B.C.'s private power sector heats up with Hydro's call for energy

"I knew that we were going to get a good number (of bids), certainly exceeding the 3,000 gigawatt hours, but triple the amount of power that they're seeking, is certainly very encouraging." — Kwatuuma Cole Sayers, executive director, Clean Energy B.C.

Published Sep 22, 2024  •  Last updated 0 minutes ago  •  4 minute read

British Columbia's private power sector has gone from almost idle to overwhelming B.C. Hydro's call for new electricity sources in the space of 18 months since the province dropped its first hint that it would do so. Photo by James MacDonald /Bloomberg

B.C.’s private power sector has gone from almost idle to overwhelming B.C. Hydro’s call for new electricity sources in the space of 18 months since the province dropped its first hint that it would do so.

Hydro, this week, received 21 applications from independent power producers proposing to supply up to 9,000 gigawatt hours per year of electricity to the utility — enough to power some 800,000 homes — three-times the 3,000 gigawatt hours (GWh) it sought.

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“I was a little surprised,” said Kwatuuma Cole Sayers, executive director of Clean Energy B.C. “I knew that we were going to get a good number (of bids), certainly exceeding the 3,000 gigawatt hours, but triple the amount of power that they’re seeking, is certainly very encouraging.”

To Sayers, “it’s a great sign for British Columbia that there’s interest in investing here.”

For B.C. Hydro, it gives the utility choices as it’s expected to pick successful proposals to fill that 3,000 GWh per year requirement, enough to power 270,000 homes, with the first to start delivery as soon as 2028. The estimated capital cost would be between $2.3 billion and $3.6 billion.

This call for power lands at a volatile time for the utility. Successive years of drought that slowed inflows to Hydro’s key reservoirs left it a net importer of electricity in its 2023-24 fiscal year, which ended in March with the corporation importing about 20 per cent of its electricity needs.

That has carried over into Hydro’s 2024-25 fiscal year, with its first-quarter financial report showing that it needed imports to fill 17 per cent of B.C.’s needs for the three months between the end of March and beginning of July.

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So there is pressure with this call for power to diversify where the province’s power is coming from.

Staff in Energy Minister Josie Osborne’s office provided an unattributed written response to Postmedia News questions, which said the province’s clean energy strategy released in June is designed to “ensure that B.C. is continuously increasing and diversifying B.C.’s production of clean electricity.”

The statement added that right now, B.C. Hydro has less need for large so-called “capacity resources,” such as Hydro’s major dams, to back up intermittent sources such as wind turbines or solar panels.

And while the power-call list does include one hydroelectric resource, 70 per cent are for wind farms ranging from Stewart Creek southwest of Fort St. John to Gilford Island, where a numbered company has proposed to place turbines near Health Bay, a village on the Inside Passage between the Central Coast and Vancouver Island.

Another 20 per cent of proposals, four in total, are for solar farms. Sayers said the design of the call for power, which called for generating capacity of at least 40 megawatts, favour wind and solar.

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In B.C. Hydro’s past, run-of-river hydro developments dominated the sector, which now make up most of the 123 independent power producers providing power to the utility.

Now, however, “the cost for wind and solar have just come down so dramatically that getting that low-cost energy onto our system is just so attractive,” Sayers said. “So (I’m) not surprised that wind and solar has dominated this one, and will likely continue to.”

B.C. Hydro, this fall, began to flood the reservoir behind its $16 billion Site C dam on the Peace River system, which will start putting electricity on the grid as early as December. At full operation, Site C is expected to generate 5,100 GWh per year, enough to power 450,000 homes.

The long-term planning in Hydro’s 20-year integrated resource plan, however, is hedging that the province will need a lot more electricity to meet objectives for replacing a lot of fossil fuel use through the adoption of electric vehicles and electrifying home heating.

Critics of Hydro’s planning, such as the Energy Futures Institute, are skeptical about Hydro’s ability to keep up with its ambitions. Its chairman, Barry Penner, argued that components of the Clean B.C. plan, such as goals for EV adoption alone, would require the equivalent of two Site C dams worth of electricity.

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Electricity use in B.C. over the last decade, however, has been relatively stable, ranging from seven per cent less to eight per cent more than the 10-year average use of 55,000 GWh per year, despite population growth, according to B.C. Hydro annual reports.

Before the 2023-24 financial year, the utility was also a net exporter of surplus electricity in the nine previous years, the reports show.

The statement from the Energy Ministry said Hydro’s critics who warn the utility will run short of power as soon as 2026 rely on “inaccurate assumptions” that underestimate its ability to generate electricity over the summer.

B.C. Hydro’s resource plan, however, estimates Clean B.C. measures will drive electricity demand 15 per cent higher than its 2021-22 year. So the province’s long-term strategy is to roll out competitive bids for new electricity every two years.

The next call could be as soon as 2026, which would be tailored to meet growth, “depending on B.C. Hydro’s projected needs at that point in time.”

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