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Western Canada Hydropower Drought strains British Columbia and Manitoba as reservoirs hit historic lows, cutting hydroelectric output and prompting power imports, natural gas peaking, and grid resilience planning amid climate change risks this winter.

Key Points

Climate-driven reservoir lows cut hydro in B.C. and Manitoba, prompting imports and backup gas to maintain reliability.

✅ Reservoirs at multi-year lows cut hydro generation capacity

✅ BC Hydro and Manitoba Hydro import electricity for reliability

✅ Natural gas turbines used; climate change elevates drought risk

Severe drought conditions in Western Canada are compelling two hydroelectricity-dependent provinces, British Columbia and Manitoba, to import power from other regions. These provinces, known for their reliance on hydroelectric power, are facing reduced electricity production due to low water levels in reservoirs this autumn and winter as energy-intensive customers encounter temporary connection limits.

While there is no immediate threat of power outages in either province, experts indicate that climate change is leading to more frequent and severe droughts. This trend places increasing pressure on hydroelectric power producers in the future, spurring interest in upgrading existing dams as part of adaptation strategies.

In British Columbia, several regions are experiencing "extreme" drought conditions as classified by the federal government. BC Hydro spokesperson Kyle Donaldson referred to these conditions as "historic," and a first call for power highlights the strain, noting that the corporation's large reservoirs in the north and southeast are at their lowest levels in many years.

To mitigate this, BC Hydro has been conserving water by utilizing less affected reservoirs and importing additional power from Alberta and various western U.S. states. Donaldson confirmed that these measures would persist in the upcoming months.

Manitoba is also facing challenges with below-normal levels in reservoirs and rivers. Since October, Manitoba Hydro has occasionally relied on its natural gas turbines to supplement hydroelectric production as electrical demand could double over the next two decades, a measure usually reserved for peak winter demand.

Bruce Owen, a spokesperson for Manitoba Hydro, reassured that there is no imminent risk of a power shortage. The corporation can import electricity from other regions, similar to how it exports clean energy in high-water years.

However, the cost implications are significant. Manitoba Hydro anticipates a financial loss for the current fiscal year, with more red ink tied to emerging generation needs, the second in a decade, with the previous one in 2021. That year, drought conditions led to a significant reduction in the company's power production capabilities, resulting in a $248-million loss.

The 2021 drought also affected hydropower production in the United States. The U.S. Department of Energy reported a 16% reduction in overall generation, with notable decreases at major facilities like Nevada's Hoover Dam, where production dropped by 25%.

Drought has long been a major concern for hydroelectricity producers, and they plan their operations with this risk in mind. Manitoba's record drought in 1940-41, for example, is a benchmark for Manitoba Hydro's operational planning to ensure sufficient electricity supply even in extreme low-water conditions.

Climate change, however, is increasing the frequency of such rare events, highlighting the need for more robust backup systems such as new turbine investments to enhance reliability. Blake Shaffer, an associate professor of economics at the University of Calgary specializing in electricity markets, emphasized the importance of hydroelectric systems incorporating the worsening drought forecasts due to climate change into their energy production planning.

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Octopus Energy and DTEK Partnership explores licensing the Kraken platform to rebuild Ukraine's power grid, enabling real-time analytics, smart-home integration, renewable energy orchestration, and distributed resilience amid ongoing attacks on critical energy infrastructure.

Key Points

Collaboration to deploy Kraken and renewables to modernize Ukraine's grid with analytics, smart control, and resilience.

✅ Kraken licensing for grid operations and customer analytics

✅ Shift to distributed solar, wind, and smart-home devices

✅ Real-time monitoring to mitigate outages and cyber risks

Octopus Energy, a prominent UK energy firm, has begun preliminary conversations with Ukraine's DTEK regarding potential collaboration to refurbish Ukraine's heavily damaged electric infrastructure as ongoing strikes threaten the power grid across the country.

Persistent assaults by Russia on Ukraine's power network, including a five-hour attack on Kyiv's grid, have led to significant electricity shortages in numerous regions.

Octopus Energy, the largest electricity and second-largest gas supplier in the UK, collaborates with energy firms in 17 countries using its Kraken software platform, and Ukraine joined Europe's power grid with unprecedented speed to bolster resilience. This platform is currently being trialled by the Abu Dhabi National Energy Company (Taqa) for power and water customers in the UAE.

A spokesperson from Octopus revealed to The National that the company is "in the early stages of discussions with DTEK to explore potential collaborative opportunities.”

One of the possibilities being considered is licensing Octopus's Kraken technology platform to DTEK, a platform that presently serves 54 million customer accounts globally.

Russian drone and missile attacks, which initially targeted Ukrainian ports and export channels last summer, shifted focus to energy infrastructure by October, ahead of the winter season as authorities worked to protect electricity supply before winter across the country.

These initial talks between Octopus CEO Greg Jackson and DTEK CEO Maxim Timchenko took place at the World Economic Forum in Davos, set against the backdrop of these ongoing challenges.

DTEK, Ukraine's leading private energy provider, might integrate Octopus's advanced Kraken software to manage and optimize data systems ranging from large power plants to smart-home devices, with a growing focus on protecting the grid against emerging threats.

Kraken is described by Octopus as a comprehensive technology platform that supports the entire energy supply chain, from generation to billing. It enables detailed analytics, real-time monitoring, and control of energy devices like heat pumps and electric vehicles, underscoring the need to counter cyber weapons that can disrupt power grids as systems become more connected.

Octopus Energy, with its focus on renewable sources, can also assist Ukraine in transitioning its power infrastructure from centralized coal-fired power stations, which are vulnerable targets, to a more distributed network of smaller solar and wind projects.

DTEK, serving approximately 3.5 million customers in the Kyiv, Donetsk, and Dnipro regions, is already engaged in renewable initiatives. The company constructed a wind farm in southern Ukraine within nine months last year and has plans for additional projects in Italy and Croatia.

Emphasizing the importance of rebuilding Ukraine's economy, Timchenko recently expressed at Davos the need for Ukrainian and international companies to work together to create a sustainable future for Ukraine, noting that incidents such as Russian hackers accessed U.S. control rooms highlight the urgency.

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EU Renewable Energy Transition is accelerating under REPowerEU, as wind and solar generation hit records, improving energy security, efficiency, and decarbonization while reducing reliance on Russian fossil fuels across the EU grid.

Key Points

EU shift to wind and solar under REPowerEU to cut fossil fuels, boost efficiency, and secure energy supply.

✅ Wind and solar set record 22% of EU electricity in 2022

✅ REPowerEU targets over 40% renewables and 15% lower demand by 2030

✅ Diversifies away from Russian fuels; partners with US and Norway

Europe is producing all-time highs of wind and solar energy as the 27-country group works to reduce its reliance on fossil fuels from Russia, a shift underscored by Europe's green surge across the bloc.

Four months after Vladimir Putin’s full-scale invasion of Ukraine in February 2022, the European Commission launched REPowerEU. This campaign aims to:

• Boost the use of renewable energy.
• Reduce overall energy consumption.
• Diversify energy sources.

EU countries were already moving toward renewable energy, but Russia’s war against Ukraine accelerated that trend. In 2022, for the first time, renewables surpassed fossil fuels and wind and solar power surpassed gas as a source of electricity. Wind and solar provided a record-breaking 22% of EU countries’ electrical supply, according to London-based energy think tank Ember.

“We have to double down on investments in home-grown renewables,” European Commission President Ursula von der Leyen said in October 2022. “Not only for the climate but also because the transition to the clean energy is the best way to gain independence and to have security of energy supply.”

Across the continent, growth in solar generation rose by 25% in 2022, according to Ember, as solar reshapes electricity prices in Northern Europe. Twenty EU countries produced their highest share of solar power in 2022. In October, Greece ran entirely on renewables for several hours and is seven years ahead of schedule for its 2030 solar capacity target.

Meanwhile, Ireland's green electricity target aims to make more than a third of its power supply renewable within four years.

By 2030, RePowerEU aims to provide more than 40% of the EU’s total power from renewables, aligning with global renewable records being shattered worldwide.

To meet the European Commission’s goal to cut EU energy usage by 15%, people and governments changed their habits and became more energy-efficient, while Germany's solar power boost helped bolster supply. Among their actions:

• Germany turned down the heat in public buildings and lowered the cost of train tickets to reduce car usage, as clean energy hit 50% in Germany during this period.
• Spain ordered stores and public buildings to turn off their lights at night.
• France dimmed the Eiffel Tower and reduced city speed limits.

For the oil and gas that the EU still needed to import, countries turned to partners such as Norway and the United States.

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US Electricity Demand 2018-2050 projects slower growth as energy consumption, power generation, air conditioning, and electric heating shift with efficiency standards, commercial floor space, industrial load, and household growth across the forecast horizon.

Key Points

A forecast of US power use across homes, commercial space, industrial load, and efficiency trends from 2018 to 2050.

✅ 2018 generation hit record; residential sales up 6%.

✅ Efficiency curbs demand; growth lags population and floor space.

✅ Commercial sales up 2%; industrial demand fell 3% in 2018.

Last year's Houston cold winter and hot summer drove power use to record levels, especially among households that rely on electricity for air conditioning during extreme weather conditions.

Electricity generation increased 4 per cent nationwide in 2018 and produced 4,178 million megawatt hours, driven in part by record natural gas generation across the U.S., surpassing the previous peak of 4,157 megawatt hours set in 2007, the Energy Department reported.

U.S. households bought 6 percent more electricity in 2018 than they did the previous year, despite longer-term declines in national consumption, reflecting the fact 87 percent of households cool their homes with air conditioning and 35 percent use electricity for heating.

Electricity sales to the commercial sector increased 2 percent in 2018 compared to the previous year while the industrial sector bought 3 percent less last year.

Going forward, the Energy Department forecasts that electricity consumption will grow at a slower pace than in recent decades, aligning with falling sales projections as technology improves and energy efficiency standards moderate consumption.

The economy and population growth are primary drivers of demand and the government predicts the number of households will grow at 0.7 percent per year from now until 2050 but electricity demand will grow only by 0.4 percent annually.

Likewise, commercial floor space is expected to increase 1 percent per year from now until 2050 but electricity sales will increase only by half that amount.

Globally, surging electricity demand is putting power systems under strain, providing context for these domestic trends.

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Duration Portfolio Energy Storage aligns layered peak demand with right-sized batteries, enabling peak shaving, gas peaker replacement, and solar-plus-storage synergy while improving grid flexibility, reliability, and T&D deferral through two- to four-hour battery durations.

Key Points

An approach that layers battery durations to match peaks, cut costs, replace peakers, and boost grid reliability.

✅ Layers 2- to 4-hour batteries by peak duration

✅ Enables solar-plus-storage and peak shaving

✅ Cuts T&D upgrades, emissions, and fuel costs

The debate over energy storage replacing gas-fired peakers has raged for years, but a new approach that shifts the terms of the argument could lead to an acceleration of storage deployments.

Rather than looking at peak demand as a single mountainous peak, some analysts now advocate a layered approach that allows energy storage to better match peak needs and complement ongoing efforts to improve solar and wind power across the grid.

"You don’t have to have batteries that run to infinity."

Some developers of solar-plus-storage projects, bolstered by cheap batteries, say they can already compete head-to-head with gas-fired peakers. "I can beat a gas peaker anywhere in the country today with a solar-plus-storage power plant," Tom Buttgenbach, president and CEO of developer 8minutenergy Renewables, recently told S&P Global.

Customers are very busy these days and rebate programs need to fit the speed of their life. Participation should be quick, easy, and accessible anywhere.

Others disagree. Storage is not disruptive for generation, but will be disruptive for transmission and distribution, Kris Zadlo, executive vice president and chief development officer at Invenergy, told the audience at a Bloomberg New Energy Finance conference last spring. Invenergy, like many renewable power developers, develops generation, energy storage and transmission projects.

But there is another path that avoids the pitfalls of positions on either end of the all-or-none approach. "Do the analysis of the need itself," Ray Hohenstein, market applications director at Fluence, told Utility Dive. If the need is only two hours in duration, it may be best served by a two-hour battery. "You don’t have to have batteries that run to infinity."

Storage vs. fossil fuel peakers

Energy storage has several benefits over traditional fossil fuel peaking plants, Hohenstein said. It is instantaneous, it has no emissions and requires no fuel, and has limited infrastructure needs. It can also help the grid absorb higher levels of renewable generation by soaking up excess output, such as solar power at noon, and many planned storage additions will be paired with solar in the next few years. But the one thing energy storage cannot do, he said, is provide limitless energy.

So, instead of looking at replacing an individual peaker, Hohenstein advocated a "duration portfolio" approach that uses energy storage to shave peak load.

If the need is for 150 MW of resources that will never need to run for more than two hours at a time, then a battery is "quite cheap," significantly less than a four or eight-hour battery, said Hohenstein. "If you fill up your peak by duration layer, it could be more cost effective."

NREL research driver

Fluence’s approach is informed by research by Paul Denholm and Robert Margolis at the National Renewable Energy Laboratory (NREL), released last spring.

The NREL researchers looked at the California market where they said 11 GW of fossil fuel capacity is expected to be retired by 2029 because of new once-through-cooling requirements that are taking effect. A lot of that capacity is peaking capacity and, according to NREL’s analysis, a large fraction could be replaced with four-hour energy storage, assuming continued storage cost reductions and growth in solar installations.

The key in NREL’s research was the level of solar power penetration. There is a "synergistic" relationship between solar penetration and storage deployment, the researchers wrote, and other studies suggest wind and solar could meet 80% of U.S. demand as these trends continue.

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FERC Grid Resiliency Pricing Opposition underscores industry groups, RTOs, and ISOs rejecting DOE's NOPR, warning against out-of-market subsidies for coal and nuclear, favoring competitive markets, reliability, and true grid resilience.

Key Points

Coalition urging FERC to reject DOE's NOPR subsidies, protecting reliability and competitive power markets.

✅ Industry groups, RTOs, ISOs oppose DOE NOPR

✅ PJM reports sufficient reliability and resilience

✅ Reject out-of-market aid to coal, nuclear

A diverse group of a dozen energy industry associations representing oil, natural gas, wind, solar, efficiency, and other energy technologies today submitted reply comments to the Federal Energy Regulatory Commission (FERC) continuing their opposition to the Department of Energy's (DOE) proposed rulemaking on grid resiliency pricing and electricity pricing changes within competitive markets, in the next step in this FERC proceeding.

Action by FERC, as lawmakers urge movement on aggregated DERs to modernize markets, is expected by December 11.

In these comments, this broad group of energy industry associations notes that most of the comments submitted initially by an unprecedented volume of filers, including grid operators whose markets would be impacted by the proposed rule, urged FERC not to adopt DOE'sproposed rule to provide out-of-market financial support to uneconomic coal and nuclear power plants in the wholesale electricity markets overseen by FERC.

Just a small set of interests - those that would benefit financially from discriminatory pricing that favors coal and nuclear plants - argued in favor of the rule put forward by DOE in its Notice of Proposed Rulemaking, or NOPR, as did coal and business interests in related regulatory debates. But even those interests - termed 'NOPR Beneficiaries' by the energy associations - failed to provide adequate justification for FERC to approve the rule, and their specific alternative proposals for implementing the bailout of these plants were just as flawed as the DOE plan, according to the energy industry associations.

'The joint comments filed today with partners across the energy spectrum reflect the overwhelming majority view that this proposed rulemaking by FERC is unprecedented and unwarranted, said Todd Foley, Senior Vice President, Policy & Government Affairs, American Council on Renewable Energy.

We're hopeful that FERC will rule against an anti-competitive distortion of the electricity marketplace and avoid new unnecessary initiatives that increase power prices for American consumers and businesses.'

In the new reply comments submitted in response to the initial comments filed by hundreds of stakeholders on or before October 23 - the energy industry associations made the following points: Despite hundreds of comments filed, no new information was brought forth to validate the assertion - by DOE or the NOPR Beneficiaries - that an emergency exists that requires accelerated action to prop up certain power plants that are failing in competitive electricity markets: 'The record in this proceeding, including the initial comments, does not support the discriminatory payments proposed' by DOE, state the industry groups.

Nearly all of the initial comments filed in the matter take issue with the DOE NOPR and its claim of imminent threats to the reliability and resilience of the electric power system, despite reports of coal and nuclear disruptions cited by some advocates: 'Of the hundreds of comments filed in response to the DOE NOPR, only a handful purported to provide substantive evidence in support of the proposal. In contrast, an overwhelming majority of initial comments agree that the DOE NOPR fails to substantiate its assertions of an immediate reliability or resiliency need related to the retirement of merchant coal-fired and nuclear generation.'

Grid operators filed comments refuting claims that the potential retirement of coal and nuclear plants which could not compete for economically present immediate or near-term challenges to grid management, even as a coal CEO criticism targeted federal decisions: 'Even the RTOs and ISOs themselves filed comments opposing the DOE NOPR, noting that the proposed cost-of-service payments to preferred generation would disrupt the competitive markets and are neither warranted nor justified.... Most notably, this includes PJM Interconnection, ... the RTO in which most of the units potentially eligible for payments under the DOE NOPR are located. PJM states that its region 'unquestionably is reliable, and its competitive markets have for years secured commitments from capacity resources that well exceed the target reserve margin established to meet [North American Electric Reliability Corp.] requirements.' And PJM analysis has confirmed that the region's generation portfolio is not only reliable, but also resilient.'

The need for NOPR Beneficiaries to offer alternative proposals reflects the weakness of DOE'srule as drafted, but their options for propping up uneconomic power plants are no better, practically or legally: 'Plans put forward by supporters of the power plant bailout 'acknowledge, at least implicitly, that the preferential payment structure proposed in the DOE NOPR is unclear, unworkable, or both. However, the alternatives offered by the NOPR Beneficiaries, are equally flawed both substantively and procedurally, extending well beyond the scope of the DOE NOPR.'

Citing one example, the energy groups note that the detailed plan put forward by utility FirstEnergy Service Co. would provide preferential payments far more costly than those now provided to individual power plants needed for immediate reasons (and given a 'reliability must run' contract, or RMR): 'Compensation provided under [FirstEnergy's proposal] would be significantly expanded beyond RMR precedent, going so far as to include bailing [a qualifying] unit out of debt based on an unsupported assertion that revenues are needed to ensure long-term operation.'

Calling the action FERC would be required to take in adopting the DOE proposal 'unprecedented,' the energy industry associations reiterate their opposition: 'While the undersigned support the goals of a reliable and resilient grid, adoption of ill-considered discriminatory payments contemplated in the DOE NOPR is not supportable - or even appropriate - from a legal or policy perspective.

About ACORE

The American Council on Renewable Energy (ACORE) is a national non-profit organization leading the transition to a renewable energy economy. With hundreds of member companies from across the spectrum of renewable energy technologies, consumers and investors, ACORE is uniquely positioned to promote the policies and financial structures essential to growth in the renewable energy sector. Our annual forums in Washington, D.C., New York and San Franciscoset the industry standard in providing important venues for key leaders to meet, discuss recent developments, and hear the latest from senior government officials and seasoned experts.

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