for the U.S. market.
A fairness argument may also be made for requiring
international RE to be included in a state’s target
emission rate. Since only states with a direct physical
connection to international generation (typically, but
not exclusively, border states) would be able to easily
leverage these resources to reduce their emissions, it
may be relatively easier for these states to meet their
targets. However, Renewable Energy Certicate (REC)
tracking systems make it possible to take credit for RE
that is not actually consumed in a particular state. A
REC is a record that one MWh of electricity was gener-
ated from a renewable source, and can be traded across
power companies and utilities through a number of state
and regional tracking systems.
77
As with current RPS
programs, power companies could choose to comply with
Clean Power Plan requirements by purchasing RECs,
meaning they would not need a physical connection to
international RE. Since the trading of RECs could allow
any state to take advantage of the emissions benets of
imported hydropower, fairness would not require this
resource to be included in the target setting method-
ology for importing states.
If EPA does not look into the RE potential in neigh-
boring states when determining an RE projection for
each state, consistency would dictate that it not include
international resources either. If, however, a regional
element is included, EPA could conceivably assess the
potential for each state to increase both interstate and
international imports.
78
However, EPA should recognize
the added complexity and uncertainty states face when
looking across international borders for their long-term
electricity needs.
FEEDBACK ON INTERNATIONAL HYDROPOWER IN
THE CLEAN POWER PLAN: COMPLIANCE
Of the dozens of comments reviewed on this topic,
which was addressed both in comments to EPA’s June
proposal and its supplemental proposal, states and other
stakeholders by and large recommend that RE imported
from Canada, including hydropower, be treated similarly
to such electricity produced domestically. Stakeholders
with this position include the American Public Power
Association, Edison Electric Institute, the Natural
Resources Defense Council, the New York Independent
System Operator, the Utility Air Regulator Group,
and the environmental agencies of Maine, Michigan,
Minnesota, and Wisconsin.
79
For example, the Michigan Department of
Environmental Quality comments note that:
Michigan has the capability to import hydroelectric
generation from Canada and believes the nal rule
should reect and acknowledge international trading
of electricity, as well as allow for the purchase of RE
credits from other nations such as Canada….allowing
international trading of low or non-emitting elec-
tricity generation to count toward meeting our state’s
emission reduction goal would encourage Michigan
to continue to build upon progress already made in
offsetting fossil fuel-red generation with cleaner
REalternatives.
80
Environmental groups are also supportive of
this approach. Sierra Club and Earthjustice note in
theircomments:
We believe that new renewable energy resources in
foreign countries, such as Canada, which are intercon-
nected to the U.S. bulk power system, should be able
to count towards the compliance of a U.S. jurisdiction
with affected EGUs. Allowing these resources to
participate is consistent with the fact that the power
grids serving our country cross both our northern
and southern borders, that electricity is regularly
transferred in both directions across these borders,
and that three REC registries encompass Canadian
provinces or Mexican states.
81
Although commenters are largely in favor of allowing
Canadian hydropower to factor into Clean Power Plan
compliance, a handful of concerns were raised. These
include protection against double counting, assurance
that Canadian RE would be offsetting domestic fossil
generation, and the prevention of leakage. Ultimately,
none of these concerns should pose a barrier for states to
take advantage of Canadian hydropower as they imple-
ment the Clean Power Plan.
Double Counting
Double counting would occur if both the importing
state and exporting province (or state) were to take
credit for the same unit of generation. NRDC notes in
its comments that in order to qualify toward compliance,
“the international resources are not double-counted as
a non-emitting or low-emitting resource for a regulatory
obligation of both the source country and Clean Power
Plan compliance.”
82
Since many Canadian provinces and
U.S. states use RECs to track the attributes of RE, this
Canadian Hydropower and the Clean Power Plan
21
concern could be satised by requiring regulated entities
to acquire RECs from Canadian hydropower in order to
be able to take advantage of its generation effect. Since
REC trading systems already have processes in place to
avoid double counting, this should be sufcient. This
is supported by the comments of Xcel Energy, which
purchases renewable electricity from Manitoba Hydro,
the RECs from which are already tracked (meaning
double counting is prevented) by the Midwest Renewable
Energy Tracking System (M-RETS).
83
Although the relative simplicity of a mass-based
approach is noted throughout this brief, REC trading
would likely not be avoidable. If a state following a mass-
based approach were importing hydropower to reduce
its fossil emissions, it would have to acquire the RECs
for this generation. Otherwise these RECs would still be
available for purchase by a utility in a rate-based state,
causing the renewable attributes of the generation to be
double counted.
Offsetting Domestic Fossil Generation
The second concern discussed by environmental groups,
which is also noted by EPA in the supplemental proposal,
is that imported RE must offset domestic fossil genera-
tion to qualify. Even in the absence of the Clean Power
Plan’s requirements, grid operators are incentivized to
use hydropower, which has low variable costs, to displace
coal or gas generation, which have higher variable costs
than zero-carbon sources such as renewables. This is
supported by a Brattle Group study on what sources are
displaced by Manitoba Hydro exports.
84
The study found
no displacement of carbon-free generation would occur
over the next 20 years. Once the requirements of the
Clean Power Plan are in place, states will have strong
incentives to reduce emissions by using hydropower to
displace coal or gas generation. In most cases, displacing
other renewables or nuclear generation with imported
hydropower would not help a state reduce its power
sector emissions rate, and is therefore discouraged by the
Clean Power Plan.
85
Many states also have RPS policies
(most of which do not count Canadian hydropower
as a qualifying resource) that will continue to drive
domestic RE development even in the presence of new
hydropowerimports.
Leakage
Leakage, which in some contexts is known as resource
shufing, describes the case where calculated emissions
are reduced from an accounting perspective without
an equal reduction in actual emissions. For example,
if a certain state begins importing RE instead of coal
energy from an exporting state, it could conclude that
it has reduced its electricity emissions. However, if the
exporting state does not adjust its actual generation, no
actual emissions have been avoided by the importing
state’s action.
Sierra Club and Earthjustice cite the risk of
cross-border leakage as a reason why interstate and
international RE generation should be treated differ-
ently.
86
These comments note that, in order to ensure
imported RE is offsetting fossil-fuel-red generation in
the importing jurisdiction, “EPA could…requir[e] the
entity seeking to take credit to provide evidence that the
electricity generated was intended for U.S. consumption,
such as through the existence of a power purchase agree-
ment or rm transmission service rights.”
87
However, there are reasons to doubt leakage would
be a concern for Canadian hydropower. Leakage would
require Canada to direct more hydropower to the
United States while generating more coal-red power
for its domestic consumption, which is unlikely. Like the
United States, Canada has committed to greenhouse
gas emission target of 17 percent below 2005 levels by
2020.
88
Canada has limited coal capacity compared to
the United States (Figure 6) and new coal plants are
subject to a strict limit of 925 lbs CO
2
/ MWh, essentially
requiring Carbon Capture and Sequestration (CCS)
technology, through the Reduction of Carbon Dioxide
Emissions from Coal-red Generation of Electricity
Regulations.
89
Driven by this and other factors, Canada
has been a leader in the commercialization of CCS—the
rst commercial-scale CCS power project began opera-
tion in 2014 in the province of Saskatchewan.
90
While
Canada’s actions on existing plants have been deemed
weaker than the Clean Power Plan in the near-term, coal
without CCS will effectively be phased out of the nation
in the medium-term.
91
Existing plants must shutter at
the end of their “useful life” (45-50 years), which would
leave very few plants operational after 2020.
92
All plants
not meeting this standard would have to be shuttered
by 2030.
93
Although this particular regulation leaves it
theoretically possible for Canada to direct more of its
hydropower to the United States while increasing the
combustion of coal for its own demand, the Canadian
coal plant regulations effectively cap the amount of
leakage this would cause, which would decline over time
as Canadian coal plants are retired.
Center for Climate and Energy Solutions
22
In addition to its federal rules on coal plants, all
Canadian provinces have either a renewable standard,
directive, or target to encourage more RE generation.
94
Canadian electricity providers are therefore encouraged
to deliver RE to their own customers, weakening any
relative incentive the Clean Power Plan would have for
RE generators in Canada to send electricity across the
border. Canadian provinces and U.S. states track most
RE through Renewable Energy Credits (RECs) through
networks that can include both states and provinces.
95
Perhaps even more relevant for a leakage assessment,
the provinces with signicant exports to the United
States either have no coal generation, policies targeted
directly at reducing greenhouse gas emissions, or
both. Quebec (43 percent of Canadian exports, see
Figure 7) does not have any coal generation and has a
cap-and-trade system that covers the electricity sector.
Ontario (27 percent of exports) has eliminated coal as a
source for electricity and is developing a carbon price.
96
Manitoba (16 percent of exports) has only one small coal
plant that can be used only in emergencies and droughts,
and will be retired when a hydropower plant currently
under development comes online.
97
Manitoba also has
a tax on coal.
98
Finally, British Columbia (11 percent of
exports) has a carbon tax in place of $30 (Canadian) per
metric ton of carbon dioxide equivalent.
99
The combination of these federal and provincial
policies discouraging the combustion of coal, prohibiting
the construction of new coal plants without CCS, and
encouraging RE generation makes it unlikely that
Canadian power companies would begin redirecting RE
generation into the United States and coal electricity for
domestic demand.
Note that a typical resource shufing scenario, which
involves changes in accounting rather than actual gener-
ation, would be extremely unlikely in this context. In a
typical resource shufing scenario, a U.S. utility would
end a long-term contract for imported coal electricity
and replace it with a contract for imported hydropower.
The U.S. utility would seek credit for reducing its emis-
sions, even though a change in the exporting province’s
generation mix may not have occurred. Under the
proposed Clean Power Plan, however, the importing state
was not responsible for the emissions from the imported
coal electricity in the rst place, nor would the imported
hydropower be qualifying generation because it would
not be the result of a new project. Moreover, the majority
of Canadian electricity trade is conducted on the spot
market and is generally the result of surplus output from
hydropower resources. The minimal turnover of long
term contracts could have only a nominal impact on a
state’s calculated power sector emissions rate.
In its comments on the Clean Power Plan, NRDC
highlights the additional risk of leakage between rate-
based and mass-based states.
100
This is an important issue
that EPA must address, but it is not exacerbated in an
international context.
POSSIBLE TREATMENTS OF CANADIAN
HYDROPOWER
Overall, EPA’s proposal and prominent comments point
to three possible treatments of international hydropower
in the Clean Power Plan:
1. Treat international hydropower similarly to
domestic hydropower.
2. Exclude international hydropower from the Clean
Power Plan.
3. Provide special consideration to international
hydropower by counting existing plants as quali-
fying generation in some circumstances.
These three possibilities are addressed in turn below,
followed by a discussion of state plans. The key distinc-
tion among options is what, if any, imported hydropower
is a qualifying resource.
Option 1: Treat international hydropower trade like
interstate hydropower trade
As proposed, the Clean Power Plan does not directly
address how states should address internationally
imported RE in their plans. One approach EPA could
take is to treat RE owing across international borders
equivalently to RE owing across state borders. EPA’s
proposed approach to interstate imports of RE is
asfollows:
The EPA is proposing that, for renewable energy
measures, consistent with existing state RPS policies,
a state could take into account all of the CO
2
emission
reductions from renewable energy measures imple-
mented by the state, whether they occur in the state or
in other states. This proposed approach for RE acknowl-
edges the existence of renewable energy certicates
(REC) that allow for interstate trading of RE attributes
and the fact that a given state’s RPS requirements often
allow for the use of qualifying RE located in another
state to be used to comply with that state’s RPS.
101
Canadian Hydropower and the Clean Power Plan
23
Under this approach, a state could take credit for
the generation effect of qualifying generation whether
it originated in-state, in another state, or in another
nation, provided the importing state acquired both the
electricity itself and its renewable attributes. There would
be a distinction between new and existing hydropower
under this approach, but no distinction related to
geography. Allowing credit for imported zero-carbon
energy would allow states to take advantage of the
least-cost option for such energy, regardless of whether it
is located in-state. This would help keep compliance costs
low without sacricing emission reductions.
Option 2: Exclude Canadian hydropower from the
Clean Power Plan
Another option for EPA would be to bar states from
taking credit for hydropower imported from Canada
as qualifying generation in their power sector emission
rate. Within the Clean Power Plan, EPA notes “We also
request comment on the option of allowing a state to
take into account only those CO
2
reductions occurring
in its state.”
102
It seems EPA may therefore be considering
keeping emission rate calculations simple by only
allowing a state to factor in the generation and emissions
that occur within its borders. This would presumably
bar states from taking credit for the generation effect of
zero-carbon generation both imported from other states
and other countries. The emissions effect that imported
RE would have on total in-state emissions would still
bepresent.
This approach would be difcult for EPA to justify.
In the interstate context, the electricity system does not
follow state borders and energy regularly ows across
borders for a variety of reasons. As one example, some
states are better suited to large-scale wind projects and
it can make much more economic sense for a power
company to import wind electricity from one of these
states rather than build a wind farm in a suboptimal
location. Preventing states from counting RE imported
from other states would restrict states from fully taking
advantage of RE opportunities and could decrease
overall investment in RE. The Great Plains states have a
high capacity for wind energy, but generally low demand.
Some Western and Midwestern states, such as California
and Missouri, have higher demand but are less suited for
wind generation. Discouraging the trade of RE across
these states would raise compliance costs in importing
states, reduce economic development in exporting states,
complicate grid operation since states would want to
avoid exporting RE generation, and reduce the total
amount of investment in RE generation without leading
to additional emission reductions.
This is true along the U.S.-Canada border as well. As
discussed above, electricity regularly ows across this
border and it would be irrational to assume that a state’s
electricity system exists only within its borders. This
integration of electricity systems across the U.S.-Canada
border would make it somewhat arbitrary for EPA to treat
interstate imports differently from international imports.
As with a bar on using interstate imports for compliance,
preventing states from leveraging Canadian imports
to reduce emissions would limit the options available
to border states and complicate grid operation. In our
review of public comments on this topic, no stakeholder
advocated for this position.
Option 3: Give consideration for new import contracts
from existing Canadian hydropower projects
The proposed Clean Power Plan notes that the genera-
tion effect from existing hydropower generation cannot
count toward compliance. EPA argues that since most
hydropower projects were built decades ago for reasons
unrelated to climate change, they should not be fully
credited for compliance with the Clean Power Plan. As
discussed above, since this generation is also not part of
the target setting methodology for states, its exclusion
from compliance demonstration has little practical
impact. However, it may be possible for EPA to make an
exception for new imports (new contracts) from existing
hydropower projects in Canada.
There are at least two possible scenarios in which
new U.S. demand could lead to marginal generation
from existing Canadian hydropower projects. These two
scenarios are similar—an existing hydropower project is
not currently operating to its full potential due to either
insufcient demand or insufcient transmission. With
the Clean Power Plan in place, states will be encouraged
to work with Canadian power producers to optimize the
use of existing hydropower plants. Although this would
not meet EPA’s current denition of new hydropower
generation, and therefore would not be qualifying gener-
ation according to the proposal, this would effectively be
additional zero-carbon generation, driven by the Clean
Power Plan, used in place of U.S. fossil generation.
Under these scenarios, the concerns discussed above
for qualifying generation (double counting, offsetting
Center for Climate and Energy Solutions
24
domestic fossil generation, leakage) would not be present
or could be easily addressed. The double-counting
question could be solved through the use of RECs, as
with new projects. States could make the same showing
that the marginal generation from existing projects is
being used to displace domestic fossil fuel consumption.
As discussed above, leakage is unlikely in the Canadian
hydropower context for both new projects and additional
generation from existing projects.
At least one set of comments, from Sierra Club and
Earthjustice, opposes this option: “Specically, genera-
tion from any renewable energy resource existing as
of the date of the proposed rule cannot count towards
compliance.”
103
Excluding existing generation from
qualifying generation ensures states will have to take
steps to make real reductions in their emissions rate, and
excluding existing imported hydropower promotes this
goal as well. However, there are some cases where action
is necessary, perhaps in the form of a new transmission
project, to import additional electricity from an existing
hydropower project. To ensure states are able to take full
advantage of Canadian hydropower to reduce emissions,
EPA should explore ways to include additional genera-
tion from existing projects as qualifying generation.
CANADIAN HYDROPOWER IN STATE PLANS
Since the Clean Power Plan will be implemented at the
state level (unless EPA issues a Federal Implementation
Plan for a state that does not submit an adequate plan),
hydropower will have to be addressed in state plans in
addition to the federal rule to take full advantage of
this resource. A more fundamental question states must
address before working through its resource options is to
determine whether it will pursue a rate-based or mass-
based compliance target. In a rate-based system, states
will have to determine whether, and how, hydropower
should be included as a qualifying resource, should EPA
allow this. States should have some exibility in how they
treat hydropower if it is included by EPA as a qualifying
resource. For example, if EPA notes in the nal Clean
Power Plan that new hydropower can count toward
compliance if installed after June 2014, a state could
choose to be more restrictive and only count the genera-
tion effect of hydropower installed during the compli-
ance period. This section rst addresses state options
under a rate-based system, followed by the implications
of a mass-based system on Canadian hydropower.
Canadian hydropower in a rate-based system
If EPA chooses to exclude Canadian hydropower from
Clean Power Plan compliance, states may still choose to
include this resource as part of their compliance plans
insofar as imported hydropower can displace fossil
generation and therefore reduce the state’s emissions
and/or emissions rate. This effect will exist regardless
of whether hydropower is deemed to be a qualifying
resource, but states will need to account for any changes
in hydropower through the compliance period in order
to ensure their power system overall will meet its target
emission rate.
If EPA includes Canadian hydropower in its Clean
Power Plan, either from incremental generation
exclusively or from both incremental generation and
new contracts, states with the capacity to draw from
this resource will be encouraged to take advantage of
it in their implementation plans. States will have to
determine any limitations on what hydropower can fully
count toward compliance, including the threshold date
for what qualies as new, how to track the zero-carbon
attribute of the electricity such that it is not double
counted (very likely through a REC tracking system),
whether there will be any distinctions among intrastate,
interstate, and international generation, and what policy
measures, if any, the state will take to encourage new
hydropower generation. In making these determinations,
states will need to consider the impacts of new hydro-
power both on Clean Power Plan compliance and their
electricity system overall. In addition to the zero-carbon
electricity it supplies, new hydropower generation could
help balance intermittent renewables a state adds to
displace fossil generation.
To explore the impact of additional hydropower
imports in rate-based systems, we analyzed the effect an
additional 1,205,325 MWh of hydropower (a hypothetical
250 MW plant operating at a 55 percent utilization
factor) would have on the emission rates of seven states
that already import Canadian hydropower. Due to the
emissions effect, states will benet from additional
hydropower even if EPA does not consider it to be quali-
fying generation. If the project were to be qualifying
generation, the generation effect would further reduce
the state’s overall emission rate.
As shown in Table 1, states with relatively low emis-
sion rates where hydropower is likely to displace coal,
including Massachusetts and New York, benet relatively
more from the emissions effect than the generation
Canadian Hydropower and the Clean Power Plan
25
effect. This is due to the removal of a signicant portion
of the states’ limited coal emissions from the numerator
of the power sector emissions rate. States with higher
emission rates and states where gas is more likely to be
displaced by hydropower benet relatively more from
the generation effect since either a relatively smaller
share of coal emissions are being removed from the
numerator (Michigan, Pennsylvania, and Wisconsin) or
a smaller absolute number is being removed from the
numerator due to the relatively low emissions rate of gas
(California). Of course, the same amount of hydropower
will have a larger effect in states with smaller generation
portfolios overall (Massachusetts has about one-third as
much qualifying generation as Michigan).
Table 1 shows that 250 MW of new imports could
help certain states take a signicant step toward compli-
ance with their proposed Clean Power Plan targets. In
Massachusetts, assuming no other changes in the state’s
power sector, this level of new imports could reduce its
overall emission rate by about 10 percent, or about 32
percent of the difference between its 2012 rate and its
proposed 2030 target. This level of new imports could
similarly help Minnesota move about 19 percent of the
way toward its proposed 2030 goal, and Wisconsin’s
emissions rate could move 12 percent of the way toward
its target with a new 250 MW project.
104
If these hypo-
thetical 250 MW projects were not qualifying generation
(meaning there would be no generation effect on the
state’s calculated emission rate), Massachusetts would
only move 20 percent of the way toward its target,
Minnesota 9 percent, and Wisconsin 4 percent.
105
For imported RE, including qualifying hydropower,
to be fully counted in overall emission rates, the
critical factor is for a state to show that it is “offsetting
fossil-fueled generation.”
106
This requirement is unique
to international RE imports.
107
EPA does not suggest
how states might meet this requirement, but in their
comments The Sierra Club and Earthjustice suggest
that states could require “the entity seeking to take
credit to provide evidence that that electricity generated
was intended for U.S. consumption, such as through
the existence of a power purchase agreement or rm
transmission rights.”
108
On the other hand, NYISO
suggests in its comments that states should simply
have to “demonstrate the displacement of fossil-red
generating units by international resources to the extent
that they must demonstrate displacement of in-state
resources.”
109
Although it is currently unclear what steps
TABLE 1: The Impact of 250 MW of New Hydropower on the Emission Rate of Selected States
if Not Qualifying (Emissions Effect) or Qualifying (Emissions and Generation Effects)
STATE FUEL 2012 RATE* EM. EFFECT DROP
EM. AND
GEN. EFFECT
DROP
(MARGINAL)
2030
TARGET
CA Gas 555 553 0.4% 549 0.7% 537
MA Coal 824 775 6.0% 745 3.8% 576
MI Coal 1,632 1,624 0.5% 1,601 1.4% 1,161
MN Coal 1,191 1,162 2.5% 1,132 2.6% 873
NY Coal 859 838 2.4% 826 1.5% 549
PA Coal 1,487 1,482 0.3% 1,471 0.8% 1,052
WI Coal 1,663 1,646 1.0% 1,607 2.4% 1,203
*2012 Rate factors in energy efciency reported by EPA. Since this was not factored into the 2012 emissions rates listed by EPA, these
rates may differ from those in EPA Technical Support Documents.
This table shows the 2012 emission rate and 2030 target emission rate, according to EPA, of states that import Canadian hydropower. The
“Em. Effect” column shows the impact of 1,205,325 additional MWh of hydropower that does not count as qualifying generation on the
state’s emission rate, assuming the listed “Fuel” is displaced. Coal was assumed to be the displaced fuel unless the state consumed less
than 1,205,325 MWh of coal generation in 2012. “Em. and Gen. Effect” shows what the state’s emission rate would be if the new hydro-
power were qualifying generation, such that the state could count both the emissions and generation effects. This is an illustrative example
only and is not highlighting any specic proposed project.
Source: U.S. Environmental Protection Agency, Goal Computation Technical Support Document. June 2014. Available at: http://www2.epa.gov/carbon-pollution-
standards/clean-power-plan-proposed-rule-technical-documents; and C2ES calculations.
Center for Climate and Energy Solutions
26
a state would have to go through to show that imported
hydropower should be a qualifying resource in a rate-
based program, no requirements should be present in a
mass-basedprogram.
Canadian hydropower in a mass-based system
Under a mass-based system, the primary element of the
Clean Power Plan’s treatment of imported hydropower
that will have an impact on state implementation should
be its impact on the target emission rate. That is, if EPA
factors imported hydropower into state emission targets,
it will result in stricter target emission rates, which would
translate to a lower mass-based target. Additionally,
if the nal version of the Clean Power Plan allows for
the banking of early action credits, states could choose
to assign mass-based credits to hydropower projects
completed between 2014 (or another threshold year
picked by the state, within bounds set by EPA) and 2020
when compliance obligations start.
In terms of demonstrating compliance, the Clean
Power Plan’s treatment of imported hydropower, or
hydropower in general, should be irrelevant to states
pursuing a mass-based target. As long as power plant
emissions are reduced, whether it be through domestic
non-hydro RE, energy efciency, or imported hydro-
power, the only issue of consequence is that power plant
emissions decline. For example, in RGGI’s mass-based
system the only requirement for compliance is that fossil
fueled power plants hold enough allowances to match
their emissions. Thus anything that reduces the demand
for fossil electricity helps power plants reduce emissions
and bring down the overall emissions of states partici-
pating in RGGI.
Canadian Hydropower and the Clean Power Plan
27
CONCLUSION
Canada already supplies a signicant share of hydro-
power to the United States, is currently working to add
more than 11,000 MW of additional capacity, and has
the potential to add much more in the future. As a
non-emitting resource, a portion of this new capacity
could help states meet their Clean Power Plan goals.
To maximize the ability of states to take advantage of
Canadian hydropower as they implement the Clean
Power Plan, EPA would need to conrm in the nal rule
that new Canadian capacity is a qualifying resource.
EPA faces a variety of decisions regarding the treat-
ment of hydropower imports in the nal version of the
Clean Power Plan. These decisions are summarized in
Table 2. The strong connection between the Canadian
TABLE 2: Summary of EPA’s Options and Implications Regarding Imported Hydropower in the
Clean Power Plan
ISSUE OPTIONS IMPLICATIONS
Treatment of international
hydropower: Target setting
Imported hydropower is
included in EPA’s target
setting methodology
Renewable energy projections would be increased for
states that have the potential to import additional hydro-
power, making their target emission rates more stringent.
Imported hydropower is
excluded from EPA’s target
setting methodology
Assuming no other policy changes, state targets would
remain as proposed.
Treatment of international
hydropower: Compliance*
International hydropower
is treated equivalently to
interstate hydropower
States will be able to fully count new and incremental
Canadian hydropower to reduce their emission rates.
International hydropower is
never considered qualifying
generation
States will not be able to include the generation effect
of Canadian hydropower in their emission rates, though
the emissions effect would still be included. International
hydropower would still be implicitly credited in states with
mass-based systems.
Special consideration is given
for new imports from existing
plants where some additional
action is required
In addition to new and incremental hydropower, states
would be able to fully count new imports from existing
plants that are enabled by new transmission projects or
other special circumstances.
Denition of incremental* All incremental generation
above 2014 levels counts as
qualifying generation
Emission rates could fall as a result of additional generation
at existing plants caused by rainfall changes. This could
also open the door to credit generation from existing
Canadian projects in certain cases.
Only incremental generation
resulting from plant upgrades
counts as qualifying
generation
Changes in generation levels, in either direction, from 2014
would have less of an impact on emission rates. States
would have more certain benets from upgrades to plants.
Credit from Canadian hydropower would be limited to
new plants and upgrades.
* For a state that takes a mass-based approach to compliance, any additional hydropower that serves to displace fossil generation would
help the state achieve compliance, regardless of whether the hydropower is qualifying generation.
Center for Climate and Energy Solutions
28
and U.S. electricity systems discussed throughout this
paper will remain regardless of EPA’s decisions in the
Clean Power Plan. However, the Clean Power Plan offers
the opportunity for states to take advantage of untapped
hydropower resources in Canada as a source of zero-
carbon, low-cost, reliable electricity.
The impact of Clean Power Plan is predicated on what
EPA includes in the nal rule, but several important
state- and regional-level decision points will likely
remain. States will still have to determine what policies to
put in their plans to comply with their nal emission rate
targets that are within the bounds set by EPA. Once state
plans are nalized, regional grid operators and power
companies will have to determine how to implement
them. If enabled by EPA’s nal rule, there should be
ample opportunities for states to craft innovative policies
and measures to take advantage of Canadian hydropower
in a manner that achieves real emission reductions.
Canadian Hydropower and the Clean Power Plan
29
ENDNOTES
1 U.S. Energy Information Administration. 2014. “Annual Energy Outlook 2014: Renewable Energy Generating
Capacity and Generation.” Available at http://w w w.eia.gov/foreca sts/aeo.
2 National Energy Board, “Canada’s Energy Future 2013—Energy Supply and Demand Projections to 2035—An
Energy Market Assessment. Chapter 8: Electricity Outlook.” November 2013. Available at: https://www.neb-one.gc.ca/nrg/
ntgrtd/ftr/2013/index-eng.html#s8.
3 U.S. Department of the Interior Bureau of Reclamation, “Hydroelectric Power” July 2005. Available at: h t t p : //
www.usbr.gov/power/edu/pamphlet.pdf.
4 Pumped storage is another type of hydropower plant. Pumped storage facilities use inexpensive electricity
(typically overnight during periods of low demand) to pump water from a lower-lying storage reservoir to a storage reservoir
located at a higher elevation than the power house (Figure 1) for later use during periods of peak electricity demand. Since
this technology uses more electricity than it generates, it is not considered to be renewable. Note that it is economical to do
this since the revenues that a generator receives during times of peak electricity generation far exceed the costs that they
pay to pump the water during times of low electricity demand.
5 John Harrison, “Columbia River Treaty (1964).” The Oregon Encyclopedia, accessed February 2015, http://www.
oregonencyclopedia.org/articles/columbia_river_treaty_1964_/#.VOtvay4YEsA.
6 A 2013 study by Black & Veatch highlights the economic and emissions benets of hydropower, and imported
hydropower specically, on New England states. Hydro Imports Analysis (November 1, 2013) Available at: http://www.nescoe.
com/uploads/Hydro_Imports_Analysis_Report_01_Nov__2013_Final.pdf. A MISO study explains that the exibility
benets of hydropower resources could enable the grid operator to take fuller advantage of its wind resources. Jordan
Bakke et al., MISO, Manitoba Hydro Wind Synergy Study. Available at: https://www.misoenergy.org/_layouts/MISO/ECM/
Download.aspx?ID=160821.
7 U.S. Geological Survey, “The Water Cycle.” March 2014. Available at: http://water.usgs.gov/edu/watercycle.html.
8 Synapse Energy Economics, “Hydropower Greenhouse Gas Emissions.” February 2012; Alain Tremblay et al.,
“The Issue of Greenhouse Gases from Hydroelectric Reservoirs: From Boreal to Tropical Regions,” Table 1, p. 3 Available
at: http://www.un.org/esa/sustdev/sdissues/energy/op/hydro_tremblaypaper.pdf.
9 Intergovernmental Panel on Climate Change. 2011. “IPCC Special Report on Renewable Energy Sources and
Climate Change Mitigation.” Prepared by Working Group III of the Intergovernmental Panel on Climate Change. Available
at: http://srren.ipcc-wg3.de/report; Pual J. Meier. 2002. “Life-Cycle Assessment of Electricity Generation Systems and
Applications for Climate Change Policy Analysis, Ph.D. Dissertation, University of Wisconsin, Madison.” Available at: h t t p : //
fti.neep.wisc.edu/pdf/fdm1181.pdf.
10 Note that pure run-of-river projects have negligible effects on ow and temperature.
11 Lea Kosnik. 2008. “The Potential of Water Power in the Fight against Global Warming in the U.S.,” Energy
Policy (36): 3252-3265. Available at: http://www.umsl.edu/~kosnikl/Saved%20Emissions.pdf; Jim Carlton, “Deep in the
Wilderness, Power Companies Wade In,” Wall Street Journal, August 2009. Available at: http://www.wsj.com/news/articles/
SB125080811184347787?mg=reno64-wsj.
Center for Climate and Energy Solutions
30
12 Kelsi Bracmort, Congressional Research Service. “Hydropower: Federal and Nonfederal Investment.” January
2013. Available at: http://fas.org/sgp/crs/misc/R42579.pdf.
13 Hydro is assumed to have seasonal storage so that it can be dispatched within a season, but overall operation is
limited by resources available by site and season. The capacity factor for the marginal site modeled can vary signicantly by
region. The capacity factor range for hydroelectric is 30 percent to 65 percent.
14 U.S. Energy Information Administration, “Annual Energy Outlook 2014,” January 2014. Available at: http://
www.eia.gov/forecasts/aeo/electricity_generation.cfm.
15 Ibid.
16 U.S. Energy Information Administration, “Assumptions to the AEO 2014.” May 2014. Available at: http://www.
eia.gov/forecasts/aeo/assumptions/.
17 Dominion Virginia Power. “Dominion Virginia Power 15-Year Plan Targets Reliable, Cost-Effective Solutions
for Growing Energy Needs.” Dominion News. September 1, 2011. Available at http://dom.mediaroom.com/index.
php?s=26677&item=71833; Hydroworld, “Project Development: From Concept to Construction: Steps to Developing a
Hydro Project.” April 2010. Available at: http://www.hydroworld.com/articles/hr/print/volume-29/issue-3/articles/project-
development.html.
18 U.S. Energy Information Administration. “Total Energy: Table 7.2a.” Available at: http://www.eia.gov/
totalenergy/data/monthly/#electricity.
19 Nuclear and hydropower are zero-emission sources in the sense that they emit no greenhouse gases from their
primary generation activities. These sources can have very low levels of emissions from operation of emergency generators,
HVAC, etc.
20 U.S. Energy Information Administration. “International Energy Statistics: Electricity: Capacity: Hydroelectric.”
Available at: http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=33&aid=7&cid=regions&syid=2008&eyid
=2012&unit=MK; Shih-Chieh Kao, Oak Ridge National Laboratory, “New Stream-Reach Development: A Comprehensive
Assessment of Hydropower Energy Potential in the United States.” April 2014.
21 Shih-Chieh Kao, April 2014.
22 Ibid.
23 Boualem Hadjerioua, Oak Ridge National Laboratory, “An Assessment of Energy Potential at Non-Powered
Dams in the United States.” April 2012.
24 Douglas G. Hall, Idaho National Laboratory, “Feasibility Assessment of the Water Energy Resources of the
United States for New Low Power and Small Hydro Classes of Hydroelectric Plants.” January 2006. Available at: http://
www1.eere.energy.gov/water/pdfs/doewater-11263.
25 U.S. Energy Information Administration. 2014. “Annual Energy Outlook 2014: Renewable Energy Generating
Capacity and Generation.” Available at: http://www.eia.gov/forecasts/aeo.
26 Statistics Canada, “Electric Power Generation: Table 127-0007.” Available at: http://www5.statcan.gc.ca/cansim/
pick-choisir?lang=eng&p2=33&id=1270007.
27 Ibid.
28 Statistics Canada, “Installed generating capacity, by class of electricity producer, annual (kilowatts),” accessed
February 24, 2015, http://www5.statcan.gc.ca/cansim/a33?RT=TABLE&themeID=4012&spMode=tables&lang=eng.
Canadian Hydropower and the Clean Power Plan
31
29 EEM Sustainable Management. 2007. “Study of Hydropower Potential in Canada.” Available at: https://canada-
hydro.ca/reportsreference/external-reports. The technical potential is the maximum amount of electric capacity that could
be added based on water ows, elevation, geography and so on. Considering environmental and economic factors, among
other things, the total electric capacity that would be feasible is smaller than the technical potential. A study of this type has
yet to be conducted.
30 United Nations Industrial Development Organization and International Center on Small Hydro Power. 2013.
“World Small Hydro Development Report 2013: Canada.” Available at: http://www.smallhydroworld.org/.
31 SNL Energy, “Potential Canadian Hydro Projects.” February 12, 2015.
32 U.S. Energy Information Administration, “Today in Energy: Canada Week: The United States and Canada
share the world’s most signicant energy trade.” November 2012. Available at: http://www.eia.gov/todayinenergy/detail.
cfm?id=8910.
33 Ibid.
34 Energy & Commerce Committee U.S. House of Representatives Chairman Fred Upton, “North American
Energy Infrastructure Act Will Bolster U.S-Canada Electricity Relationship.” May 2014. Available at:: http://energycom-
merce.house.gov/press-release/north-american-energy-infrastructure-act-will-bolster-us%E2%80%93canada-electricity.
35 Andrew Martinez et al., Integrated Canada-U.S. Power Sector Modeling with the Regional Energy Deployment System
(ReEDS), (National Renewable Energy Laboratory, Golden, CO: February 2013), 34. Available at: http://www.nrel.gov/docs/
fy13osti/56724.pdf.
36 Bipartisan Policy Center, “Clean Power Plan Comments Map,” last accessed March 27, 2015, http://bipartisan-
policy.org/energy-map/.
37 Stephane Bordeleau, CBC News, “Where Canada’s Surplus Energy Goes.” March 31, 2011. Available at: http://
www.cbc.ca/news/canada/where-canada-s-surplus-energy-goes-1.1109321.
38 Canadian Electricity Association. “Electricity 101.” August 2014. Available at: http://www.electricity.ca/media/
Electricity101/Electricity101.pdf.
39 National Energy Board (Canada), “Electricity Exports and Imports Statistics,” accessed January 2015, https://
apps.neb-one.gc.ca/CommodityStatistics/Statistics.aspx?language=english
40 Ibid.
41 Transmission Developers Inc., “Champlain Hudson Power Express: Project Development Portal: About the
Project.” Accessed January 2015: http://www.chpexpress.com/about.php.
42 Trabish, Herman K., Utility Dive, “How ITC Holdings plans to connect PJM demand
with Ontario’s rich renewables.” December 2014. Available at: http://www.utilitydive.com/news/
how-itc-holdings-plans-to-connect-pjm-demand-with-ontarios-rich-renewables/341524/.
43 The Northern Pass, “Project Overview,” accessed February 2, 2015, http://northernpass.us/project-overview.
htm; Allie Morris, Concord Monitor, “Northern Pass ofcials willing to bury more transmission lines, but how much more?”
November 18, 2014. Available at: http://www.concordmonitor.com/news/work/business/14412887-95/northern-pass-
ofcials-willing-to-bury-more-transmission-lines-but-how-much-more; John Herrick, VT Digger, “Hydro-Quebec looking
south to new markets.” March 24, 2015. Available at: http://www.concordmonitor.com/news/work/business/14412887-95/
northern-pass-ofcials-willing-to-bury-more-transmission-lines-but-how-much-more.
44 Herman K. Trabish, Utility Dive, “FERC approves Great Northern transmission line to link
Manitoba hydro and Minnesota wind.” January 14, 2015. Available at: http://www.utilitydive.com/news/
ferc-approves-great-northern-transmission-line-to-link-manitoba-hydro-and-m/352797/.
Center for Climate and Energy Solutions
32
45 Minnesota Power, “Great Northern Transmission Line: Federal approval of a construction agreement for the
Great Northern moves international transmission project forward.” December 2014. Available at: http://www.greatnorth-
erntransmissionline.com/news/federal-approval-construction-agreement-great-northern-moves-international-transmission-
project-forward/
46 Evan Ramstad, Star Tribune, “Minnesota Power les for new power line from Canada to Iron Range. April
16, 2014, http://www.startribune.com/business/255513641.html; for more information see Minnesota Power, “Great
North Transmission Line,” http://www.greatnortherntransmissionline.com/les/8314/2349/4330/MP-GNTL_Handout_
v13_20150109.pdf
47 World Bank Group, “Public-Private Partnership in Infrastructure Resource Center,” accessed
February 5, 2015, http://ppp.worldbank.org/public-private-partnership/sector/energy/energy-power-agreements/
power-purchase-agreements.
48 Minnesota Power, “Hydro,” accessed February 6, 2015, http://www.mnpower.com/Environment/Hydro.
49 Nancy Remsen, Burlington Free Press, “Board approves power deal with Hydro-Québec.” April
18, 2011. Available at: http://archive.burlingtonfreepress.com/article/20110418/NEWS03/110418018/
Board-approves-power-deal-Hydro-Quebec.
50 Natural Resources Defense Council, “Carbon Pollutions Standards Fact Sheet: Iowa.” May 2014, http://www.
nrdc.org/air/pollution-standards/les/cps-state-benets-IA.pdf.
51 79 Fed. Reg. 34867 (June 18, 2014).
52 Kyle Aarons, Q&A: EPA Regulation of Greenhouse Gas Emissions from Existing Power Plants (Washington, DC: Center
for Climate and Energy Solutions, 2015), http://www.c2es.org/docUploads/qa-epa-clean-power-plan.pdf.
53 Center for Climate and Energy Solutions, “Carbon Pollution Standards Map,” accessed March 17, 2015, h t t p : //
www.c2es.org/federal/executive/epa/carbon-pollution-standards-map.
54 U.S. Environmental Protection Agency, Technical Support Document for Carbon Pollution Emission Guidelines for
Existing Stationary Sources: GHG Abatement Measures (Washington, DC: U.S. Envrionemtnal Protection Agency, 2014), 4-1–4-2,
http://www2.epa.gov/sites/production/les/2014-06/documents/20140602tsd-ghg-abatement-measures.pdf.
55 Edison Electric Institute, Comments of the Edison Electric Institute on Carbon Pollution Emission Guidelines
for Existing Stationary Sources: Electric Utility Generation Units (December 1, 2014), 93–119, http://www.regulations.
gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-23224.
56 Center for Climate and Energy Solutions, “Renewable and Alternative Energy Portfolio Standards Map,”
accessed March 12, 2015, http://www.c2es.org/us-states-regions/policy-maps/renewable-energy-standards.
57 U.S. Environmental Protection Agency, Technical Support Document for Carbon Pollution Emission Guidelines for
Existing Stationary Sources: GHG Abatement Measures, 4-5.
58 U.S. Environmental Protection Agency, Alternative RE Approach Technical Support Document (Washington, DC: U.S.
Envrionemtnal Protection Agency, 2014), http://www2.epa.gov/sites/production/les/2014-06/documents/20140602tsd-
alternative-re-approach.pdf.
59 Douglas G. Hall et al., Feasibility Assessment of the Water Energy Resources of the United States for New Low Power and
Small Hydro Classes of Hydroelectric Plants (Idaho National Laboratory, Janurary 2006), http://www1.eere.energy.gov/water/
pdfs/doewater-11263.pdf.
60 U.S. Environmental Protection Agency, Alternative RE Approach Technical Support Document, 5.
61 79 Fed. Reg. 34870 (June 18, 2014).
62 U.S. Environmental Protection Agency, Alternative RE Approach Technical Support Document, 8–13.
Canadian Hydropower and the Clean Power Plan
33
63 U.S. Environmental Protection Agency, Data File: Renewable Energy (RE) Alternative Approach (XLS), accessed
March 12, 2015, http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
64 EPA’s proposed approach projects a total of 521,513 gigawatt-hours of RE in the contiguous United States
(Alaska and Hawaii are not included in IPM) by 2030. The alternative approach leads to a total projection of 524,066
gigawatt-hours, an increase of about 0.5 percent. State-by-state results can be found in EPA’s Alternative RE Approach
Technical Support Document and the associated XLS Data File, available at: http://www2.epa.gov/carbon-pollution-standards/
clean-power-plan-proposed-rule-technical-documents.
65 Bipartisan Policy Center, “Clean Power Plan Comments Map,” accessed March 27, 2015, http://bipartisanpolicy.
org/energy-map/.
66 The reverse is not true. States are authorized to reduce power sector emissions through measures not included
in EPA’s target setting methodology.
67 79 Fed. Reg. 34891 (June 18, 2014).
68 79 Fed. Reg. 34869 (June 18, 2014).
69 U.S. Environmental Protection Agency, Goal Computation Technical Support Document (Washington, DC:
U.S. Envrionmental Protection Agency, June 2014), 3, 27, http://www2.epa.gov/sites/production/les/2014-06/
documents/20140602tsd-goal-computation.pdf.
70 79 Fed. Reg. 34867 (June 18, 2014).
71 This could be unlikely in the West where 2011 and 2012 were particularly strong years for hydropower genera-
tion. See, for example, 2012 hydropower generation gures relative to 2013 and 2014 in California, Idaho, Montana,
Oregon, and Washington. U.S. Energy Information Administration, “Electricity Data Browser: Report 1.13: Net generation
from hydroelectric (conventional) by state by sector,” accessed March 30, 2015, http://1.usa.gov/19pDqcW.
72 79 Fed. Reg. 34869 (June 18, 2014).
73 Regional Greenhouse Gas Initiative, “RGGI States’ Comments on Proposed Carbon Pollution Emission
Guidelines for Existing Stationary Sources: Electric Utility Generation Units,” (November 5,2014), 22, http://www.rggi.org/
docs/PressReleases/PR110714_CPP_Joint_Comments.pdf.
74 Ibid., 24.
75 79 Fed. Reg. 65496 (November 4, 2014).
76 James Duffy and Ann Weeks, Clean Air Task Force, Comments of Clean Air Task Force on the Carbon Pollution
Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories; Multi-Jurisdictional
Partnerships (December 19, 2014), 11, http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-27987.
NRDC notes that EPA should explore this option, but does not explicitly advocate for EPA to take this approach.
David Doniger, Benjamin Longstreth, and Noah Long, Natural Resources Defense Council, Comments of Natural
Resources Defense Council on the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in
Indian Country and U.S. Territories; Multi-Jurisdictional Partnerships (December 19, 2014), 4, http://www.regulations.
gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-27979.
77 Center for Climate and Energy Solutions, “Renewable Energy Credit Tracking Systems,” accessed March 13,
2015, http://www.c2es.org/us-states-regions/policy-maps/renewable-energy-credit-tracking.
78 Since EPA’s proposed target setting incorporates state RPS policies, some of which are at least partially based on
interstate and/or international electricity imports, a regional element to RE development would be implicitly included to
some extent.
Center for Climate and Energy Solutions
34
79 James J. Nipper et al., American Public Power Association, Comments of the American Public Power Association
(APPA) on EPA’s Section 111(d) Proposed Rule for Carbon Dioxide from Existing EGUs (December 1, 2014), 210, http://www.
regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-22871; Edison Electric Institute, Comments of the Edison
Electric Institute on Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generation Units
(December 1, 2014), 193–199, http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-23224; David
Doniger, Benjamin Longstreth, and Noah Long, Natural Resources Defense Council, Comments of Natural Resources
Defense Council on the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and
U.S. Territories; Multi-Jurisdictional Partnerships, 4; Nathan Markey, New York Independent System Operator, Inc. (NYISO),
Comments of the New York Independent System Operator, Inc. on the Carbon Pollution Emission Guidelines for Existing
Stationary Sources: Electric Utility Generating Units in Indian Country and U.S. Territories; Multi-Jurisdictional Partnerships;
Proposed Rule (December 19, 2014), http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-27984;
Allison D. Wood et al., Hunton & Williams LLP on behalf of Utility Air Regulatory Group (UARG), Comments of the Utility
Air Regulatory Group on the United States Environmental Protection Agency’s Carbon Pollution Emission Guidelines for
Existing Stationary Sources: Electric Utility Generating Units; Proposed Rule (December 1, 2014), 195-196, http://www.regula-
tions.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-22768; Bipartisan Policy Center, “Clean Power Plan Comments Map.”
80 Dan Wyant, Michigan Department of Environmental Quality, Comments of Michigan Department
of Environmental Quality on the Carbon Pollution Guidelines for Existing Stationary Sources:EGUs in Indian
Country and U.S. Territories; Multi-Jurisdictional Partnership (December 19, 2014), 1, http://www.regulations.
gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-29686.
81 Joanne Spalding et al., Sierra Club Environmental Law Program, Comments of Sierra Club and Earthjustice on
the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories;
Multi-Jurisdictional Partnerships (December 19, 2014), 43, http://www.regulations.gov/#!documentDetail;D=EPA-HQ-
OAR-2013-0602-27986; In their comments in the original proposal, Sierra Club and Earthjustice note that they do not
support all types of new hydropower, though they acknowledge that some limitations would not fall within the scope of the
Clean Power Plan. “We do not support all new hydropower development, especially large projects that disrupt hydrological
systems, destroy habitat and jeopardize protected species. However, we do not believe that it is within the scope of this rule
for EPA to impose limits on which hydropower resources should be available for compliance, other than excluding existing
hydropower as it has proposed.” Joanne Spalding et al., Sierra Club Environmental Law Program, Comments of Sierra Club
and Earthjustice on the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating
Units (December 1, 2014, 112, http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-24029.
82 David Doniger, Benjamin Longstreth, and Noah Long, Natural Resources Defense Council, Comments of
Natural Resources Defense Council on the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in
Indian Country and U.S. Territories; Multi-Jurisdictional Partnerships, 4.
83 Frank P. Prager, Xcel Energy Inc., Comments of Xcel Energy Inc. On the Carbon Pollution Emission Guidelines
for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories; Multi-Jurisdictional Partnerships (December
19, 2014), 4, http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-27335; Midwest Renewable Energy
Tracking System, “REC Imports & Exports,” accessed March 13, 2015, http://www.mrets.org/registries/.
84 Dean Murphy, Onur Aydin, and Kent Diep, Electricity Market Overview for Manitoba Hydro’s Export Market in MISO
(The Brattle Group: July 2013), slides 43-44. Available at:http://www.hydro.mb.ca/projects/development_plan/bc_docu-
ments/appendix_05_3_electricity_market_overview_for_manitoba_hydros_export_market_in_miso.pdf.
85 One exception is that, according to the proposed rule, qualifying hydropower would help a state reduce its
calculated emission rate if it displaces existing nuclear generation since only six percent of existing nuclear generation is
factored into emission rates. In any case, a state would maximize reductions to its emission rate by displacing coal genera-
tion with hydropower.
Canadian Hydropower and the Clean Power Plan
35
86 Joanne Spalding et al., Sierra Club Environmental Law Program, Comments of Sierra Club and Earthjustice on
the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories;
Multi-Jurisdictional Partnerships, 44.
87 Ibid.
88 Government of Canada, “Canada’s Action on Climate Action,” accessed March 23, 2015, http://www.climat-
echange.gc.ca/default.asp?lang=En&n=AA3F6868-1.
89 Canada Consolidation: Reduction of Carbon Dioxide Emissions from Coal-red Generation of Electriction
Regulations (February 16, 2015), Section 3, Page 8. Available at: http://laws.justice.gc.ca/PDF/SOR-2012-167.pdf.
(Converted from 420 metric tons / GWh to 925 lbs / MWh).
90 This plant is capturing more than 90 percent of CO
2
emissions. Doug Vine, “Saskpower unveils rst commercial-
scale, coal-red power plant to capture carbon,” C2ES Blog Post (September 29, 2014), http://www.c2es.org/blog/vined/
saskpower-unveils-rst-commercial-scale-coal-red-power-plant-capture-carbon.
91 James Dion et al., A Climate Gift of a Lump of Coal? The emission impacts of Canadian and U.S. greenhouse gas regula-
tions in the electricity sector (International Institute for Sustainable Development, September 2014), 6–10, http://www.iisd.org/
sites/default/les/publications/climate-gift-or-lump-of-coal.pdf.
92 Ibid; Margo McDiarmid, CBC News “New coal plant regulations have ‘negligible effect,’ resport says,” September
18, 2014, http://www.cbc.ca/news/politics/new-coal-plant-regulations-have-negligible-effect-report-says-1.2770385.
93 Canada Consolidation: Reduction of Carbon Dioxide Emissions from Coal-red Generation of Electriction
Regulations (February 16, 2015), Section 29, Page 59. Available at: http://laws.justice.gc.ca/PDF/SOR-2012-167.pdf.
94 Pembina Institute, “Canada’s Renewable Energy Future,” accessed March 16, 2015, http://www.pembina.org/
re/canada.
95 Midwest Renewable Energy Tracking System, “REC Imports & Exports.”
96 Jennifer Beaudry and Lynn Wong, “Creating Cleaner Air in Ontario,” Ontario Press Release (April 15, 2014),
http://news.ontario.ca/mei/en/2014/04/creating-cleaner-air-in-ontario-1.html; Adrian Morrow, The Globe and Mail
“Carbon pricing coming to Ontario, strategy to be unveiled this year,” January 13, 2015, http://www.theglobeandmail.com/
news/politics/carbon-pricing-coming-to-ontario-strategy-to-be-unveiled-this-year/article22422031.
97 Manitoba, Focused on What Matters Most: Manitoba’s Clean Energy Strategy (2012), 16, http://www.gov.mb.ca/ia/
energy/pdfs/energy_strategy_2012.pdf.
98 Manitoba, Taxation Division, “Emissions Tax on Coal and Petroleum Coke,” accessed March 23, 2015, h t t p : //
www.gov.mb.ca/nance/taxation/taxes/coal.html.
99 British Columbia Ministry of Finance, Budget and Fiscal Plan 2014/15–2016/17 (February 18, 2014), 64, h t t p : //
bcbudget.gov.bc.ca/2014/bfp/2014_budget_and_scal_plan.pdf#page=74.
100 Benjamin Longstreth, Natural Resources Defense Council, Comments of the Natural Resources Defense
Council on the Carbon Pollution Emission Guidelines for Existing Staionary Sources: Electric Utility Generating Units
(December 1, 2014), 9-24–9-27, http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2013-0602-26818.
101 79 Fed. Reg. 34922 (June 18, 2014).
102 79 Fed. Reg. 34922 (June 18, 2014).
103 Joanne Spalding, et al., Sierra Club Environmental Law Program, Comments of Sierra Club and Earthjustice on
the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories;
Multi-Jurisdictional Partnerships, 43–44.
Center for Climate and Energy Solutions
36
104 These gures were calculated by dividing the difference between a state’s 2012 emission rate and the rate in
the “Em. and Gen. Effect” column by the difference between a state’s 2012 emission rate and its proposed 2030 target rate.
These gures are intended for illustrative purposes only and do not account for changes in demand between 2012 and 2030
or the specic generation type being displaced by a hypothetical new hydropower project, among other factors that would
change the effect of new hydropower imports.
105 These gures were calculated by dividing the difference between a state’s 2012 emission rate and the rate in
the “Em. Effect” column by the difference between a state’s 2012 emission rate and its proposed 2030 target rate. These
gures are intended for illustrative purposes only and do not account for changes in demand between 2012 and 2030 or the
specic generation type being displaced by a hypothetical new hydropower project, among other factors that would change
the effect of new hydropower imports.
106 79 Fed. Reg. 65496 (November 4, 2014).
107 Joanne Spalding et al., Sierra Club Environmental Law Program, Comments of Sierra Club and Earthjustice on
the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories;
Multi-Jurisdictional Partnerships, 44.
108 Ibid.
109 Nathan Markey, New York Indpendent System Operator, Inc. (NYISO), 3.
The Center for Climate and Energy Solutions (C2ES) is an independent non-prot, non-partisan organization promoting
strong policy and action to address the twin challenges of energy and climate change. Launched in 2011, C2ES is the succes-
sor to the Pew Center on Global Climate Change.
CENTER FOR CLIMATE AND ENERGY SOLUTIONS
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