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How will BC Hydro power up renewable-energy ambitions?

The province’s electric utility has revised forecasts and expects BC’s electricity grid will slip from surplus to power deficit by 2030, even with the addition of its own Site C dam.

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The province’s announcement that BC Hydro will seek a big block of new, renewable electricity generation starting by 2028 to accommodate its green ambitions for electrification represents something of a reversal of recent policy.

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As late as 2020, BC’s then-Energy Minister Bruce Ralston was distancing BC Hydro from considering additional independent power producers, but to environmental economist Mark Jaccard, the change “is more of a relief to those of us trying to act on climate than surprise.” ”

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“It’s kind of like, ‘finally,’” said Jaccard, director of the school of resources and environment at Simon Fraser University, a former chairperson of the BC Utilities Commission, and newly minted member of the clean energy task force Premier David Eby called for BC Hydro to establish.

The timing of Eby’s announcement on June 15 caught BC’s private-power sector a little by surprise, considering the province’s recent policy direction, but members of Clean Energy BC aren’t totally unprepared, said Yuho Okada, chairperson of the industry group that represents many existing suppliers to BC Hydro.

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“Certainly, the industry is ready to deliver that, (although) there are some uncertainties around permitting (projects),” Okada said.

And this will be the first time in 15 years that BC Hydro has made a “call for power,” an open bid for private companies to submit proposals to meet that forecast demand, which it is expected to issue in 2024.

Why is BC Hydro doing this now?

BC Hydro has a surplus of power, built up in part under policies of former premier Gordon Campbell’s government demanding that the utility maintain energy self-sufficiency. With Hydro’s Site C dam, that surplus was expected to last into the 2030s.

The latest update of Hydro’s integrated resource plan, however, estimates that new demand to meet BC’s climate goals to electrify the economy will boost the province’s power demand 15 per cent beyond the 53,452 gigawatt-hours (GWh) worth of electricity British Columbians consumed in 2021 -22, which would outstrip its capacity, even with Site C, as early as 2030.

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How much electricity does BC Hydro want?

The utility wants to secure generation for 3,000 GWh of electricity per year, enough to power 270,000 homes with renewable energy, with some hooked up to the grid as early as 2028. That will be on top of the 5,100 GWh per year that its Site C dam will be added to the grid by 2025.

Okada said Clean Energy BC has argued as an intervener in hearings on the integrated resource plan that BC Hydro was likely to run short of electricity “a lot faster than what they were presenting.” This, for us, feels like it is more aligned with what we were pointing out as facts, at least our view.”

Where will that power come from?

IPPs supply electricity to BC Hydro under 125 separate energy purchase agreements and provide about 30 per cent of BC’s electricity now, some 16,824 Gwh in 2021-22. The IPP industry that built up before Site C’s approval lobbied to offer an alternative to a single mega project.

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In 2014, Clean Energy BC put together an “alternative portfolio” of projects to deliver an equivalent amount of electricity, and Okada’s sense is that “people are taking out (and) dusting off those binders that have been buried for 15 years,” to assess what they will need to do to revive them.

Okada added that Hydro has said it is specifically looking for larger projects to connect to the grid, but “there are several developer members that certainly have sizeable projects that will fit the bill.”

How realistic is BC Hydro’s timeline?

BC Hydro expects to launch the official call in the spring of 2024, with the hope that projects will start connecting to the provincial grid by 2028. Hitting that deadline will depend on both IPPs renewing proposals and the province rebuilding its ability to review and approve projects. , Okada argued.

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“It’s been 15 years since a large project has been permitted, so there’s a lack of capacity on the government side to do a rigorous due diligence,” Okada said.

A view beyond 2028

IPPs and economists are also anticipating the 2024 call for power won’t be the end of BC Hydro’s interest in new electricity sources. Okada said increasing demand for renewable power is a North America-wide phenomenon and the prospect of additional calls for power would help BC look more competitive.

“A lot of the developers have been investing elsewhere in North America, so to bring that capital back to this province is going to require some work,” Okada said.

Jaccard added that BC Hydro’s proposed call is a “low-risk” venture, considering that any surplus the utility develops would likely be quickly taken up.

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“In this case, you’re talking about a jump in electricity output that is linked to things all analysts in the world in my field, which is energy (and) climate economics, tell you you’re going to use a lot more electricity Jaccard said.

Where does reconciliation with Indigenous Nations fit in?

Eby said the call for power will be designed with input from First Nations, and proponents will face requirements for Indigenous participation in new projects. Okada doesn’t anticipate difficulties on that point because First Nations “have been the main proponents for economic reconciliation through energy projects.”

And the province included a $140-million contribution to the BC Indigenous Clean Energy Initiative to help back Indigenous-led power projects.



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