Manitoba Hydro

[bodaggin]

5,000 MW Cedar Lake to Lake Winnipeg Pumped Hydro Analysis

This will be complex, so prepare. Note, we're looking from the lens of a Battery As A Service (BaaS) model. It's basically price arbitrage. Buying off-peak electricity during windy times to store it, then selling back during no wind (on-peak).


Assumptions:

-5,000MW nameplate capacity
-15,000 cubic meters/second flow
-120 foot hydraulic head
-Cedar Lake Volume 4.34 cubic km (using average depth 11 feet)
-Max battery runtime 50hrs (that drains 60% of Cedar Lake)
-40% capacity factor (80% efficiency, half of that spent 'charging', the other half generating).
-17,520,000 MW annual generation (40% capacity * 5000mw * 24hr * 365 days)
-Lifespan 100yr+



Now the tricky shit. How much can it earn from that 17,520gw? Price arbitrage is dynamic, and slippage occurs. But let's estimate some ranges.

Ontario TOU Rates:
Low: $0.09/kwh
High: $0.18/kwh
Arbitrage/Difference: $0.09/kwh.
Call it $0.05 to $0.06/kwh with slippage.

Ontario Ultra Low Overnight Rates:
Low: $0.03/kwh (I couldn't believe this)
High: $0.29/kwh
Arbitrage: $0.26/kwh.
Say $0.15/kwh with slippage

Every regional market will be different. Super dynamic number. And fixed contracts would occur. It's hard to accurately estimate this number. But let's also run a $0.03/kwh scenario for the low low end.


Annual earning Scenarios for the 17,520gw:

$0.03/kwh = $525 million
$0.06/kwh = $1,050 million
$0.15/kwh = $2.63 BILLION

The $800m to $1.2b range seems reasonable. Call it $1B for simplicity.


Construction Cost + Profitability:

Average Hydro Build costs are $3-6 million per MW. Not $21m like they blew on Keeyask. They need to get their act together and hit the $5 million. We'll use that.

Construction Cost: $25 billion (5000mw * $5m)
Annual Profit: $1 billion
Repayment: 25yrs (pre-interest)

These are good numbers in terms of a mega project. Keep in mind, the more the switch to wind occurs, the higher the demand for baseload. The higher this demand, the greater the spread between on-peak vs off-peak widens; and thus the higher the pumped-hydro water battery earns annually. The faster it pays off too. This isn't an outlier scenario, we're already seeing those spreads widen like in Alberta's crisis this January. It will only get worse throughout the transition IMO.

And guess what. Another pumped-hydro can be built on the Fairford/Dauphin river using Lake Manitoba as the battery. Maybe 10gw.

Told you it was complex. For now, my invoice is in the mail for doing your fcking work, Manitoba Hydro.