Too little hydro means lost growth

Opinion

Hey there, time traveller!
This article was published 25/02/2025 (206 days ago), so information in it may no longer be current.

In the summer of 2023 — almost two years ago — Manitobans learned that Manitoba Hydro did not have sufficient generating capacity to keep up with anticipated demand.

We also learned that more than a dozen energy-intensive industrial projects were on hold because Hydro’s “near-term surplus electricity supply” was so small that even “a single energy-intensive connection may consume all remaining electrical capacity.”

The situation has worsened since then. We learned last year that demand could exceed supply before the end of this decade.

In apparent response to the looming energy crisis, the Manitoba government released “The Manitoba Affordable Energy Plan” last September. The strategy purports to set out a blueprint for “the next generation of energy that will keep rates low for all Manitobans,” including

• Creating an Indigenous loan guarantee program to provide First Nations and Métis the capital support and capacity to participate in the energy transition and finance new partnerships in wind generation;

• Refurbishing Hydro generating stations to unlock up to 200MW of additional power; and

• “Ending the first-come-first-served approach for large grid connection to better align with our economic development goals.”

Later in the document, it says “No longer will important economic development opportunities be stalled in a first-come-first-served approach in the commercial sector. Prioritizing requests for new large grid connections will maximize benefits for Manitobans from our electricity resources for projects that align with government’s economic development strategy.”

What that means is that there isn’t enough electricity available for all the businesses that want to locate in Manitoba or expand their operations. Beyond that, the government will decide which of those businesses gain access to that electricity, based on the government’s priorities for the province.

If your plans align with the government’s goals, you get your power connection. If not, you’re out of luck.

It’s an approach that is ripe for political abuse and favouritism but, even worse, it is already costing Manitoba jobs and economic growth opportunities.

Those jobs, and all those growth opportunities, are heading to Alberta, where more than a dozen new proposed data centres, requiring up to 10,000 megawatts of electricity, have applied for connection to that province’s electricity transmission system.

Almost all of those projects have emerged in the past eight months, meaning there is huge demand for large volumes of reliable electricity. Alberta is willing to satisfy that demand through natural gas-powered generating facilities, along with its abundant supply of wind and solar power. Just last week, the Alberta government confirmed that the province could attract up to $100 billion in new data centres over the next five years.

Those potential investments centres are triggering investment in other tech-related sectors in the province. According to data provided by the Canadian Venture Capital Association, tech companies in Alberta have raised almost $3.3 billion in new tech investment since 2020.

Last year alone, Calgary-based tech firms raised $630 million in venture capital — and a great deal of that is because of the abundant and reliable supply of electrical power in that province.

It is fair for Manitobans to wonder why all that investment, and all the jobs, growth and prosperity that would flow from that investment, isn’t happening here in Manitoba.

After all, our electricity rates are lower than Alberta’s, and we have been told for decades that our abundant supply of clean, green hydro-generated power was our portal to becoming a “have” province.

It is now clear that those claims have no basis in reality, at least not anymore. Manitoba Hydro currently generates barely enough electricity to satisfy current demand, and the Crown corporation estimated last year that projected demand for electricity in the province could require 10,000MW to 16,000MW of additional generating capacity by the early 2040s.

In fact, it estimated that demand could exceed supply before the end of this decade.

We must more than double the amount of electricity being generated in the province, but the “Manitoba Affordable Energy Plan” released last September falls far short of laying out a strategy for generating that additional electricity.

While we await that strategy and solution, the province is drawing closer to the prospect of blackouts or having to purchase higher-priced electricity from other provinces — assuming that power will even be available.

It’s a reality that threatens our future and security; it is costing us investment, jobs and economic growth.

The clock is ticking and the stakes are high. It’s time for the Manitoba government and Manitoba Hydro to release a viable plan to increase generating capacity to meet expected demand and position Manitoba to compete for investment in the tech sector.

The sooner the better, because the existing situation is costing us money and impairing our future.