Canada is already the world's second-largest hydropower producer behind China. But Canada is bent on producing more, driven by its vast potential for hydropower generation and demands for more clean energy in the U.S.

It's a major element of Canada's plan to boost its economy, as lawmakers attempt to wean the country off coal-fired power through landmark legislation that encourages the development of renewable energy, especially hydropower.

"The federal government is intending to introduce legislation to reduce emissions pretty significantly from coal-fired plants," said Colin Clark, chairman of the Canadian Hydropower Association. "I think that creates an opportunity for hydropower."

In the U.S., where restrictions on carbon emissions are anticipated and demand is growing, there's a big market for Canada's hydropower resources. A handful of deals to export that power to the U.S. have already been made and more are looming.

"The U.S. is constrained in how it can develop its own generation systems because of uncertainty around carbon," said Dan McCarthy, president and chief executive officer of Black & Veatch Water. "Canadian hydro companies have an opportunity to take advantage of that uncertainty and get some power purchase agreements in place."

Hydro-Quebec recently reached long-term agreements to export hydropower supplies to Vermont and New England.

Hydro-Quebec and Public Service of New Hampshire plan to build a 140-mile transmission line that will bring up to 1,200 MW of Canadian hydropower to central New Hampshire. In another agreement, Hydro-Quebec will provide up to 225 MW of hydropower to two Vermont utilities, Central Vermont Public Service and Green Mountain Power, for 26 years beginning in 2012.

Canada, home to about 475 hydroelectric plants with a capacity of 70,000 MW, produces about 355 terawatt-hours of hydropower each year. But Canada's untapped potential is far greater.

According to a study commissioned by the Canadian Hydropower Association, Canada has 163,000 MW of untapped hydropower potential, more than twice the country's existing hydropower capacity.

Already, hydropower accounts for 60 percent of Canada's electricity consumption. That number is sure to rise as construction of several new hydropower plants near completion while more coal-fired plants are shuttered in the name of clean air.

There has been "a very significant increase in the number of references to hydropower by the federal government," Clark said. "It shows that the politicians are strongly supportive of the hydropower development in Canada and policies that will encourage development."

Earlier this year, British Columbia approved an aggressive plan known as the Clean Energy Act to create jobs and reduce carbon emissions through the development and export of new hydropower capacity.

Among other things, the measure establishes a goal of energy self-sufficiency by 2016, requires the province to generate a whopping 93 percent of its power from renewable resources such as hydro, and raises the standard for meeting incremental power demand through conservation and efficiency improvements from 50 percent to 66 percent by 2020.

In addition, the bill authorizes significant public investments in expansions at BC Hydro's Mica and Revelstoke projects.

Another chief objective of the act is to make BC Hydro a net exporter of electricity. Under the measure, BC Hydro will be able to secure long-term export power sales contracts with other jurisdictions, something that was prohibited before the law was passed.

"We want British Columbia to become a leading North American supplier of clean, reliable, low-carbon electricity and technologies that reduce greenhouse gas emissions while strengthening our economy in every region," said British Columbia Premier Gordon Campbell.

In Ontario, the Green Energy Act has led to a surge of new interest in building renewable energy projects throughout the province.

The act includes a feed-in-tariff (FIT) program, which provides price supports for renewable-energy producers serving Ontario. The FIT program is a major part of the province's aggressive plan to eliminate coal-fired power.

Under the FIT program, the Ontario Power Authority (OPA) has offered contracts to 184 projects with a capacity exceeding 500 kW each. Altogether, those projects are expected to add nearly 2,500 MW of new capacity. Of the 184 projects, 46 are hydropower projects.