Canada: BC Hydro Releases Final Integrated Resource Plan; Includes New Clean Energy Strategy To Support Renewables Sector And Promote Opportunities For First Nations

Last Updated: November 28 2013
Article by Sven O. Milelli and Joshua C. Walters

Most Read Contributor in Canada, September 2018

On November 26, 2013, the BC government confirmed its approval of BC Hydro's Integrated Resource Plan (IRP). The IRP provides a 20-year outlook of how BC Hydro expects to reliably and cost-effectively meet the anticipated future electricity needs of the province through conservation and acquisition of sufficient generation and transmission resources.

As we noted previously, BC Hydro submitted its draft IRP (Draft IRP) to Minister of Energy and Mines Bill Bennett for approval on August 2, 2013.  Minister Bennett subsequently directed BC Hydro to carry out a final round of consultation on the Draft IRP by October 18, 2013 and re-submit a revised draft for consideration by November 15, 2013.

Although the IRP is in most cases substantially identical to the Draft IRP, the final IRP includes a new strategy for clean energy and a number of other notable revisions.

Clean Energy Strategy

As previously alluded to by Minister Bennett at Clean Energy BC's annual conference in October 2013, the final IRP features a new chapter entitled "Clean Energy Strategy" which outlines BC Hydro's strategy to support the province's clean energy sector and promote clean energy opportunities for First Nations communities.

Reflecting input from the Minister of Energy and Mines as well as feedback received during the final phase of IRP consultations, the Clean Energy Strategy aims to advance a number of objectives embodied in the province's Clean Energy Act (CEA), including:

  • generating at least 93% of the province's electricity from clean or renewable resources;
  • encouraging switching to energy sources that decrease greenhouse gas emissions in the province;
  • fostering development of First Nation and rural communities through the use and development of clean or renewable resources; and
  • ensuring that BC Hydro's rates remain among the most competitive in North America.

Under the Clean Energy Strategy, the following actions by BC Hydro will be taken over the next two years:

  • undertaking cost-effective electricity purchase agreement (EPA) renewals. EPA renewals are predicted to be second only to demand side management (DSM) in contributing to BC Hydro's ability to meet forecasted energy demands.  The IRP confirms that during EPA renewal negotiations, BC Hydro will consider the seller's opportunity cost, the electricity spot market and the cost of service for the seller's plant, among other factors;
  • broadening opportunities under standing offers for clean energy by:
    • increasing the maximum project size eligible under the Net Metering Program from 50 kW to 100 kW;
    • introducing a "micro-SOP" component of the overall Standing Offer Program (SOP) annual target dedicated to projects in the range of 100 kW to 1 MW and involving a simpler, more streamlined process within the SOP, including a simplified form of SOP EPA;
    • increasing the overall SOP annual target from 50 GWh/year to 150 GWh/year (including the new "micro-SOP" stream described above); and
    • removing high-efficiency co-generation using non-clean fuels from SOP eligibility in order to create more opportunity for clean energy projects within the SOP.
  • promoting greater participation by First Nations in clean energy projects by:
    • engaging further with First Nations and the clean energy sector on mechanisms to encourage greater participation by First Nations in the SOP as well as future competitive bid processes; and
    • giving weight to maintaining or improving relationships with First Nations as it manages its independent power producer (IPP) portfolio through deferrals, downsizing or terminating pre-COD EPAs where projects are in material default.
  • reviewing the IRP in two years to determine if, as a result of changes to the load-resource balance, an energy gap is expected in the near or medium term, potentially requiring additional power acquisitions.  By way of an illustrative example, if the fall 2015 review of the IRP indicates a need for additional power of 3,000 GWh/year or more of clean or renewable energy, BC Hydro would likely launch a call with EPA awards taking place nine to 12 months later, such that successful projects could be online as early as F2020-21.
  • pursuing bilateral EPAs that are cost-effective and benchmarked to competitive processes and which further the province's energy objectives embodied in the CEA.
  • working with government to advance electrification options for industrial, transportation, and other sectors to reduce GHG emissions and support long-term demand for clean or renewable resources.  Among other initiatives, BC Hydro cites its implementation of the Dawson Creek/Chetwynd Area Transmission Project (DCAT) to serve electricity demand from natural gas exploration and development activities in the Montney Basin.
  • continuing to encourage the liquefied natural gas (LNG) industry to use clean or renewable electricity, including for ancillary power requirements by larger-scale plants and for both compression and ancillary requirements for smaller projects.
  • maintaining a current understanding of clean or renewable technologies in BC and their resource potential, prices and technical capabilities.

Implementation of the Clean Energy Strategy will begin immediately with the increase to the SOP annual target and will continue with planned engagements in support of other action items throughout F2014 and F2015.

Other Changes to the Draft IRP

The IRP reflects a number of other notable changes to the Draft IRP, including:

  • In reiterating its prediction that LNG projects will require 3,000 GWh/year of energy and 360 MW of capacity from BC Hydro in future (Expected LNG Load), the IRP indicates that four 100 MW simple cycle gas turbine generation facilities may be required in the North Coast region to satisfy these requirements.  In turn, the IRP recommends that BC Hydro determine where and how gas-fired generation could be built in the North Coast region to reduce project lead times and to be able to meet LNG load requirements as they materialize.
  • BC Hydro revised its estimated short-term firm energy gap that will emerge before Site C is in-service to 1,100 GWh/year (previously 1,500 GWh/year) and a short-term capacity gap of 650 MW (previously 600 MW).  Similarly, if LNG-related loads are higher than expected, BC Hydro estimates that energy shortfalls could amount to 4,700 GWh/year and capacity shortfalls could be 1,100 MW (estimated to be 5,200 GWh/year and 1,000 MW in the Draft IRP, respectively).
  • BC Hydro indicated that, in addition to actions highlighted in the Draft IRP, BC Hydro could support government climate policy objectives by working with:
    • government, the ports, and industry to expand the availability of shore power to shipping at BC ports; and
    • governments and other partners to manage the installation of electric vehicle fast-charging stations across the province.
  • BC Hydro concluded that Site C continues to be a cost-effective resource compared to portfolios of alternative resources.  Given its large up-front capital cost, the IRP confirms that Site C is expected to cause an increase in BC Hydro rates in the short term but will result in lower rates in the long term compared to alternative supply options.  Interestingly, BC Hydro also concludes that the Expected LNG Load could reduce both the magnitude and duration of the rate impact of Site C as the energy surplus associated with Site C could be sold to LNG proponents at rates that are higher than what BC Hydro would obtain by selling such surplus power on the market.
  • BC Hydro reduced its forecasted reliance on IPPs slightly and assumes that by F2017 the utility will rely on about 8,300 GWh/year of firm energy from IPPs, down from an estimated 8,500 GWh/year post-attrition as set out in the Draft IRP.
  • BC Hydro acknowledged that its DSM targets are aggressive and, as a result, there is likely a greater risk that the program will under-deliver rather than over-deliver energy savings.  In that regard, BC Hydro revised its DSM target in the IRP to conserving approximately 1,300 MW of capacity by F2021 instead of 1,400 MW, but left its 7,000 GWh/year target for energy savings unchanged.
  • Assuming the implementation of the DSM target and EPA renewals, BC Hydro expects to experience a capacity gap in F2019 instead of F2021, with or without the Expected LNG Load.  BC Hydro continues to plan to meet this gap with a series of bridging measures such as market purchases and power from the Canadian Entitlement under the Columbia River Treaty. The IRP also includes a revised estimated timeline for the emergence of an energy shortfall, with a gap now predicted for F2028 instead of F2027.  BC Hydro also increased its proposal to rely on the Canadian Entitlement from 200 MW to 300 MW of capacity during a five-year capacity gap until Site C comes online in F2024.
  • BC Hydro revised its forecasted capacity load-resource balance deficits between the IRP and Draft IRP as follows: (i) 693 MW by F2017, rather than 594 MW; (ii) 2,745 MW by F2023, rather than 2,646 MW; and (iii) 4,837 MW by 2033, rather than 4,737 MW.  In contrast, the energy load-resource balance estimates remain unchanged between the Draft IRP and the IRP and remain 363 GWh/year in F2017, 15,660 GWh/year in F2023, and 26,634 GWh/year in F2033.

Future Updates to the IRP

Given the submission of the IRP to the Minister in August 2013, BC Hydro will be required to submit a new IRP in August 2018 (or upon another date that may be specified by regulation in the future).  As BC Hydro is entitled to submit amendments to an approved IRP, the utility intends to review the IRP in fall 2015, when it expects to have further information concerning (i) ongoing progress with demand side management, (ii) EPA renewal pricing and volumes, (iii) an environmental assessment decision concerning Site C and (iv) a combination of LNG proponent final investment decisions and decisions to take service from BC Hydro.

To view original article, please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions