While clean energy companies throughout Ontario are jumping for joy in response to the province's renewable energy policy, one of Canada's largest private hydroelectric firms is feeling a pinch. Brookfield Power owns and operates more than 850 MW of hydroelectric energy projects throughout northern Ontario and plenty more in other parts of Canada and the United States. Despite the dependability of hydro compared to other 'green' technologies -- it has a typical capacity factor between 50% and 80%, meaning most hydro projects will be running at full capacity 50%-80% of the time, compared with wind and solar that are around 35% and 13%, respectively -- Brookfield Power's production has fallen 40%-50%. Yikes.
The drop has been blamed primarily on an unordinarily dry year leading to very low water levels in northern Ontario. Annual variations in water levels are not uncommon, but as Brookfield's situation indicates, it can be pretty damaging economically: profits have fallen almost 50%. In stark contrast, the prairies have seen much higher precipitation levels than normal this year.
Some might be able to shake off one bad year, but as climate change threatens the historical predictability of Canadian weather, the Canadian hydroelectric industry could be in trouble. And as provinces like BC, Ontario, Quebec and Manitoba continue to expand their hydro generating capacity, you might wonder whether they're getting a bit nervous.
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