BC Hydro needs to acquire more electricity than it previously thought, and it won’t be available soon enough.
Introduction
BC Hydro, the provincially owned electrical utility, needs more electricity. In 2024, with no new generation of its own planned, it sought bids from the private sector to build new, clean generation (2024 Call for Power). Bids have been selected, contracts signed, and the electricity purchase agreements are now under regulatory review.
But one well-known columnist has speculated that the need for energy might be “even more acute than officials are acknowledging.” Is he right?
The 2024 Call for Power
There’s little doubt more energy is needed. BC Hydro forecasts that, without new generation, it will have a deficit of 1,000 gigawatt hours (GWh) in fiscal year 2029 (F2029), rising to 2,900 GWh in F2031.
To address this deficit, BC Hydro said it would acquire 3,700 GWh of energy per year. 3,000 GWh of new generation would be sought in the 2024 Call for Power as early as F2029, and 700 GWh would come from existing private sector facilities “prior to fiscal 2029.”
By December 2024, BC Hydro accepted bids for 4,830 GWh per year of new generation. On its face, then, the 2024 Call for Power has achieved its objective to secure the 3,700 GWh of electricity it was looking for in the short term.
Too little…
Actually, the 2024 Call for Power hasn’t been quite as successful as the press release suggests.
The first problem is that BC Hydro wasn’t able to buy the 700 GWh per year it wanted to from existing generators. Presumably the price being offered wasn’t sufficient to lure them away from selling to the export market. This doesn’t bode well for the price BC Hydro will have to pay if it needs to buy more market energy in future.
In addition, it means BC Hydro must now acquire 3,700 GWh of new generation rather than the 3,000 GWh it had originally intended. Which brings us to the second problem.
It turns out that BC Hydro doesn’t really expect to get the full 4,830 GWh per year from the 2024 Call for Power. Based on prior experience, it anticipates 30 percent of the energy will be lost due to “attrition”, i.e. bidders failing to start operation on time, or at all. Possible reasons include financing problems, supply chain issues, and bidders concluding they can’t make enough money at the price they bid.
This latter risk is real, as the UK just found out. Orsted, a Danish energy company that last year won a contract to build and deliver 2.4 GW of offshore wind power, has downed tools as a result of “higher supply chain costs and interest rates”. BC Hydro’s successful bidders have provided hefty security guarantees, but still may be willing to walk away if their costs increase too much between now and when they start operations.
The 30 percent attrition rate means BC Hydro is really anticipating only 3,381 GWh per year, which is less than the 3,700 GWh it planned to acquire, and is perilously close to the 2,900 GWh deficit anticipated in F2031.
…too late
The biggest problem, though, may not be the amount of energy being procured, but the timing.
Also missing from BC Hydro’s press release is that the earliest start date for any of the ten projects will be F2031, two years later than anticipated when the bids were requested. Worse, the missing 700 GWh that BC Hydro had hoped to buy from existing facilities was needed before F2029.
In fact, five of the projects, representing 2,608 GWh or 60 percent of the planned energy, won’t start operations until F2032.
Even if all five projects slated for F2031 come through on time, they will only provide 1,708 GWh of electricity. That leaves the energy deficit unaddressed until at least F2032. BC Hydro says it’s working to advance the bidders’ timelines, otherwise presumably it will have to import energy to fill this deficit, as it is doing currently.
And there’s always the nightmare scenario that some projects get tied up in legal challenges. A subject for another day…
Conclusion
The energy from the 2024 Call for Power was never going to be more than a short-term fix, but the way things are shaping up BC Hydro needs to find more sources of generation as soon as possible.
The new call for power announced May 5 (2025 Call for Power), one year early, is a good start. The fact that individual bids won’t be limited to 200 MW generation is a sensible move, as it allows bids from plants that are more efficient at larger scale. However, announcing a target of 5,000 GWh per year may have been a mistake – BC Hydro should be open to more energy, if the price is right.
The real “elephant in the room” here is the government’s electrification program.
BC Hydro’s deficit of 2,900 GWh by F2031 is its “reference”, or “most likely” forecast. In its Integrated Resource Plan, BC Hydro also considered how much electricity it would need to meet BC’s greenhouse gas emission reduction targets. This includes everything from electrifying the oil and gas sector and liquified natural gas production to electric vehicles and building heat pumps, as laid out in the government’s CleanBC Roadmap to 2030.
To meet these emission reduction targets through electrification, BC Hydro would be short 10,800 GWh by F2031, around 2 Site C dams’ worth. It’s also more than twice what the utility expects to get in the 2025 Call for Power, which is unlikely to arrive before F2032 at the very earliest, if the current call for power is any indication.
The government and BC Hydro are on a collision course with reality here. If the 2024 Call for Power wasn’t capable of solving the “business as usual” electricity deficit by F2031, just doing virtually the same thing again won’t solve a problem three times as big on the same schedule.
The government has at least admitted it won’t achieve the 2030 GHG emission reduction target, although it hasn’t formally abandoned the target yet (it should). What it should also do is admit that a lack of new generation is limiting how fast it can electrify the economy.
A review of the CleanBC program is now underway. This would be an ideal time to come clean (as it were).