NDP moves to scrap energy self-sufficiency
The NDP government is moving to scrap the province’s legislated requirement that B.C. remain self-sufficient in electricity supply, a centrepiece of the previous government’s green-energy policy.
The NDP, in its legislative agenda for this session, tabled amendments to the Clean Energy Act, which include stripping out the legislation’s definition of energy self-sufficiency.
Energy and Mines Minister Bruce Ralston characterized it as a public-policy shift away from a measure that the NDP disagreed with when put in place in 2010, which simply gives B.C. Hydro some leeway in preparing its next major demand estimate.
“Eliminating it will enable Hydro, give it a bit more flexibility to purchase clean energy at the most affordable prices from within and without the province,” Ralston said.
Independent power producers, however, which saw significant growth of their sector while the policy was in force, worry that the measure simply shuts them out of future development just as the province is promoting the electrification of industry under its Clean B.C. plan.
“It just doesn’t make sense to us to take this action now,” said Laureen Whyte, CEO of Clean Energy B.C., the industry group representing independent power producers. “Essentially, what (the province) is doing is looking to import electricity instead of creating it here, along with the jobs and economic development and taxes that go with that.”
Independent power producers (IPPs) now supply B.C. Hydro with about a quarter of all its electricity under more than 120 long-term contracts with the utility after a decadeand-a-half of growth under the previous government.
“What this means for investors is that they have invested in this jurisdiction, in good faith, by the rules, understanding that there is a future for IPP technology,” Whyte said. “(The amendment has) kind of sent a message back to the investment community that, you know, maybe it’s not a secure place to be investing in as they thought.”
Ralston said the alarm of private power producers is “exaggerated,” because government hasn’t proposed tampering with B.C. Hydro’s considerable commitment to the long-term contracts of independent producers and the Clean Energy Amendment Act, Bill-17, doesn’t rule out new domestic power development.
“The change is to give B.C. Hydro the option (to import power) if it’s advantageous to.”
The electricity self-sufficiency provisions of the 2010 Clean Energy Act, under former premier Gordon Campbell, mandated that B.C. Hydro be able to meet the province’s electricity needs solely from within the province.
In fiscal 2010, B.C. Hydro spent $568 million to buy 8.9 million gigawatt hours worth of electricity from independent producers at an average price of $63.85 per megawatt hour, according to its annual report. In the same year, the utility spent $311 million to generate some 42.1 million gigawatt hours from its own power dams at an average price of $7.19 per megawatt hour.
The amount of private power B.C. Hydro buys, by fiscal 2019, ballooned to $1.2 billion for 14.2 million gigawatt hours at an average price of $87.52 per megawatt hour, according to last year’s annual report. In the same year, it spent $332 million to generate 42.2 million gigawatt hours from its own facilities at an average price of $7.87 per megawatt hour.
B.C. Hydro has surplus supplies of electricity now, which, with the addition of its $10.7-billion Site C dam, scheduled to come on line in 2024, is expected to last into the 2030s.
Ralston added spot market prices for new sources of solar electricity from Arizona, Nevada and California have been cheap, $34-$41 per megawatt hour, compared with the almost $100 B.C. Hydro spends to buy power from IPPs.
Whyte, however, said that is an unfair comparison. B.C.’s existing IPPs, primarily runof-river hydro projects with a handful of wind farms, were developed at a time when the technology was still being developed. She argued that their advantage at the time was that they were secure sources at predictable prices.
Costs for all renewable power producers have come down considerably since, Whyte said, so new B.C.-based IPP developments would be equally competitive.