If CleanBC electrification goes ahead as planned, by 2030 BC will be short over 26,000 gigawatt hours (GWh) – the equivalent of five Site C dams – to meet provincial electricity demand. Where will it come from? The only reasonable answer is independent power producers (IPPs) that are either First Nations-owned entities or private companies, all of whom would partner with Indigenous communities.
Over the past 18 months, the BC government has criticized IPPs, signaling they want to see an end to private power producers. Last month, they introduced Bill 17 which would damage the IPP sector, including First Nations, local communities and investors. The evidence shows that these attacks are based on inaccurate or misleading information.
As far back as 2005, BC Hydro was forecasting an “emerging electricity gap” of almost 30,000 GWh a year (worst case scenario) because of strong economic growth. “It has been more than two decades since British Columbia last made a major addition to its electricity system…Our current load forecast indicates that BC’s electricity requirements will grow by between 25 percent and 45 percent over the next 20 years,” BC Hydro wrote in a public report.
BC Hydro also told the BC Utilities Commission that its level of imports was “too high.” Import prices had also risen dramatically. The BCUC approved BC Hydro’s assessment and the plan to bring IPP projects – mostly small hydro – on stream relatively quickly for only a small premium over the cost of a new hydro dam. Yes, energy purchase agreements from 2007 averaged $100/MWh, but that’s what clean energy projects cost then, as BC Hydro acknowledged in its submission.
Unfortunately, BC Hydro’s forecasts turned out to be inaccurate due to the global financial crisis of 2008 and the subsequent recession which saw electricity consumption drop and flatline for nearly a decade. At times, BC Hydro was forced to sell the surplus power at a steep discount. The financial issues were clearly caused by an economic crisis, not sweetheart deals.
This history is important because just like 2005, British Columbia is again on the cusp of an emerging electricity gap. This time the drivers are CleanBC and Victoria’s commitment to electrify parts of the natural gas industry.
Last time, BC Hydro erred with its 20-year load forecast. This time, the Horgan government’s mistake is accepting the sweetheart deals narrative and seeking to source the needed electricity from high-risk Western United States spot markets instead of partnering with IPPs. In fact, the government recently introduced legislation designed to phase-out IPPs just as the capital investment and economic development are needed more than ever.
What has changed since 2005? In the world of electricity and utilities, everything.
Wind turbines and solar panels that generated power for hundreds of dollars per MWh in 2005 are now the lowest-cost source of electricity – as low as $28/MWh for wind and $32/MWh for solar, according to Lazard. BC’s costs will probably be closer to $50 because of mountainous terrain and transmission. Compare those costs to two independent research institutes’ estimate of Site C’s $110 to $145 per MWh. Battery storage has also plummeted, making wind and solar even easier to integrate into the provincial power grid.
Where will the wind and solar generation needed by 2030 come from?
The Province has yet to give CleanBC marching orders to BC Hydro and the BCUC.
One thing we do know is that BC Hydro isn’t planning more new dams.
Purchasing cheap wind and solar power on American spot markets is a very risky strategy because while there is plenty of surplus power now, Western states are doing exactly what BC plans to do: electrifying their economies to combat climate change. Today’s surplus could be tomorrow’s shortage.
Why should BC ship tens of billions in capital investment and thousands of jobs south of the border? The far better strategy for BC is to build wind and solar farms as they’re needed.
Indigenous communities have embraced renewable energy projects as developers, and through partnerships. These projects provide electricity to our communities instead of dirty fossil fuels, and revenue on terms that align with Indigenous values. Wind and solar projects ensure that future generations have the same as, if not more, opportunity than today’s generation.
We can install wind turbines, solar panels, biomass facilities, and tidal generators just as well as the Americans. Hypothetically, BC could supply all of its future electricity needs with its own dirt-cheap renewable energy, creating jobs and tax revenue within the province.
The only industry able to marshal the investment, resources and expertise is the IPPs.
Why would our governments not incentivize regional projects and diversity? Now is the time to proactively invest in a resilient energy system for all British Columbians.
Patrick Michell, Chief, Kanaka Bar First Nation
Laureen Whyte, Executive Director, Clean Energy BC