Manitoba Hydro proposes $1.4B fuel-burning generating station to stave off winter power shortages

February 27, 2025 Canuck

Manitoba Hydro is proposing to spend $1.36 billion on a new fuel-burning station capable of generating 500 megawatts of electricity on demand, in order to stave off a power shortage expected as soon as five winters from now.

On Tuesday, the provincial Crown corporation asked the Public Utilities Board to review a preliminary estimate for a new “dispatchable capacity resource” made up of two 250-megawatt fuel-combustion turbines.

While no decision has been made on the fuel source for the turbines, the least expensive available option would be natural gas — a fuel the province’s NDP government has promised to phase out as an electricity source by 2035.

Adrien Sala, the minister responsible for Manitoba Hydro, said the Crown corporation is also looking at the use of hydrogen and renewable natural gas in the new facility.

Manitoba Hydro has a generating capacity of 6,120 megawatts when all of its generating stations are functioning and water levels are topped up on Lake Winnipeg, its main reservoir.

In a six-page cost estimate for the proposed new generating station, Hydro warns the province needs to be able to generate more electricity on demand to prevent “sustained winter peak capacity deficits” that could arise as early as 2029-2030.

Hydro said it has to start planning right now for this station to “ensure construction and procurement timelines can be achieved and have supply in place” in time for the end of 2029.

The $1.36-billion estimate is based on the lowest-cost known facility, which would be a pair of combustion turbines.

“Manitoba Hydro is studying a variety of fuels,” the estimate states. “No decision on the fuel source has been made.”

Peter Chura, a spokesperson for Hydro, said the Crown corporation is just starting to consider what fuel would be used in the proposed plant.

“We want to have on the one hand the lowest-cost resource available, and yet we have not ruled out some of the latest technologies,” Chura said. “Whatever is the best option at the at the most affordable price.”

Other options may require additional expenditures

While natural gas is widely available, Premier Wab Kinew has asked Sala to phase out the on-demand use of Manitoba’s sole existing natural gas-fired plant, the 280-watt Brandon Generating Station, by 2035.

The other fuel options for the new plant — hydrogen and renewable natural gas, which is derived from biological gases emitted from the likes of compost, landfills, sewage treatment or even livestock farms — would require additional expenditures.

For example, a new facility would have to be built in Manitoba to purify biogas to the point where it can be burned as fuel, while hydrogen is expensive to store because steel tanks require layers of coating to prevent them from absorbing the fuel, becoming brittle and fracturing.

A power plant. — The Brandon Generating Station, which runs on natural gas, is Manitoba Hydro’s sole major fuel-combustion plant. Several northern First Nations also use diesel generators. (Riley Laychuk/CBC)

Sala would not rule out natural gas as a fuel source for the new Manitoba Hydro plant.

“Our government certainly supports the work of decarbonizing wherever possible, but this is focused right now on ensuring that we meet our energy needs here in Manitoba and that we keep energy as affordable as possible,” the minister said in an interview Wednesday in his office.

“They’re looking at all the various different fuel sources as part of that proposal. And again, we certainly want to ensure that Hydro is looking at options other than natural gas and that’s exactly what they’re doing.”

Integrated resource plan in the works

At the same time Hydro prepares to build the new fuel-combustion plant, it’s working on an integrated resource plan that will serve as a roadmap for the expansion of generating capacity via other means, including wind power.

The province has already announced its intention to partner up with Indigenous-owned businesses to build new wind farms capable of generating 600 megawatts of electricity.

Hydro said in its estimate it intends to submit its plans for the new plant to the Public Utilities Board in 2026, potentially together with its integrated resource plan.

Due to the growing demand for electricity, Hydro has said it needs to double or even triple its generating capacity by the 2040s, mainly through the construction of wind farms. The cost of this expansion will be in the billions of dollars.

Hydro must spend billions more to fix up its aging infrastructure, all the while managing $24.8 billion in debt.

The NDP government, meanwhile, has touted a freeze on Hydro rates, with Premier Wab Kinew going so far as to state Hydro’s purpose is to provide affordable power.

Sala said the government is also committed to the reliability of Manitoba’s power supply, insisting Hydro is able to weather future cold snaps without fear of running short on power.

“We’re ready for what comes. We do have exchange agreements in place with other jurisdictions that allow us to, if we need to, import energy to meet needs in those kinds of challenging situations,” he said.

Manitoba has had to import 60 megawatts of electricity on Jan. 20, when the temperature in Winnipeg dropped to –31 C.