BC Hydro belatedly acknowledges the value of natural gas to keep its system operating reliably. The BCUC should ensure the utility comes clean about how it can scale up this approach to meet future growth as well.
Introduction
On March 2, a BC Hydro filing to the BC Utilities Commission (BCUC) revealed an increased forecast for electricity demand. While it wasn’t stated explicitly, it was possible to calculate that the utility was facing shortages of energy and capacity by 2030.
Shortly thereafter, BC Hydro requested a delay in the BCUC’s review of its 20+ year Integrated Resource Plan pending “material new developments” (the BCUC agreed to the delay).
Then, big announcement! BC Hydro will spend over a billion dollars on Power Smart 2.0!
The reboot of the energy efficiency program will reportedly reduce electricity consumption and shift demand away from peak times, allowing BC Hydro to avoid or defer $2 billion in investment, all without adding to BC’s greenhouse gas (GHG) emissions.
Surely this was the “material new development” that would solve the 2030 challenges, and ensure British Columbians would continue to have clean and reliable electricity into the next decade?
Er…no.
It’s a gas, gas, gas!
At about the same time as Power Smart 2.0 was launched, BC Hydro filed its anticipated update with the BCUC, and sure enough, it’s now projecting a small surplus of both energy and capacity in 2030, rather than deficits.
Good news indeed, but the turnaround isn’t due to efficiency gains from Power Smart 2.0. BC Hydro had already counted on these energy and capacity savings between now and 2030, and baked those savings into the Integrated Resource Plan submitted to the BCUC last year.
Instead, the real story here is that BC Hydro will now be relying on electricity generated from natural gas to plug its supply gaps. BC Hydro plans to extend contracts to buy electricity from two independent power producers.
One source of reliable power is the 275 megawatt (MW) Island Generation facility in Campbell River, identified right here at Just and Reasonable in April as one of the best options for additional capacity. The contract, which was due to expire in October, will be renewed.
The other source is the 120 MW McMahon facility in Taylor, near Fort St. John. In an ironic twist, this plant is half an hour’s drive from new Site C dam, BC Hydro’s newest source of clean energy.
Without the generation from these two gas-fired facilities, BC Hydro would still have a deficit of both energy and capacity in 2030.
The use of these facilities comes at a cost though, and it’s not just financial (the price of the electricity was not disclosed). In 2021 BC Hydro wrote that the McMahon facility was its “single largest source of greenhouse gas emissions on the system at about 340,000 tonnes of carbon dioxide equivalent (CO2 e) per year”. The Island Generation plant is responsible for only around 10,000 tonnes – even though it has a larger capacity, BC Hydro plans to use it less frequently.
You can’t always get what you want
Given where it finds itself today, BC Hydro had little choice but to rely on natural gas to ensure reliable service through to 2030. Its choices were limited by the long lead times to build alternative new generation or implement energy efficiency measures, and earlier ministerial dithering wasted valuable years despite it being clear more electricity would be needed.
The more interesting question is what BC Hydro should do in the longer term, when it has a wider range of choices of how to meet demand while balancing cost, reliability and GHG emissions. This is what the BCUC’s review of the Integrated Resource Plan should be all about.
BC Hydro’s current Integrated Resource Plan application doesn’t mention gas-fired generation as a source of “dispatchable” power (i.e. something that’s always there when you need it, unlike wind and solar generation). This seems to be something of an omission, especially considering the new reliance on gas.
When the BCUC’s review of the Integrated Resource Plan gets underway again in June, one of the topics under discussion is “viable resource options”; I hope that the use of natural gas is taken more seriously than it has been of late.
Sympathy for the Devil
Natural gas for electricity generation has been demonized in BC for many years owing to its GHG emissions, culminating in the previous government’s decision to shut down the Burrard Thermal gas-fired plant near Vancouver in 2016. The replacement hydropower is relatively clean, and storage reservoirs can support the addition of other clean generation such as wind, although we don’t yet know how much more we can safely add to the system.
But hydroelectricity is no panacea. As the recent multi-year drought has shown, we cannot rely solely on today’s hydro dams even to meet current demand. And there are other risks too, with BC’s largest reservoirs located far from the largest source of demand. A former BC Hydro power engineer told me that in 1972 an ice storm severed two of the three transmission lines serving the Lower Mainland, leaving Burrard Thermal to run “flat out for two weeks”, in addition to heavy imports from the US.
It’s not just about meeting today’s demand. While much of the focus of the BCUC’s review is on BC Hydro’s “reference” (most likely) demand forecast, that isn’t sufficient to meet either the government’s GHG emission reduction targets or new industrial demand from mining and liquefied natural gas (LNG) plants at the end of the proposed North Coast Transmission Line. BC Hydro has provided a forecast for higher levels of demand, but hasn’t been specific about how it would add the generation to meet it.
Fortunately BC Hydro seems to be rediscovering the virtues of natural gas, and FortisBC Inc. (FBC), which provides electricity in southeastern BC, already plans to use electricity generated from renewable natural gas by the early 2030’s, a plan approved by the BCUC in 2022.
Natural gas generation, along with more wind and solar power, could allow us to electrify the economy faster at the same time as growing it. The trade-off with additional GHG emissions might be worth it, although FBC showed that using renewable natural gas plants can reduce this problem, at a cost.
These are all questions that could, and should, be examined in the BCUC’s review of BC Hydro’s Integrated Resource Plan.
Shine a light
The billion dollar Power Smart 2.0 announcement made quite a splash, but didn’t tell us much we didn’t already know about BC Hydro’s energy saving plans. The under-the-radar filing to the BCUC about the use of natural gas for generation was far more significant, and almost got lost in all the excitement.
BC Hydro’s acceptance that it requires more natural gas generation is living proof of the value of diversification. It could provide even more benefits in future, especially if the proposed North Coast Transmission Line comes to fruition.
The BCUC’s review of the Integrated Resource Plan is an opportunity for an open and transparent debate about trade-offs, and how we could generate more electricity in future without sacrificing reliability or economic opportunities.
Who knows, maybe there’s still a case for Burrard Thermal?