Premier Christy Clark’s recent fanfare about developing a natural gas export industry in northern B.C. included a major change in electricity policy.
Last year Clark’s government forced BC Hydro to trim its operations and keep its next two annual rate increases below four per cent. Part of the savings will come from redefining former premier Gordon Campbell’s climate strategy, which required BC Hydro to be self-sufficient in even low-water years, with no net electricity imports.
The target is now self-sufficiency in average-water years, limiting expansion of independent power projects. It also means B.C. will import more gas-fired electricity in the coming years, and burn some of its own abundant gas to generate new power up north. North America finds itself floating on a sea of shale gas.
Campbell’s plan entailed using B.C.’s big dams to stabilize and store power from new intermittent sources of hydro and wind, building the Site C dam on the Peace River and exporting clean energy at a premium in a carbon-priced North American market.
Both the carbon market and the export market have evaporated. While B.C. was developing run-of-river to sell to California, the U.S. west coast built new capacity, much of it gas fired, after an electricity crisis that caused brownouts more than a decade ago.
Today, Washington state producers are actually paying BC Hydro to take their excess power because they need to move it into the grid, and B.C. is the only place that can store it using dam capacity.
NDP energy critic John Horgan is celebrating this change in BC Hydro policy. He says the government made a multi-billion-dollar miscalculation by assuming California’s electricity shortage would continue indefinitely, and surplus power would be profitable. He says independent power contracts are part of BC Hydro’s current financial problems, but political interference in planning is the bigger issue.
Horgan would not endorse the Wilderness Committee’s call to cancel electricity purchase contracts BC Hydro has signed for more run-of-river developments. Additional projects are planned for the Upper Lillooet, Upper Toba and Harrison Rivers in southern B.C., and the Kokish River on northern Vancouver Island. Most are aboriginal partnerships.
Energy Minister Rich Coleman told me no contracts will be cancelled, and he rejected my suggestion that BC Hydro could end up with too much power in the wrong places and at the wrong time of year. BC Hydro can move power around as well as store it, and that ability will improve when the smart grid is completed.
Independent power doesn’t end there. It shifts to northern B.C., where three liquefied natural gas projects will need output equivalent to two and a half Site C dams to operate.
Coleman confirmed that at least one modern gas-fired power plant will be needed to develop LNG, which is expected to be in business before Site C could be built. That powerhouse will likely be built by the LNG developers, and used to back up new intermittent sources of offshore and land-based wind and any river or geothermal sites available along a new northwest power line.
B.C. will likely have a second gas-fired power plant in the northeast corner, to supply the Horn River shale gas development and processing plant now underway. Coleman says that plant should be able to capture carbon dioxide and sequester it deep underground. Fort Nelson and points north will remain off the BC Hydro grid.
Even with carbon capture in the northeast, Campbell’s greenhouse gas targets look to be the next part of his legacy to be abandoned.
Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com
tfletcher@blackpress.ca