ExecutiveSummary CollaborativeGovernance TableofContents Acknowledgements MessagefromtheChair MessagefromthePresidentandCEO AbouttheNRTEE NRTEEMembers ExecutiveSummary 1.IntroductionandPurpose Introduction PurposeofReport 2.AddressingNaturesWaterNeeds EcosystemServices HumanActivitiesthatAffectEcosystemServices EcosystemsManagementintheContextofCompetingInterests AddressingtheValueofFreshwaterEcosystemServices 3.WaterGovernanceandManagementinCanada DivisionofResponsibilityforWaterManagement FederalJurisdictionandResponsibilities ProvincialJurisdictionandResponsibilities Inter-JurisdictionalWaterManagement EmergingRoleofCollaborativeGovernanceStructures KeyChallenges,Gaps,andOpportunities 4.NaturalResourceSectorsWaterUse,IssuesandOpportunities ElectricitySector HydroelectricPowerGenerationSector ThermalPowerGenerationSector OilandGasSector AgricultureSector MiningSector ForestSector 5.NationalWaterIssues GovernanceandManagement ImpactsofClimateChangeonWaterResources TheWater-EnergyNexus PublicLicencetoOperate 6.FindingsandConclusions Findings Conclusions 7.Appendices NRTEEExpertAdvisoryCommitteeMembers Glossary References

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Canada is experiencing growing energy needs and the sector is expected to grow substantially over the medium and long term. The International Energy Agency (IEA) estimates that Canada will need an additional 74 gigiawatts (GW) of capacity by 2030 to meet both system demand growth and plant retirement needs³⁵ ? an addition equal to more than half our existing electricity capacity. The need to lower greenhouse gas emissions may further drive infrastructure renewal in Canada with the potential electrification of other sectors.³⁶

This projected demand has prompted Canadian utility companies to consider investing in medium-term projects.³⁷ Major hydroelectric projects are under construction in the near and medium term for Qubec and Newfoundland and Labrador, and for Manitoba over the medium term. Over the longer term, Ontario is anticipated to make significant power generation investments in nuclear and wind power. Investment in fossil power generation is expected to dominate capacity development particularly in British Columbia and Yukon. Prince Edward Island is expected to invest in large-scale wind energy projects, while New Brunswick is currently refurbishing the Point Lepreau nuclear plant and considering a second reactor.

One key consideration that will influence the overall electricity generation mix in the future is the types of electricity generation available to provide baseload supply versus peak supply. Baseload supply is the minimum amount of electricity constantly demanded at all times, and has historically been provided by hydro, nuclear, and coal-fired facilities. Peak supply is produced to meet peak demand requirements at certain times of the day when electricity demand is high, and is usually provided by oil, single-cycle natural gas, coal, and hydro facilities. Future changes to the generation mix will most likely be made to peak supplies, but in some cases to baseloads as is the case in Ontario as it moves away from coal-fired generation. The change to the generation mix is an important consideration because the development and extraction of the fuel sources (oil, gas, coal) all have different implications for water resources.

Hydroelectricity is expected to continue to dominate future power generation in Canada and presents an opportunity to meet a significant portion of Canada?s increasing energy needs with both large scale and small hydro facilities. Canada?s hydroelectric expansion potential is estimated to be more than double its current capacity, with potential in all of the provinces and territories.³⁸ A recently completed inventory of Canadian hydro potential determined that approximately 163,000 MW39 of additional capacity could be developed across the country.

Hydroelectric Power Generation Sector

This study considers conventional hydropower electricity covering two types of operations:^h

• Storage-based hydro, which requires dams to control water flow or increase the head of a waterfall, and reservoirs to store water.
• Run-of-river hydro, which have lower dams than storage-based hydro and either have little or no storage capacity (i.e., water intake roughly equals water outflow).

Although often distinguished as different types of operations, in actuality these exist on a continuum (i.e., some facilities may have a few days? worth of water storage, but are still usually referred to as run-of-river). ⁱ

Key Water Uses

While there are no statistics to draw upon to describe the quantitative use of water by the hydroelectric power sector, it is obvious that the sector relies upon and uses a great deal of water to produce electricity; but the use is largely non-consumptive. While such use does not quantitatively affect rivers and streams, the large storage-based hydroelectric facilities can have a big impact on flow regimes and water levels in the watersheds in which they are located. Careful management is required to balance electricity production with the needs of other users including ecosystem needs.

At storage-based hydroelectric facilities, water is stored in a reservoir that could contain up to years of storage capacity or little more than days. To produce electricity, water from the reservoir enters an intake in the dam, flows through a large pipe (called the penstock), and then spins a turbine to generate electricity before being released back to the river, below the dam. From time to time, excess water may be passed through a dam?s spillway, which allows water to be spilled from the upstream side of the dam to the downstream side of the dam. Run-of-river facilities use moving water from rivers or streams to generate electricity by diverting water into turbines that are either placed directly in the river or off to the side of the river. The amount of electricity that can be produced depends on fluctuations in river flow and the capacity of the facility, as water is not stored for strict run-of-river facilities.

Electricity output depends on two factors: 1) the height of the dam head above the turbine, and 2) the volume of water flowing through the turbine. In almost all cases, water use intensity (per unit of energy generation) is higher for hydroelectric facilities than for nuclear and fossilfuel facilities. Although some very small quantities of water may be consumed at hydroelectric facilities for domestic purposes, all other water uses are considered non-consumptive. In some parts of the world, large storage-based facilities may consume roughly one to two per cent of dam capacity through evaporative loses from reservoirs; however, this is not the case for most facilities in Canada. In Canada, many reservoirs are covered in ice during the winter, and air and water temperatures do not get very high in the summer, so evaporation from reservoirs is negligible.

As large storage-based hydroelectric facilities are built and land is flooded to create reservoirs, the physical layout of watersheds may be drastically altered. Once hydroelectric facilities are operational, they can continue to impact physical characteristics of watersheds by trapping sediment and changing flow regimes, which may affect the structure of natural river composition. In addition, water chemistry may be affected as silt accumulates heavy metals and other pollutants, and water temperature may be affected as a result of storing water in reservoirs.

Key Water Issues

Main concerns about water availability for the sector include managing impacts of climate change and managing impacts on ecosystems.

Managing Impacts of Climate Change

Secure water provision for the hydroelectric power generation sector is a critical issue. The sector sees its greatest vulnerability as any event that threatens long-term water supply. The sector is most interested in how extreme events (e.g., droughts, floods, early freezes, and early thaws) will affect systems in the future. Because hydroelectric facilities are designed to have about a 70?75 year lifespan, an accurate understanding of future conditions is essential for designing new facilities and, as such, the sector has advanced models that try to predict future hydrological conditions. Hydroelectric power generators in some provinces (e.g., Manitoba, Ontario, and Qubec) are concerned about the potential impacts of climate change and the uncertainty associated with model predictions.

Some utilities have noticed greater variability in weather patterns and water flows, but are unclear about how to incorporate this knowledge into planning. Others are used to dealing with considerable variability and use extreme events as design targets, but are concerned about whether long-term climate change impacts will pose threats beyond what has been experienced previously. Certain utilities may be more vulnerable to climate change impacts, such as those that operate in a single river basin.

As a result of more frequent or higher intensity extreme events, facilities will need to undertake greater efforts to manage floods and dam safety issues. This might include changing design standards and management practices for dams and reservoirs. The sector is undertaking research to examine impacts of climate change on operations and many companies are undertaking impact and vulnerability assessments with the intention of integrating findings into risk management strategies and existing operations and planning processes. Currently, some utilities may be incorporating some safety factors into the design of new facilities (i.e., by including a bigger margin of safety in design), but for the most part, hydroelectric power generators are simply monitoring climate science.

Despite the potential negative effects that climate change poses to the sector, opportunities exist to leverage changing weather patterns to generate more electricity. Most climate change models predict that average annual precipitation will increase in regions that have significant hydroelectric development (e.g., eastern Canada) or in areas that have development potential (northern Canada). The purpose of reservoirs is to store water in times of low flows, to save it for when it is needed. With increased precipitation and more extreme events, the role of reservoirs may become more important and actually permit greater electricity generation in certain regions.

Managing Impacts on Ecosystems

All types of hydroelectric facilities can block migration of aquatic organisms and impact the health of regional fish populations; however, these impacts can be managed more easily at runof- river facilities because dams are lower, making it easier to address fish passage. Run-of-river facilities do not create impacts to water resources on the same scale as storage-based facilities; however, they do alter water flows in a river and therefore, on a cumulative basis, have the potential to negatively affect the ecosystems and watersheds within which they are developed. Small run-of-river facilities have the potential to be much greater in number and pose a potential cumulative effect on the broader landscape. Similar to large storage-based facilities, run-of-river facilities undergo multiple regulatory reviews and licensing requirements in order to obtain approval, including a review of potential environmental effects to ensure that potential impacts are identified and mitigated.

Concerns about fisheries and in-stream flow needs are placing increasing pressures on hydroelectric facilities to mitigate impacts and maintain certain water levels. In some provinces, meeting environmental requirements (i.e., in-stream flow) is the main concern. Fisheries considerations are strongly influencing the design of new facilities, resulting in significant financial costs in some cases. Some power generators also believe that commercial fishery interests may be resistant to new hydroelectric facility development in coastal regions.

Ecological requirements are usually described in operating licences and identify maximum and minimum flows. Interested stakeholders usually direct their concerns to regulators during the licensing process; however, as part of the social license to operate, some facilities have been working with a greater number of environmental groups to address concerns. Many measures are implemented to mitigate impacts including regulating flows, and installing fish ladders or diversion nets to facilitate passage. Some operators have also developed, or are in the process of developing, memorandums of understanding (MOUs) with the Department of Fisheries and Oceans (DFO) to establish a risk-based approach to the management of fisheries issues.

It is worth noting that the existence of dams in the Prairie provinces plays an important role in capturing annual spring runoff, controlling flooding and regulating flows throughout the summer. Without this reservoir capacity many of the downstream ecosystems and communities would likely be without sufficient water in dry periods. This type of situation demonstrates the trade-offs that are sometimes necessary when considering the effects existing dams have on ecosystems.

Drivers, challenges and opportunities

Although hydroelectric facilities in Canada do not consume water, opportunities for improving water use have been driven by finding ways to use water more efficiently. Producing greater electrical capacity from the same flow of water is cost effective, and thus cost savings is a major driver for improved water use. There are many old hydropower facilities in Canada, so several utilities have programs to replace old equipment with newer, efficient equipment including new turbines, control gates, and runners. Hydroelectric power generators have indicated that equipment upgrades can increase overall energy production by 10?20%.

Many utilities have also installed, or are planning to install, technologies to improve monitoring capabilities at facilities. Refining how they look at water management can lead to managing water resources more effectively.

Thermal Power Generation Sector

In thermal power generation, fuels are combusted to either generate heat, which produces steam, or create highly pressurized gases, which rotate turbines to produce electrical energy. Fuel sources that are burned at fossil electric power facilities include coal, oil, natural gas, and less common forms of fuel such as biomass, biogas, municipal waste, and industrial by-products. In the case of nuclear power generation, nuclear fission ? rather than combustion ? is used to create heat to generate steam. Uranium is the fuel source used at nuclear power facilities. This report considers thermal power generation at fossil fuel combustion facilities and nuclear facilities, but excludes the discussion of water use at facilities that use alternate fuel sources such as biomass and biogas, which currently make up only a small portion of thermal power generation in Canada. Fossil electric and nuclear power generating stations are found across Canada (Figure 10) with many located close to major rivers and lakes, illustrating their reliance upon large, sustainable supplies of freshwater. Of the electricity produced by fossil fuel facilities in Canada, coal-fired facilities currently generate the most, followed by natural gas-fired facilities (with oil-fired facilities well behind).

FIGURE 10

Key Water Uses

Relative to the hydroelectric power generation sector, the fossil and nuclear power generation sectors use less water but have greater consumptive use, and greater potential to negatively affect water quality. For both fossil and nuclear power generation, two main uses of water exist:

1. Generation of steam to drive turbines: Most fossil power plants and all nuclear power plants generate electricity by converting water into high-pressure steam, which then drives turbines. This steam is then condensed and recycled so that it can be reused in the generation process.

2. Use of water for cooling: Water is also used as a coolant at most facilities to condense steam into water. Water is drawn directly from a water body and run through a heat exchanger, and then either released back into the water body (once-through cooling) or pumped to cooling towers and recycled in the plant (closed-loop cooling). Water use and water consumption at fossil and nuclear electric power facilities, and the associated impacts to water resources, vary considerably depending on the type of fuel, turbine, and cooling system used. Fossil and nuclear power facilities can be categorized according to their primary fuel source and the process used to generate electricity (Table 3).

TABLE 3

Generally speaking, coal-fired and oil-fired power plants use more water than natural gas-fired plants and potentially have greater negative effects on water quality.* Steam turbines use more water than combined-cycle facilities, which in turn use more than single-cycle combustion turbines. However, many special cases exist in Canada, so water use must be examined on a facility-by-facility basis. Coal-fired and oil-fired facilities may be equipped with wet scrubbers to reduce air emissions, which result in greater water use and greater consumption through the production of wastewater. On the other hand, if wet scrubbers are not installed, diffuse water pollution may occur from long-range transportation and deposition of acidic air pollutants and mercury. In addition to effluent streams from power plants, additional wastewater is produced on-site at coal-fired facilities through coal-pile drainage and stormwater runoff from the plant site and ash landfill. These effluent streams are collected and typically treated at on-site wastewater treatment facilities.

Once-through cooling systems use more water than closed-loop cooling systems, but water consumption is negligible. Cooling water is drawn from a water body and most is returned to that water body at a higher temperature, producing a thermal discharge. In some cases, chlorine may be released into water bodies to control mussel and bacterial growth in warmed cooling water.

Closed-loop systems use less water than once-through cooling systems as a result of recycling cooling water, but consume more water as a result of evaporative losses in cooling towers. Further, due to a salt build-up in cooling towers, some water is used in removing these solids (known as blowdown) and results in the production of wastewater. Dry cooling systems use and consume essentially no water, as air is used for cooling; however, as with closed-loop systems, some water is used for blowdown. Most of Canada?s fossil electric power facilities are located next to major lakes or rivers and feature once-through cooling systems; all nuclear power facilities are located near major water bodies due to significant water requirements of the once-through cooling systems. A number of closed-loop fossil electric power plants exist in western Canada. At some facilities, ocean water, rather than freshwater is used for once-through cooling.

Key Water Issues

As the fossil and nuclear power generation sectors have typically relied on access to large quantities of water, availability ? both in terms of constraints at existing facilities and proper siting of new facilities ? is a key consideration for the sectors. Some members of the sectors do not appear to be significantly concerned about water scarcity; however, there are some regional and operational concerns due to recent weather conditions. The sectors? primary concern regarding future water management is to ensure a secure electricity supply. Concerns about climate change are less of a focus, but are largely related to responding to the potential cost of emissions and adapting to changing climatic conditions. Effects on water quality from thermal and chemical discharge are also important issues that the sectors manage.

Water Availability

Concerns about water availability prevail in some parts of the country for both existing and new facilities, particularly in central Canada and the Prairie Provinces where fossil or nuclear facilities are used to produce baseloads. Unlike hydroelectric facilities, thermal power facilities are usually located next to big electricity-using centres in densely populated areas. Therefore, in times of drought, maintaining certain water levels that take into account a variety of human and ecological uses can be a challenge. Competing water uses and water availability can be a big issue for large, older facilities because these facilities cannot be retrofitted with closed-loop cooling systems. It has been, and continues to be, more economical to design fossil and nuclear power facilities with access to lots of water so that once-through cooling systems can be used. Facilities that use less water can be designed, and will likely be necessary in water-constrained locations in the future.

Impacts on Water Quality

At facilities where once-through cooling systems are used, large quantities of cooling water are returned to water bodies at warmer temperatures. There is the potential that warmer water could impact fisheries, or could cause eutrophication, changing the chemical composition of water. Utilities must comply with provincial thermal discharge regulations. Monitoring of environmental effects at facilities has demonstrated that discharges have not produced significant adverse effects.

Fossil and nuclear power facilities try to reduce chemical emissions to water; however, the release of toxins is always an issue. One of the main concerns is the release of hydrazine, which is used to prevent scaling and corrosion of pipes at nuclear power facilities; another is the release of chlorine, which is used to control zebra mussels at some thermal discharge sites. Tritium, which is produced at nuclear power facilities, may also be released inadvertently or accidently to water bodies. Substantial detailed reporting is required for discharges, and some facilities are testing different management practices to reduce chemical releases, such as using predatory controls to manage zebra mussel populations in place of using chlorine. Wastewater is produced in a number of ways at fossil and nuclear power generation stations including from blowdown, sewage, coal-pile drainage, and stormwater runoff from the plant and ash landfill sites; however, wastewater is treated and tested before being released back into the environment. Groundwater and surface water sources that may be impacted are typically monitored at facilities on a regular basis.

Adapting to Climate Change

The potential impact of climate change on water availability is an unknown factor for most companies in the fossil and nuclear power sectors at this time, and needs further investigation. As climate change may cause an increase in air and water temperature in some regions where facilities exist, more water may be required for cooling processes. The unknown factor is how much additional water supply will be required and whether this will be available. In some parts of the country, the sectors are used to dealing with huge variability of water and have learned to manage these conditions by designing systems to operate on the lowest flows on record. These operators may be well positioned to deal with fluctuating water levels.

In some cases climate change is not a concern for fossil (gas) plants because they are small facilities used primarily as back-up, or because they will be phased out over time. However, coal-fired facilities are typically designed for a lifespan of about 40 years, natural gas facilities for a lifespan of about 25 years, and nuclear for a lifespan of about 30?40 years. Once built, these facilities have limited flexibility for retrofits to accommodate significant technology changes. Existing facilities will likely be able to accommodate only small changes to operations if water requirements change. In the future, taking climate change into account, companies will need to make crucial decisions in the selection of appropriate cooling technologies and location of new facilities. Some companies are undertaking risk assessments to better understand potential implications for their operations.

Drivers, Challenges and Opportunities

To date, physical characteristics of the environment in which facilities have been built have largely influenced technology choices at thermal power facilities. Many thermal power facilities are relatively old and contain once-through cooling systems, which were constructed based on access to a large supply of cooling water. Although cooling technologies that reduce water use exist, retrofitting existing facilities is usually not possible, so these technologies can only be incorporated into new facilities. However, technology that is less water-intensive is often more expensive to build, may be less energy efficient, and may result in greater water consumption (as is the case with closed-loop cooling systems).

Regional water availability and conditions will likely continue to drive cooling water technology choices in the future. For example, provinces regulate thermal discharge from once-through cooling systems, and if the temperature of receiving water bodies increases (as predicted with climate change) this may create challenges for companies complying with regulations. In the U.S., regulations have largely driven greater use of closed-loop cooling technologies. Some industry representatives believe that restrictions on water use or some form of water valuation or pricing might influence how the sector develops and uses water in Canada.

Regional water availability may also drive industry to find alternative water sources. For example, ?grey water? (wastewater generated from domestic activities) is currently used in a few fossilfuel generating facilities in Alberta and Saskatchewan. In anticipation of further uses, Alberta is looking to develop guidelines for grey-water use. More restrictions on water withdrawals may push the industry to look further into using grey water in the future. However the key challenge remains with costs. Clean water is required in thermal power steam generation processes and so the added costs associated with the treatment of grey water to an acceptable quality for use within the plants would have to justify such a shift.

New fuel and clean-air technologies are thought to provide promising opportunities for reducing air pollutants and GHG emissions at thermal power facilities, but these may or may not be accompanied by associated improvements to water use and impacts. Certainly, natural gas combined-cycle facilities use, consume, and produce fewer impacts on water than other fossil-fuel systems and result in fewer GHG emissions. However, the application of certain technologies could result in greater water use and/or the production of wastewater. For example, putting wet scrubbers on coal plants to reduce air emissions would result in greater water use, more wastewater, and the need for treatment. Further, if carbon capture and storage technologies for fossil power facilities are commercialized, water use could potentially increase. One new technology under development, Integrated Gasification Combined Cycle (IGCC), which uses gas produced from coal, results in fewer GHG emissions, but the amount of water needed is uncertain. IGCC may also result in greater impacts to water quality through the release of arsenic, selenium, and cyanide. One last example is found specifically in Ontario with plans to substitute biomass for coal in some of its facilities. Facility-level water needs are unknown, but aggregate water use will likely decrease as a result of running fewer facilities in the province.

In Summary

Future trends point toward a more diversified electricity sector in Canada, which will include a mix of small and large facilities. Generation from both oil-fired and coal-fired plants is expected to decrease with growth expected from natural gas plants and hydropower. Although nuclear power provides a generation option that is less emissions intensive, growth of the sector may be difficult for economic and/or public acceptance reasons. The use of alternate fuel sources such as biomass or municipal waste is also expected to grow over the next 20 years, but will still remain small compared to conventional thermal power generation. Anticipated water use by the sector will be dependent upon the future generation mix, and as this is currently in the planning and development stages across the country, expected future water use is not known. However, given that the electricity sector is a major water user across the country, pressures on water resources can be expected to grow as a result of this sector?s activities. For both thermal and hydroelectric power, existing technologies and approaches hold promise for reducing water use and improving conservation.

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(h) Pumped storage hydro, which pumps and stores water for reuse in periods of high demand, is not considered in this study.

(i) Some water is produced as a result of burning fossil fuels. This water is released into the atmosphere through evaporation, resulting in a small net increase to surrounding surface water sources, but is not typically accounted for in water use calculations.