TheThe Future Future ofof HydropowerHydropower

Myriam Truchon Director, Environnement and Sustainability – Hydro-Québec

Vice President – Canadian Hydropower AssociationVice Chair, Sustainability Committee – International Hydropower Association

Session IV : Energy diversificationBi-Regional WEC ForumNorth America, Latin America, the CaribbeanMexico City, June 6 2006

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. . . HQ in a Snapshot

State owned utilityAnnual Revenue (2005): 10,890 $ CNDInstalled capacity: 34,591 MW97% hydroelectric generating output3.6 million customersPer capita GHG emissions in Québec half of those of the other Canadian provinces22,000 employees + 20,000 jobs by subcontractingInvestment program of 3 to 4 G$ per year until the end of the decade

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Hydropower Development Outlook

4 G$ under construction

4 G$ additionnal capacityunder study

Next: Romaine

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About 4000 MW hydro power projects under construction or in preparation by HQ

1000 MW wind power under construction by IPPs

A second RFP for an additional 2000 MW has been launched in October 2005

Decentralized generation managed with net metering from small customers newly authorized

Energy efficiency: additional savings of 4.1 TWh (10% of Mexico Centre Region)

About 4000 MW hydro power projects under construction or in preparation by HQ

1000 MW wind power under construction by IPPs

A second RFP for an additional 2000 MW has been launched in October 2005

Decentralized generation managed with net metering from small customers newly authorized

Energy efficiency: additional savings of 4.1 TWh (10% of Mexico Centre Region)

Recent Developments

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By far the cleanest way to produce electricity: no atmospheric pollutants andnext to no GHG emissions

Allows countries to benefit from their domestic resources Is a driving force for regional developmentOffers stable electricity rates, as it is independent from fuel price fluctuations Reservoirs serve as energy storage to provide more flexibility and stability to the electric gridReservoirs also offer the opportunity for enhanced freshwater management enabling

Flood control IrrigationWater based transport

Benefits of Hydropower

Domestic and industrial supplyLeisureEtc…

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In 2003 (Kyoto, Japan)the 3rd World Water Forum

Concluded that hydropower has an important role to play in sustainable development as one of the renewable and clean energy sources (art.15)

It also stressed the need to strengthen structural measures such as reservoirs and dikes to cope with the growing severity of floods and droughts (art.27)

Hydropower and Recent International Policy Developments

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In 2004 (Bonn, Germany)

The First International Conference for Renewable Energy

Confirmed hydropower as part of the renewables portfolio

"to be substantially increased with a sense of urgency"

Hydropower and Recent International Policy Developments (cont'd)

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In 2004 (Beijing, China)

The first UN Symposium on Hydropower and Sustainable Development

Recalled the strategic importance of hydropower for sustainable development - not only to reduce poverty, but also to mitigate greenhouse gas emissions

Its declaration also calls for tangible action to assist developing countries to finance sustainable hydropower

Hydropower and Recent International Policy Developments (cont'd)

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In 2006 (Johannesburg, South Africa)The Ministerial Conference on Hydropower and Sustainable Development

Calls upon increased collaboration

"to unlock the hydropower potential of Africa as a major renewable energy option to promote sustainable development, regional integration, water and energy security, and poverty eradication in Africa"

Hydropower and Recent International Policy Developments (cont'd)

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In 2006 (Mexico-City, Mexico)The Fourth World Water Forum

Reaffirms the critical importance of water, in particular freshwater, for all aspects on sustainable development, including (…) hydropower (art. 1)

It also states (art.3)" We note with interest the importance

of enhancing the sustainability of ecosystems and acknowledge the implementation and importance in some regions of innovative practices such as rain water management and the development of hydropower projects"

Hydropower and Recent International Policy Developments (cont'd)

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AMERICA produces 46% of the world hydroelectric output

CANADA: 69 GW 355 TWh/yWorld leading hydropower producer

USA: 76 GW 300 TWh/yAfter China, world second largest installed hydropower capacity

BRAZIL: 68 GW 300 TWh/yAfter China, second world leader in current hydropower development 9,800 MW

MEXICO :Government committed to increase renewablesoutput, highlighting the importance of hydropower given that currently only about 1/5 of its potential (10,500 MW of 53,000 MW) is developed

Source: Source: TheThe International Journal on International Journal on HydropowerHydropower & Dams. & Dams. WorldWorld Atlas & Atlas & IndustryIndustry Guide. 2004Guide. 2004

Hydropower in America

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Hydropower is a key component in the energy mix required to meetfluctuating power demand while reducing dependence on fuel imports

Hydropower's Important Role in National Energy Portfolios

Moreover hydropower is climate and air

friendly

% in national electricity supply

100

99

81

80

78

60

15

7

0 20 40 60 80 100 120Paraguay

Urugay

Peru

Costa Rica

Brazil

Canada

Mexico

USA

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Demonstrating sustainability and carbon neutrality

Being part of Emerging Carbon Credit Market

Financing capital intensive projects

Creating a fair level-playing field among all electricity generating options

Full integration of externalities (i.e. multiple-use benefits)

International Hydro Issues

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Demonstrating Sustainabilitywithin the Hydropower Sector

Members of the International Hydropower Association (IHA)have adopted sustainability standards since 2003

Initiatives include:• Sustainability Guidelines Sustainability

Assessment Protocols (3 volumes) • Blue Planet Prize• Sustainable Hydropower Website, and• a proposed Certification Scheme

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Rewarding Excellence: IHA Blue Planet PrizeKing River Power Development (Australia, 2001)

Salto Caxias (Brazil, 2003)

Palmiet Pumped Storage Scheme (South Africa, 2003)

Andhikola (Nepal, 2005)

Arrow Lakes (Canada, 2005)

Sechelt Creek (Canada, 2005)

Demonstrating Sustainabilitywithin the Hydropower Sector

2005 Reward ceremony (COP11, Montreal, Canada)

DEADLINE FOR 2007 REWARD

1st of September 2006

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Establishing High-level Policy Networksin Key Regions

2004: UN Symposium (Beijing, China)

2006: African Ministerial Conference(Johannesburg, South Africa)

200X: Latin American Ministerial Conference( under negotiation)

For more information, please contact IHA Central Office +44 20 8288 1918

URL: www.hydropower.org

Creating a significant Exchange Forum through regional summits on hydropower and sustainable development

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Water security Energy security

Future Outlook …

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A Major contribution …A Major contribution …. . . as . . . as drivingdriving force for force for sustainablesustainabledevelopmentdevelopment

Achieving UN MilleniumDevelopment Goals

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Climate Change Mitigation and AdaptationPart of the Solution …

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Backbone of an Integrated RenewableEnergy System