Today let's look at why one small Canadian power company enjoyed a 63% stock surge in the past month...

The play revolves around hydropower.

While hydroelectric power remains the world's largest utility-scale renewable energy, there's now a better, more efficient way to generate electricity from rushing rivers.

It's called run-of-river hydropower, and it's quickly becoming the new mainstream for consumers and investors alike.

That's partially because large-scale hydropower gets little love from environmentalists who say dams do too much damage to alluvial areas.

The reservoir-dam model also takes a hit as old, Depression-era engineering in this age of smart grids. No one wants to pitch a plan most Americans associate with Herbert Hoover!

Anyway, the best spots for dams have already been picked out and transformed by decades of surveying and construction. Developing countries may have room to build like beavers, but there are other obstacles to face.

On the way to becoming the world's largest water-driven power station, China's Three Gorges Dam project displaced over 1.2 million people and outraged everyone from ornithologists to archaeologists. Three Gorges Dam itself is over 6 times as long as the Hoover Dam and almost 50% larger than the Grand Coulee Dam — America's biggest.

It's too bad China didn't look upstream instead of down when officials decided to dam the Yangtze.

If Beijing's top brass had it to do over now, they'd see that run-of-river hydroelectricity is already changing the way the world gets power from water.

Take Canada, for example. . .

Run-of-River Scores a Win in Canada

In the province of British Columbia, run-of-river power has been run through the political mill lately.

The New Democratic Party stumped for a 6-month moratorium on private power projects that encompassed several clean energy technologies. Hydro was included on the forced dormancy list, so were wind and biomass (the local solar resource is negligible).

But the Liberal Party won, and Canadian clean energy investors didn't just breathe a sigh of relief — they also propelled shares of companies like Plutonic Power (TSX:PCC) into double-digit gains.

Vancouver-based Plutonic Power's stock jumped by more than 20% on the heels of the May 12 vote.

Over the past month, PCC shot up over 63%!

That one company has at least 17 small-scale hydroelectricity generation sites planned for the hilly headwaters of Bute Inlet, a fjord just north of Vancouver and Vancouver Island.

Below, you see the layout of how run-of-river generation works in Plutonic Power's proposals:



This run-of-river design diverts some water into a pipe called a penstock, which channels the river water into turbines for generation. Then, the water goes back into the stream with little or no net effect on downstream water levels.

That's perhaps the most salient difference between dams and ROR projects in terms of environmental impact and the regulatory hoops specialty firms have to jump through.

Hoover Dam, that national landmark and symbol of how long hydro has given power to the American Southwest, has a generating capacity of just over 2000 MW.

If approved, Plutonic's modular Bute Inlet array will be optimized to generate more than 1000 MW!

That's enough to power 300,000 homes. But of course, it's only a small piece of the puzzle to get British Columbia's energy mix more accessible, localized, and efficient.

Moving Beyond British Columbia

"It's not a given that our business plan advances," Plutonic CEO Donald McInness told the Vancouver Sun_, "but without the Liberals winning, we certainly weren't going to advance at all."

That Liberal win keeps alive a process initiated by provincial utility British Columbia Hydro and Power that puts new, renewable generation sources up against each other.

BC Hydro projects consumer electricity demand growth of up to 35% before 2030.

Competition is good — we're not looking for sweetheart stock plays here. We want winners.

In addition to Plutonic, top bidders in BC are likely to include Finavera, Innergex, Naikun, and Swift Power Corp.

But it does look like Plutonic's run-of-river technology is headed for the medal stand when it comes to expansion of electricity resources and access around the world.

The company also has the backing of General Electric (NYSE:GE). Together, they're lauching joint bids and developing synergies that could take successful application in British Columbia to GE's worldwide operations.

As small sites begin delivering power to large grid networks, we'll pay close attention to run-of-river hydropower's progress.

Regards,

Sam Hopkins

PS. Look for a full report on this topic in the next few weeks.  You'll be able to find it in the FREE report section, along with other great supplemental Green Chip Review material.