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Comprehensive Review of BC Hydro - Disappointing Phase 2 Interim Report

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Tuesday, March 24, 2020
BCSEA
BCSEA
2005 - BC Hydro power line - Squamish

24 March 2020

Disappointing Phase 2 Interim Report of Comprehensive Review of BC Hydro

Last year, BCSEA wrote about the Phase 2 Comprehensive Review of BC Hydro.[1] The important and ambitious purpose of the review included giving BC Hydro guidance on the critical issue of how it should implement the electrification called for in the 2018 CleanBC climate action plan.

The interim report was released early in March. It should have identified and grappled with the serious barriers and trade-offs needed for BC Hydro to achieve low carbon electrification; and it should have provided, or at least proposed, the major strategic decisions that the government must take in order to support and direct BC Hydro.

Instead, the Interim Report bogs down in vague discussions of secondary issues, makes several oddball proposals and invites a further round of public input on a list of largely rhetorical questions.

The CleanBC Plan clearly indicates the magnitude of the electrification required to get three-quarters of the way to BC’s 2030 GHG reduction target: 4,000 GWh per year by 2030. This is about an 8% increase over BC Hydro’s current supply resources. Additional new resources will be needed to get the rest of the way to achieving the 2030 target. And more new resources will be needed to meet the 2040 and 2050 targets.[2]

The CleanBC Plan also discusses where electrification should be pursued across the main sectors of energy use in BC:

  • 60% of homes and 40% of commercial buildings to be heated with electricity by 2030, including fuel switching of existing homes and commercial buildings, leading to a 40% drop in GHGs from buildings;[3]
  • 30% of sales of light-duty cars and trucks to be zero-emission vehicles by 2030, rising to all sales in 2040, with the entire fleet moving to zero emissions as light-duty fleet turns over;[4]

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[1] Low-carbon electrification in BC: next steps for BC Hydro, 14 August 2019  and Low-carbon electrification and BC Hydro’s role in implementing the CleanBC action plan, 16 October 2019 

[2] CleanBC, pp. 10 and 59

[3] Ibid, page 52

 

  • trucking, public transit, port and airport vehicles and marine vessels switching to electric in the long term, with an interim low-carbon fuel step;[5]
  • BC Ferries’ inland fleet electrifying;[6]
  • natural gas production and “large [industrial] operations” encouraged to electrify and the use of heavy electric vehicles encouraged for industry.[7]

The big problems and trade-offs in achieving these goals—which should have been the substance of the Interim Report—are in general:

  • How can BC Hydro’s rates be kept manageably low while its existing and new customers demand more electricity? BC Hydro will have to extend and beef up its transmission grid while also acquiring large additional volumes of electricity and DSM savings. Despite advances in clean renewable generation technology and reductions in generation costs, expanding the system will put upward pressure on rates.
  • How should BC Hydro carry out its new mandate of load building—encouraging more electricity use—as distinct from its traditional role of simply supplying the power that customers ask for? Incentives, legislation and policy will all be required, raising questions of who pays and who takes political responsibility.
  • How can electricity compete with today’s absurdly low natural gas prices? Current gas commodity prices are about one third the price of BC Hydro’s electricity, even with the current carbon price of $40/tonne of CO2 (equivalent).

The Interim Report calls for another round of public comment before the Phase 2 report is finalized, although no particular process is specified for this.[4] BCSEA intends to send comments soon. Anyone with an interest in this important topic should write to our new Minister of Energy, Mines and Petroleum Resources, the Honourable Bruce Ralston. Write soon: no specific deadline is given, but the report is to be finalized sometime this spring.

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[4] Ibid

[5] Ibid, page 41

[6] Ibid, page 22

[7] Ibid, page 9

[8] Comprehensive Review of BC Hydro website: 

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