British Columbia's Minister of Energy and Mines Bill Bennett addressed the province's independent power producers at the opening of Clean Energy BC's annual conference in Vancouver on October 16, 2014. Speaking in the wake of the announcement earlier in the week that the Site C clean energy project (Site C) has received environmental approvals from the B.C. and federal governments, Minister Bennett confirmed that the B.C. government has not yet made a final investment decision with respect to Site C and is in the final stages of a "due diligence" process that includes comparisons to other potential alternatives, including a portfolio of renewable resources.
Noting that "all signs" point toward greater economic growth and electricity demand in B.C., Minister Bennett reviewed the four key components for meeting forecast load growth in the province, as described in BC Hydro's current Integrated Resource Plan (IRP): (1) conservation and other demand side management (DSM) initiatives, currently targeted to satisfy 78% of future load growth; (2) refurbishment of and upgrades to existing heritage hydro assets; (3) acquisitions from independent power producers; and (4) Site C.
Minister Bennett noted that, in reaching a final investment decision on Site C, the B.C. government's primary focus will be on the protection of ratepayers, who are already facing significant rate increases under the province's current 10-year energy plan. While echoing the findings of the joint federal-provincial review panel, which concluded in May 2014 that Site C represents the least expensive alternative to meeting the province's future capacity and energy needs, Minister Bennett acknowledged several potential advantages associated with a portfolio of clean energy projects, including:
- the transfer of project cost and risk to the private sector
- the avoidance of increased public debt and its negative impact on B.C.'s credit rating
- a right-sized, right-timed incremental approach better able to match growth in demand
- greater geographic dispersion of associated economic development
- benefits from increasingly cost-competitive position of wind power
- enjoys broad support among First Nations
These and other findings are highlighted in a recent study commissioned by Clean Energy BC which concludes that such a portfolio could save the province between $750 million and $1 billion over 70 years relative to the cost of Site C. A further, similar study conducted by KPMG LLP is expected to be released in the coming days.
Minister Bennett concluded by noting that whether or not Site C is approved, there remains significant opportunity for renewable energy in B.C., and he cited a number of factors that could potentially result in loads exceeding the forecast contained in BC Hydro's IRP, including:
- increased industrial activity in Northeastern B.C., including upstream oil and gas development
- the re-opening of two pulp and paper mills
- increased mining activity, including the Red Chris mine currently under construction and the proposed KSM copper/gold project, which received environmental approval in July 2014
- proposed liquefied natural gas (LNG) projects using grid electricity to meet ancillary power requirements
- the proposed electric-drive Woodfibre LNG project near Squamish
- FortisBC's proposed expansion of its electric-drive Tilbury LNG storage facility
The B.C. government is expected to make its final investment decision for Site C in November. Going forward, BC Hydro intends to review the IRP in fall 2015, where it will take into account, among other things, the then-current status of Site C, developments relating to ongoing progress with DSM, EPA renewal pricing and volumes, LNG proponent final investment decisions and general industrial activity levels.
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