The challenges of bringing smaller-scale energy projects to
fruition are not in debate. But the BC Government's
August 30 announcement that BC Hydro will cancel as many as 10
electricity purchase contracts (and defer up to nine more) is
raising eyebrows in the BC energy sector.
An optimistic take on this news is that the endangered projects are
those least likely to prove viable. If true, then this move
by BC Hydro to jettison "dead weight" can be viewed as
efficient, sensible, and potentially to the benefit of projects
with hallmarks of feasibility: credible management, sound
financing/ownership and good prospects for overcoming
environmental, First Nations and other approval hurdles.
Moreover, BC Energy and Mines Minister Bill Bennett confirmed that
the 19 projects in question have not met their contractual
obligations and none are yet in "serious construction
mode".
The other view is that this announcement heralds a shift away
from the goals of the BC Clean Energy Act, which requires 93% of
BC's energy to come from clean or renewable resources.
Criticism of governmental support for independent power producers
is nothing new: many projects fail to reach operation and they are
significantly more costly sources of energy. This criticism
has extended to BC Hydro's IPP-friendly initiatives (2006 and
2008 Clean Energy Calls and the Standing Offer Program that
facilitates 15MW-and-under projects).
It remains to be seen whether we are witnessing cooling of
affection for IPP projects, or just a sensible
house-cleaning. Both the identification of the
cancelled/deferred projects and a close look at BC Hydro's
recently-released draft Integrated Resource Plan will permit more
insight as to where BC energy policy is headed.
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