Clean Energy Looking for a Place in the New North

resources | BCBusiness
Paul Kariya

With industrial development in the north expected to spark a surge in electricity demand, and alternatives like wind and run-of-river contributing an ever-bigger slice of the energy pie, the executive director of Clean Energy BC talks about where independent power producers might fit in the new power equation

In August this year BC Hydro released a draft of its 20-year plan describing how it plans to meet future growth in demand for electricity. The power utility sought public input through October 18, and plans to submit a final draft to the provincial government for approval by November 15.
Absent from Hydro’s Integrated Resource Plan, according to Paul Kariya, executive director of Clean Energy B.C., is provision for adequate new electricity sources to meet the expected increase in demand in northern B.C. In particular, the draft plan makes little provision for independent producers of alternative sources of energy, such as wind, run-of-river and geothermal.
Kariya, who heads the association representing independent producers of clean energy, explains to BCBusiness how he believes independent producers can contribute to meeting expected demand, and what he hopes to see in the final plan presented for provincial government approval.
Resource developments currently in the planning stages, including new mines and LNG processing plants, would have huge energy demands. How much of that could be supplied by independent producers of clean energy?
Paul Kariya: I think the potential is there. The way the BC Hydro resource plan, which is their 20-year electricity plan, is structured right now, the buyer for all the power is BC Hydro, and its plan doesn’t take into account a lot of that demand. So at this point it’s uncertain what that means for the clean energy sector. We’re hopeful; we’re trying to work with BC Hydro and government on a future that would say that they want to use more clean energy. But to be fair, I think some of the resource developers themselves have expressed a concern or interest in how they’re going to power themselves, and many of them would rather self-generate than rely upon BC Hydro.
But is the capacity there? Run of river and geothermal, for example, are pretty small projects. Apart from BC Hydro’s policies or plans, do independent producers have the capacity to significantly up their portion of the province’s electricity generation?
PK: It’s complex and I wouldn’t want to snow you that small hydro and biomass are going to meet all of the needs that are coming. The complexity is that many of the renewable sources are intermittent power, and they need to be shaped with firm power. Probably the likely candidates to shape would be BC Hydro’s storage system, which is a perfect complement, and the other is gas generation would work well with wind and intermittent hydro. So you’ve got BC Hydro, and you have gas and it’s cheap and we should be using it as transmission and all the other infrastructure that’s needed is built. I think we’ve got a perfect complement to meet the load going forward.
How much of BC’s electricity currently comes from independent clean energy producers?
PK: From non-BC Hydro sources, it’s about just under 25 per cent, and if you break it down further, there are 14 operators that sell power to BC Hydro as a sideline to mining or forestry. Teck Cominco, for example, is a big producer that, when they don’t need their own power they have an agreement to sell to BC Hydro. But if we take those producers out, it’s probably about 17 or 18 per cent that my members provide to BC Hydro.
What’s the likelihood of that percentage increasing significantly in the near future?
PK: Not significantly. All the projects that are currently being constructed came out of power calls in 2006 and 2008. 2008 is the last time that BC Hydro had a formal power call and my members are currently constructing those projects. There will be a little bit of an uptick next year and the year after as some of those come on stream. But there haven’t been any more requests for power and it could go silent after that.
Big hydro dams have been the major source or electricity for decades. Is that likely to change in the near future?
PK: We’re hopeful, but as I mentioned, BC Hydro is looking to have a lot of that northern development self-powered. And then if indeed there is power that’s required from BC Hydro, their supply priorities are first, the Site C project, then their own demand-side management taking care of a lot of the load. Third and fourth are market purchases on the spot market and potentially repatriating some of the entitlement from the Columbia River treaty. We’re trying hard to make sure the draft plan is revised to ensure a robust diversity of supply.
A decade or two ago there was a lot of optimism about wind playing a significant part in new power generation in B.C., but to date wind’s contribution is minimal. Is it fair to say that wind hasn’t lived up to expectations, and if so, why not?
PK: In the last power call in 2008, seven wind projects received contracts from BC Hydro. One has been built and began operating earlier this year. Another one, the Cape Scott wind farm, is testing right now on northern Vancouver Island and will come on full stream probably in January. Those will add to the two that are up and running, so potentially we’re going to have four operating wind farms come January.
But we are under-developed, for the good wind resources we have. Part of that’s because we have so many other good renewables, the key one being hydro; if you look at how many hydro projects are in that supply set, we’ve got way more than other provinces. So wind is there and wind will continue to play a good role, and the cost of wind has dropped dramatically in terms of the cost of turbines and supplies. So if there is this increased need for power and the BC Hydro plan is adapted or redrafted to include more clean energy, I think wind is going to pick up significantly in this province.
We often hear that alternative renewables cost much more than major hydro dams. Is that correct?
PK: It isn’t. It’s very complex, only because people end up comparing apples to oranges. When the media say that BC Hydro’s big dam electricity is so much cheaper, it is if you’re comparing what was built in the 1960s, 70s and the last one in Revelstoke in 1984—what everyone refers to as heritage power. It’s great—it’s there, it’s contracted for, and it’s coming in at three or four cents a kilowatt hour. But if you look at more recent information, the most comparable project would be the Aberfeldie project that BC Hydro refurbished and built several years ago, and its power cost is no different than what the independent power producers produce for. Today’s labour costs, the cost of capital—all of those things are comparable, whether BC Hydro does it or we do it. So no, we’re not more expensive.