Trade war complicates Manitoba Hydro plan to buy gas turbines from U.S. manufacturer

Trade war complicates Manitoba Hydro plan to buy gas turbines from U.S. manufacturer

Premier says purchase is not a done deal; Environmental organization urges province to cancel

The Canada-U.S. trade war has complicated Manitoba Hydro's plan to buy gas turbines for its $3-billion Brandon generating station expansion from a manufacturer based in Massachusetts.

Premier Wab Kinew is casting doubt on a Hydro reservation agreement to purchase three gas turbines from GE Vernova, a Cambridge, Mass., company spun off from General Electric to build gas and wind turbines.

The agreement was made public in a document submitted to the Public Utilities Board in January as well as during public hearing testimony before the provincial energy regulator last week.

This agreement reserves a place in line for Hydro to buy turbines at a time when machinery for generating stations is in extremely high demand due to the worldwide rush to produce more electricity.

Kinew said last week Hydro might not proceed with the purchase, even as he characterized the deal as being struck with GE Canada, which is based in Mississauga, Ont.

"I wouldn't say it's a done deal," he said in Winkler, Man., on Aug. 26.

Kinew said Manitoba has a very good relationship with GE Canada but mused about both the $3-billion Brandon construction project as well as $30 billion worth of additional infrastructure improvements Manitoba Hydro has to make in the coming decades.

"If all of a sudden firms in Trump's America were not eligible for that, I wonder how much attention that would get. So we've got to take a look at the fact that Manitoba has a lot of leverage," the premier said.

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"What if we made a decision in Manitoba to ensure that we were only going to procure the next $30 billion of public spending on our energy infrastructure from firms located in companies that respect Canada and respect Manitoba business?"

Climate Action Team Manitoba, a non-profit organization that has voiced opposition to Hydro's plans to purchase natural gas turbines, suggested it does not make sense for the province to spend billions on turbines manufactured in the United States while the premier touts the trade-war leverage gained by removing U.S. alcohol from liquor-store shelves.

Policy manager James Wilt also noted GE Vernova donated $500,000 to Trump's 2025 inauguration.

"There needs to be serious consideration of how this will look, given that the premier has been very vocal about needing to divest from U.S. investments," Wilt said in an interview Wednesday.

"This could be one of the largest investments made in this generation: A $3-billion gas turbine purchase, and then the lifetime costs in terms of whatever it would require for maintenance and parts and so on."

Siemens Energy, a manufacturer based in Munich, Germany, was also shortlisted as a potential gas turbine supplier, according to a June submission to the utilities board in June.

"We think that this is an important moment not only to pivot away from GE Vernova, but also to pivot away from the gas turbines as a concept entirely," Wilt said, touting wind power and battery storage as alternatives to burning gas in order to stave off energy shortages Hydro says it could experience within four years.

"There's other generation and storage technologies that can meet peak capacity needs, which can be sourced from other countries, whether in Europe or elsewhere, and that can be delivered and installed before the 2030 requirements."

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The Brandon generating station expansion is part of Hydro's plan to save and produce more power over the next 10 years. Public hearings into this plan before the Public Utilities Board are slated to conclude on Friday.

The board will then make recommendation to the provincial government about this plan. Interim Hydro CEO Hal Turner said the utility does not have to wait for those recommendations before it proceeds with its plans to buy the gas turbines.

"We've built mechanisms into the contract for us to be able to adapt to whatever the PUB recommends," Turner said on Aug. 28.

Kinew's cabinet can choose to accept, amend or ignore the PUB's recommendations.

Bartley Kives joined CBC Manitoba in 2016. Prior to that, he spent three years at the Winnipeg Sun and then 18 at the Winnipeg Free Press, writing about politics, music, food and outdoor recreation. He's the author of three books — two of them Canadian bestsellers — and the winner of a Canadian Screen Award for reporting.